U.S.  SECURITIES  AND  EXCHANGE  COMMISSION
                          WASHINGTON,  D.C.    20549
                                   FORM  10-KSB

[X]  ANNUAL  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE  ACT  OF  1934
     For  the  Fiscal  Year  Ended  December  31,  1997

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934  FOR  THE  TRANSITION  PERIOD  FROM  ________  TO  ________

     Commission  File  Number  000-23174

     THE  QUIZNO'S  CORPORATION
     (Name  of  small  business  issuer  as  specified  in  its  charter)


 COLORADO                                          84-1169286
---------                                          ----------
 (State  or  other  jurisdiction  of
 incorporation  or  organization)            (I.R.S.  Employer
                                            Identification  No.)

 1099  18TH  STREET,  SUITE  2850
DENVER,  COLORADO                                    80202
-----------------                                    -----
(Address  of  Principal  Executive  Offices)      (Zip  Code)


 (303)  291-0999
 ---------------
 (ISSUER'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,  $.001  par  value
----------------------------------

Check whether the issuer (1) filed all reports required to be filed by Section
13  or  15(d) of the Securities Exchange Act during the past 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 no disclosure will 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.  [  ]

The  registrant's  revenue  for  the  fiscal year ending December 31, 1997 was
$12,107,662.

The  aggregate  market  value  of  the  registrant's  common  stock  held  by
non-affiliates  of  the  registrant  as  of  March  23, 1998 was approximately
$7,798,000  (for  purposes  of  the  foregoing  calculation  only, each of the
registrant's  officers  and  directors  is  deemed  to  be  an  affiliate).

There  were  2,934,224  shares  of registrant's common stock outstanding as of
March  23,  1998.

DOCUMENTS  INCORPORATED  BY  REFERENCE:    Portions  of the registrant's Proxy
Statement  that  will  be filed with the Securities and Exchange Commission in
connection  with  the  registrant's  annual  meeting  of  stockholders  are
incorporated  by  reference  in  Part  III  of  this  Form  10-KSB.

TRANSITIONAL  SMALL  BUSINESS DISCLOSURE FORMAT (CHECK ONE): Yes [  ]  No [X]

<PAGE>

     TABLE  OF  CONTENTS


PART  I                                                         PAGE
 NO.


ITEM  1.  DESCRIPTION  OF  BUSINESS                              1

ITEM  2.  DESCRIPTION  OF  PROPERTY                             11

ITEM  3.  LEGAL  PROCEEDINGS.                                   11

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF
          SECURITY  HOLDERS                                     12

PART  II

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED
          STOCKHOLDER  MATTERS                                  12

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS
          OR  PLAN  OF  OPERATION                               13

ITEM  7.  FINANCIAL  STATEMENTS                                 22

ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH
          ACCOUNTANTS  ON  ACCOUNTING  AND  FINANCIAL
          DISCLOSURE                                            22

PART  III

ITEM  9.  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND
          CONTROL  PERSONS;  COMPLIANCE  WITH
          SECTION  16(A)  OF  THE  EXCHANGE  ACT                23

ITEM  10. EXECUTIVE  COMPENSATION                               23

ITEM  11. SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL
          OWNERS  AND  MANAGEMENT                               23

ITEM  12. CERTAIN  RELATIONSHIPS  AND  RELATED
          TRANSACTIONS                                          23

ITEM  13. EXHIBITS  AND  REPORTS  ON  FORM  8-K                 23

     PART  I

ITEM  1.  DESCRIPTION  OF  BUSINESS

THE  RESTAURANTS

     The  Company is engaged in franchising and, to a lesser extent, operating
quick  service  restaurants  ("QSR")  (the "Restaurants") using the registered
service mark "Quizno's" and the name "Quizno's Classic Subs."  The Restaurants
offer  a  menu  of  submarine  style  sandwiches,  salads, soups, desserts and
beverages,  including  "Classic  Lite"  selections of submarine sandwiches and
salads  designed  for  consumers  who  are  looking  for  a  low-fat,  healthy
alternative  to  typical  fast  food  products.

     The  Company  believes  that  the  submarine  sandwiches  offered  in the
Restaurants are distinctive in the market for several reasons.  Each submarine
sandwich  is  prepared after the customer orders and with special ingredients,
recipes  and  techniques.    These  ingredients,  recipes  and  techniques are
controlled  to  provide  uniformity  of  taste  and  quality  among all of the
Restaurants.

     One  of  the most important distinctions of the Quizno's sandwich product
is  that  it  is  served to the customer warm.  Each sandwich is prepared open
face  and  run through a conveyor oven that toasts the bread, melts the cheese
and  enhances  the  flavors  of  the  meats.

     The  Company  focuses  on the quality of the ingredients contained in the
food  products  it  uses  and  requires that all of its specified ingredients,
which  are  generally  higher quality than those that other submarine sandwich
shops  use,  be  purchased  from  approved suppliers.  The cheeses used in the
Restaurants  are  all  natural.   The Italian style meats include a wine-cured
Genoa  salami,  pepperoni  and  capicola,  an  Italian spiced ham.  The turkey
breast  is  real  turkey  breast.

     The  Restaurants  also  are required to use certain products prepared for
the  Company  in accordance with proprietary recipes developed by the Company.
Foremost  among these is Quizno's special recipe soft baguette style bread and
its  red-wine  based  vinaigrette  dressing  used  as  a  base  on most of the
sandwiches.  In addition, the Restaurants use the Company's proprietary recipe
tuna  mix  blend,  garlic  oil  blend,  and  marinara  sauce.

     The  Restaurants'  upscale  decor  is  designed to convey an Italian deli
ambiance and to match the upscale QSR market niche represented by the product.
Open  kitchens allow customers to watch as their sandwiches are prepared.  The
decor  package  for the Restaurants includes reproductions of old Italian food
product  labels, and hand-painted Italian style posters.  The Italian theme is
prevalent throughout the Restaurant.  Real wood trim adds a rich warmth to the
dining  room  not  found  in  typical  fast  food  dining  environments.

     Besides  a  pleasant  upscale  environment  for  in-house  dining,  the
Restaurants  offer  conveniently  packaged  meals for carry out to serve lunch
time  office  workers  and  to  serve the home meal replacement segment of the
market.

     The  Restaurants are also located in mall food courts and are designed to
operate  in  smaller  spaces  while retaining the same ambiance and decor as a
traditional Quizno's Restaurant.  "Quizno's Express" Restaurants are typically
smaller units established at such non-traditional locations as convenience and
gasoline  stations,  sports  facilities,  hospitals,  and  college  campuses.
Quizno's Express units offer a full menu with an extensive variety of Quizno's
sandwiches.  Soups, salads and desserts are also available at Quizno's Express
units.  Quizno's Express units will typically share common area seating or may
have  very  limited  seating  at  venues  designed  primarily  for  take  out.

     Quizno's  Restaurants  were  first  opened  in  1981  by  the  Company's
predecessor.    As  of March 24, 1998, there were 341 Restaurants in operation
(including  Bain's  Deli  restaurants),  20  of  which were Company-owned, and
agreements  were  in  place  for  the  opening of an additional 176 franchised
Restaurants.

BAIN'S  DELI  ACQUISITION

     On  November  12,  1997, the Company, through its wholly-owned subsidiary
The  Quizno's  Acquisition  Company,  acquired  certain  assets  used  in  the
franchise  operations  and  restaurant  business  known as "Bain's Deli."  The
Company  acquired the rights to operate three company-owned restaurants and to
be  the  franchisor  of  49  operating  Bain's  Deli  restaurants. Bain's Deli
restaurants  are  located  principally  in  the  Eastern  United  States,  and
therefore  enhance  the  Company's  presence  in  that  region.  The  Company
subsequently  elected  not  to  purchase 2 of the 3 company-owned units and to
reduce  the purchase price pursuant to certain rights under the Asset Purchase
Agreement.    The  Company intends to encourage existing Bain's franchisees to
convert  their units to Quizno's Restaurants, and may offer incentives such as
temporary  waivers  of  royalties,  reduced  or no initial franchise fees, and
financing  programs  arranged  through  third-party  lenders.

CONCEPT  AND  STRATEGY

     The  Company's  marketing strategy is to position the Restaurants between
fast  food  and  full-service dining.  The Company believes that consumers are
looking  for  healthy  and  tasty  alternatives  to  typical  fast  foods;  in
particular,  they  are  looking for an alternative to fast food hamburgers and
fried  foods.    At the same time, the Company believes many busy families are
looking  for  a  more  convenient  and  reasonably  priced  alternative  to
full-service dining.  Quizno's offers all the convenience of typical fast food
in  terms  of  quick  ticket times, affordability, and carry out and home meal
replacement  options,  but  with  a  fresh,  tasty  alternative  to  fast food
products.    In  terms  of  full-service dining benefits, Quizno's offers more
comfortable  dining  rooms  than most fast food restaurant concepts as well as
other  dining  options  --  such  as  catering  and  delivery -- generally not
available  in  the fast food arena.  Due to the Company's unique quick service
product, the Company believes it is well positioned to fill a growing niche in
the  restaurant business that is developing between fast food and full-service
dining.    The  Quizno's concept also accommodates a variety of dining options
from  comfortable  in-house  dining  to  lunchtime  carry  out  to  home  meal
replacement.

     The  Company's  goal  is  to  build  a strong and consistently profitable
nationwide  chain  of  Restaurants.    In  1997,  the  Company  became  the
third-largest  submarine  sandwich chain.  Since 1993, the primary vehicle for
achieving  the  Company's  planned growth has been its Area Director marketing
program.  Under this program, the Company grants an Area Director the right to
sell  Quizno's franchises on behalf of the Company in a specified market area.
The  Area  Director  is  required  to  sell  and  open  a  specified number of
franchised  Restaurants  annually  throughout  the  life  of the Area Director
marketing  agreement.

     The  Company's  revenues  are  derived  from  a  royalty  on all sales at
franchised  Restaurants, initial franchise fees from each franchise sold,  and
fees  collected  from  Area  Directors for the grant of territorial Restaurant
marketing rights.  Franchisees and Area Directors pay fees to the Company only
once  in  connection  with execution of Franchise Agreements and Area Director
Marketing  Agreements.    Royalties  provide  a long-term continuing source of
revenue.  Franchise  fees and royalties are expected to increase as the number
of  franchised  Restaurants  in  operation  increases.  The  Company  may also
repurchase  certain  territories in the future.  The royalty rate is currently
6%  for  traditional Restaurants, but will increase to 7% on April 1, 1998 and
the  royalty rate is 8% for Quizno's Express units; however, a small number of
franchisees  operate under older agreements that set lower royalty rates at 4%
or  5%.

AREA  DIRECTOR  MARKETING  AGREEMENTS

     The  Company  offers  to  qualified  candidates  ("Area  Directors")  an
exclusive  territory ("Territory") within which to sell franchised Restaurants
pursuant to an Area Director Marketing Agreement.  The Area Director marketing
program  was  established  by  the Company in January 1993 and restructured in
December 1994.  This program is designed to assist the Company in accelerating
the marketing and sale of franchises and the selection of Restaurant locations
in  the  Territory.  Each Territory is based on areas of dominant influence of
local  television  broadcast  stations  as defined by the television broadcast
industry.    The  Company's growth strategy clusters Restaurants in particular
television  markets  in  order to facilitate implementation of its advertising
program.

     Each  Area  Director  pays  the  Company  a fee based on the total of the
population  in  the territory.  At present, the fee is $.07 per person located
within  the  territory,  plus  a training fee of $10,000 (reduced from $15,000
effective January 1, 1998).  The population based portion of the fee is deemed
fully  earned  by  the  Company  when  paid  and  is  not  refundable.

     Area  Directors  are  required to market franchises for Restaurants to be
located  within  the Territory.  The Area Director agrees to open, through the
sale  of  franchises,  a specified number of franchised Restaurants within the
Territory during the term of the Area Director Marketing Agreement.  The sales
and  opening schedules are lower in the first years of the development period.
The  Area  Director  Marketing  Agreement does not grant the Area Director the
exclusive  right to market franchises or solicit franchisees in the Territory,
but  it  does  grant  the  Area Director the right to receive certain fees and
royalties,  described  in  more  detail  below,  from  all  franchised  and
Company-owned  Restaurants established in the Territory during the term of the
Area  Director  Marketing Agreement.  The Company reserves the right under the
Area  Director  Marketing  Agreement  to  market  and  sell  franchises and to
establish  Company-owned  Restaurants  in  a  Territory.

     The  Company,  as  of  March  24,  1998,  has  76  Area  Directors  whose
Territories cover approximately 71% of the population of the United States and
all  of  Canada.  As of March 1, 1998, the Company had Area Director Marketing
Agreements  for  Territories  in  the  following  states:    Alabama, Arizona,
Arkansas,  California,  Colorado,  Connecticut,  Florida,  Georgia,  Idaho,
Illinois,  Indiana,  Iowa,  Kansas,  Kentucky,  Louisiana, Maryland, Michigan,
Minnesota,    Mississippi,  Missouri,  Montana,  Nebraska, Nevada, New Mexico,
North  Carolina,  North  Dakota,  Ohio,  Oklahoma, Oregon, Pennsylvania, South
Carolina,  South  Dakota,  Tennessee,  Texas,  Utah,  Virginia,  Washington,
Wisconsin,  and  Wyoming.    The  Company  also  had  Area  Director Marketing
Agreements  in  place  in  Puerto  Rico  and  British  Columbia,  Canada.

     The  Area  Director  Marketing  Agreements  set  increasing  "Minimum
Performance  Levels"  that  require  the  Area  Director  to  sell  and open a
specified number of franchised Restaurants in each year during the term of the
Area  Director  Marketing  Agreement.   The Company's experience with the Area
Director  program to date indicates that while some Area Directors will exceed
their development schedules, others will fail to meet their schedules.  In its
planning,  the  Company has allowed for a certain percentage of Area Directors
who  will not meet their development schedule.  Delays in the sale and opening
of  Restaurants can occur for many reasons.  The most common are delays in the
selection or acquisition of an appropriate location for the Restaurant, delays
in  negotiating  the  terms  of the lease and delays in franchisee financings.
The  Company  may  terminate  an Area Director Marketing Agreement if the Area
Director  fails  to  meet the development schedule, and the Company would then
have  the  right  to  resell  the  Territory  to  a  new  Area  Director.

     Most  Area  Directors  are  required  to  maintain  an  office within the
Territory.    In  addition,  through  a  required  monthly  minimum  marketing
expenditure,  the  Area  Director  is required to actively promote the sale of
Company  franchises  within  the  Territory.  The Area Director is required to
visit  with  prospective  franchisees  and  refer  appropriate  locations  for
franchised  Restaurants within the Territory to the Company for consideration.
The  Area  Director must also perform monthly quality assurance inspections of
the Restaurants in its area and assist franchisees within its area in opening.
The  Company's  franchise  sales  materials  are  made  available  to the Area
Director.

     Each  Area  Director  is  paid  a  commission  of 40% of the royalty fees
collected by the Company from each franchised Restaurant or for royalties that
would  otherwise  be  payable  by  Company  owned Restaurants in the Territory
opened  and  operated during the term of the Area Director Marketing Agreement
so  long as the Area Director performs periodic inspections and other services
with  respect  to  such Restaurants.  In certain circumstances, Area Directors
are entitled to an ongoing commission of 1% on gross sales of Restaurants open
and  operating  in  the  Territory  on  the  date  the Area Director Marketing
Agreement  is  terminated  through  either  the initial term of the underlying
franchise  agreement  or  five  years  (15  years for Area Director Agreements
executed  before  January 1998), whichever is less.  This approach rewards the
Area  Director  for  selecting  higher  quality franchisees and higher quality
locations  while  discouraging the Area Director from selecting locations that
are  too  close  together.  In addition to the foregoing, the Area Director is
entitled to receive a commission of 50% of the initial fee paid to the Company
for  each  franchise  sold  and  open  within  the  Territory.

     The  Company  has  a program under which it will finance up to 50% of the
Area Director Marketing Fees for certain approved Area Director candidates who
have  the  experience  and skill sought by the Company for its Area Directors,
but  do not have sufficient cash to pay the fee in full.  The Area Director is
required  to  personally sign a promissory note due the Company for the amount
financed,  which  will  bear interest at 15% per year and be repaid in monthly
installments  over  five  years.    The promissory note is secured by the Area
Director  Marketing  Agreement  and  by  other  collateral  unrelated  to  the
business,  typically  a  second  mortgage  in  the  Area  Director's  home.

FRANCHISE  PROGRAM

     The  Company  authorizes  individuals  and  companies  ("Franchisees"  or
"Owners")  to  establish  and  operate  Restaurants  at  an  approved location
pursuant  to  the  terms  of  a  Franchise  Agreement.    Under  the Franchise
Agreement,  the  Company  undertakes  to  perform  or  have  performed certain
services  with  respect  to  the  opening  and  operation of a Restaurant.  In
connection with the opening of a Restaurant, those services include (i) review
and approval of the proposed Restaurant location, (ii)  review and approval of
construction  plans  for  the  Restaurant,  (iii) identification of sources of
supply  for items which are ordinarily necessary to operate a Restaurant, (iv)
an operations manual providing detailed instructions with respect to operation
of  the  Restaurant,  (v)  training  with  respect  to the Company's method of
operations,  including  operating  procedures,  food  preparation  techniques,
controls,  promotion  programs,  management  and  public  relations,  and (vi)
pre-opening assistance.  After opening of the Restaurant, the Company provides
continuing  advice  and  consultation  with  respect  to  operation  of  the
Restaurant.    From  time  to time, the Company takes over the operations of a
store  from  an  unsuccessful  franchisee  and  operates the store until a new
franchisee  is  found.    The  Company's  investment in such operations may be
recovered  at  the  time  the  store  is  transferred  to  the new franchisee.

     The  current  franchise  fee for the Owner's first Restaurant is $20,000,
$15,000 for the second, and $10,000 for the third and any additional franchise
agreement.    The  Company  offers its franchise at a reduced fee for Quizno's
Express  units.    As  of  April  1,  1998,  the Owner also pays the Company a
continuing  royalty  fee  of  7%  of  the Owner's gross sales (8% for Quizno's
Express franchises).  Older forms of Franchise Agreement provide royalty rates
of  between 4% and 6%. "Gross sales" is defined as all sales whether on credit
or  for  cash, and all revenues from any source caused by the operation of the
Restaurant,  whether  directly  or  indirectly  relating  to  the Restaurant's
operation.    Sales  tax  and any other state or federal tax is excepted.  The
Owner  also pays an advertising fee to the Company in an amount equal to 1% to
4%  of  the  Franchisee's  gross sales, which fees are used by the Company for
advertising, marketing, and public relations programs and materials to enhance
and  build  the  image and goodwill of the Quizno's system.  There are certain
other  fees  that  must  be  paid by the Franchisee to the Company in order to
reimburse  the Company for costs incurred in connection with the establishment
of  a  Restaurant.    The  total  average  cost  to a Franchisee for opening a
Restaurant  ranges  between $37,600 and $190,450, including funds to cover the
initial  franchise fee, with most of the variation attributable to differences
in  the  costs  of  leasehold  improvements  for  the  Restaurant, size of the
Restaurant,  and  whether  the  unit  is  a traditional or Express Restaurant.

     The  Company has developed certain items, such as bread and dressings for
salads  and  sandwiches,  which  are prepared for use in the Restaurants based
upon  recipes  developed by the Company and which are provided to Owners under
the  private  label "Quizno's."  The Owner is required to purchase those items
from  specified  vendors  for  sale  and use in the Restaurant.  The Franchise
Agreement  also  requires  the  Owner  to  acquire  specified  equipment  and
inventory,  to  establish  and  maintain  specified signage and to operate the
Restaurant  in  accordance with the standards and requirements outlined in the
Company's  operations  manual.

     The  Company  has entered into an agreement with a national food products
distributor that allows Owners to obtain meat products, produce and other food
and non-food items necessary for operation of franchised Restaurants at prices
more favorable than those that could be obtained by individual Owners.  All of
the  purchasing  of  the  ingredients  for  the  food  products offered in the
Restaurants  is done centrally by the Company, which allows for better quality
control  by the Company.  Each Owner then contacts the distributor directly to
obtain the items needed for the Owner's Restaurant, which are delivered by the
distributor.   The distributor bills the Owner directly for all items ordered.
If  the  national food products distributor no longer provided this service to
the  Company  and  its  franchisees, the Company believes adequate alternative
services  would  be  available  to it without a significant increase in costs.

     The  Company retains the right to approve the terms of the Owner's lease.
A  law  firm  selected  by the Company must negotiate the lease as part of the
approval process.  The costs for review of the lease by the lawyer selected by
the  Company  are  at the expense of the Owner.  The Company also reserves the
right  to  enter into a lease directly with each landlord and then to sublease
to  the  Franchisee.

     The Owner, or person designated by the Owner and approved by the Company,
is  required  to  devote  his  or  her full time, attention and efforts to the
performance  of  the  Owner's duties under the Franchise Agreement relating to
the  operation of the Restaurant.  The Owner agrees in the Franchise Agreement
to use his or her best efforts to produce maximum volume of gross sales in the
Restaurant.    The  Restaurant  must be operated continuously on such days and
during such minimum hours as are required by the Company, unless restricted by
Owner's  lease  or  other  rules  applicable  to  the  Restaurant.

     The  Owner  agrees  to  maintain  books and records for the Restaurant in
accordance  with  the  requirements  and specifications set forth from time to
time by the Company.  The Franchisee is required by the Franchise Agreement to
be  responsible for submitting all required reports to the Company when and in
the  manner  or  format  required  by  the  Company.

     In  order  to  provide  for  proper  financial  tracking and planning for
Owners,  the  Company  began providing a restaurant bookkeeping service to its
Restaurant Owners in 1994.  This service is intended to assure the Owners have
accurate  financial  records  as well as to allow the Company to keep accurate
system  wide  statistics.    Franchise  agreements executed after February 10,
1995,  require  Owners  to  use this bookkeeping service for the first year of
operations  for the Owner's first unit for a fee of $80 per week ($85 per week
for  franchise  agreements  executed  after  March  31,  1998).   This service
provides  for  a revenue source from franchised restaurants and is expected to
become  profitable  as  the  number  of  Restaurants  serviced  increases.

     The  Owner  must submit copies of all proposed advertising or promotional
materials for approval by the Company prior to use.  The Company must give its
written  approval to any advertising or promotional materials before the Owner
is  authorized  to  use  such  materials.

     The  Company  expects  that  Restaurants  operating  within its franchise
system  will  emphasize  quality  "submarine" sandwiches.  In order to satisfy
customer  expectations  regarding  menus  and  service,  the  Company requires
substantial uniformity among all Restaurants.  All Restaurants must conform to
the decor and menu specifications of the Company.  The Owner is not allowed to
sell any goods or services at a Restaurant other than those goods and services
specified  by  the  Company.

FRANCHISE  MARKETING  PROGRAMS

     In  order  to  facilitate  the  marketing  of franchised Restaurants, the
Company  devotes  resources  for  national print media, sales staff, marketing
materials, and trade shows.  In addition, the Company has specific programs to
market  its  franchise,  which  are  discussed  below.

     Discovery  Day.  Discovery Day is a day-long event regularly scheduled in
     --------------
Denver  to  introduce  potential  Owners  from  throughout  the country to the
Quizno's  concept.

     Toll  Free  Phone Line.  The Company has installed a toll free phone line
     ----------------------
(1-800-DELI-SUBS)  which  rings  directly into the Franchise Sales Department.
The  information  is  entered  into  a  data  base  of  Owner inquiries and an
informational  package  mailed  to  the  caller.

     Open  Houses.   The Company has an ongoing program of hosting open houses
     ------------
throughout  the  country  in conjunction with its Area Directors.  Individuals
who  have expressed an interest in the Company's franchise are invited to open
houses.

     Computerized Data Base of Franchise Inquiries.  The Company has installed
     ---------------------------------------------
a  computer  network  within its Franchise Sales Department for the purpose of
organizing, managing, and tracking individuals who inquire about the Company's
franchise.

     National  Advertising.  The Company continues to advertise nationally for
     ---------------------
new  franchisees  on  a regular and consistent basis in national, regional and
local  publications.

COMPANY  OWNED  RESTAURANTS

     The  Company  currently owns and operates 19 Quizno's Restaurants, mostly
located  in  Denver, and 1 Bain's Deli restaurant located in Boston.  In 1997,
Company-owned  Restaurants  generated  $291,651  in  earnings.

     While  the  Company  expects  to  add  new Company owned Restaurants from
time-to-time, the Company expects most of its growth in the foreseeable future
to  result  from  the  development  of  franchised  Restaurants.

     In  addition,  the  Company,  from  time to time, acquires or assumes the
operation  of  franchised  Restaurants  that the franchisee has been unable to
operate  successfully for reasons unrelated to the location or the market.  In
such  cases,  the  Company  will  typically  operate  the Restaurant, make any
required  improvements and repairs, re-staff, begin local store marketing, and
ultimately transfer the Restaurant to a new qualified owner.  Occasionally the
Company  may  incur  short  term  losses  in such cases.  However, the royalty
stream  provided  over  the long term by the new owner will normally offset or
exceed  any  such  losses.

ADVERTISING

     Quizno's  advertising staff develops advertising campaigns for use at all
levels  to  support  consumer  sales in all of its locations.  The advertising
fees  paid  to the Company by Owners goes into a "national" fund to be used to
develop  advertising  to  attract  customers  to the Restaurants and to create
awareness  of  the  Quizno's  brand  image.    Campaigns  developed  using the
"national"  fund  are created with television, radio and print elements, which
are  available  to  each  local Quizno's market.  In 1998, the Company began a
cable  television  campaign  in selected markets throughout the United States.

     Each  Restaurant, except for Quizno's Express Restaurants, is required to
spend  another  3% of sales for local advertising or promotions.  Funds may be
used to purchase media schedules for Company produced TV, radio, print ads, or
any other approved media.  A limited number of markets with a concentration of
restaurants  have formed separate advertising cooperatives which coincide with
the  area of dominant influence of local television broadcast stations.  These
cooperatives  pool  their  advertising  fees  to jointly purchase media.  Each
Restaurant pursues local marketing strategies, such as distribution of coupons
and fliers in the immediate area of the Restaurant and point of sale materials
displayed  in  the  Restaurant.    Several  local marketing programs have been
developed  by the Company's advertising staff and made available to individual
Restaurants.

     Consumer  advertising  chain  wide  also is funded by a vendor program in
which  marketing  funds are solicited by the Company from vendors on behalf of
all  Restaurants once a year.  These funds are used to support "national" fund
programs,  which  benefit  all Restaurants.  The vendor payments are voluntary
and  there  is  no  guarantee or assurance that such funds will continue to be
available  in  the  future.

RECENT  PROGRAMS

     The  Company  has,  and  will  continue to develop new programs that will
augment  its  Restaurant  operations  and  facilitate  the  marketing  of  new
franchised  Restaurants.

     Company  Organization.    The  Company continues to strive to improve the
     ---------------------
Restaurant chain and its franchising organization.  Early in 1996, the Company
took  a major step in its national growth plan by dividing the corporate staff
into  two  divisions -- one specifically focused on Franchise Support Services
and  the  other  on  Franchise  Development.   Clearly defined goals of making
Quizno's  Owners successful for the Franchise Support division and of bringing
new  markets  to critical mass quickly for the Franchise Development division,
have  been  identified to help implement the key strategies of making Quizno's
Owners  successful  and  of  bringing  new  markets  to critical mass quickly.

     Co-Branding.    In  1998,  the  Company will continues to investigate and
     -----------
solicit  co-banding  opportunities  with other food service retailers offering
products  compatible  with  the  Quizno's    menu.   The Company will look for
co-branding  partners  that  offer  products  that  can  enhance the Company's
existing  menu,  produce  increased  traffic  through  the Company's units, or
provide  products  that  will  increase  sales  during the evening and morning
day-parts.

     Regionalization.    The  Company  places regional representatives who are
     ---------------
delegated  to  implement  and  manage  the Franchise Support functions in four
geographic  regions of the U.S.  The regional representatives will be based in
their  respective  markets,  allowing  the  Company  to be more efficient with
regard  to  travel  costs  as  it  adds  Restaurants  throughout  the country.

     Turnkey  Program.    In  1997,  the  Company  implemented  a  "Turnkey"
     ----------------
development  program  funded  from a portion of the proceeds of the $2 million
debt  financing  completed  in  December 1996.  Under the turnkey program, the
Company targets specific areas, locations, or types of locations where it will
select  sites, negotiate and sign leases, fully construct and equip a Quizno's
Restaurant,  and then sell the completed Restaurant to an approved franchisee.

     The  Company  utilizes  its own funds to lease, build, equip, and furnish
each turnkey Restaurant.  Upon completion, each turnkey Restaurant is marketed
to  prospective  franchisees for the Company's total development costs plus an
initial  franchise  fee and a development fee.  The Company typically does not
offer  financing  but  believes  that long term financing will be available to
franchisees  for  up  to 70% of the total cost from traditional small business
lenders,  including  those who currently provide financing to Quizno's Owners.

     In  1997, the Company developed 7 turnkey units, 3 of which had been sold
and  one of which was under contract to sell as of March 1, 1998.  In order to
realize  interim  revenue  from  unsold units, the Company opened and operated
four  turnkey  Restaurants.    At  December 31, 1997, the Company had $593,675
invested  in  Company  owned turnkey Restaurants.  The Company expects to sell
those units to franchisees during the first half of 1998.  In 1998 the Company
plans  to use a portion of these funds for turnkey conversions of Bain's units
to  Quizno's.

COMPETITION

     Restaurant  Operations.    The  restaurant industry is highly competitive
with  respect  to  price,  service,  food  quality  and location and there are
numerous  well-established  competitors  possessing  substantially  greater
financial,  marketing,  personnel  and  other  resources  than  the  Company.

     The  Company  competes in the sandwich segment of the fast food industry,
an  industry long dominated by hamburger chains.  Subway, the nation's largest
submarine  sandwich  restaurant chain, has grown significantly in recent years
and had approximately 13,000 units opened at December 31, 1997.  The expansion
of  Subway  has  drawn  attention  to  submarine  sandwiches, during a time of
growing  concern  relating  to  beef  and  fried foods.  Despite the growth of
Subway, its sales revenues make up less than 6% of the total sales revenues of
the  18  largest  sandwich  chains.    The Company believes that the submarine
sandwich  segment  is  underdeveloped,  and  that  demand  for submarine style
sandwiches  will  continue  to  grow.    Blimpie, the second largest submarine
sandwich  chain  had  only  1667 units opened in the United States at June 30,
1997.    Most  of the other submarine sandwich chains currently have less than
200  units  each or are primarily local or regional.  As of December 31, 1997,
the  Company  had  327 franchised units operating (including 49 Bain's units),
making  the  Company  the third largest submarine sandwich chain in the United
States.

     The  Company's major competitors, including Blimpie, have followed Subway
closely  in the style and quality of the product, creating very little, if any
differentiation    in  the market.  Subway offers a low-cost product in a fast
food style restaurant.  The Company has positioned the Restaurants between the
traditional  fast  food restaurant style of its submarine sandwich competitors
and  full-service  dining, and has focused on higher quality food products, to
distinguish  the  Restaurants  from  their  competitors.

     Certain  Factors  Affecting the Restaurant Industry.  The Company will be
required  to  respond  to  various  factors affecting the restaurant industry,
including  changes  in  consumer  preferences,  tastes  and  eating  habits,
demographic trends and traffic patterns, increases in food and labor costs and
national,  regional  and  local  economic  conditions.   A number of fast food
restaurant  companies  have recently been experiencing flattening growth rates
and  declines in average sales per restaurant, in response to which certain of
such companies have adopted "value pricing" strategies.  Such strategies could
have  the  effect of drawing customers away from companies which do not engage
in  discount pricing and could also negatively impact the operating margins of
competitors,  including  the  Company,  which do attempt to match competitors'
price  reductions.

     Franchise  Competition.    In  addition to its Restaurant operations, the
Company  competes  with  fast  food  chains, major restaurant chains and other
franchisors  for  franchisees.    Many  franchisors,  including  those  in the
restaurant  industry,  have  greater market recognition and greater financial,
marketing  and  human resources than the Company.  The Company believes it can
compete  successfully  for franchisees for several reasons.  The total cost of
opening  a  Quizno's  Restaurant tends to be lower than that of hamburger fast
food  and  full-service  dining  restaurants.   The ratio of sales revenue per
restaurant to restaurant opening costs is also better for Quizno's Restaurants
than for most of its competitors.  Finally, the ambiance of Restaurants offers
a  Franchisee  a  pride  in  ownership that is unique to the Quizno's concept.

GOVERNMENT  REGULATIONS

     The Company is subject to Federal Trade Commission ("FTC") regulation and
several  state  laws  which  regulate  the  offer and sale of franchises.  The
Company  is  also subject to a number of state laws which regulate substantive
aspects  of the franchisor-franchisee relationship.  The FTC has adopted rules
and  regulations governing the sale of franchises throughout the United States
(the  "FTC  Rule"),  which    requires  the  Company to furnish to prospective
franchisees a franchise offering circular containing information prescribed by
the  FTC  Rule.

     State  laws  that  regulate  the  offer  and  sale  of franchises and the
franchisor-franchisee  relationship presently exist in a substantial number of
states.    State  laws  that regulate the offer and sale of franchises require
registration  of  the  franchise  offering with state authorities.  Those that
regulate  the franchise relationship, generally require the franchisor to deal
with its franchisees in good faith, prohibiting interference with the right of
free  association  among  franchisees, limiting the imposition of standards of
performance  on a franchisee and regulating discrimination against franchisees
in charges, royalties or fees. Although such laws may restrict a franchisor in
the  termination  of  a  franchise  agreement by, for example, requiring "good
cause"  to  exist  as  a  basis  for  the  termination,  advance notice to the
franchisee  of  the  termination,  an  opportunity  to  cure  a  default and a
repurchase of inventory or other compensation, these provisions have not had a
significant  effect on the Company's franchise operations.  The Company is not
aware  of  any  pending  franchise  legislation which in its view is likely to
materially  affect  the  operations of the Company.  The Company believes that
its  operations  comply  in  all  material  respects with the FTC Rule and the
applicable  state  franchise  laws.

     Each franchised Restaurant, and each Company-owned Restaurant, is subject
to licensing and regulation by a number of governmental authorities, which may
include  health,  sanitation, safety, fire, building and other agencies in the
state  or  municipality  in  which the Restaurant is located.  Difficulties in
obtaining  or failure to obtain the required licenses or approvals could delay
or  prevent  the  development  of  a new Restaurant in a particular area.  The
Company  is  subject to federal and state environmental regulations, but these
have  not  had  a material effect on the Company's operations.  More stringent
and  varied  requirements of local governmental bodies with respect to zoning,
land use and environmental factors could delay or prevent the development of a
new  Restaurant  in  a  particular  area.

     The  Company  is also subject to state and federal labor laws that govern
its  relationship  with  its  employees,  such  as  minimum wage requirements,
overtime, working conditions and citizenship requirements. Significant numbers
of  food  service  and preparation personnel are paid at rates governed by the
federal  minimum  wage.    Accordingly, increases in the benefits under any of
these  laws  would  increase  labor  costs to the Company and its franchisees.

TRADEMARKS

     The Company presently owns the following trademarks or service marks (the
"Marks"),  each of which is registered on the Principal Register of the United
States  Patent  and  Trademark  Office:

<TABLE>
<CAPTION>

       Mark               Registration Number             Registration Date
       ----               -------------------             -----------------
<S>                               <C>                          <C>
"QUIZNO'S" service mark     1,317,420                      January 29, 1985

"QUIZNO'S" service mark     1,317,421                      January 29, 1985

"QUIZNO'S & Design" 
 service mark               1,716,834                      September 15, 1992

"QUIZNO'S EXPRESS 
 CLASSIC SUBS" service
 mark                       2,086,598                      September 19, 1996

"CHEEZE LOUISE & Design"
 service mark               2,125,221                      December 30, 1997
</TABLE>

     The  Quizno's  Acquisition Company grants current Bain's Deli franchisees
the  non-exclusive right to use the following trademarks for the operations of
their  Bain's  Deli  restaurants:   "BAIN'S CAFETERIA" trademark, Registration
Number  959,079  (May  15,  1973); and "BAIN'S" trademark, Registration Number
1,640,049  (April  2,  1991).


<PAGE>

     There  are  no  presently  effective  determinations of the United States
Patent  and  Trademark  Office,  the  trademark  trial  and  appeal board, the
trademark  administrator  of any state or any court, nor are there any pending
infringement,  opposition  or cancellation proceedings or material litigation,
involving  the Marks.  There are no other agreements currently in effect which
significantly  limit  the  Company's  right  to  use or license the use of the
Marks.

EMPLOYEES

     As  of December 31, 1997, the Company employed 48 full-time employees and
2  part-time employees, at its headquarters in Denver, Colorado.  In addition,
the  Company  employed  32  full-time  and  92  part-time  employees  in  its
Company-owned  Restaurants.    The  Company's employees are not covered by any
collective bargaining agreement and management believes its employee relations
are  excellent.

ITEM  2.          DESCRIPTION  OF  PROPERTY

     The Company leases its headquarter's office space of 7,462 square feet at
1099  18th  Street,  Suite  2850,  Denver,  Colorado.   The Company leased the
premises for each of the 18 Company-owned and operated Restaurants at December
31,  1997,  as  follows:

<TABLE>
<CAPTION>
<S>             <C>                           <C>                  <C>
1.  12201 E. Arapahoe Rd., #B7     Englewood, CO 80112     2,486 sq. feet
2.  6525  Gunpark  Dr.             Boulder,  CO  80301     1,976 sq. feet
3.  191  Blue  River Pkwy.         Silverthorne, CO 80498    931 sq. feet
4.  8081 E. Orchard Rd., #67       Greenwood Village, CO
                                     80111                 3,166 sq. feet
5.  2875  Pearl  St.,  Unit A      Boulder, CO 80301       2,450 sq. feet
6.  760 S. Colorado Blvd., Unit 1  Glendale, CO 80222      2,855 sq. feet
7.  1275  Grant  Street            Denver,  CO  80203      1,400 sq. feet
8.  1250 S. Hover Rd., Bldg. 8A    Longmont, CO 80501      2,350 sq. feet
9.  1660  Lincoln  St.,  #105      Denver, CO 80264        1,660 sq. feet
10. 10450  West  Colfax            Lakewood, CO  80215     1,992 sq. feet
11. 4495  North  Washington        Denver, CO  80216       1,903 sq. feet
12. 11211  120th  Ave., #73A       Kenosha, WI 53142       1,214 sq. feet
13. Coors  Field                   Denver,  CO    80205    429  sq. feet
14. 999  18th  Street,  #136       Denver, CO 80202        1,360 sq. feet
15. 3507 Manchester Expr., #F10    Columbus, GA 31909      613 sq. feet
16. 2236 Cove Blvd., #FC 2236      Panama City, FL 32405   687 sq. feet
17. 75 Middlesex Turnpike, #2109   Burlington, MA 01803    716 sq. feet
18. 999 S. Washington St. (Bain's) N. Attleborough, MA
                                    02760                  464 sq.  feet
</TABLE>

ITEM  3.          LEGAL  PROCEEDINGS

     A Demand for Arbitration was filed on December 31, 1996 by S2D Subs, LLC,
a  franchisee,  Ken  Herring  and Vicki Harding (collectively, "S2D"), listing
allegations  against The Company, Timothy Schaden, Richard E. Schaden, Richard
F.  Schaden  and  Ronald  Feldman  for  breach  of  contract,  fraud,
misrepresentation,  unfair trade practices including violation of the Michigan
Franchise  Investment  Law,  breach  of the implied covenant of good faith and
fair  dealing  and  manipulation of prices, without alleging any factual basis
for  such  allegations (S2D Subs, LLC v. The Quizno's Corporation, Case No. 54
                        -----------------------------------------
114  00027  97,  American Arbitration Association).  The Company and the other
defendants  have  denied  the claims and vigorously defended this action.  The
Company  also  filed counterclaims against S2D for, among other things, breach
of  its franchise agreement.  Hearings were held in January and February 1998.
The  parties  are currently engaged in the preparation of post-hearing briefs,
and  a  decision  by  the  arbitrator  is expected in the Second Quarter 1998.
Based  on  the  evidence adduced at the hearings, the Company believes it will
prevail  on  all  claims.

     There  are  no  other  pending  material  legal  proceedings to which the
Company  is  a party or to which the property of the Company is subject.  From
time  to  time,  the Company is involved in litigation and proceedings arising
out  of  the  ordinary  course  of  its  business.

ITEM  4.          SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     No  matters  were  submitted to a vote of security holders of the Company
during  the  fourth  quarter  of  its  fiscal  year  ended  December 31, 1997.

     PART  II

ITEM  5.          MARKET  FOR  COMMON  EQUITY  AND RELATED STOCKHOLDER MATTERS

     The  Company's  Common  Stock  is  traded  in the NASDAQ Small-Cap Issues
Market  under the symbol "QUIZ."  The following table shows high asked and low
bid  price  information  for  each  quarter  in the last two calendar years as
reported  by  the  NASDAQ  Stock  Market,  Inc.    Such  quotations  reflect
inter-dealer  prices,  without  retail mark-ups, markdowns or commissions, and
may  not  necessarily  represent  actual transactions.  On March 23, 1998, the
stock  closed  at  $5.56  bid,  $5.75  asked.

<TABLE>
<CAPTION>

Fiscal  Year  Ended  December  31,  1996
----------------------------------------
                                                     Last
                        High           Low           Trade
                        ----          ______         -----
<S>                       <C>            <C>           <C>
First  Quarter          $4.13          $3.38          $3.63
Second  Quarter         $3.75          $2.88          $3.13
Third  Quarter          $3.50          $2.63          $3.50
Fourth  Quarter         $4.38          $3.00          $3.13
</TABLE>

<TABLE>
<CAPTION>

Fiscal  Year  Ended  December  31,  1997
----------------------------------------
                                                      Last
                        High           Low           Trade
                        -----         -----           -----
<S>                     <C>            <C>            <C>
First  Quarter          $3.63          $2.94          $3.13
Second  Quarter         $4.44          $3.00          $4.13
Third  Quarter          $6.88          $3.81          $5.00
Fourth  Quarter         $6.38          $4.50          $4.88
</TABLE>

     There  were  approximately  128  holders of record (and approximately 500
beneficial  owners)  of  the Company's Common Stock as of March 23, 1998.  The
first number includes shareholders of record who hold stock for the benefit of
others.

     The  Company does not expect to pay any dividends on its  Common Stock in
the  foreseeable future.  Management currently intends to retain all available
funds  for  the  development  of  its business and for use as working capital.

     During  the  last  quarter of 1997, the following securities were sold by
the  Company  without registration with the Securities and Exchange Commission
pursuant  to  the  exemption  noted:

<TABLE>
<CAPTION>

Securities            Number of                                       Exemption
  Sold       Date      Shares     Consideration      Purchasers         Claimed
---------- --------   --------- -----------------  -------------  --------------
<S>          <C>         <C>          <C>               <C>            <C>

Class  B                100,000  Exchange for      Retail &       Regulation D
 Preferred November 11,  shares   $500,000 of       Restaurant
            1997                  debt              Growth
                                                    Capital Fund

Class  C                167,000  $835,000          Private        Regulation D
 Preferred October-      shares                     Investors
            November,
            1997    

Common                  18,182   $100,000 of       Sellers of     Regulation D
 Stock     November 12,  shares   acquisition       Business
            1997                  price


Common     December 4,     475   $2,375 plan       Quizno's       Section 4(2)
 stock      1997          shares  obligation        401(k)
                                                    Plan
</TABLE>

ITEM  6.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS

OVERVIEW

     1997  was a milestone year for the Company.  In the first quarter of 1997
the  Company reported a loss of $(217,906), followed by a loss of $(49,356) in
the second quarter, a profit of $104,058 in the third quarter, and a profit of
$73,586  in  the  fourth  quarter.    Combined, the Company reported a loss of
$(89,618)  for  the  year.

     On  a  quarterly  basis,  earnings  by  business segment reflect the same
continued  improvement  over  the  last  eight  quarters.

<TABLE>
<CAPTION>

                    Franchise           Company
                    Operations           Stores           Other      Net
                     ----------         ---------         -----      ---
<S>                      <C>                <C>            <C>        <C>

1st  Quarter  1996   $(6,229)            $9,567       $(196,386)   $(193,048)
2nd  Quarter  1996   139,199             17,211        (131,064)      25,346
3rd  Quarter  1996  (141,937)            53,622        (176,816)    (265,131)
4th  Quarter  1996    28,833              6,434        (621,422)    (586,135)
1st  Quarter  1997     7,272                966        (226,144)    (217,906)
2nd  Quarter  1997   103,631             70,279        (223,266)     (49,356)
3rd  Quarter  1997   214,261            118,347        (228,550)     104,058
4th  Quarter  1997   357,876            102,059        (386,349)      73,586
</TABLE>

     The  following  is  a  summary of the Company's net income from franchise
operations,  Company  store  operations,  and  other charges for the last four
years:

<TABLE>
<CAPTION>

                                1997        1996         1995         1994
                                ----        ----         ----         ----
<S>                              <C>        <C>           <C>          <C>
Franchise  Operations:
 Revenue                    $ 7,887,447  $ 4,574,603  $ 3,375,372 $ 1,849,739
 Expenses                    (7,204,407)  (4,554,737)  (3,045,505) (2,218,691)
                              ---------    ---------    ---------   ---------
  Income  (loss)                683,040       19,866      329,867    (368,952)
                              ---------    ---------    ---------   ---------

Company  Store  Operations:
--------------------------
  Revenue                     4,070,666    2,680,521   3,011,195      603,485
  Expenses                   (3,779,015)  (2,593,687) (3,078,821)    (630,440)
                              ---------    ---------   ---------      -------
  Income  (loss)                291,651       86,834     (67,626)     (26,955)
                              ---------    ---------   ---------      -------

Other  Charges:
--------------
 New programs and
  research  and
    development                (72,161)     (217,321)    (10,564)       (954)
 Reserves  against 
  amounts  due  the
    Company                    (49,540)     (224,063)    (13,780)    (15,182)
  Provision  for 
   litigation 
   settlement,
   legal  costs 
   and  settlement                 --       (134,500)       --          --
  Loss  on  store  closures   (120,928)         --          --          --
  Loss  related  to 
   stores  held
   for  resale                 (60,673)      (76,442)   (120,439)   (326,889)
  Other                        (64,544)     (104,844)    (43,625)    175,000
  Depreciation  and 
   amortization               (406,444)     (288,435)   (253,459)   (131,962)
  Interest  expense           (290,019)      (80,063)   (111,946)    (58,137)
                              --------       -------    --------   ---------
  Total  other               1,064,309    (1,125,668)   (553,813)   (358,124)
                             ---------     ----------    -------   ---------

Net  loss  before  preferred
  stock  dividends            $(89,618)  $(1,018,968)  $(291,572)  $(754,031)
                              =========    =========    ========    ========
</TABLE>

     The  Company's  primary  business  is  the  franchising  of  Quizno's
Restaurants.  As  a  franchisor,  revenue  is derived from:  (1) area director
marketing  fees,  (2)  initial  franchise  fees, and (3) royalties paid by its
Owners.    Area  director  fees  occur only once for each exclusive area sold.
Initial franchise fees are one time fees paid upon the sale of a franchise and
vary  directly  with  the  number of franchises the Company can sell and open.
Royalties,  on the other hand, are ongoing fees paid by franchised restaurants
and  increase as the number of franchised restaurants increase.  The Company's
goal  is  to  increase  royalties  as  the  most stable and reliable source of
revenue.   Each of these sources of revenue contribute to the profitability of
the  Company,  but  the  relative contribution of each source will vary as the
Company matures.  Over time initial franchise fees and royalties will generate
proportionately  more  revenue  than  area  director  marketing  fees.


<PAGE>

     The  following  table reflects the Company's revenue growth by source and
the  Company's  restaurants  for  the  past  four  years:

<TABLE>
<CAPTION>

                                             Year  Ended  December  31,
                                             --------------------------
                                     1997       1996       1995       1994
                                     ----       ----       ----       ----
<S>                                  <C>         <C>         <C>        <C>
Royalties                        $2,747,955  $1,590,673  $1,046,329   $779,249
Initial  franchise fees           2,269,001   1,164,500     593,350    390,000
Area  director  fees              2,139,080   1,421,555   1,379,640    326,391
Other                               731,411     397,875     356,053    354,099 
                                  ---------   ---------   ---------    -------
Franchise  revenue                7,887,447   4,574,603   3,375,372  1,849,739
Sales  by  Company owned stores   4,070,666   2,680,521   3,011,195    603,485
Sales  by  stores  held
  for  resale                       149,549     231,371     142,525    193,891
                                  ---------   ---------   ---------   --------
Total  revenue                  $12,107,662  $7,486,495  $6,529,092 $2,647,115
                                 ==========   =========   =========  ==========
                                     62%          15%          147%
                                     ===          ===          ====

Restaurants  open,  beginning           156         105          66         40
New  restaurants  opened                140          67          39         27
Restaurants  acquired                    52           -           -          -
Restaurants  closed                     (16)        (12)          -         (1)
Restaurants  closed, scheduled
  to reopen                              (5)         (4)          -          -
                                         ---         ----       ----       ----
Restaurant  open,  end                  327         156         105         66
                                        ===          ===        ===        ===
New  franchises  sold                   180         172          50         37
Initial  franchise  fees
   collected                     $2,919,946  $1,743,846  $1,040,188   $710,000
Systemwide  sales               $55 million $36 million  $26 million $19 million
Average  unit  volume(1)           $316,259    $300,580    $322,000   $363,000
Same store sales (2) (3)            Up 1.3%     Down .2%  Down 7.3%    Up  4.1%
</TABLE>

(1)          Excludes  units  located  in convenience stores and gas stations.
Includes  only  units  open  at  least  one  year  under  the  same ownership.
(2)       Same store sales for 1997 is based on 52 stores open all of 1996 and
1997.    Stores  which  transferred  ownership  during this period, or were in
substantial  default  of  the  franchise  agreement  at December 31, 1997, are
excluded.
(3)     Because the Company is and will continue to be in an aggressive growth
mode  over  the  next  few years, it is anticipated that same store sales will
fluctuate  as  units  are  included  from  more  start  up  markets.

<PAGE>
During  1997  same  store  sales  were  as  set  forth in the following table:

<TABLE>
<CAPTION>

1st  Quarter            2nd  Quarter            3rd  Quarter       4th Quarter
------------          --------------          --------------      ------------
<S>                        <C>                     <C>                <C>
 (0.4%)                    (2.2%)                    3.5%              9.3%
-------                  --------                  ------             ------
</TABLE>


RESULTS  OF  OPERATIONS

Comparison  of  Years  Ended  December  31,  1997  and  1996

     Franchise  revenue increased 72% in 1997 to $7,887,447 from $4,574,603 in
1996.    Total revenue increased 62% in 1997 to $12,107,662 from $7,486,495 in
1996.    The  revenue  increase resulted from the following items, in order of
impact:    Company store sales, royalty fees, initial franchise fees, and area
director  fees.

     ROYALTY FEES increased 73% to $2,747,955 from $1,590,673 in 1996. Royalty
fees  are  a  percentage  of  each  Owner's sales paid to the Company and will
increase  as new franchises open, as the average royalty percentage increases,
and  as  average  unit sales increase or decrease.  At December 31, 1997 there
were 308 franchises open (including Bain's) as compared to 147 at December 31,
1996.    The royalty was increased to 6% for all Quizno's franchise agreements
entered  into after February 10, 1995.  The royalty for Quizno's Express units
is  8%.    The  Company  will  increase  the royalty to 7% for all non-express
franchise  agreements  entered  into  after  March  31,  1998.

     Included are 51 Bain's franchises acquired on November 12, 1997 which pay
royalties  at  rates  ranging  from  0% to 5%, and account for $72,347 in 1997
royalty  revenue,  approximately  6.3%  of the increase.  The Company recorded
royalty  revenue  from  approximately  one half of the Bain's franchisees that
comply  and  pay  fees.    The  Company is aggressively pursuing collection of
royalties  from  the other Bain's franchisees and will record the revenue when
and if the funds are collected.  Bain's franchisees who do not convert will be
required  to  pay  royalties  pursuant  to  their  existing  Bain's  franchise
agreements.    The  Company  expects  between 10 and 20 Bain's franchisees may
convert  to  Quizno's  in  1998  and  1999.

     The  purchase  price  paid  by  the  Company  for  the  Bain's  chain was
calculated knowing the high number of non-paying franchises in the chain.  The
amount  paid  by  the Company was based on a multiple of actual royalties paid
and  no value was ascribed to the non-paying franchises.  However, the Company
has  the  right  to  collect  current  and  past  due royalties, which will be
reported  as  income  when  collected.

     INITIAL  FRANCHISE  FEES  increased  95%  in  1997  to  $2,269,001  from
$1,164,500  in  1996.  Initial franchise fees are one time fees paid by Owners
at  the  time  the  franchise  is  purchased.  Initial  franchise fees are not
recognized  as  income  until  the  period  in  which  all  of  the  Company's
obligations  relating  to  the  sale  have been substantially performed, which
generally  occurs  when  the  franchise opens. In 1997, the Company opened 140
franchises  as compared to 67 opened in 1996.  The Company's initial franchise
fee  has been $20,000 since 1994.  Owner's may purchase a second franchise for
$15,000 and third and subsequent franchise for $10,000.  The initial franchise
fee  for a Quizno's Express franchise is $10,000 for the first, $7,500 for the
second,  and  $5,000  for the third and additional franchises purchased by the
same  Owner.

     For  four  months  during  1996  the  Company  offered  approved existing
franchisees the right to purchase one additional franchise for every currently
effective  franchise agreement for an initial fee of $1,000.  The Company sold
75 such franchises, 14 of which were opened in 1996 and 1997, 32 of which were
terminated,  and  29  of  which  are  planned  to  open  in  1998.

     Initial  franchise fees collected by the Company are recorded as deferred
initial  franchise  fees  until the related franchise opens.  Deferred initial
franchise  fees  at  December  31,  1997  were  $2,148,662  and  represent 142
franchises  sold  but not yet in operation, compared to $1,575,471 at December
31,  1996  representing  150 franchises sold but not open.  The decline in the
number of unopened franchises and the low per unit average fee in 1996 was due
to the sale of 75 franchises for $1,000 discussed above.  Direct costs related
to  the  sale,  primarily sales commissions to area directors, are deferred on
the  books  of  the Company and recorded as an expense at the same time as the
related  initial franchise fee is recorded as income.  Deferred costs paid and
due  at the time of opening with respect to initial franchise fees deferred at
December 31, 1997 were $638,616.   Approximately 50% of all initial franchisee
fees  received by the Company are paid to area directors for sales and opening
commissions.

     The  Company  did not sell or open any Bain's franchises in 1997 nor does
it  expect  to  in  the  future.

     AREA  DIRECTOR  MARKETING  FEES  increased 51% in 1997 to $2,139,080 from
$1,421,555 in 1996. Area director marketing fees are one time fees paid to the
Company for the right to sell franchises in a designated, non-exclusive, area,
including  international  markets.  The fee for U.S. areas was $.03 per person
in  the  designated  area  through  June  1996,  $.035  from July 1996 through
December 1996, $.05 from January 1997 through December 1997, $.06 from January
1998  through  February 1998, and $.07 since March 1, 1998.  In addition, each
area  director  is  required to pay a training fee of $15,000 ($10,000 through
June 1996).  The population based portion of the fee is deemed fully earned by
the  Company  when  the  area  director  marketing  agreement is signed and is
recognized  as  income  in  that period. In 1997, the Company sold 28 new area
directorships  including  12  existing area directors who purchased additional
territory, as compared to 22 area directorships sold in 1996.  At December 31,
1997,  the  Company  had  a  total  of  76  area  directors  who  owned  areas
encompassing  approximately  71%  of  the  population  of  the  United States.

     The  Company  offers  area director applicants financing for up to 50% of
the  area  director marketing fee.  The amount financed is required to be paid
to  the  Company  in  installments  over  five  years  at  15%  interest.  The
promissory  notes are personally signed by the area director and, depending on
the  personal  financial  strength  of  area  director,  secured by collateral
unrelated  to  the  area  directorship,  usually a second mortgage on the area
director's  home.    Of  the  28 area directorships sold in 1997, 12 used this
financing  for $354,412, representing 17% of  the area director marketing fees
recognized in 1997. In 1996, a total of $236,407 was financed representing 17%
of  area  director  fee  revenue.

     There are no area directors in the Bain's system and the Company does not
intend  to  sell  any  Bain's  area  directorships  in  the  future.

     OTHER  REVENUE  increased  by  139%  in 1997 to $593,771 from $248,094 in
1996. Other revenue is primarily bookkeeping fees charged Owner's for whom the
Company  provided bookkeeping services and amounts paid by equipment suppliers
for  design  and  construction.  Since 1995, the Company's franchise agreement
requires all new franchisees to utilize the Company's bookkeeping services for
their  first  12  months  of operations.  The current fee per store is $80 per
week.  The  fee will be increased to $85 per week for all franchise agreements
executed  after  March  31,  1998.    Bookkeeping  fees  were $326,958 in 1997
compared  to  $189,055  in  1996.

     SALES  AND  ROYALTY  COMMISSIONS  expense increased 156% to $2,346,746 in
1997 from $914,726 in 1996.  Sales and royalty commissions are amounts paid to
the  area directors of the Company under its area director program implemented
March  1995.

     The  Company's  area  directors  receive  commissions equal to 50% of the
initial  franchise  fees  and  40%  of  royalties received by the Company from
franchises  sold,  opened, and operating in the area director's territory.  In
exchange  for these payments, the area director is required to market and sell
franchises,  provide location selection assistance, provide opening assistance
to  new  owners, and perform monthly quality control reviews at each franchise
open  in  the  area  director's  territory.

     The  Area  Director is entitled to receive commissions for a period of 15
years following the opening of each franchised Restaurant, notwithstanding the
expiration  of the Area Director Agreement (unless the Area Director Agreement
is terminated upon the occurrence of an event of default).  Upon expiration of
the agreement, the commission paid is reduced to 1% of sales for the remainder
of the 15 years.  Subsequent to year end, this period was reduced to a maximum
of  5  years.

     GENERAL  AND  ADMINISTRATIVE expenses increased 36% to $4,611,978 in 1997
from  $3,400,802  in  1996.    As  a percent of franchise revenue, general and
administrative  expenses  have fallen from 80% in 1995, 74% in 1996, to 58% in
1997.   General and administrative expenses include all the operating costs of
the  Company.    The increase is primarily due to the addition of employees to
service  the  rapidly  growing  network of Quizno's owners and area directors.
Although  general and administrative expenses will likely continue to increase
as  the  Company  grows,  management  expects the rate of increase to decline.

     The Company believes its general and administrative expenses are adequate
and  are  not  in excessive in relation to the size and growth of the Company.

     SALES BY COMPANY OWNED STORES increased by 52% in 1997 to $4,070,666 from
$2,680,521 in 1996. During 1997 the Company operated stores for a total of 118
store  operating  months.    In  1996,  the  Company  had  a total of 82 store
operating  months.    Sales  per store month increased 5.5% in 1997 to $34,497
from  $32,689.    During  1997,  the Company earned $291,651 at Company stores
compared  to  $86,834 in 1996.  At December 31, 1997 the Company had 17 (eight
at  December  31, 1996) operating Company stores plus one store which operates
only  during  baseball  season.

     DIRECT  RETAIL  ADVERTISING  was  $3,053  in  1997  and $120,936 in 1996.
Direct  retail advertising is the cost for direct retail advertising on behalf
of  franchised  stores.    Prior  to  1996  the  Company had not made any such
contribution  and the Company has no plans to make such contributions in 1998.

     RESEARCH AND DEVELOPMENT was $69,108 in 1997 compared to $17,295 in 1996.
Research  and  development  are costs incurred to research, test, and evaluate
new  concepts,  products  and  menu  items.

     NON-TRADITIONAL  DEVELOPMENT  PROGRAM  expenses  were  zero  in  1997 and
$79,090  in 1996.  In 1996 the Company formed and staffed a department for the
purpose of developing a program to sell franchises and place Quizno's units in
non-traditional  locations such as airports, hospitals, convenience stores and
gas stations, sports arenas, etc.  In 1997, the cost of operating this program
was  rolled  into  the  Company's  real  estate  department.

     STORES HELD FOR RESALE lost $60,673 on sales of $149,549 in 1997 compared
to  a  loss  of  $76,442  on  sales of $231,371 in 1996.  In 1997, the Company
operated one store held for resale for three months, which store was sold to a
franchisee  in  the  first quarter of 1997, and one store for ten months which
was  then closed.  In 1996, the Company operated one store for six months, and
one  store for two months, both sold to franchisees in 1996, and one store for
three  months  which  was  then  closed.    At  December 31, 1997, the Company
operated  no  stores  held  for  resale  (one  at  December  31,  1996).

     The  Company has in the past and may continue in the future to acquire or
takeover  franchised  stores  from  Owners  who  have  been  unable to operate
successfully  for  reasons  unrelated  to the location or the market.  In such
cases,  the  Company  will typically operate the restaurant, make any required
improvements  and  repairs,  re-staff,  begin  local  store  marketing,  and
ultimately transfer the restaurant to a new qualified Owner.  Occasionally the
Company  may  in the future, as it has in the past, incur short term operating
losses  in  cases  where  it  takes  over  and  re-markets a franchised store.
However,  the royalties paid over the long term by the new owner will normally
offset  or  exceed  such  losses.

     LOSS  ON  SALE  OR CLOSURE OF STORES HELD FOR RESALE was $120,928 in 1997
and  zero  in 1996.  The loss represents the cost for one store closed in 1997
located on a shopping center pad where the anchor tenant ceased operations and
was not replaced, resulting in traffic flow insufficient to support a Quizno's
restaurant.

     PROVISION  FOR LITIGATION SETTLEMENT was $134,500 in 1996. In 1997, there
was  no provision for litigation settlement.  The 1996 amount includes $13,500
related  to  a  settlement  agreement  reached  in  1996  with a previous area
director,  which  sum was paid in 1997, $95,000 reserved at December 31, 1996,
and  direct  legal  costs  associated with claims.  The 1996 charge of $95,000
relates  to  a potentially adverse claim made by one area director.  The claim
was  settled  in  1998  for  a payment to be made of $68,000.  The reserve for
litigation  loss  is  $95,000  at  December  31,  1997.

     PROVISION FOR BAD DEBTS was $49,540 in 1997 compared to $224,063 in 1996.
The 1996 expense includes an addition to the Company's reserves of $173,000 in
the  4th quarter of 1996 made based on management's evaluation of business and
industry  factors  occurring  in  1996  having  a  negative  impact  on  the
collectibility of certain amounts due the Company.  The allowance for doubtful
accounts  and  promissory  notes  is  $178,231  at  December  31,  1997.

     OTHER  EXPENSES  were  $64,544 in 1997 compared to $104,844 in 1996.  The
1997  expense  is primarily subleasing losses related to two stores previously
owned by the Company and sold to franchisees.  The 1996 expense includes a one
time  loss  on the sale of a store located in Missouri and sold by the Company
to  a  franchisee  in  1996,  plus  subleasing  losses.

     DEPRECIATION  AND AMORTIZATION was $404,644 in 1997 and $228,435 in 1996.
The  increase is primarily due to the acquisition and development of eight new
Company  owned  stores  and  the  acquisition  of  the  Bain's  chain in 1997.

     INTEREST  EXPENSE was $290,019 in 1997 and $80,063 in 1996.  The increase
is  primarily  attributable  to  the interest on convertible subordinated debt
borrowed  on  December  31,  1996,  $2,000,000  through  November 11, 1997 and
$1,500,000  from  November  12,  1997  through  December  31,  1997.


<PAGE>

LIQUIDITY  AND  CAPITAL  RESOURCES

     NET  CASH  PROVIDED BY OPERATING ACTIVITIES was $723,951 in 1997 compared
to  cash  used  by operating activities of $410,964 in 1996, an improvement of
$1,134,915.    The primary reason for the improvement from 1996 to 1997 is the
1997  loss  which  was  less  than  the  1996  loss  by  $929,350.

     NET  CASH USED IN INVESTING ACTIVITIES was $2,620,457 in 1997 compared to
cash used by investing activities of $780,651 in 1996.  Cash used by investing
activities  for  both  years  was  primarily  related  to  the  acquisition or
development  of  Company  owned stores.  In addition, in 1997 cash was used to
acquire  Bain's  and  was  invested  in  short  term  A rated corporate bonds.

     NET  CASH  PROVIDED BY FINANCING ACTIVITIES was $330,463 in 1997 compared
to  cash  provided  by financing activities of $1,634,523 in 1996.  The amount
provided in 1997 was primarily from the sale of preferred stock less principal
payments  on  debt.  The amount provided in 1996 was primarily the proceeds of
the  convertible  subordinated  debt  financing  for  $2  million.

     At  December 31, 1997, the Company had $593,675 invested in Company owned
turnkey  restaurants  offered for sale.  One such restaurant is under contract
to  be  sold for cash in the first quarter of 1998.  The other restaurants are
expected  to  be  sold  for  cash  in  1998.

     In  the first quarter of 1998, the Company acquired one restaurant from a
franchisee  for  $50,000  cash  and entered into leases for the development of
three new Company stores at a cost of approximately $350,000, most of which is
expected  to  be  financed.

     In  the first quarter of 1998 the Company announced a program under which
its  area  directors  will have a right to elect to have all future franchisee
leases  in the area director's territory signed by The Quizno's Realty Company
("TQRC"),  a  wholly  owned  subsidiary of the Company.  As a condition of the
lease,  the  landlord  will agree not to look beyond TQRC for payments.  These
locations  would  then  be  subleased by TQRC to the franchisee whose personal
liability  is  limited  to  one  year.    The  franchisee  will  pay  TQRC  an
indemnification  fee of $165 per month, pay a one time lease processing fee to
TQRC  of  $2,200, and pay a security deposit to TQRC equal to two months rent.
Effective  March 1, 1998, the Company transferred cash and other assets having
a  book  value  of  approximately $500,000 to TQRC in exchange for stock and a
promissory  note.    The  Company expects that 10% to 20% of all new franchise
locations  will  be  developed  under  this  program.

     As it has in the past, the Company will continue to consider acquisitions
of  other  chains,  the purchase of Quizno's restaurants from its franchisees,
and the purchase of Quizno's area directorships from its area directors.  From
time to time the Company will make offers and enter into letters of intent for
such  transactions  subject  to  the completion of due diligence.  In all such
cases, the Company will identify the sources of cash required to complete such
transactions  prior  to  entering  into  a  binding  agreement.

     On  December  31,  1996,  the  Company  completed a debt financing for $2
million  of  which $500,000 was converted to preferred stock in December 1997.
The $1,500,000 loan is payable  interest only at 12.75%, $15,937.50 per month,
through  June 1998, interest and principal  payments of $34,141 from July 1998
through  November  2001,  and a final balloon payments of $587,295 on December
31,  2001.   Any outstanding balance on the loan is due in full if the Company
has a secondary public offering of its stock. In connection with the loan, the
lender  has the right to purchase 372,847 shares of the Company's common stock
for  $3.10  per  share.

     The  lender  has  agreed  to  subordinate its security interests to other
lenders,  including  a  line  of  credit  lender, for amounts up to a total of
$700,000.    At  December  31, 1997, the Company had $188,929 of such "senior"
debt  outstanding,  thus  leaving  another  $511,071  available.   The Company
intends  to  arrange  a  working capital line of credit for this amount and is
currently  negotiating  with  interested  lenders.

     In  November  of  1997,  the  Company  and  the  lender agreed to convert
$500,000  of  the  principal  amount  of the $2 million debt to a new class of
preferred  stock (Class B).  Class B preferred stock has a cumulative dividend
of  12.75%,  is  callable  at any time by the Company, and is convertible into
common stock after five years at the then-current market value.  In connection
with  this  conversion,  the Company granted to the lender 42,209 common stock
purchase warrants exercisable at $5 per share.  The number of warrants decline
to  20,586  over  three  years  if  the  preferred  stock is not called by the
Company,  all  dividends have been paid, and certain specified earnings levels
have  been  reached.

     Other  than  the  above,  the  Company  does  not have any commitments or
contracts  to  build,  acquire,  or  sell any additional Company owned stores.

     Since its inception, the Company has incurred losses totaling $2,085,122,
through  December  31,  1997.  The Company has financed these losses primarily
through  the  sale of common stock and through the issuance of preferred stock
as  well  as convertible subordinated debt.  The Company's trends are positive
in  that  for  the six months ended December 31, 1997, it had a profit  before
preferred stock dividends of $177,644.  As seen in its statement of cash flows
for 1997, the Company generated cash from operation of approximately $724,000.
The  Company  believes  its  ability  to  generate  cash  flow,  combined with
additional  financing,  if necessary, will generate sufficient cash to support
its  operations  for  the  next  twelve  months.

     The  Company's  restaurant  sales,  and  therefore  royalties, during the
months of November through February are generally lower due to the location of
most  of  its  restaurants.

     YEAR  2000  DISCLOSURE

     The  Company  uses  current  versions  of widely used, publicly available
software  for  its  accounting  and  other  data processing requirements.  The
providers  of the software utilized by the Company have stated that there will
be  no  failures  in  the programs used by the Company resulting from the year
2000.    The  Company  has  no  customized  software.  The Company has not yet
determined  the impact, if any, that year 2000 issues may have on its vendors.
However,  the Company believes there are adequate alternative vendors that can
supply  products  and  services  to  the  Company  if necessary.  Finally, the
Company's  business  quick  service restaurants is not highly dependent upon
electronic data processing.  In conclusion, the Company does not believe it is
at  a  material  risk  from  year  2000  issues.


<PAGE>

     FORWARD-LOOKING  STATEMENTS

     Certain  information  discussed in this Form 10-KSB, and in particular in
the  section  entitled  "Management's  Discussion  and  Analysis  of Financial
Condition  and  Results  of  Operations,"  are forward-looking statements that
involve  risks  and  uncertainties  that  might adversely affect the Company's
operating  results  in  the  future  in  a  material  way.    Such  risks  and
uncertainties include, without limitation, the effect of national and regional
economic  and market conditions in the United States and in other countries in
which  franchises  are  sold,  costs  of labor and employee benefits, costs of
marketing,  costs  of  food  and  non-food  items used in the operation of the
Restaurants,  intensity  of competition for locations and franchisees, as well
as customers, perception of food safety, legal claims, and the availability of
financing  for the Company and its franchisees.  Many of these risk are beyond
the  control  of  the Company.  In addition, specific reference is made to the
"Risk  Factors'  contained in the Company's Prospectus, dated January 9, 1998,
related  to  the  Registration  Statement  on  Form  S-3  filed by the Company
(Registration  No.  333-38691).

     As  described  earlier,  the  Company's  principal  sources of income are
royalty fees, initial franchise fees, and area director marketing fees.  These
sources  are  subject  to a variety of factors that could adversely impact the
profitability  of  the Company in the future, including those mentioned in the
preceding  paragraph.    The  continued  strength of the U.S. economy is a key
factor to the restaurant business because consumers tend to immediately reduce
their  discretionary  purchases  in economically difficult times.  An economic
downturn  would  adversely affect all three of the above identified sources of
income.    Because  the  Company's  franchises are still concentrated in a few
regions  of  the  U.S.,  regional  economic factors could adversely affect the
Company's  profitability.    Weather, particularly severe winter weather, will
adversely  affect  royalty  income  and  could  affect the other sources cited
above.    Culinary  fashions  among Americans and people in other countries in
which  franchises  are  sold will also impact the Company's profitability.  As
eating  habits  change  and  types  of cuisine move in and out of fashion, the
Company's  challenge  will  be  to  formulate  a  menu  within  the  Company's
distinctive  culinary  style  that  appeals  to  an  increasing  market share.
Finally,  the  intense  competition  in  the  restaurant industry continues to
challenge  participants  in  all  segments  of  this  industry.

ITEM  7.          FINANCIAL  STATEMENTS

     Attached  hereto  and  filed  as  a  part  of  this  Form  10-KSB are the
consolidated  financial  statements  listed  in  the Index to the Consolidated
Financial  Statements  at  page  F-1.

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

     None.



<PAGE>

     PART  III

ITEM  9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

ITEM  10. EXECUTIVE  COMPENSATION

ITEM  11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM  12. CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  information  required by the above four Items is omitted because the
Company  intends  to  file  a  proxy statement with the Commission pursuant to
Regulation  14A  not later than 120 days after the close of the fiscal year in
accordance  with  General  Instruction  E(3)  to Form 10-KSB.  The information
called  for  by  these  Items is incorporated herein by reference to the proxy
statement.

ITEM  13.          EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)         Exhibits required by Item 601 of Regulation S-B.  The Company
                 -----------------------------------------------
will  furnish to its shareholders of record as of the record date for its 1998
Annual  Meeting  of  Stockholders,  a copy of any of the exhibits listed below
upon  payment of $.25 per page to cover the costs of the Company of furnishing
the  exhibits.

Item  No.                       Exhibit  Description
---------          ----------------------------------------------

2.1                Articles  of  Merger  Merging Schaden & Schaden into The 
                   Quizno's Operating Company, incorporated by reference to
                   Exhibit 2(ii) to the Company's Form  8-K,  filed  November 4,
                   1994.

2.2                Asset Purchase Agreement, among The Quizno's Acquisition 
                   Company, Bain's  Deli  Franchise  Associates,  through  its 
                   General  Partner,  Gemini Enterprises,  Ltd., Gemini One, 
                   Inc. And Jolles #4 Partnership, dated November 12,  1997,
                   incorporated by reference to Exhibit 2.1 to Form 8-K, filed 
                   by the Company  with  the  SEC  on  November  26,  1997.

3.1                Amended  and  Restated  Articles of Incorporation of the 
                   Company, incorporated  by  reference  to  Exhibit  3(a)  to
                   the Company's Registration Statement  on  Form  SB-2  (Reg.
                   No.  33-72378-D).

3.2                Articles of Amendment to the Articles of Incorporation of 
                   the Company authorizing  146,000 shares of Class A Cumulative
                   Convertible Preferred Stock, incorporated  by  reference to 
                   Exhibit 3.2 to the Company's Form 10-KSB, dated
                   March  28,  1997.

3.3                Articles  of Amendment changing the Company name,
                   incorporated by reference  to  Exhibit 3.3 to the Company's
                   Form 10-KSB, dated March 28, 1997.

3.4                By-laws of the Company, incorporated by reference to Exhibit
                   3.4 to the  Company's  Form  10-KSB,  dated  March 28, 1997.

3.5                Articles of Amendment to Articles of Incorporation of the
                   Company authorizing  100,000  shares  of Class B Preferred 
                   Stock and 200,000 shares of Class  C  Cumulative  Convertible
                   Preferred  Stock.

4.1                Form of certificate evidencing Common Stock, $.001 par value,
                   of the Company,  incorporated  by  reference  to  Exhibit 
                   4.1  to  the  Company's Registration  Statement  on  Form 
                   S-3  (Reg.  No.  333-38691).

4.2                Form of Representative's Warrant, incorporated by reference
                   to Exhibit 4(b)  to  the  Company's  Registration  Statement
                   on  Form  SB-2  (Reg.  No. 33-72378-D).

9.1                Voting  Trust Agreement between Richard E. Schaden and 
                   Richard F. Schaden,  dated  July  14, 1994, incorporated by
                   reference to Exhibit A to the Schedule 13-D, dated July 14,
                   1994, filed by Richard E. Schaden and Richard F. Schaden.

9.2                First Amendment to Voting Trust Agreement dated November 4,
                   1994, incorporated  by  reference  to  Exhibit  a to the
                   Amendment No. 1 to Schedule 13-D,  dated  November  4, 1994,
                   filed  by Richard E. Schaden and Richard F. Schaden.

9.3                Second Amendment to Voting Trust Agreement dated September 5,
                   1996, incorporated  by  reference to Exhibit 9.3 to the 
                   Company's Form 10-KSB, dated March  28,  1997.

10.1               Employment  Agreement of Mr. Richard E. Schaden, incorporated
                   by reference  to  Exhibit  10(a)  to the Company's 
                   Registration Statement on Form SB-2  (Reg.  No.  33-72378-D).

10.2               Employment  Agreement of Mr. Richard F. Schaden, incorporated
                   by reference  to  Exhibit  10(b)  to the Company's 
                   Registration Statement on Form SB-2  (Reg.  No.  33-72378-D).

10.3               Employee Stock Option Plan, incorporated by reference to 
                   Exhibit 99.1 to  the  Company's  Registration  Statement  on
                   Form S-8 (Reg. No. 333-45549).

10.4               Amended and Restated Stock Option Plan for Non-Employee
                   Directors and Advisors  incorporated  by  reference  to  
                   Exhibit  99.2  to  the  Company's Registration  Statement
                   on  Form  S-8  (Reg.  No.  333-45549).

10.5               Indemnity  Agreement between the Company and Richard E.
                   Schaden, incorporated  by  reference  to  Exhibit  10(e)  to
                   the Company's Registration Statement  on  Form  SB-2  (Reg. 
                   No.  33-72378-D).

10.6               Indemnity  Agreement between the Company and Richard F.
                   Schaden, incorporated  by  reference  to  Exhibit  10(f)  to
                   the Company's Registration Statement  on  Form  SB-2  (Reg. 
                   No.  33-72378-D).

10.7               Indemnity  Agreement  between the Company and Patrick E. 
                   Meyers, incorporated  by  reference  to  Exhibit  10(g)  to
                   the Company's Registration Statement  on  Form  SB-2  (Reg. 
                   No.  33-72378-D).

10.8               Indemnity  Agreement between the Company and Brownell M.
                   Bailey, incorporated  by  reference  to  Exhibit  10(h)  to
                   the Company's Registration Statement  on  Form  SB-2  (Reg.
                   No.  33-72378-D).

10.9               Indemnity Agreement between the Company and Frederick H. 
                   Schaden, incorporated  by  reference  to  Exhibit  10(i)  to
                   the Company's Registration Statement  on  Form  SB-2  (Reg.
                   No.  33-72378-D).

10.10              Indemnity Agreement between the Company and J. Eric Lawrence.

10.11              Indemnity Agreement between the Company and Mark L. Bromberg.

10.12              Form  of  Franchise  Agreement.

10.13              Form of Area Director Marketing Agreement, incorporated by
                   reference to  Exhibit  10.12  to  the  Company's  10-KSB 
                   dated  March  28,  1997.

10.14              Office Lease for the Company, incorporated by reference to
                   Exhibit 10.14  to  the  Company's  Form  10-KSB,  dated 
                   March  28,  1997.

10.15              Amendment  to  Employment Agreement between the Company and
                   Mr. Richard  E.  Schaden,  dated  February  29, 1996,
                   incorporated by reference to Exhibit  10.15  to  the
                   Company's  10-KSB,  dated  March  29,  1996.

10.16              Amendment  to  Employment Agreement between the Company and
                   Mr. Richard  F.  Schaden,  dated  February  29, 1996, 
                   incorporated by reference to Exhibit  10.16  to  the
                   Company's  10-KSB,  dated  March  29,  1996.

10.17              Deferment  Agreement  between  the  Company  and  Illinois
                   Food Management,  Inc.,  dated  February  27,  1996, 
                   incorporated  by reference to Exhibit  10.17  to  the
                   Company's  10-KSB,  dated  March  29,  1996.

10.18              Investment Agreement between the Company and Retail and 
                   Restaurant Growth  Capital,  L.P.  ("RRGC"),  a Delaware  
                   limited partnership, dated as of December 31, 1996, 
                   incorporated by reference to Exhibit 10.18 to the Company's
                   Form  10-KSB,  dated  March  28,  1997.

10.19              Senior  Subordinated  Convertible Promissory Note (with Form
                   of Warrant  attached)  issued  by  the  Company to RRGC, 
                   dated December 31, 1996, incorporated  by reference to 
                   Exhibit 99(a) to Schedule 13D filed by RRGC with the  SEC
                   on  January  9,  1997.

10.20              Security  Agreement  between  the Company and RRGC, dated as
                   of December 31, 1996, incorporated by reference to Exhibit
                   10.20 to the Company's Form  10-KSB,  dated  March  28, 1997.

10.21              Stockholders' Agreement between the Company and RRGC, dated
                   as of December  31, 1996, incorporated by reference to
                   Exhibit 99(b) to Schedule 13D filed  by  RRGC,  filed  with
                   the  SEC  on  January  9,  1997.

10.22              Amended and Restated Senior Subordinated Convertible
                   Promissory Note issued by  the Company to RRGC, incorporated
                   by reference to Exhibit 99(c) to Schedule  13D/A  filed  by 
                   RRGC  with  the  SEC  on  December  4,  1997.

10.23              First  Amendment  to  Investment Agreement between RRGC and
                   the Company,  dated  October  8,  1997.

10.24              Warrant  to  Purchase  Shares  of  Common Stock of The
                   Quizno's Corporation,  dated  as  of  November  11,  1997
                   and  issued  to  RRGC.

10.25              First Amendment to Security Agreement between the Company
                   and RRGC, dated  as  of  November  11,  1997.

10.26              Amended  and Restated Security Agreement among the Company,
                   The Quizno's  Operating  Company  and  RRGC,  dated  as  of 
                   December  31,  1996.

10.27              License Agreement between The Quizno's's Acquisition Company
                   and Jolles  #4  Partnership,  dated  as  of  November  12, 
                   1997,  incorporated by reference  to  Exhibit  99.1 to
                   Form 8-K, filed by the Company with the Sec in
                   November  26,  1997.

20.1               Risk Factors Section from the Company's Prospectus dated 
                   January 9, 1998  included  in the Registration Statement on
                   Form S-3 filed by the Company (Registration  No.  333-38691).

21.1               List  of  Company  subsidiaries.

27                 Financial Data Schedule

     (b) Reports on Form 8-K.  The Company filed one Report on Form 8-K during
         -------------------
the  last  quarter  of  1997.   Such filing was made on November 26, 1997, and
amended  by  a  Form  8-K/A  filed  on  December  31,  1997 and related to the
acquisition  of  the  assets  and  business  of  Bain's  Deli  by the Company.

<PAGE>

     SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the  Registrant  caused  this  report  to  be  signed  on  its  behalf  by the
undersigned,  thereunto  duly  authorized  on  March  26,  1998.

     THE  QUIZNO'S  CORPORATION



     By: /s/ Richard E. Schaden
   Richard  E.  Schaden,
   President  and  Chief  Executive
   Officer

In  accordance  with 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  indicated  and  on  the  dates  indicated.


      Signature                        Title                    Date
      ---------                        -----                    ----

/s/ Richard E. Schaden      President,  Chief  Executive    March  26, 1998
                            Officer  and  Director
Richard  E.  Schaden        (Principal  Executive  Officer)


/s/ Richard F. Schaden      Vice President, Secretary       March 26, 1998
Richard  F.  Schaden        and  Director


/s/ Brownell M. Bailey      Director                        March 26, 1998
Brownell  M.  Bailey



/s/ Mark L. Bromberg        Director                        March 26, 1998
Mark  L.  Bromberg


/s/ J. Eric Lawrence        Director                        March 26, 1998
J.  Eric  Lawrence

/s/ Frederick H. Schaden    Director                        March 26, 1998
Frederick  H.  Schaden


<PAGE>

/s/ John L. Gallivan        Chief Financial Officer         March 26, 1998
John  L.  Gallivan          and  Treasurer  (Principal 
                            Financial  and  Accounting
                            Officer)


<PAGE>
                           THE QUIZNO'S CORPORATION
                               AND SUBSIDIARIES

                     CONSOLIDATED FINANCIAL STATEMENTS AND
                         INDEPENDENT AUDITORS' REPORT
                       DECEMBER 31, 1997, 1996 AND 1995






                   THE QUIZNO'S CORPORATION AND SUBSIDIARIES




                               TABLE OF CONTENTS
                               -----------------

                                                                          Page
                                                                          ----

Independent  Auditors'  Report                                         F  -  1

Consolidated  Financial  Statements

     Consolidated  Balance  Sheets                                     F  -  2

     Consolidated  Statements  of  Operations                          F  -  3

     Consolidated  Statement  of  Stockholders'  Equity                F  -  4

     Consolidated  Statements  of  Cash  Flows                         F  -  5

Notes  to  Consolidated  Financial  Statements                         F  -  7




                         INDEPENDENT AUDITORS' REPORT



To  the  Board  of  Directors  and  Stockholders
The  Quizno's  Corporation  and  Subsidiaries
Denver,  Colorado

We  have  audited the accompanying consolidated balance sheets of The Quizno's
Corporation  and  Subsidiaries as of December 31, 1997, 1996 and 1995, and the
related  consolidated statements of operations, stockholders' equity, and cash
flows  for  the years then ended.  These consolidated financial statements are
the  responsibility  of  the  Company's  management.  Our responsibility is to
express  an  opinion  on  these consolidated financial statements based on our
audits.

We  conducted  our  audits  in  accordance  with  generally  accepted auditing
standards.    Those  standards  require that we plan and perform the audits to
obtain  reasonable  assurance  about  whether  the  consolidated  financial
statements are free of material misstatement.  An audit includes examining, on
a  test  basis,  evidence  supporting  the  amounts  and  disclosures  in  the
consolidated  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.
We  believe  that  our  audits  provide  a  reasonable  basis for our opinion.

In  our  opinion,  the  consolidated  financial  statements  referred to above
present  fairly,  in  all  material  respects,  the  financial position of The
Quizno's  Corporation  and Subsidiaries as of December 31, 1997, 1996 and 1995
and  the  results  of their operations and their cash flows for the years then
ended,  in  conformity  with  generally  accepted  accounting  principles.

As  disclosed  in Note 1 to the consolidated financial statements, the Company
changed  its  method  of  computing  earnings  per  share.




                                        /s/Ehrhardt Keefe Steiner & Hottman PC
                                           Ehrhardt Keefe Steiner & Hottman PC
February  20,  1998
Denver,  Colorado

                   THE QUIZNO'S CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                               December 31,
                                 ------------------------------------------
                                    1997            1996            1995
                                 -----------    -----------      ----------
<S>                                 <C>            <C>              <C>
                               ASSETS (NOTE 10)
Current  assets
 Cash and cash equivalents      $  561,287       $2,127,330      $1,684,422
 Short-term  investments           538,188               -               -
 Restricted  cash                       -            16,748          15,927
 Accounts  receivable, 
  net  of  allowance 
  for  doubtful  accounts
  of $38,231 (1997), 
  $51,077  (1996) 
  and  $11,777  (1995)
  (Note  8)                       545,109           363,602         276,522
 Current portion of 
   notes  receivable
   (Notes  3  and  8)             598,486           501,255         304,918
 Other  current  assets           375,902           147,856         155,973
 Assets  of  stores  held 
   for  resale  (Note  4)              -            116,229         144,499
 Stores  under  development
   (Note  4)                      593,675                 -              -
                                ---------         ----------      -----------
   Total  current  assets       3,212,647         3,273,020       2,582,261
                                ---------         ----------      -----------

Property  and  equipment  at
 cost, net (Notes 2 and 5)      2,164,898         1,458,979       1,083,476
                                ---------         ---------       ---------

Other  assets
 Intangible  assets,  net 
  (Notes  2  and  6)            1,727,400           557,483         537,149
 Deferred assets (Notes 7
   and 13)                        914,762           937,450         588,051
 Deposits  and other assets
  (Note 2)                         76,294            37,630          31,454
 Notes  receivables,
   net  (Notes  3  and  8)        734,495           575,222         528,484
                                ---------         ---------       ---------
   Total  other  assets         3,452,951         2,107,785       1,685,138
                                ---------        ----------      ----------

Total  assets                  $8,830,496        $6,839,784      $5,350,875
                                =========         =========       =========

                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current  liabilities
 Accounts  payable             $1,065,374        $1,053,028      $  713,446
 Accrued liabilities (Note 8)     489,848           170,728          53,168
 Line-of-credit  (Note  9)             -            100,000         160,000
 Current  portion  of 
  long-term  obligations 
  (Notes 8 and 10)                303,084           375,595         171,217
 Current  portion  of 
   subordinated  debt 
   (Note  10)                     110,912                -               -
 Provision  for  loss  on 
   stores  held  for
   resale  (Note 4)                    -                 -           58,000
                               -----------        ---------       ----------
   Total current liabilities    1,969,218         1,699,351       1,155,831

Line-of-credit  (Note  9)              -            120,239         215,505
Long-term  obligations 
  (Notes  8  and  10)             741,570           203,801         341,453
Convertible  subordinated 
  debt  (Note  10)              1,389,088         2,000,000              -
Other  liabilities                     -                 -           12,101
Deferred  revenue  (Note  8)    2,148,662         1,575,471       1,309,155
                               ----------        ----------      ----------
   Total  liabilities           6,248,538         5,598,862       3,034,045
                               -----------        ----------      ----------

Commitments  and  contingencies
  (Notes  4,  11  and  15)

Stockholders'  equity  (Notes 
 10  and  12)
 Preferred  stock,  $.001  par 
  value,  1,000,000  shares 
  authorized; Series A issued
  and  outstanding 146,000 in
  1997, 1996 and 1995 ($876,000
  liquidation  preference)            146              146             146
 Series  B  issued  and 
   outstanding  100,000  in
   1997 and 0 in 1996 and 1995
  ($500,000  liquidation 
  preference)                         100               -                -
 Series  C  issued  and  
  outstanding  167,000  in 
  1997 and 0 in 1996 and 1995
  ($835,000  liquidation
  preference)                         167               -                -
 Common  stock,  $.001  par 
  value;  9,000,000  shares 
  authorized; issued and
  outstanding,  2,923,294 
  in  1997,  2,864,757  in
  1996  and  1995                  2,923            2,865             2,865
 Capital  in  excess  of 
   par  value                  4,663,744        3,233,415         3,290,355
 Accumulated  deficit         (2,085,122)      (1,995,504)         (976,536)
                             -----------       -----------       ---------
     Total  stockholders'
      equity                   2,581,958        1,240,922         2,316,830
                             -----------       ----------        ----------

Total liabilities and
 stockholders' equity         $8,830,496       $6,839,784        $5,350,875
                              ==========       ==========        ==========
</TABLE>
                          See notes to consolidated financial statements.


<PAGE>
                    THE QUIZNO'S CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                      For the Year Ended December 31,
                              ---------------------------------------------
                                  1997             1996             1995
                              ------------    --------------   ------------
<S>                              <C>               <C>              <C>

Franchise  operations:
 Revenue  (Note  8)
   Royalty  fees               $ 2,747,955      $ 1,590,673      $ 1,046,329
   Initial  franchise  fees      2,269,001        1,164,500          593,350
   Area  director marketing
     fees                        2,139,080        1,421,555        1,379,640
   Other                           593,771          248,094          208,776
   Interest  revenue               137,640          149,781          147,277
                                 ---------        ---------         --------
     Total  revenue              7,887,447        4,574,603        3,375,372
                                ----------        ---------        ---------

 Expenses
   Sales and royalty 
    commissions                 (2,346,476)        (914,726)        (253,173)
   Advertising and promotion      (245,953)        (239,209)         (79,074)
   General  and  administrative
    (Note  8)                   (4,611,978)      (3,400,802)      (2,713,258)
                                 ---------        ---------        ---------
     Total  expenses            (7,204,407)      (4,554,737)      (3,045,505)
                                 ---------        ---------        ---------

Income  from  franchise 
  operations                       683,040           19,866          329,867
                                  --------          -------         --------

Company  store  operations:
 Sales  by  Company  owned  
  stores  expenses               4,070,666        2,680,521        3,011,195
                                 ---------        ---------        ---------
 Cost  of  sales  at  Company
   stores                       (1,309,624)        (959,045)      (1,006,317)
 Cost  of  labor  at  Company
   stores                       (1,037,101)        (777,170)        (894,217)
 Other  Company  store
   expenses                     (1,432,290)        (857,472)      (1,178,287)
                                -----------       ---------       ----------
     Total  expenses            (3,779,015)      (2,593,687)      (3,078,821)
                                -----------      -----------      -----------

Income  (loss)  from  Company
  stores  operations               291,651           86,834          (67,626)

Other  income  (expenses):
 Research  and  development 
   and  new  programs
   Direct  retail  advertising      (3,053)        (120,936)              -
   Research  and  development      (69,108)         (17,295)        (10,564)
   Non-traditional development
    program                              -          (79,090)              -
 Other
   Sales  by  stores  held 
     for  resale                   149,549          231,371         142,525
   Loss  and  expenses 
    related  to  stores
    held  for  sale               (210,222)        (307,813)       (262,964)
   Loss  on  sale  or 
    closure  of  Company
    stores                        (120,928)              -               -
   Provision  for  litigation
    settlement                          -          (134,500)             -
   Provision  for  bad  debts      (49,540)        (224,063)        (13,780)
   Other  expenses                 (64,544)        (104,844)        (43,625)
   Depreciation and amortization  (406,444)        (288,435)       (253,459)
   Interest  expense              (290,019)         (80,063)       (111,946)
                                ----------           --------       ---------
     Total  other expenses      (1,064,309)      (1,125,668)       (553,813)
                               -----------       -----------       ---------

Net  loss                          (89,618)      (1,018,968)       (291,572)
Preferred  stock  dividends        (93,998)         (56,940)        (56,940)
                                  --------       --------       --------

Net  loss  applicable  to  
 common  stockholders          $  (183,616)     $(1,075,908)     $ (348,512)
                               ===========      ===========      ==========

Basic  net  loss  per share
  of common stock              $      (.06)     $      (.38)     $    (.12)
                               ===========      ===========      =========

Weighted  average  common
   shares  outstanding           2,878,310        2,864,757      2,863,130
                                ==========       ==========      =========
</TABLE>
                         See notes to consolidated financial statements.
<PAGE>

                  THE QUIZNO'S CORPORATION AND SUBSIDIARIES               

                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>

                                    Convertible
                                  Preferred Stock           Common Stock
                               ---------------------    --------------------
                                 Shares     Amount       Shares     Amount
                               ---------  ----------    --------  ----------
<S>                               <C>         <C>           <C>       <C>

Balance, December 31, 1994      146,000      $  146     2,860,000   $2,860  

Issuance  of  common  stock
 in exchange for general
 partnership  interest               -            -         2,500        3

Purchase  price  paid  for 
  Quiz  One  Limited
  Partnership  general
  partner's interest  over 
  historical  book  value            -            -             -        -   

Issuance  of  common  stock 
 pursuant  to  employee 
 benefit  plan                       -            -          2,257       2

Preferred  stock dividends           -            -             -         -  

Net  loss                            -            -             -         -   
                                ----------   ----------   ----------  --------

Balance, December 31, 1995       146,000         146     2,864,757      2,865 

Preferred  stock dividends           -            -             -         - 

Net  loss                            -            -             -         -   
                                 ---------   -----------  ----------   ---------

Balance,  December  31, 1996     146,000         146    2,864,757       2,865 

Issuance  of  convertible
 Series  C preferred stock 
 for cash, net of offering
 costs  of  $36,454  (Note 12)   167,000         167           -            - 

Issuance  of  Series  B  
 convertible preferred stock 
 for debt, net of offering
 costs  of  $44,277  (Note  10)  100,000         100           -            - 

Inherent  value of warrants
 granted to lender in connection
 with conversion at debt  to 
 Series  B  preferred  stock 
 (Note  10)                           -            -           -            -

Issuance  of  common  stock 
 for  acquisition,  (Note  2)         -             -       18,182         18 

Issuance  of common stock for
 exercise of options and 
 pursuant to the employee
 benefit  plan  (Note  12)            -             -       40,355         40

Inherent  value  of  options
  granted  to  area  directors 
 (Note  12)                           -             -            -          -

Preferred  stock  dividend            -             -            -          -

Net  loss                             -             -            -          -
                                --------      ---------   ------------  --------

Balance, December 31, 1997       413,000        $  413       2,923,294   $2,923
                                ========      =========   =============  =======
</TABLE>

                            See notes to consolidated financial statements.



Stockholders' Equity continued below


<TABLE>
<CAPTION>
                                       Additional
                                         Paid-in          Accumulated
                                         Capital            Deficit
                                      ------------       -------------
<S>                                       <C>                 <C>

Balance, December 31, 1994              $3,339,495          $   (684,964)

Issuance of common stock in 
 exchange for general partnership
 interest                                    9,997                    -

Purchase price paid for Quiz One
 Limited Partnership general
 partner's interest over historical
 book value                                (10,000)                   -

Issuance of common stock pursuant
 to employee benefit plan                    7,803                    -

Preferred stock dividends                  (56,940)                   -

Net loss                                        -               (291,572)
                                         -------------       -------------

Balance, December 31, 1995                3,290,355             (976,536)

Preferred stock dividends                   (56,940)                  -

Net loss                                         -            (1,018,968)
                                         --------------      -------------

Balance, December 31, 1996                3,233,415           (1,995,504)

Issuance of convertible Series
 C preferred stock for cash,
 net of offering costs of 
 $36,454 (Note 12)                          798,379                  -

Issuance of Series B convertible
 preferred stock for debt,
 net of offering costs of
 $44,277 (Note 10)                          455,623                  -

Inherent value of warrants
 granted to lender in connection
 with conversion at debt to 
 Series B preferred stock
 (Note 10)                                   44,277                  -

Issuance of common stock for
 acquisition (Note 2)                        99,982                  -

Issuance of common stock for
 exercise of options and 
 pursuant to the employee
 benefit plan (Note 12)                      92,116                  -

Inherent value of options
 granted to area directors
 (Note 12)                                   33,950                  -

Preferred stock dividend                    (93,998)                 -

Net loss                                         -               (89,618)
                                            ---------           -----------

Balance, December 31, 1997               $4,663,744          $(2,085,122)
                                         ============         ============
</TABLE>


<PAGE>

                  THE QUIZNO'S CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                     For the Year Ended December 31,
                             ---------------------------------------------
                             1997                 1996              1995
                             ------             --------          --------
<S>                             <C>               <C>                <C>
Cash  flows  from  operating  activities
 Net loss                 $  (89,618)          $(1,018,968)      $ (291,572)
                          ------------        -------------       -----------
 Adjustments  to  reconcile
  net loss to net cash
  provided (used) by operating
  activities  -
   Depreciation  and 
    amortization             406,444               259,840          253,459
   Provision  for  losses 
    on  accounts  and
    notes receivable         (12,846)              179,300            7,077
   Loss  on  disposal 
    of  asset                120,928                44,648          189,463
   Reserve  for  closure 
    losses                        -                     -            35,000
   Issuance  of  stock 
     for  services            16,349                    -             7,805
   Inherent  value  of
     options  granted         33,950                    -                -
   Amortization  of  deferred
    financing costs           54,072                    -                -
   Issuance  of notes
    receivable for area
    director agreements     (354,412)             (236,407)        (208,594)
   Changes  in  assets 
    and  liabilities  -
     Restricted  cash         16,748                  (821)          14,353
     Accounts  receivable   (168,661)             (126,380)        (146,470)
     Other  current assets  (209,745)                8,117          (69,911)
     Accounts  payable        12,346               339,582          334,597
     Accrued  liabilities    319,120               117,560            5,208
     Other  liabilities           -                (12,101)          (8,591)
     Deferred franchise
       costs                   6,085              (231,650)        (249,553)
     Deferred initial 
      franchise fees         573,191               266,316          446,838
                            --------               --------         --------
                             813,569               608,004          610,681
                            --------               --------         ---------
      Net cash provided
       (used) by operating
        activities           723,951              (410,964)         319,109
                            --------             ---------          --------

Cash  flows  from 
  investing  activities
 Cash paid in 
   acquisition             (623,800)                   -                  -
 Purchase  of  property 
   and  equipment          (764,184)             (626,157)        (869,926)
 Proceeds  from  notes  
  receivable                553,007               273,421           24,680
 Investment  in 
   turnkey  stores         (593,675)                   -                 -
 Short-term  investments   (538,188)                   -                 -
 Issuance  of  other 
   notes  receivable       (455,099)             (305,089)         (75,474)
 Intangible  assets        (294,853)              (72,366)        (153,008)
 Proceeds  from  sale 
   of  asset  and stores    135,000                13,716          119,460
 Deposits                   (38,665)               (6,176)          12,130
 Payments  of  obligation
  associated  with  stores
  held  for resale               -                     -          (236,000)
 Provision  for  store
   closure                       -                (58,000)              -
                            --------            -----------       ----------
       Net cash used by 
        investing 
        activities        (2,620,457)            (780,651)      (1,178,138)
                           -----------          -----------      ----------

Cash  flows  from 
 financing  activities
 Line-of-credit  -  net     (220,239)            (155,266)        (115,001)
 Principal payments on
   long-term obligations    (347,799)            (196,099)        (397,183)
 Proceeds  from long-term 
  obligations                155,615            2,160,577                -
 Loan  costs                 (37,469)            (117,749)               -
 Proceeds  from  issuance
   of  common stock and 
  preferred stock            910,807                   -                 -
 Offering  costs             (36,454)                  -                 -
 Dividends  paid             (93,998)             (56,940)         (56,940)
                            ---------             ---------          --------
       Net  cash  provided
        (used)  by  
        financing 
        activities           330,463            1,634,523         (569,124)
                            ---------           ----------        ----------

Net  (decrease)  increase
  in  cash  and  cash
  equivalents             (1,566,043)             442,908       (1,428,153)

Cash  and cash
  equivalents - beginning
  of year                  2,127,330            1,684,422        3,112,575
                          ----------            ---------        ----------

Cash  and  cash 
 equivalents  -  end 
 of year                  $  561,287         $  2,127,330      $ 1,684,422
                         ==============        ===========      ===========
</TABLE>


Supplemental  disclosure  of  cash  flow  information
   Cash  paid  during  the  year  for  interest was $290,019 (1997), $80,063
   (1996)  and  $111,946  (1995).

Supplemental  disclosure  of  non-cash  investing  and  financing  activities
   During  1997,  the  Company  converted  $500,000  of subordinated debt to
   100,000  shares  of  Series  B  convertible  preferred stock net of $44,277
   of deferred  offering  costs.

   Additionally,  the  Company  acquired the assets of Bain's Deli Franchise
   Associates,  which  included  59  franchise deli restaurants and three 
   company owned  deli  restaurants  as  follows:

<TABLE>
<CAPTION>
<S>                                       <C>
 Property  and  equipment            $    225,000
 Non-compete  agreement                 1,060,000
 Other  assets                            122,900
                                        ---------
                                     $  1,407,900
                                        =========

 Acquisition  costs                  $   (104,600)
 Cash  paid                              (623,800)
 Promissory  note  issued                (579,500)
 Common  stock  issued                   (100,000)
                                        ---------
                                     $ (1,407,900)
                                        =========
</TABLE>
During  1997,  1996  and  1995, the Company acquired assets under capital
leases  totaling  $77,942,  $24,841  and  $27,581,  respectively.

During  1996,  the Company sold a restaurant to a franchisee for $115,000
plus $20,000 for a franchise fee.  The franchise fee was paid in cash with the
remaining  $115,000  to  be  paid in the future pursuant to a promissory note.
The  net  book  value  of  the assets sold was $155,000 resulting in a loss of
$40,000  in  the  current  year.

During 1996, the Company purchased three existing stores from franchisees
resulting  in  goodwill  of  $77,407  for  a  note  payable.

During  the  fourth quarter of 1996 and 1995, the Company offered a store
for  resale and reclassified $116,229 and $144,499, respectively, of property
and  equipment  as  assets  held for resale.  During 1996,  the 1995 store was
taken off the market and the $144,499 property and equipment were reclassified
back  into  operating  assets.    The  1996  store  was  sold  in  1997.

During  the first quarter of 1995, the Company issued 2,500 shares of its
$.001  par value common stock to Berger Restaurant Corporation in exchange for
the general partner's interest in Quiz One Limited Partnership owned by Berger
Restaurant  Corporation.    The shares and the general partner's interest were
valued  at  $10,000.

During  the  second  quarter of 1995, the Company sold two restaurants to
franchisees for $114,000 of which $30,000 was paid in cash, $49,000 to be paid
in  the  future  pursuant to a promissory  note, and $35,000 to be paid in the
future upon the renewal of the franchisee's franchise agreement.  The net book
value  of the assets sold was $281,650, resulting in a loss of $167,650, which
had  been  accrued  and  reserved  for  in  1994.

During  the fourth quarter of 1995, the Company sold three restaurants to
franchisees  for  $455,000  of  which $75,000 was paid in cash, $380,000 to be
paid  in  the  future pursuant to promissory notes.  The net book value of the
assets  sold  was  $473,278,  resulting  in  a  loss  of  $18,278.


                   See notes to consolidated financial statements.
<PAGE>


                       THE QUIZNO'S CORPORATION AND SUBSIDIARY

                      Notes to Consolidated Financial Statements

NOTE  1  -  DESCRIPTION  OF  BUSINESS  AND  SUMMARY  OF SIGNIFICANT ACCOUNTING
------------------------------------------------------------------------------
POLICIES
--------

The Quizno's Corporation (The Company) was incorporated on January 7, 1991, in
the State of Colorado, and is primarily engaged in the business of franchising
Quizno's  quick  service  restaurants  throughout the United States and Canada
featuring  submarine  sandwiches,  salads,  soups,  and  refreshments.

The  Company's  wholly  owned  subsidiaries are The Quizno's Operating Company
(QOC)  incorporated  in  1994  to own and operate Company stores, The Quizno's
Development  Company  (QDC)  incorporated in 1995 to develop stores to sell or
lease  to  franchisees, The Quizno's Realty Company (QRC) incorporated in 1995
to  execute  leases  for  store  locations,  and  The  Quizno's  Acquisition
Corporation  (QAC)  incorporated  in 1997 to purchase existing unrelated quick
service  restaurants.

The  following  table  summarizes  the  number of Quizno's restaurants open at
December  31,  1997:

<TABLE>
<CAPTION>
                           Sold But Not
                              Yet in
                             Operation          Operational          Total
                             ---------          -----------          -----
<S>                             <C>                 <C>               <C>
Quizno's
--------
Company Owned Restaurants        -                  18                18
Franchise  Restaurants         142                 257               399

Bain's
------
Company  Owned  Restaurants      -                   3                3
Franchise  Restaurants           -                  49               49
                               ---                 ----             ----

                               142                 327              469
                               ====               ====             ====
</TABLE>

Principles  of  Consolidation
-----------------------------

The  consolidated financial statements include the accounts of The Company and
its  wholly  owned subsidiaries QOC, QDC, QRC, QAC and a 52% owned subsidiary,
Classic Subs LLC.  The minority interest in Class Subs LLC was reduced to zero
in previous years due to losses incurred by Classic Subs LLC.  All significant
intercompany  transactions  have  been  eliminated.

Cash  and  Cash  Equivalents
----------------------------

The Company considers all highly liquid instruments purchased with an original
maturity  of  three  months  or  less  to  be  cash  equivalents.

Inventory
---------

Inventory  is  included  in other assets and is stated at the lower of cost or
market  and consists of food and paper products.  Cost is determined using the
first  in,  first  out  (FIFO)  method.

<PAGE>


NOTE  1  -  DESCRIPTION  OF  BUSINESS  AND  SUMMARY  OF SIGNIFICANT ACCOUNTING
------------------------------------------------------------------------------
POLICIES  (CONTINUED)
---------------------

Credit  Risk
------------

The  Company  grants  credit  in  the  normal  course  of  business, primarily
consisting  of  royalty fees receivable and loans to area directors and to its
franchisees  throughout  the United States and Canada.  To reduce credit risk,
the Company electronically debits the franchisees bank account weekly for fees
due the Company according to franchise agreements entered into after 1993, and
reserves  the  right  to  terminate franchise and area director agreements for
non-payment  of  amounts  owed.

The  Company's  cash  equivalents consists of short-term commercial paper with
original  maturities  not  in excess of three months.  The Company continually
monitors  its  positions  with,  and  the  credit  quality  of,  the financial
institutions  it  invests with.  In addition, the Company limits the amount of
credit  exposure  with  any  one  institution.

Short-term  Investments
-----------------------

The  Company  classifies  its  investment  in  corporate  debt securities with
original  maturities  in  excess  of  three  months  as short-term investments
held-to-maturity.    The  Company  has  the  ability  and intent to hold these
securities  until  maturity.

Short-term  investments  are  recorded  at  amortized  cost,  adjusted for the
amortization or accretion of premiums or discounts.  Realized gains and losses
are  recognized  in  earnings  upon  redemption.   The specific identification
method  is  used  to  determine  the  cost  of  securities sold.  Discounts or
premiums  are  accreted  or amortized using the level-interest-yield method to
the  earlier  of  the  call  date  or  maturity  of  the  related  security.

During  1997,  unrealized  gains  and losses were immaterial as amortized cost
approximated  market  value.

Accounts  Receivable/Royalties  Receivable
------------------------------------------

At  the time the accounts and royalties receivable are originated, the Company
considers a reserve for doubtful accounts based on the creditworthiness of the
franchisee.    The provision for uncollectible amounts is continually reviewed
and adjusted to maintain the allowance at a level considered adequate to cover
future  losses.   The allowance is management's best estimate of uncollectible
amounts  and is determined based on historical performance which is tracked by
the  Company on an ongoing basis.  The losses ultimately incurred could differ
materially  in  the  near  term  from the amounts estimated in determining the
allowance.

<PAGE>


NOTE  1  -  DESCRIPTION  OF  BUSINESS  AND  SUMMARY  OF SIGNIFICANT ACCOUNTING
------------------------------------------------------------------------------
POLICIES  (CONTINUED)
---------------------

Property  and  Equipment
------------------------

Property  and  equipment is stated at cost.  Equipment under capital leases is
valued  at  the lower of fair market value or net present value of the minimum
lease  payments at inception of the lease.  Depreciation is provided utilizing
the  straight-line  method  over  the estimated useful lives for owned assets,
ranging  from  3  to  10  years,  and  the  related  lease  term for leasehold
improvements  and  equipment  under  capital  leases.

Deferred  Financing  Costs
--------------------------

Cost  associated with obtaining debt financing are deferred and amortized on a
straight-line  basis  over  the  term  of  the  debt.

Intangible  Assets
------------------

The  amount paid by the Company for non-compete agreements are being amortized
over  the  term  of  the  non-compete  agreements.

The excess of the purchase price over net assets acquired for stores purchased
by  the  Company  from  unrelated third parties is recorded as goodwill and is
amortized  over  15  years.

Other  intangibles are recorded at cost and are amortized on the straight-line
basis  over  the  contractual  or  estimated  useful  lives  as  follows:

Franchise  agreements                             12     years
Trademarks  and  other  intangibles                3-15  years

Long-Lived  Assets
------------------

The  Company  reviews  its long-lived assets for impairment whenever events or
changes  in  circumstances  indicate that the carrying amount of the asset may
not be recovered.  The Company looks primarily to the undiscounted future cash
flows  in  its  assessment  of  whether  or  not  long-lived  assets have been
impaired.  At December 31, 1997 and 1996, the Company determined no impairment
was  appropriate.

Initial  Franchise  Fees  and  Related  Franchise  Costs
--------------------------------------------------------

Management  believes  it  is  probable that all of the deferred franchise fees
will  be  realized.    The  amount  of  the deferred franchise fees considered
realizable,  however,  could  be  reduced in the near term if estimates of the
future  franchise  openings  is  reduced.

<PAGE>


NOTE  1  -  DESCRIPTION  OF  BUSINESS  AND  SUMMARY  OF SIGNIFICANT ACCOUNTING
------------------------------------------------------------------------------
POLICIES  (CONTINUED)
---------------------

Initial  Franchise  Fees  and  Related  Franchise  Costs  (continued)
---------------------------------------------------------------------

Initial  franchise  fees  are recognized as revenue when all material services
and conditions required to be performed by the Company have been substantially
completed,  which  is  generally  when  the  franchise  commences  operations.
Initial  franchise  fees collected by the Company before all material services
and  conditions  are substantially performed is recorded as deferred franchise
sales  revenue.  Incremental development costs are deferred, but not in excess
of  the  deferred  revenue and estimated cost to open the Quizno's restaurant,
and  are  expensed  when  the  revenue  is  recognized.

Area  Director  Marketing  Agreements
-------------------------------------

The  area director marketing agreement provides the area director an exclusive
right  to  sell  and  open  franchises  in  a defined geographic territory and
requires that the area director be responsible for advertising for, soliciting
and  screening  prospective franchisees.  The agreements also require the area
director to sell and open a minimum of new franchised restaurants each year or
to  forfeit future rights to the territory.  In addition, the area director is
responsible  for  identifying  possible  locations,  providing on-site opening
assistance,  and  providing  quality  assurance  services to franchises in the
defined area.  The Company pays the area director 50% of the initial franchise
fee sold by the area director, and a fee of 40% of the royalty received by the
Company from each franchise within the defined area.  The agreements are for a
period  of  ten  years, with the option to extend for an additional ten years.
The  area director is entitled to receive commissions for a period of 15 years
following  the  opening  of  each  franchised  Restaurant, notwithstanding the
expiration  of the area director agreement (unless the area director agreement
is terminated upon the occurrence of an event of default).  Upon expiration of
the agreement, the commission paid is reduced to 1% of sales for the remainder
of the 15 years.  The area director marketing fee is $.06 per person living in
the  area  director's territory, plus a $15,000 training fee which is deferred
until  training  has  been  completed.    Subsequent  to year end, the Company
increased  the  marketing fee to $.07 per person living in the area.  Revenues
are  recognized  when  all  material  services  and  conditions required to be
performed  by  the  Company  have  been  substantially  completed.

<PAGE>
------


NOTE  1  -  DESCRIPTION  OF  BUSINESS  AND  SUMMARY  OF SIGNIFICANT ACCOUNTING
------------------------------------------------------------------------------
POLICIES  (CONTINUED)
---------------------

Royalties  and  Advertising  Fees
---------------------------------

Pursuant  to  the various franchise agreements, franchises are required to pay
the  Company  royalties  and  advertising  fees based on a percentage of sales
ranging  from  4%  to  8%  for  royalties,  and 1% to 4% for advertising fees.

Royalties  as  allowed  by  the  franchise  agreement  are  accrued based on a
percentage  of  gross  sales,  as  reported by franchisees and are included in
accounts  receivable.

The Company does not recognize any portion of the advertising fees as revenue,
nor  does  it  accrue  such  fees  or  consolidate  the accounts of any of the
advertising  funds  as  they  are  paid to and disbursed out of separate legal
advertising  trusts.

Income  Taxes
-------------

The  Company  calculates and records the amount of taxes payable or refundable
currently  or  in  future  years  for  temporary  differences  between  the
consolidated  financial  statement  basis  and  income  tax basis based on the
current  enacted  tax laws.  Temporary differences are differences between the
tax  basis  of  assets  and  liabilities  and  their  reported  amounts in the
consolidated  financial  statements  that will result in taxable or deductible
amounts in future years.  The Company's temporary differences result primarily
from  depreciation,  deferred  franchise sales revenues and deferred franchise
costs  and  net  operating  loss  carryforwards.

Basic  and  Diluted  Loss  Per  Common  Share
---------------------------------------------

During the year ended December 31, 1997, the Company adopted the provisions of
Statement  of Financial Accounting Standard No. 128, "Earnings Per Share" (FAS
128).    FAS  128  established  new definitions for calculating and disclosing
basic  and  diluted earnings per share.  In accordance with FAS 128, all prior
periods  have  been  restated to conform to the new methodology.  The restated
amounts  did  not  differ  materially  from  amounts  previously reported.  No
diluted  earnings  per  share  is  presented  as all potential dilutive common
shares  are  antidilutive.

Use  of  Estimates
------------------

The  preparation  of  consolidated  financial  statements  in  conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure  of  contingent  assets  and  liabilities  at  the  date  of  the
consolidated  financial  statements  and  the reported amounts of revenues and
expenses  during the reporting period.  Actual results could differ from those
estimates.

<PAGE>


NOTE  1  -  DESCRIPTION  OF  BUSINESS  AND  SUMMARY  OF SIGNIFICANT ACCOUNTING
------------------------------------------------------------------------------
POLICIES  (CONTINUED)
---------------------

Fair  Value  of  Financial  Instruments
---------------------------------------

The  carrying  amounts  of  financial  instruments  including  cash  and  cash
equivalents, short-term investments, receivables, prepaids, current portion of
notes  receivable,  accounts  payable  and  accrued expenses approximated fair
value  as  of  December  31,  1997 because of the relatively short maturity of
these  instruments.

The  carrying  amounts of long-term notes receivable approximate fair value as
of  December  31,  1997  because  the  discounted  cash flows at current rates
approximate  the  rates  of  the  notes.

The  carrying  amounts of notes payable and debt issued approximate fair value
as  of  December  31,  1997  because  interest  rates  on  these  instruments
approximate  market  interest  rates.

Reclassifications  of  Prior  Year  Amounts
-------------------------------------------

Certain  reclassifications  have been made to the balances for the years ended
December  31, 1996 and 1995 to make them comparable to those presented for the
year ended December 31, 1997, none of which change the previously reported net
income  or  total  assets.


NOTE  2  -  ACQUISITION  OF  ASSETS
-----------------------------------

In  November  1997,  the Company purchased the assets of Bain's Deli Franchise
Associates.    The  results  of operations of Bain's Deli Franchise Associates
from  the  effective  date to December 31, 1997 have been included in the 1997
consolidated  financial  statements.    The acquisition has been accounted for
under  the  purchase  method  of  accounting.

The  aggregate purchase price has been allocated to the assets purchased based
on  the  fair  market  values  at  the  date  of  acquisition,  as  follows:

<TABLE>
<CAPTION>
<S>                                    <C>
 Property  and  equipment            $    225,000
 Non-compete  agreement                 1,060,000
 Other  assets                            122,900
                                        ---------

   Net  assets  acquired             $  1,407,900
                                        =========

 Acquisition  costs                  $    104,900
 Fair value of common stock issued        100,000
 Promissory  note  issued                 579,000
 Cash  paid                               624,000
                                        ---------

 Total  payment                      $  1,407,900
                                        =========
</TABLE>

<PAGE>


NOTE  2  -  ACQUISITION  OF  ASSETS  (CONTINUED)
------------------------------------------------

The common stock issued in the acquisition was recorded at the market value of
the  stock  at  the  date  of  the  acquisition  which  was  $5.50  per share.

No  pro  forma statement of operations is presented as the effect would not be
material  to  the  Company's  operations.


NOTE  3  -  NOTES  RECEIVABLE
-----------------------------

Notes  receivable  consist  of  the  following:

<TABLE>
<CAPTION>

                                               December  31,
                                 -----------------------------------------
                                 1997              1996              1995
                                 ------          --------          --------
<S>                                <C>             <C>                 <C>
Notes  receivable  related  to
 area  director  marketing
 agreements, interest
 ranging  from  0%  to  15%, 
 due  in  varying  amounts 
 through  January 2003.        $   853,028      $  453,135       $    241,697

Notes  receivable  for sale 
 of stores, interest ranging
 from 8% to 15%, due in
 varying  amounts through 
 October 2007.  $265,000 is
 in default and the Company
 has  filed  a  suit  to  
 collect.                          494,318         434,383            464,000

Other  notes  receivable  with
 interest ranging from 0% to 
 15%, due in varying amounts 
 through  2011.    Includes
 $35,524  (1997)  and  
 $178,444 (1996) and $95,447 
 (1995)  due  from  the 
 Advertising  Fund  (Note  8).    125,635          328,959            127,705
                                 --------        ----------          ---------
                                1,472,981        1,216,477            833,402
 Less  current  portion          (598,486)        (501,255)          (304,918)
                                ----------       ---------          ---------
                                  874,495          715,222            528,484
 Less  allowance                 (140,000)        (140,000)                -
                                ----------        ----------         --------

                               $  734,495      $   575,222         $  528,484
                               ==========       ==========         ==========
</TABLE>

At  the  time notes receivable are executed, the Company reserves an allowance
for  doubtful  collections.    The  provision  for  uncollectible  amounts  is
continually  reviewed  and  adjusted  to  maintain  the  allowance  at a level
considered  adequate  to  cover  future losses.  The allowance is management's
best  estimate  of uncollectible amounts and is determined based on historical
performance  of the notes which is tracked by the Company on an ongoing basis.
The  losses  ultimately incurred could differ materially in the near term from
the  amounts  estimated  in  determining  the  allowance.    The  Company
collateralizes  the  notes with the Area Directorship agreement, assets of the
store  sold  or  other  related  assets.

<PAGE>


NOTE  3  -  NOTES  RECEIVABLE  (CONTINUED)
------------------------------------------

Future  principal  payments  are  as  follows:

<TABLE>
<CAPTION>
<S>                                        <C>
 Year  Ended  December  31,
 --------------------------

 1998                               $    598,486
 1999                                    175,010
 2000                                    153,148
 2001                                    162,107
 2002                                    270,312
 Thereafter                              113,918
                                       ---------
                                       1,472,981
 Less  allowance                        (140,000)
                                      ----------

                                  $    1,332,981
                                      ==========
</TABLE>


NOTE 4 - RESERVE FOR LOSSES ON STORES HELD FOR RESALE AND INVESTMENT IN STORES
------------------------------------------------------------------------------
UNDER  DEVELOPMENT
------------------

Reserve  for  Losses  on  Stores  Held  for  Resale
---------------------------------------------------

At  December  31,  1996  and  1995, the Company identified one and two Company
owned  stores for closure or sale in 1997 and 1996, respectively.  At December
31, 1996, the Company had a signed letter-of-intent relating to the store held
for  sale  which  was  in  excess of the carrying amount of the stores assets,
therefore  no  impairment  was  recorded.    During 1996 and 1995, the Company
impaired the carrying value of the assets to their estimated realizable value.

Included  in  assets  of  stores  to  be  sold  or  closed  are the following:

<TABLE>
<CAPTION>

                                                December  31,
                                  -------------------------------------------
                                   1997              1996              1995
                                  -------          --------          --------
<S>                                <C>               <C>               <C>
 Furniture fixtures and equipment  $  -          $  29,999          $  36,961
 Leasehold  improvements              -             81,673            107,538
 Goodwill                             -              4,557                -
                                  --------         -------            -------

                                   $  -          $ 116,229          $ 144,499
                                  ========         =======            =======
</TABLE>

<PAGE>


NOTE 4 - RESERVE FOR LOSSES ON STORES HELD FOR RESALE AND INVESTMENT IN STORES
------------------------------------------------------------------------------
UNDER  DEVELOPMENT  (CONTINUED)
-------------------------------

The  provision  for  loss  on  stores  held  for  resale  is  comprised of the
following:

<TABLE>
<CAPTION>
                                                   December  31,
                                -------------------------------------------
                                 1997              1996                1995
                                ------          --------          ----------
<S>                              <C>                <C>               <C>
 Impairment  of  assets 
   held  for  sale              $    -            $  -                 $  -
 Reserve  for  costs  
  associated  with  the
  termination of the 
  facility leases                    -               -                58,000
                                --------          ---------         --------

                                $    -            $  -              $ 58,000
                                 ======            ======            ========
</TABLE>

The  operating  losses  associated  with  these  stores  for the periods ended
December  31,  1996  and  1995 were $85,838 and $67,889, respectively, and are
included  in  the loss and provision for loss on stores held for resale in the
accompanying  consolidated  financial  statements.

In  1995, the Company sold one store in Denver and two stores in Detroit for a
net  loss  of  $43,625.    $14,117  of the loss related to the store in Denver
operated by the Company for two months.  The balance of the loss is applicable
to  the  two  stores  in Detroit.  The two Detroit stores were acquired, along
with  the  area  directorship  for  Detroit,  in connection with the Company's
purchase  of  Quiz  One  Limited  Partnership  in  1994.    The  Detroit  area
directorship  was  resold for $147,000 in the fourth quarter of 1995, the same
quarter  the  two  Detroit stores were sold at a loss, resulting in a combined
net  gain  of  $117,492.

Investment  in  Stores  Under  Development
------------------------------------------

During  1997, the Company used approximately $593,000 of the proceeds from the
subordinated  debt  to construct and develop four stores.  Three of the stores
were  complete  at  December  31,  1997 and are being operated by the Company.
When  a store is completed, the Company will operate the store until such time
as  the  store  can be sold as a franchise.  At December 31, 1997, the Company
had  expected  to  sell  stores for amounts in excess of their carrying value.

<PAGE>


NOTE  5  -  PROPERTY  AND  EQUIPMENT
------------------------------------

Property  and  equipment  consist  of  the  following:
<TABLE>
<CAPTION>


                       Useful                            December  31,
                                       -------------------------------------
                       Life              1997           1996            1995
                      ------          --------          --------      --------
<S>                    <C>              <C>               <C>          <C>

 Equipment          3-10 years      $  903,371      $  267,061      $  227,581
 Furniture and
   fixtures        7-10  years         390,435         271,727         195,590
 Leasehold 
  improvements      Lease term 
                     (Note  11)      1,297,334       1,138,461         804,866
                                    -----------      ---------      -----------
                                     2,591,140       1,677,249       1,228,037
 Less  accumulated  depreciation
   and  amortization                  (426,242)       (218,270)       (144,561)
                                      ---------     ----------      -----------

 Net  property  and  equipment      $2,164,898      $1,458,979      $1,083,476
                                     =========       =========       =========
</TABLE>


NOTE  6  -  INTANGIBLE  ASSETS
------------------------------

Intangible  assets  consist  of  the  following:

<TABLE>
<CAPTION>

                                                    December  31,
                                          --------------------------------
                                          1997          1996          1995
                                          ------      --------    --------
<S>                                         <C>         <C>          <C>

 Covenants  not  to  compete         $  1,664,759      $  500,113  $  500,113
 Franchise  agreements                    292,395         292,395     292,395
 Goodwill  (Note  14)                     126,705          77,407           -
 Trademarks  and  other                   305,628         183,885     159,141
                                        ---------        --------    --------
                                        2,389,487       1,053,800     951,649
 Less accumulated amortization           (662,087)       (496,317)   (414,500)
                                        ---------       ---------    ---------

                                       $1,727,400      $  557,483  $  537,149
                                        =========       ========== ==========
</TABLE>

<PAGE>


NOTE  7  -  DEFERRED  ASSETS
----------------------------

Deferred  assets  consist  of  the  following:
<TABLE>
<CAPTION>


                                                 December  31,
                                   ----------------------------------------
                                   1997              1996              1995
                                   ------          --------          --------
<S>                                 <C>              <C>               <C>
 Deferred  franchise  costs         $  638,616      $  644,701     $  413,051
 Deferred  tax  asset (Note 13)        175,000         175,000        175,000
 Deferred  financing  costs            101,146         117,749            -
                                     ---------       ---------        --------

                                     $ 914,762      $  937,450     $  588,051
                                    ==========       =========        ========
</TABLE>

NOTE  8  -  RELATED  PARTY  TRANSACTIONS
----------------------------------------

The  Company  has  notes  receivable  from  the  Advertising  Fund of $35,524,
$178,144  and  $95,447 at December 31, 1997, 1996 and 1995, respectively.  The
balances  relate  to  an  off  season  build-up  for  advertising and which is
reimbursed  to  the Company in the subsequent year.  At December 31, 1996, the
Company  had  a  $44,555 non-interest bearing note due to the Advertising Fund
which  was  paid  off  in  1997.

In  1995  the  Company  sold  the  Detroit  Area  Directorship  to  a majority
stockholder  of the Company for $150,000 paid in cash.  The Company recognized
$147,000 in 1995 for area director revenue, net of $3,000 for future marketing
services  to  be  provided  by  the  Company.

Two  directors  of  the Company own more than 50% of the outstanding shares of
Illinois  Food  Managers, Inc. which owned and operated Quizno's franchises in
the  Chicago  area.  Two directors of the Company owned 55% of the outstanding
shares  of S&K Food Services, Inc. which was a franchisee of the Company until
such  franchise  was  sold in October 1995.  As of December 31, 1997, 1996 and
1995,  the Company had notes receivables of approximately $52,913, $12,092 and
$51,048  (net  of  area  director  royalties  due),  respectively.

Summarized  below  is  a  recap  of  the related party transactions previously
described:

<TABLE>
<CAPTION>

                                            As of and for the Years Ended
                                                      December  31,
                                           -------------------------------
                                           1997         1996          1995
                                           ------     --------    ----------
<S>                                        <C>          <C>           <C>
Assets
 Accounts  receivable                     $ 40,116    $  44,793      $  61,829
 Notes  receivable                          88,437      178,444         95,447
                                          --------    ---------        -------

                                          $128,553    $ 223,237      $ 157,276
                                           =======     ========       ========
</TABLE>

<PAGE>


NOTE  8  -  RELATED  PARTY  TRANSACTIONS  (CONTINUED)
-----------------------------------------------------

<TABLE>
<CAPTION>

                                            As of and for the Years Ended
                                                    December  31,
                                            -----------------------------
                                            1997        1996        1995
                                            ------    --------     ------
<S>                                          <C>         <C>         <C>
Liabilities
 Accrued  liabilities                      $  7,221   $ 14,611    $  42,655
 Current portion of long-term obligations        -      44,555       28,855
 Long-term  obligations                          -          -        10,297
 Deferred  initial  franchise  fees              -          -         3,000
                                            --------    --------    ------

                                           $  7,221   $ 59,166    $  84,807
                                            =========  ==========  ========

Revenue
 Royalty  fees                             $    -     $ 16,773    $  51,100
 Area  director  marketing  fees                -           -       147,000
 Other  income                                4,835     10,720        3,605
                                             -------   --------     -------

                                            $ 4,835   $ 27,493    $ 201,705
                                             ======    =======     ========
Expenses
 General  and  administrative expenses      $     -   $ 47,429    $  63,083
                                            =======    =========    =======
</TABLE>

NOTE  9  -  LINE-OF-CREDIT
--------------------------

The  Company  had  a  $300,000 line-of-credit and a term note from a financial
institution.    As  of  December  31,  1996,  the  outstanding  balance on the
line-of-credit  and  term  note  was  $220,239,  of which $100,000 of the 1996
balance  is  classified  as  a current liability.  The line-of-credit and term
note  were  paid  off  January  1997.


NOTE  10  -  LONG-TERM  OBLIGATIONS  AND  CONVERTIBLE  SUBORDINATED  DEBT
-------------------------------------------------------------------------

Long-term  obligations  consists  of  the  following:
<TABLE>
<CAPTION>


                                                    December  31,
                                            ------------------------------
                                            1997         1996         1995
                                            ------     --------    --------
<S>                                          <C>         <C>          <C>
Note  payable  to  a  financial 
 institution,  monthly  principal and
 interest payments  of  $6,699  through 
 December  1998,  when  any unpaid 
 principal and interest  is  due. 
 Interest  is  at 1% over the bank's 
 index rate (9.50% at December  31, 
 1997).    Collateralized by accounts
 receivable, inventory, and restaurants
 equipment.                             $    99,841     $ 166,433  $ 226,970

Various  capital  leases, with monthly
 installments totaling $4,921, including
 interest  and  expiring  through 
 November 1999.  Collateralized by
 restaurant equipment.                      127,770        88,647    121,015


Note  payable  to  an  individual,
 monthly payments totaling $1,509, 
 including interest  at  7%, through
 June 1998, when any unpaid principal 
 and interest is due.    Collateralized
 by  restaurant  equipment.                 10,462         25,846     41,546

Note  payable  to  a  financial
 institution, $1,372 monthly payments
 including interest  at the bank index
 rate (9.25% at December 31, 1996) plus 
 1%, through February  2001,  when  any
 unpaid principal and interest is due. 
 The note is collateralized  by  restaurant 
 equipment.                                 52,048        68,123      83,987


Note  payable  to a company, with 
 interest at 11%.  The note calls for
 monthly payments of $1,583 and matures
 November 2001.  Collateralized by the 
 assets of one  store  with  a  net  
 book  value  of  approximately  $80,000.   59,188            -           -

Notes  payable  to a company with interest
 at 11%.  The notes call for monthly
 payments of $2,888 and mature through
 July 2001.  Collateralized by the assets
 of  two  stores  with  a  net  book 
 value  of  approximately  $117,000.        82,833            -           -

Note payable to seller (Note 2) with
 interest payments at 10%.  The note calls
 for  monthly  payments of $10,736 and
 matures in January 2004.  Collateralized
 by  the  assets  acquired  from  Bain's
 Deli  Franchise  Associates.             576,612             -           -

Note  payable to a former area director,
 no interest.  The balance is due June
 1998  without  collateral.                35,900             -           -


Notes  payable,  paid  in  full  in  
 1997  and  1996.                             -           230,347       39,152
                                        ------------ -------------- ----------
                                        1,044,654         579,396      512,670
Less  current  portion                   (303,084)       (375,595)    (171,217)
                                        ----------        ---------  ---------

                                       $  741,570       $ 203,801     $341,453
                                        =========        ========      =======
</TABLE>


Convertible  subordinated  debt  consists  of:

<TABLE>
<CAPTION>
 
                                                       December  31,
                                             ------------------------------
                                             1997         1996         1995
                                             ------      --------   --------
<S>                                           <C>          <C>         <C>
12.75%  Convertible  Subordinated  Debt,
 $1,155,825 convertible into 10% on a
 fully  diluted  basis,  (372,847 shares 
 at December 31, 1997) of the Company's
 common  stock  at  $3.10  per  share.
 Interest  only  until  June 30, 1998.
 Principal  and interest payments based
 upon a 5 year amortization from July 1,
 1998  through  November  30, 2001 with
 the balance due December 31, 2001.  The
 note is collateralized by a first deed
 on all of the assets of the Company and
 in  90% of the stock of the two largest
 stockholders who are also Directors of
 the  Company.    The note will be 
 subordinated to $700,000 of debt if and
 when arranged  by  the  Company.    The
 Company  is  subject  to certain financial
 covenants  including  maintaining a net
 worth of $1,000,000 and current ratio,
 debt  service  and  cash  flow  ratios,
 along  with  restrictions  on capital
 expenditures,  stock  issuance  and 
 acquisitions.    The underlying stock and
 warrants have a put option to the Company
 on December 31, 2002, if the Company
 has  not  completed  a secondary public 
 offering.  The warrants and underlying
 stock  have  demand  registration  rights
 as  well  as  unlimited  piggy back
 registration  rights  .    No  value was
 ascribed to the underlying conversion
 rights  as the conversion price exceeded
 the trading value of the stock on the
 date  of  issuance.    $500,000  was 
 converted into 100,000 shares of Series B
 convertible  preferred  stock  in  1997.    $1,500,000   $2,000,000  $      -

 Less  current  portion                        (110,912)          -          -
                                             ----------    ---------    --------

                                             $1,389,088   $2,000,000  $      -
                                              =========    =========   =========
</TABLE>

<PAGE>


NOTE  10 - LONG-TERM OBLIGATIONS AND CONVERTIBLE SUBORDINATED DEBT (CONTINUED)
------------------------------------------------------------------------------

In  connection  with the conversion of debt to equity, the Company granted the
note  holder 42,209 warrants to purchase common stock at $5.00 per share.  The
inherent  value  of  the  options of $44,277 was recorded as deferred offering
costs  associated  with  the  conversion.

Maturities of long-term obligations, convertible subordinated debt and capital
leases  are  as  follows:

<TABLE>
<CAPTION>

                        Long-Term Obligations
                           and Convertible 
Year Ending                Subordinated          Capital
December 31,                  Debt               Leases            Total
-------------        ---------------------   -------------   ------------
<S>                       <C>                 <C>              <C>

 1998                     $    366,269           $ 59,048      $ 425,317
 1999                          409,091             35,443        444,534
 2000                          421,149             24,392        445,541
 2001                          997,877             21,191      1,019,068
 2002                          111,387                 -         111,387
 Thereafter                    111,111                 -         111,111
                           -----------            --------    -----------
                             2,416,884            140,074      2,556,958
 Less  amount  
  representing  interest            -             (12,304)       (12,304)
                           -----------            --------     -----------
 Total  principal            2,416,884            127,770      2,544,654
 Less  current  portion       (366,269)           (47,727)      (413,996)
                            ----------            --------       ---------

                            $2,050,615           $ 80,043     $2,130,658
                             =========           =========     =========
</TABLE>


Included  in  equipment in the accompanying 1997, 1996 and 1995 balance sheets
are  assets  held  under capital leases in the amount of $161,147, $83,205 and
$134,557,  respectively  and  accumulated amortization of $65,079, $32,850 and
$54,895,  respectively.


NOTE  11  -  COMMITMENTS  AND  CONTINGENCIES
--------------------------------------------

The  Company  leases  an  office  facility,  twenty  one  restaurant locations
(including  stores under development) and certain equipment and vehicles under
operating  lease  agreements  which  provide  for the payment of rent totaling
approximately  $68,000  per  month plus common area maintenance costs.  One of
the restaurant locations also requires the Company to pay 6% of gross sales in
excess  of  $430,000  annually.    Rent  expense under these operating leases,
totaled  $636,874,  $367,439  and $335,846 during the years ended December 31,
1997,  1996  and  1995,  respectively.

<PAGE>


NOTE  11  -  COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)
---------------------------------------------------------

Future  minimum  rental  payments  are  as  follows:

<TABLE>
<CAPTION>

 Year  Ending  December  31,
 ---------------------------
<S>                                   <C>
 1998                             $  840,332
 1999                                759,687
 2000                                610,609
 2001                                554,799
 2002                                480,113
 Thereafter                        1,239,513
                                 -----------

                                 $ 4,485,053
                                 ===========
</TABLE>

In  1993,  the  Company entered into employment agreements with two directors,
officers,  and  stockholders  of  the Company which provide for the payment of
annual salaries totaling $145,000 plus individual bonuses equal to six and ten
percent  of  the  positive  increase  in  net  income  before  depreciation,
amortization and interest over the prior year.  The agreements were amended to
reduce  the  bonus percentages to 4% and 7% for 1995 only, equal to a total of
$86,340,  which  was  accrued  at  December  31,  1995.  There were no bonuses
accrued  and  paid  during 1996; however, $291,260 was accrued at December 31,
1997.    The  agreements  expire in December 1998 and 2003, respectively.  The
annual salary amount, in total, was increased to $192,000 effective October 1,
1994.

Litigation
----------

There  are  various  claims  and  lawsuits pending by and against the Company,
which,  in  the  opinion of the management, and supported by advice from legal
counsel,  will  not result in any material adverse effect in excess of amounts
accrued  in  the  accompanying  consolidated  financial  statements.

On  December  5, 1997, an arbitration involving the Company as a defendant was
held  in  January  and  February  1998  with a decision expected in the second
quarter of 1998.  The Demand for Arbitration was filed on December 31, 1996 by
S2D Subs, LLC, a former franchisee of the Company.  The arbitration also names
two  stockholders  and  officers  of  the  Company.  While the specific amount
sought  by  the  plaintiff  is  not  stated  in  the  Demand  for Arbitration,
preliminary  discussions  between  representatives  of  the  parties suggested
plaintiff  would  settle for approximately $300,000.  The Company rejected any
possible  settlement and intends to vigorously defend that action.  Management
of the Company does not believe that this claim will have a material affect on
the  Company.    The  Company  has  filed  a  counterclaim  against the former
franchisee  alleging  among  other  things, breach of its franchise agreement.

<PAGE>


NOTE  11  -  COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)
---------------------------------------------------------

Service  Agreement
------------------

In connection with the Bain's acquisition (Note 2), the Company entered into a
two  year  consulting  agreement  with  a  seller of Bain's to provide various
services  to  the  Company  for  $50,000  per  year.


NOTE  12  -  STOCKHOLDERS'  EQUITY
----------------------------------

Convertible  Preferred  Stock
-----------------------------

Series A convertible preferred stock bears a 6.5% cumulative dividend, payable
monthly  and  is  convertible into common shares on a one for one basis and is
callable  by  the  Company  with  sixty days notice.  The Series A convertible
preferred  stock  has  a  liquidation preference of $6 per share plus all then
accrued  and  unpaid  cumulative  dividends.

Series  B  convertible  preferred  stock  bears  a 12.75% cumulative dividend,
payable  monthly  and is convertible after five years at the then market value
of  the  common stock.  The Series B convertible preferred stock is redeemable
at the Company's option at $5.00 per share and has a liquidation preference of
$5.00  per  share  plus  all  then  accrued  and  unpaid cumulative dividends.

Series  C  convertible  preferred  stock  bears  a 12.00% cumulative dividend,
payable monthly and is convertible into common stock on a one-for-one basis at
$5.00  per  share.   The Series C convertible preferred stock is redeemable at
the  Company's  option  at $5.00 per share and has a liquidation preference of
$5.00  per  share  plus  all  then  accrued  and  unpaid cumulative dividends.

During 1997, the Company sold 167,000 shares of Series C convertible preferred
stock  at  $5.00  per  share.  The Company incurred legal and accounting costs
related  to  the  sale  of  $36,454.

Stock  Options  and  Warrants
-----------------------------

The  Company  has  established  an Employee Stock Option Plan (the Plan).  The
Company  has reserved 320,000 shares of its Common Stock for issuance upon the
exercise  of  options available for grant under the Plan.  Options are granted
under  the  plan  at not less than the market price of the Company stock.  The
options can not be exercisable for more than ten years.  Options granted under
the Plan will include incentive stock options (ISOs) as defined in Section 422
of  the  Internal Revenue Code and non-qualified stock options (NQSOs).  Under
the  terms  of  the  Plan,  all  officers and employees are eligible for ISOs.
During  the  years ended December 31, 1997, 1996 and 1995, 84,987, 53,073, and
64,899,  options  were  granted  under  the  Plan,  respectively.

<PAGE>


NOTE  12  -  STOCKHOLDERS'  EQUITY  (CONTINUED)
-----------------------------------------------

Stock  Options  and  Warrants  (continued)
------------------------------------------

Additionally, the Company has established an Amended and Restated Stock Option
Plan for Non-Employee Directors and Advisors (Director Plan).  The Company has
reserved  140,000  shares  of  common  stock for issuance upon the exercise of
options  granted or available for grant to non-employee directors and advisors
under  the  Director  Plan.    The  Director Plan provides that any person who
becomes  a  non-employee  director  or  advisor  of the Company may receive an
option  to purchase 4,000 shares (or a pro rata portion thereof) at their fair
market  value  on  the  date  such  person  becomes a non-employee director or
advisor  and  on  the  first day of each year thereafter as long as the person
continues  as a non-employee director or advisor limited to the overall number
of shares available for issuance under the Director Plan.  Options that expire
or are canceled may be re-granted under the Director Plan at the discretion of
the Board of Directors.  The options expire after ten years.  During the years
ended  December  31,  1997,  1996, and 1995, 18,000, 12,000 and 28,000 options
were  granted  under  the  Director  Plan,  respectively.

During  1997, the Company granted stock options covering 56,500 shares to Area
Directors  pursuant  to  individual contracts.  The Company has established an
Area  Director  Equity  Participation  Rights  Stock  Option  Plan  (AD  Plan)
providing  for  grants  of  stock options to Area Directors beginning in 1998.
Options  are granted under the AD Plan at the market price of the common stock
for  six  month options or a 20% discount (not to exceed $1.20) if the grantee
exercises  within  seven  business  days  of the grant.  During the year ended
December  31,  1997,  56,500  options  were  granted, and an additional 16,050
options,  9,750  of  which  were  exercised at a 20% discount, were granted in
January  1998.   The Company recorded $33,950 related to the inherent value of
the  options  granted  to  Area  Directors  in  1997.

In connection with the Company's public offering, the Company issued a warrant
for  the  underwriter  to purchase up to 100,000 shares of its common stock at
$5.00  per  share.    At  December  31, 1997, no warrants have been exercised.

The  Company  has  adopted  the  disclosure-only  provisions  of  Statement of
Financial  Accounting  Standards  No.  123,  "Accounting  for  Stock-Based
Compensation."   Accordingly, no compensation cost has been recognized for the
stock  option  plans.    Had  compensation cost for the Company's two employee
stock  option  plans been determined based on the fair value at the grant date
for consistent with the provisions of SFAS No. 123, the Company's net earnings
and  earnings  per  share  would  have  been  reduced to the pro forma amounts
indicated  below:

<TABLE>
<CAPTION>
                                                    December  31,
                                           ------------------------------
                                           1997         1996         1995
                                           ------     --------   --------
<S>                                       <C>           <C>          <C>

Net  loss  applicable  to  common 
 stockholders - as reported             $  (183,618)  $(1,075,908)  $(348,512)
Net  loss  applicable  to  common
 stockholders  - pro forma              $  (433,536)  $(1,218,264)  $(577,126)
Basic  loss  per share - as reported    $      (.06)  $      (.38)  $    (.12)
Basic  loss  per  share  - pro forma    $      (.15)  $      (.43)  $    (.20)
</TABLE>

<PAGE>


NOTE  12  -  STOCKHOLDERS'  EQUITY  (CONTINUED)
-----------------------------------------------

Stock  Options  and  Warrants  (continued)
------------------------------------------

The  fair  value  of each option grant is estimated on the date of grant using
the  Black-Scholes  option-pricing  model  with the following weighted-average
assumptions used for grants: dividend yield of 0%; expected volatility of 38%;
discount  rate  of  9.0%;  and  expected  lives  of  8  years.

Convertible  Preferred  Stock
-----------------------------

The  following  is  a  table of the shares covered by the options and warrants
granted:

<TABLE>
<CAPTION>
                                                          Exercise
                                            Options and     Price
                                             Warrants    Per  Share
                                             --------    ----------
<S>                                           <C>           <C> 

Balance,  December  31,  1995                281,220     $3.31 - $5.00

  Granted                                     65,073     $3.00 - $3.88
  Forfeited                                  (24,500)    $3.13 - $5.00
                                           ---------     -------------

Balance,  December  31,  1996                321,793     $3.00 - $5.00

  Granted                                    201,696     $3.44 - $5.50
  Forfeited  or  exercised                   (37,076)    $3.13 - $5.00
                                           ---------     -------------

Balance,  December  31,  1997                486,413     $3.00 - $5.50
                                           =========     =============
</TABLE>

The  weighted  average  option  exercise  price at December 31, 1997 is $3.82.

The  Company  granted an option during the year ended December 31, 1993, to an
area  director  that  after  this area director opened its tenth restaurant in
accordance  with  the  area  director  agreement,  the  area director would be
entitled  to  purchase one percent of the then outstanding common stock of the
Company  for  $50,000.    In  1997, the Company waived the requirement for ten
restaurants  and the area director exercised the right to purchase one percent
of  the outstanding common stock for $50,000 and received approximately 28,900
shares  of  common  stock.

<PAGE>


NOTE  13  -  INCOME  TAXES
--------------------------

As  an  S Corporation prior to its 1994 initial public offering, the Company's
taxable  income  exceeded  its  financial  reporting income by $560,000 due to
recognition  of  franchise  fees and costs on a cash basis.  Consequently, the
Company  will  not  pay  income taxes on this income when it recognizes it for
financial  reporting  purposes and accordingly recognized a deferred tax asset
of $175,000 in 1994.  Although realization is not assured, management believes
it  is  more  likely  than  not  that  all  of  the deferred tax asset will be
realized.    The  amount  of  the deferred tax asset is considered realizable,
however,  could be reduced in the near term if estimates of the future taxable
income  are  reduced.    The  Company  has  incurred  losses  of approximately
$2,085,000  on  the C Corporation conversion resulting in a deferred tax asset
from  operations  of  approximately  $900,000.    The Company has impaired the
deferred  tax  asset  resulting  from  operations.

The  following  is  a  summary  of  the  deferred  tax  asset:

<TABLE>
<CAPTION>

                                                December  31,
                                       ------------------------------
                                       1997         1996         1995
                                       ------     --------      ------
<S>                                    <C>          <C>           <C>
 Deferred  tax  asset  related
  to  S  Corporation  termination    $  175,000    $175,000    $175,000
 Deferred  tax  asset  related 
   to  net  operating  losses           725,000     561,000     325,000
                                       --------     -------     -------
                                        900,000     736,000     500,000
   Less  impairment                    (725,000)   (561,000)   (325,000)
                                       --------     -------     -------

 Net  deferred  tax  asset           $  175,000    $175,000    $175,000
                                      =========     =======     =======
</TABLE>


As  of  December 31, 1997, the Company has net operating loss carryforwards of
approximately  $1,700,000  expiring  through  2013.


NOTE  14  -  PURCHASE  AGREEMENTS
---------------------------------

During  1997  and  1996,  the  Company  acquired  three  and  three  existing
restaurants  from  franchisees, respectively.  The net purchase price exceeded
net  assets  acquired  by  approximately  $61,000  and  $77,000, respectively.
Subsequent  to  the  acquisition  of  one of the 1996 acquired stores with net
assets  of  approximately  $155,000  it was sold for $115,000 in the form of a
note  receivable  and  a  $40,000  loss  was  recorded.

<PAGE>


NOTE  15  -  EMPLOYEE  BENEFIT  PLAN
------------------------------------

The  Company  has  adopted  a  401(k)  plan  during  1995  for  its employees.
Participation is voluntary and employees are eligible to participate at age 21
and after one year of employment with the Company.  The Company matches 50% of
the  employee's  contribution  up  to  6%  of  the  employee's  salary.

A  participant's  vested benefit is fully distributed upon death or disability
and  is  distributed upon termination of employment according to the following
vesting  schedule:

<TABLE>
<CAPTION>

   Years  of  Services                   Percentage
----------------------          ----------------------------
<S>                                    <C>
           1                              0%
           2                             25%
           3                             50%
           4                             75%
           5                            100%
</TABLE>

The  Company  has contributed $33,251, $10,525 and $19,878 to the Plan for the
years  ended  December  31,  1997,  1996  and  1995,  respectively.



Amounts  are  before  preferred  stock  dividends.