5

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C.  20549

                                    FORM 10-K
(Mark  One)
[X]     ANNUAL  REPORT  PURSUANT  TO  SECTION  13  OR  15(D)  OF  THE SECURITIES
EXCHANGE  ACT  OF  1934     FOR  THE  FISCAL  YEAR  ENDED  JUNE  30,  2002.
     Transition  report  pursuant  to  Section  13  or  15(d)  of the Securities
Exchange  Act  of  1934  for     the  transition  period  from  _____  to _____.

                         COMMISSION FILE NUMBER 0-12919

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

                             MISSOURI     47-0654575
                 (State  or  jurisdiction  of     (I.R.S.  Employer
                   incorporation  or  organization)     Identification  No.)

                              3551  PLANO  PARKWAY
                         THE  COLONY,  TEXAS     75056
(Address  of  principal  executive  offices)     (Zip  Code)

     Registrant's telephone number, including area code:     (469) 384-5000
      Securities Registered Pursuant to Section 12(b) of the Act:     NONE
           Securities Registered Pursuant to Section 12(g) of the Act:
                        COMMON STOCK, PAR VALUE $.01 EACH
                                (Title of Class)

     At  September  13,  2002,  there were 10,058,324 shares of the registrant's
Common  Stock outstanding, and the aggregate Market value of registrant's Common
Stock  held by non-affiliates was $16,847,693, based upon the average of the bid
and  ask  prices.

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during the preceding 12 months (or such shorter period that the registrant
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days.  Yes [X]  No

     Indicate  by check mark if disclosure of delinquent filers pursuant to Item
405  of  Regulation  S-K  is not contained herein, and will not be contained, to
the  best  of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in  Part  III  of this Form 10-K or any
amendment  to  this  Form  10-K. [X]

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate  by  check mark whether the registrant has filed all documents and
reports  required  to  be  filed  by  Section  12, 13 or 15(d) of the Securities
Exchange  Act  of 1934 subsequent to the distribution of securities under a plan
confirmed  by  a  court.   Yes    No
                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions  of  the  registrant's  definitive  Proxy  Statement,  to be filed
pursuant  to  Section 14(a) of the Securities Exchange Act of 1934 in connection
with the registrant's annual meeting of shareholders in December 2002, have been
incorporated  by  reference  in  Part  III  of  this  report.


<PAGE>


                                     PART I

ITEM  1  -  BUSINESS

GENERAL

     Pizza  Inn,  Inc.  (the  "Company"), a Missouri corporation incorporated in
1983, is the successor to a Texas company of the same name that was incorporated
in  1961.  The  Company  is  the franchisor and food and supply distributor to a
system  of  restaurants  operating  under  the  trade  name  "Pizza  Inn".

     On  September  13,  2002,  the  Pizza  Inn  system  consisted of 427 units,
including  two  Company  owned  and  operated units, a third that the Company is
currently  in  the  process  of  relocating,  and  424  franchised  units.  The
Company-operated  units are used for product testing and franchisee training, in
addition  to  serving customers.  The domestic franchised units are comprised of
216 full service units, 55 delivery/carry-out units, 15 self serve buffet units,
and  78  franchised  Express  units.  The  international  franchised  units  are
comprised  of  20 full service units, 25 delivery/carry-out units and 15 Express
units.  Pizza  Inn  units  are  currently  located  in  20 states and 11 foreign
countries.  Domestic units are located predominantly in the southern half of the
United  States,  with  Texas,  North  Carolina,  and  Mississippi accounting for
approximately  32%,  16%,  and  8% of the total, respectively.  Norco Restaurant
Services  ("Norco"),  a  division  of  the  Company,  distributes food products,
equipment,  and  other supplies to units in the United States and, to the extent
feasible,  in  other  countries.

     On August 21, 2002, C. Jeffery Rogers, the Company's former Chief Executive
Officer,  resigned  his  position  with  the  Company.

PIZZA  INN  RESTAURANTS

     Full  service  restaurants  ("Full  Service")  offer  dine-in and carry-out
service  and,  in  most  cases,  also offer delivery service.  These restaurants
serve  pizza  on three different crusts (Original Thin Crust, New York Pan,  and
Italian  Crust),  with  standard  toppings and special combinations of toppings.
They also offer pasta, salad, sandwiches, desserts and beverages, including beer
and  wine  in  some  locations.  They  are  generally  located  in free standing
buildings in close proximity to offices, shopping centers and residential areas.
The  current standard Full Service units are between 3,000 and 5,000 square feet
in  size  and  seat  120  to  185  customers.  The interior decor is designed to
promote  a  contemporary,  family  style  atmosphere.

     Restaurants  that  offer delivery and carry-out service only ("Delcos") are
growing  in  popularity  and  number.  Delcos  typically are located in shopping
centers  or  other in-line arrangements, occupy approximately 1,000 square feet,
and  offer  limited or no seating.  Delcos generally offer the same menu as Full
Service  units,  except for buffet.   The decor of these units is designed to be
bright  and  highly  visible,  featuring  neon,  lighted  displays  and awnings.

     The  Self Serve Buffet restaurant ("Self Serve") offers items from the full
dine-in  menu,  and  features  delivery,  carryout,  and a self-serve buffet and
beverage  station.  The  Self  Serve  can be free-standing or located in a strip
center.  Slightly  larger  than  a  Delco, it ranges in size from 2,400 to 2,600
square  feet  and  seats  approximately  60  customers.

     Express  Serve  units  ("Express"),  are typically located in a convenience
store,  college  campus,  airport  terminal, or other commercial facility.  They
have  limited  or no seating and offer quick carry-out service of a limited menu
of  pizza  and  other  foods  and beverages.  An Express unit typically occupies
approximately 200 to 400 square feet and is commonly operated by the same person
who  owns  the  commercial  facility or who is licensed at one or more locations
within  the  facility.

<PAGE>

FRANCHISING

     The  Pizza  Inn  concept  was  first  franchised in 1963.  Since that time,
industry  franchising  concepts  and  development strategies have changed,  thus
present franchise relationships are evidenced by a variety of contractual forms.
Common to those forms are provisions that: (i) provide an initial franchise term
of  20  years  (except  as described below) and a renewal term, (ii) require the
franchisee  to  follow  the  Pizza  Inn  system  of  restaurant  operation  and
management,  (iii)  require the franchisee to pay a franchise fee and continuing
royalties,  and  (iv)  except for Express units, prohibit the development of one
unit  within  a  specified  distance  from  another.

     The  Company's  current  form  of  franchise agreement provides for:  (i) a
franchise  fee  of  $20,000  for  a Full Service unit, $15,000 for a Self Serve,
$7,500  for  a  Delco, and $3,500 for an Express unit, (ii) an initial franchise
term  of  20  years for a Full Service or Self Serve unit, 10 years for a Delco,
plus a renewal term of 10 years in both cases, and an initial term of five years
for an Express unit plus a renewal term of five years, (iii) contributions equal
to  1%  of  gross  sales  to  the  Pizza Inn Advertising Plan or to the Company,
discussed  below,  (iv) royalties equal to 4% of gross sales for a Full Service,
Self  Serve,  or  Delco,  and  6%  of  gross  sales for an Express unit, and (v)
required  advertising  expenditures  of  at  least  5% of gross sales for a Full
Service,  Self  Serve  and  a  Delco,  and  2%  for  an  Express  unit.

     The  Company  has  adopted  a  franchising  strategy  that  has three major
components:  continued  development  within  existing  Pizza  Inn  market areas,
development  of  new  domestic  territories,  and  continued  growth  in  the
international  arena.  As a cornerstone of this approach, the Company offers, to
certain  experienced restaurant operators, area developer rights in both new and
existing  domestic markets.  An area developer pays a negotiated fee to purchase
the  right  to operate or develop, along with the Company, Pizza Inn restaurants
within  a  defined  territory,  typically  for  a  term of 20 years plus renewal
options  for  10  years.  The  area  developer agrees to a new store development
schedule and assists the Company in local franchise service and quality control.
In  return,  half of the franchise fees and royalties earned on all units within
the  territory  are  retained  by  the  area  developer  during  the term of the
agreement.  Similarly,  the  Company  offers  master franchise rights to develop
Pizza  Inn  restaurants  in  certain  foreign  countries,  with negotiated fees,
development  schedules,  and  ongoing  royalties.

     As  with  developers,  a  master  licensee  for  a  foreign  country pays a
negotiated  fee  to  purchase  the  right  to  develop  and  operate  Pizza  Inn
restaurants within a defined foreign territory, typically for a term of 20 years
plus  renewal  options  for 10 years.  The master licensee agrees to a new store
development  schedule  and the Company trains the master licensee to monitor and
assist  franchisees  in their territory with local franchise service and quality
control,  with  support  from  the  Company.  In  return,  the  master  licensee
typically  retains  half the franchise fees and approximately half the royalties
on  all  units within the territory during the term of the agreement.  While all
Pizza  Inn  restaurants  opened in an area of a developer's territory enter into
franchise  agreements  with  the Company, a master licensee may open restaurants
owned  and  operated  by  the  master  licensee, or they may open sub-franchised
restaurants  owned  and  operated  by  third  parties through agreement with the
master  licensee.

FOOD  AND  SUPPLY  DISTRIBUTION

     The Company's Norco division offers substantially all of the food and paper
products,  equipment  and  other  supplies  necessary  to  operate  a  Pizza Inn
restaurant.  Franchisees  are  required  to  purchase  from  Norco  certain food
products  that  are  proprietary to the Pizza Inn system.  In addition, the vast
majority  of  franchisees  also  purchase  other  supplies  from  Norco.

     Norco  operates its central distribution facility six days per week, and it
delivers  to  all  domestic  units  on  a  weekly  basis,  utilizing  a fleet of
refrigerated  tractor-trailer  units operated by Company drivers and independent
owner-operators.  Norco  also  ships products and equipment to its international
franchisees.  The  food,  equipment, and other supplies distributed by Norco are
generally  available  from  several  qualified  sources,  and the Company is not
dependent  upon  any  one  supplier  or limited group of suppliers.  The Company
contracts with established food processors for the production of its proprietary
products.  The  Company does not anticipate any difficulty in obtaining supplies
in  the  foreseeable  future.




ADVERTISING

     The  Pizza  Inn Advertising Plan ("PIAP") is a Texas non-profit corporation
that  creates  and  produces  print  advertisements,  television  and  radio
commercials,  and  in-store promotional materials along with related advertising
services for use by its members.  Each operator of a Full Service, Self Serve or
Delco  unit,  including  the Company, is entitled to membership in PIAP.  Nearly
all of the Company's existing franchise agreements for Full Service, Self Serve,
and  Delco  units  require  the  franchisees to become members of PIAP.  Members
contribute  1%  of  their  gross  sales  to PIAP.  PIAP is managed by a Board of
Trustees  comprised of franchisee representatives who are elected by the members
each  year.  The  Company  does  not  have  any ownership interest in PIAP.  The
Company  provides  certain administrative, marketing, and other services to PIAP
and  is  paid  by  PIAP  for  such  services.  On  September  13,  2002,  the
Company-operated stores and substantially all of its franchisees were members of
PIAP.  Operators  of  Express  units  do  not participate in PIAP; however, they
contribute  up  to  1% of their gross sales directly to the Company to help fund
purchases of Express unit marketing materials and similar expenditures.  Express
units  may  also  voluntarily  contribute  up  to 2% of their gross sales to the
Royalty Rebate Advertising Program ("RRAP").  The RRAP contributions are matched
by  the  Company  and  used  to  help  fund  purchases of Express unit marketing
materials  and  similar  expenditures.

     Groups  of  franchisees in some of the Pizza Inn system's market areas have
formed  local advertising cooperatives.  These cooperatives, which may be formed
voluntarily  or  may  be required by the Company under the franchise agreements,
establish  contributions  to be made by their members and direct the expenditure
of  these  contributions on local media advertising using materials developed by
PIAP  and  the  Company.

     The  Company  and  its franchisees conduct independent marketing efforts in
addition  to  their  participation  in  PIAP  and  local  cooperatives.

TRADEMARKS  AND  QUALITY  CONTROL

     The  Company owns various trademarks, including the name "Pizza Inn", which
are  used  in  connection with the restaurants and have been registered with the
United  States  Patent and Trademark Office.  The duration of such trademarks is
unlimited,  subject  to  continued  use.  In  addition, the Company has obtained
trademark  registrations  in  several  foreign  countries  and  has  applied for
registration in others.  The Company believes that it holds the necessary rights
for  protection  of  the  trademarks  essential  to  its  business.

     The  Company  requires  all  units  to  satisfy  certain  quality standards
governing  the  products  and  services  offered  through  use  of the Company's
trademarks.  The  Company  maintains  a  staff  of  field representatives, whose
primary  responsibilities  include  periodic  visits  to  provide  advice  in
operational and marketing activities and to evaluate and enforce compliance with
the  Company's  quality  standards.

TRAINING

     The  Company  offers  numerous  training  programs  for  the  benefit  of
franchisees  and  their restaurant crew managers.  The training programs, taught
by  experienced  Company  employees,  focus  on  food preparation, service, cost
control,  sanitation,  safety,  local store marketing, personnel management, and
other  aspects  of  restaurant  operation.  The  training programs include group
classes,  supervised work in Company-operated units, and special field seminars.
Training  programs  are offered free of charge to franchisees, who pay their own
travel  and  lodging  expenses.  Restaurant  managers  train their staff through
on-the-job training, utilizing video tapes and printed materials produced by the
Company.

WORKING  CAPITAL  PRACTICES

     The  Company's  Norco division maintains a sufficient inventory of food and
other  consumable supplies that it typically distributes to Pizza Inn units on a
weekly  basis.  The  Company's  accounts receivable and notes receivable consist
primarily  of  receivables  from  food  and  supply  sales, equipment sales, and
accrued  franchise  royalties.

GOVERNMENT  REGULATION

The  Company  is  subject  to registration and disclosure requirements and other
restrictions  under  federal  and  state  franchise  laws.  The  Company's Norco
division  is  subject  to various federal and state regulations, including those
regarding  transportation  of  goods,  food  labeling,  safety,  sanitation,
distribution,  and  vehicle  licensing.

     The  development  and  operation of Pizza Inn units are subject to federal,
state,  and  local  regulations,  including  those  pertaining to zoning, public
health,  and  alcoholic  beverages, where applicable.  Many restaurant employees
are  paid  at rates related to the minimum wage established by federal and state
law.  Increases in the federal minimum wage can result in higher labor costs for
the  Company  operated units, as well as its franchisees, which may be partially
offset  by  price  increases  or  operational  and  equipment  efficiencies.

EMPLOYEES

     On  September  13,  2002,  the  Company  had  approximately  220 employees,
including 67 in the Company's corporate office, 76 at its Norco division, and 28
full-time  and 49 part-time employees at the Company-operated restaurants.  None
of  the  Company's  employees  are  currently  covered  by collective bargaining
agreements.  The  Company  believes  that  its employee relations are excellent.

COMPETITION

     The  restaurant  business  is  highly  competitive.  The  Company  and  its
franchisees  compete  with other national and regional pizza chains, independent
pizza  restaurants,  and  other  restaurants that serve moderately priced foods.
The  Company believes that Pizza Inn units compete primarily on the basis of the
quality,  value  and  price of their food, the consistency and level of service,
and  the  location,  attractiveness,  and  cleanliness  of  their  restaurant
facilities.  Because  of  the  importance  of  brand  awareness, the Company has
increased  its  development  emphasis on individual market penetration and local
cooperative  advertising  by  franchisees.

     The  Company's  Norco  division  competes  with  both  national  and  local
distributors of food, equipment and other restaurant supplies.  The distribution
industry  is  very  competitive.  The  Company  believes  that  the  principal
competitive  factors  in the distribution industry are product quality, customer
service and price.  Norco is the sole authorized supplier of certain proprietary
products  which  are  required  to  be  used  by  all  Pizza  Inn  units.

     In  the  sale of franchises, the Company competes with franchisors of other
restaurant concepts and franchisors of a variety of other products and services.
The  Company  believes that the principal competitive factors affecting the sale
of  franchises  are  product  quality and value, consumer acceptance, franchisor
experience  and  support,  and  the  quality relationship maintained between the
franchisor  and  its  franchisees.

SEASONALITY

     Historically,  sales  at  Pizza  Inn  restaurants have been somewhat higher
during  the  warmer  months  and  somewhat lower during the colder months of the
year.  The  Company  believes that the increasing popularity of delivery service
and  expansion  into  the  high impulse purchase markets of Express units should
lessen  the  seasonal  impact  on  future  chainwide  sales.

SUBSEQUENT  EVENTS

     On August 21, 2002, C. Jeffery Rogers, the Company's former Chief Executive
Officer,  resigned  his position with the Company.  In addition, pursuant to the
terms of that certain Severance Agreement and Release ("Agreement") dated August
21,  2002  between  C.  Jeffery  Rogers and Pizza Inn, Inc. the Company paid Mr.
Rogers  $195,000  in lieu of salary and made certain other payments as described
in  the  Agreement  which  is  attached  as  Exhibit  10.12  to  this  filing.






ITEM  2  -  PROPERTIES

     In  November  2001 the Company moved into a new 40,000 square foot facility
housing  its  corporate  office  and  training center, and a 100,000 square foot
warehouse  and  distribution  facility.  These  buildings  were  constructed  on
approximately  11  acres  of  land the Company purchased in The Colony, Texas in
December  2000.  Refer to the notes to the consolidated financial statements for
information  concerning  financing  terns  and  construction  costs.

     The  Company continues to lease 20,677 square feet in Dallas, Texas that it
previously occupied as its corporate office. The lease expires in April 2003 but
the  Company  is  actively  marketing  the  premises  for  a  subtenant.

          Each  of  the  Company-operated  Pizza Inn restaurants (all located in
Texas)  are leased.  The Company-operated units range in size from approximately
2,500  to  3,600  square  feet  and incur annual minimum rent between $12.50 and
$20.00  per  square foot.  Some of the leases require payment of additional rent
based  upon  a  percentage  of  gross  sales  and require the Company to pay for
repairs,  insurance  and  real  estate taxes.  The leases are renewable and will
expire  in  2005  and  2007.

ITEM  3  -  LEGAL  PROCEEDINGS

     Certain  pending  legal  proceedings  exist  against  the  Company that the
Company  believes  are not material or have arisen in the ordinary course of its
business.

     On  January  18,  2002,  the  Company  was  served  with a lawsuit filed by
Blakely-Witt  &  Associates,  Inc.  in  the  District  Court,  L-193rd  Judicial
District, Dallas County, Texas (Cause No. 01-11043).  The suit alleges Pizza Inn
sent  or caused to be sent unsolicited facsimile advertisements to plaintiff and
others  in  violation  of  (i)  47  U.S.C.  Section 227(b)(1)(C) and (b)(3), the
Telephone  Consumer  Protection  Act,  and (ii) Texas Business and Commerce Code
Section  35.47.  The plaintiff has requested this matter be certified as a class
action.  We plan to vigorously defend our position in this litigation. We cannot
assure  you that we will prevail in this lawsuit and our defense could be costly
and  consume the time of our management. We are unable to predict the outcome of
this case. However, an adverse resolution of this matter could materially affect
our  financial  position  and  results  of  operations.

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

     No  matters  were submitted to a vote of security holders during the fourth
quarter  of  the  Company's  fiscal  year  2002.


<PAGE>

                                     PART II

ITEM  5  - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     On  September  13,  2002,  there  were  2,440 stockholders of record of the
Company's  Common  Stock.

     The  Company's  Common  Stock  is  listed  on  the  Small-Cap Market of the
National Association of Securities Dealers Automated Quotation ("NASDAQ") system
under the symbol "PZZI". The following table shows the highest and lowest actual
trade  executed price per share of the Common Stock during each quarterly period
within the two most recent fiscal years, as reported by the National Association
of  Securities  Dealers.  Such  prices  reflect inter-dealer quotations, without
adjustment  for  any  retail  markup,  markdown  or  commission.


<TABLE>
<CAPTION>


                                              Actual Trade
                                             Executed Price
                                          High         Low
                                     --------------  -------
 2002
<S>                                  <C>             <C>
    First Quarter Ended 9/23/2001 .         2 17/64  1 27/32
    Second Quarter Ended 12/23/2001         2  5/32  1  1/32
    Third Quarter Ended 3/24/2002 .         1 43/64  1 13/64
    Fourth Quarter Ended 6/30/2002.         1 35/64  1  3/32

 2001
    First Quarter Ended 9/24/2000 .               4  2 15/16
    Second Quarter Ended 12/24/2000          3  3/8   1  5/8
    Third Quarter Ended 3/25/2001 .          2  7/8  1  7/16
    Fourth Quarter Ended 6/24/2001.          2  1/4   1  5/8


</TABLE>
Under  the  Company's bank loan agreement, the Company is limited in its ability
to  pay  dividends or make other distributions on the common stock.  The Company
did  not pay any dividends on its common stock during the fiscal year ended June
30,  2002.  The Company paid dividends of $1,243,000, or $.12 per share, for the
fiscal year ended June 24, 2001.  Any determination to pay cash dividends in the
future will be at the discretion of the Company's Board of Directors and will be
dependent upon the Company's results of operations, financial condition, capital
requirements,  contractual  restrictions  and  other  factors  deemed  relevant.




<PAGE>
 ITEM  6  -  SELECTED  FINANCIAL  DATA

     The  following  table  contains  certain  selected  financial  data for the
Company for each of the last five fiscal years through June 30, 2002, and should
be  read in conjunction with the financial statements and schedules in Item 8 of
this  report.  Earnings  per  share  data  for  all  periods presented have been
restated  to  reflect  the  computation of earnings per share in accordance with
SFAS  128.

<TABLE>
<CAPTION>


                                                              Year Ended
                                                              -----------
                                             June 30,    June 24,    June 25,   June 27,  June 28,
                                               2002       2001        2000       1999     1998
                                            --------  ---------  ----------  ---------  -----
(In thousands, except per share amounts)
<S>                           <C>          <C>        <C>        <C>         <C>        <C>    <C>
SELECTED INCOME STATEMENT DATA:
  Total revenues . . . . . . . . . . . .  $    66,642  $  65,268  $  67,640  $  67,261   $  65,269

  Income before taxes. . . . . . . . . .        1,723      3,921      4,389      4,096       7,023
  Net income . . . . . . . . . . . . . .        1,137      2,480      2,884      2,752       4,880
  Basic earnings per common share. . . .         0.11       0.23        .25        .24         .38
  Diluted earnings per common share. . .         0.11       0.23        .25        .23         .36
  Dividends declared per common share. .          -         0.12        .24     (2).18    (1)  .24

SELECTED BALANCE SHEET DATA:
  Total assets . . . . . . . . . . . . .       24,614     19,872     17,691     18,586      21,773
  Long-term debt and
       capital lease obligations . . . .       15,227     11,161     10,655      6,944       5,454
<FN>

(1)     On  June  28,  1999  the  Company's Board of Directors declared a quarterly dividend of $.06 per share
     on  the  Company's  common  stock,  payable  to  shareholders  of  record  on  July  9,  1999.

(2)     On  June  26,  2000  the  Company's Board of Directors declared a quarterly dividend of $.06 per share
     on  the  Company's  common  stock,  payable  to  shareholders  of  record  on  July  7,  2000.
</TABLE>

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

                              RESULTS OF OPERATIONS

FISCAL  2002  COMPARED  TO  FISCAL  2001

          Diluted  earnings  per  share decreased 52% to $0.11 from $0.23 in the
prior year.  Net income decreased 54% to $1,137,000 from $2,480,000 in the prior
year,  on revenues of $66.6 million in the current year and $65.3 million in the
prior  year.  Pre-tax  income  decreased 56% to $1,723,000 from $3,921,000.  The
decrease  in  net  income  was  primarily  attributable  to  a  pretax charge of
approximately  $1.9 million to reserve for a note receivable owed to the Company
from  C. Jeffrey Rogers, the Company's former Chief Executive Officer.  Based on
a  review  of certain financial information provided by Mr. Rogers, the Board of
Directors  of  the  Company  has  determined  the  collection  of  the  loan  of
approximately  $1.9  million  from  the  Company to Mr. Rogers is doubtful.  The
Company  recorded  the  charge  in  the  fourth  quarter of fiscal 2002 to fully
reserve  for  the possible nonpayment by Mr. Rogers. The Company intends, to the
extent  legally permissible, to enforce this obligation under the relevant terms
of  the Promissory Note and the Pledge Agreement. On August 21, 2002, C. Jeffery
Rogers, the Company's former Chief Executive Officer, resigned his position with
the  Company.

     Results  of  operations  for  fiscal  2002 include fifty-three weeks versus
fifty-two  weeks  in  fiscal  2001.

     Food  and  supply  sales  by  the Company's Norco division include food and
paper  products, equipment, marketing material, and other distribution revenues.
Total  food and supply sales increased 1% to $57.7 million from $57.0 million in
the  prior  year.  Higher  cheese prices, the additional week of operations, and
increased  sales of marketing materials were partially offset by lower chainwide
retail  sales.

     Franchise  revenue,  which includes royalties, license fees and income from
area  development  and foreign master license (collectively, "Territory") sales,
increased  3%  or  $155,000  in  fiscal  2002  primarily  due  to the sale of an
international  master  license.

     Restaurant  sales,  which  consist of revenue generated by Company-operated
stores, for the year decreased 9% or $212,000 compared to the same period of the
prior  year.  This  is  the result of the temporary closing of the Delco unit in
September  2001.

     Other  income  primarily  consists  of  interest  income  and non-recurring
revenue  items.  Other  income  increased  137% or $724,000 primarily due to the
non-cash  reversal  of  a  $700,000  reserve  which was originally set up as the
Company  emerged  from  bankruptcy,  and  is  now  deemed  unnecessary.

     Cost of sales increased less than 1% to $54.1 million from $53.8 million in
the prior year.  As a percentage of sales, cost of sales decreased to 90.5% from
90.6%  compared  to  the prior year.  Higher cost of sales due to the additional
week  of  operations,  as  described  above,  were  offset  by lower fuel costs.

     Franchise  expenses  include  selling,  general and administrative expenses
(primarily  wages  and travel expenses) directly related to the sale and service
of franchises and Territories.  These costs increased 8% or $217,000 compared to
last  year  primarily  due  to  the  additional week of operations and increased
expenses  for  training  materials.

     General  and  administrative  expenses  increased 22% or $839,000 in fiscal
2002.  This is primarily the result of the full provision for all remaining rent
expense at the Company's former corporate headquarters of approximately $304,000
and  additional  legal  reserves  of $165,000.  Additionally, property taxes and
insurance  associated  with  the  new  facility,  along  with  the extra week of
operations  in fiscal 2002, all contributed to higher general and administrative
expenses.

     Interest  expense  decreased  less  than  1% or $4,000 in the current year.
Lower  interest  rates  and  increased  capitalized  interest  on  funds used in
construction  of  the  new  corporate  office  and  distribution  facility  were
partially  offset  by  higher  debt  levels  in  the  current  year.

     Provision  for  income taxes decreased 59% or $855,000 due to lower income.
The  effective tax rate was 34% compared to 37% in the prior year.  The decrease
in  the  effective  tax  rate  is  primarily  due to a decrease in nondeductible
permanent  differences, which were partially offset by a change in the valuation
allowance  due to the potential expiration of certain foreign tax carryforwards.

     During fiscal 2002, the Company opened for business a total of 37 new Pizza
Inn  franchise  units,  including  29  domestic  and  8  international  units.
Domestically,  46  units were closed by franchisees or terminated by the Company
typically  because  of  unsatisfactory  standards  of  operation or performance.
Similarly,  8  international  units  were  closed.

FISCAL  2001  COMPARED  TO  FISCAL  2000

     Diluted  earnings  per  share decreased 8% to $0.23 from $0.25 in the prior
year.  Net income decreased 14% to $2,480,000 from $2,884,000 in the prior year,
on  revenues of $65.3 million in the current year and $67.6 million in the prior
year.  Pre-tax  income decreased 11% to $3,921,000 from $4,389,000.  The Company
considers  pre-tax  income  to be the best measure of its performance due to the
significant  benefit  of  its  net  operating  loss  carryforwards.  These
carryforwards,  which  total  $2.8  million  at June 24, 2001, reduce the income
taxes paid by the Company from the 34% statutory rate to the minimum tax rate of
approximately  2%.

     Food  and  supply sales by the Company's distribution division decreased 4%
to  $57.0  million  from  $59.1  million  in the prior year as a result of fewer
stores,  softer  retail  sales, and slightly lower cheese prices.  International
food  and supply sales decreased $554,000 from the prior year due to lower sales
and  store  closings  caused primarily by poor economic and social conditions in
international  markets.  Domestic  and  international  equipment sales decreased
12.6%,  or  $213,000  from  the  prior  year  due  to  fewer  store  openings.

     Franchise  revenue,  which includes royalties, license fees and income from
area  development  and foreign master license (collectively, "Territory") sales,
decreased  6%  or  $325,000  in  fiscal  2001.  Royalty  revenue decreased 5% or
$294,000 compared to last year, mainly resulting from a decrease in domestic and
international  chainwide  sales.

     Restaurant  sales,  which  consist  of  revenue  generated by Company-owned
stores,  for  the  year  decreased  less  than 1% or $6,000 compared to the same
period  of  the  prior  year.

     Other  income  consists  of  primarily  interest  income  and non-recurring
revenue  items.  Other  income  increased  15%  or  $69,000 due to higher vendor
incentives  in  the  current  year, the sale of promotional items, and increased
interest  income.

     Cost of sales decreased 4% to $53.8 million from $55.9 million in the prior
year.  As  a  percentage  of  sales, cost of sales decreased to 90.6% from 90.9%
compared to the prior year.  Cost of sales decreased primarily due to lower food
and  supply  sales  as noted above, which was partially offset by higher vehicle
costs,  depreciation  and  amortization,  and  rent  expense.

     Franchise  expenses  include  selling,  general and administrative expenses
(primarily  wages  and travel expenses) directly related to the sale and service
of  franchises and Territories.  These costs decreased 1% or $36,000 compared to
last  year.

     General  and  administrative  expenses  increased  5% or $188,000 in fiscal
2001.  This  is  a result of computer system modifications that were capitalized
in  the  prior  year,  and  lower  legal  fees  in  the  prior  year.

     Interest  expense  increased  11%  or  $86,000  in the current year.  Lower
interest rates and capitalized interest on funds used in construction of the new
corporate  office and distribution facility were partially offset by higher debt
levels  in  the  current  year.

     Provision  for income taxes decreased 4% or $64,000 in the current year due
to  lower  income.  The  effective tax rate was 37% compared to 34% in the prior
year.  The increase in the effective tax rate is primarily due to an increase in
permanent  differences  from  the  prior  year.

     During fiscal 2001, the Company opened for business a total of 35 new Pizza
Inn  franchise  units,  including  27  domestic  and  8  international  units.
Domestically,  58  units, including 25 Express units, were closed by franchisees
or  terminated  by  the Company typically because of unsatisfactory standards of
operation  or  performance.  Similarly,  23  international units were closed, of
which  11  were  kiosk  units.





                               FINANCIAL CONDITION

     Cash  and  cash  equivalents increased $230,000 in fiscal 2002. The Company
used  the  cash  flow generated from operations plus the proceeds from increased
net  bank  borrowings  of  $4.5  million  to  fund approximately $9.0 million of
capital  expenditures  consisting  primarily  of  construction costs for the new
corporate  office  and  distribution  center,  and  approximately  $573,000  to
reacquire  262,100  shares  of  its own common stock at prevailing prices on the
open  market.

     At  June 30, 2002 the net deferred tax asset balance was $2.6 million. This
balance  includes  various  temporary differences. At June 30, 2002, the Company
has  a  valuation  allowance of $225,000 which consists primarily of foreign tax
credit  carryforwards  that  may expire before they can be utilized. The Company
believes  that  it  is  more  likely  than  not  that  these credits will not be
realized.

     Management believes that future operations will generate sufficient taxable
income,  along  with the reversal of temporary differences, to fully realize the
deferred  tax  asset, net of a valuation allowance of $225,000 primarily related
to  the  potential  expiration  of  certain  foreign  tax  credit carryforwards.
Additionally,  management  believes  that  taxable income based on the Company's
existing  franchise base should be more than sufficient to enable the Company to
realize  its  net  deferred  tax asset without reliance on material, non-routine
income.

     The  Company  has  realized substantial benefit from the utilization of its
net operating loss carryforwards to reduce its federal tax liability and expects
to  realize  a  benefit  in  future  years from the utilization of its temporary
differences,  which  currently total $2.6 million.  In accordance with SFAS 109,
carryforwards,  when  utilized, are reflected as a reduction of the deferred tax
asset  rather  than  a  reduction  of  income  tax expense.  This has caused the
Company to reflect an amount for federal income tax expense on its statements of
operations  at an effective corporate rate of 34%, 37%, and 34% for fiscal years
2002,  2001 and 2000, respectively.  However, the actual amount of taxes paid at
the alternative minimum tax rate of approximately 0%, 0% and 2% for fiscal years
2002,  2001,  and  2000,  respectively, is significantly less than the corporate
rate  reflected  on the Company's statement of operations.  As of June 30, 2002,
the  net  operating  loss carryforwards have been fully utilized.  Historically,
the  differences  between  pre-tax earnings for financial reporting purposes and
taxable  income for tax purposes have consisted of temporary differences arising
from  the  timing  of depreciation, deductions for accrued expenses and deferred
revenues,  as well as permanent differences as a result of the exercise of stock
options  deducted  for  income  tax  purposes  but  not  for financial reporting
purposes.

                         LIQUIDITY AND CAPITAL RESOURCES

     Cash  provided by operations totaled $5,560,000 in fiscal 2002 and was used
primarily,  in  conjunction  with  additional  borrowings,  to  fund  capital
expenditures  and  to  reacquire  the  Company's  common  stock.

     The  Company  increased  its  net  bank borrowings by $4.5 million to $16.7
million  at  June  30,  2002  from $12.2 million at June 24, 2001 primarily as a
result  of  construction  costs  and  equipment for the new corporate office and
distribution  center.

     During  fiscal  2002 the Company purchased 262,100 shares of its own common
stock  on  the  open  market  for a total price of approximately $573,000.  This
brings  the total number of shares in treasury to 4,897,645 as of June 30, 2002.

     Capital  expenditures of $8,952,000 during fiscal 2002 consist primarily of
construction  costs  and equipment for the new corporate office and distribution
center.

     The  Company's  future  requirements  for  cash  relate  primarily  to  the
repayment  of  debt, capital expenditures, including information system upgrades
and  miscellaneous  equipment,  and  the  possible  periodic purchase of its own
common  stock.

     The  Company's  primary  sources  of  cash  are sales from the distribution
division,  royalties,  license  fees  and  Territory  sales.  Existing  area
development  and  master license agreements contain development commitments that
should  result in future chainwide growth.  Related growth in distribution sales
and  royalties  are  expected  to provide adequate working capital to supply the
needs  described  above.  The  signing  of  any  new  area development or master
license agreements, which cannot be predicted with certainty, would also provide
significant  infusions  of  cash.

                                   MARKET RISK

     The  Company  has  market  risk  exposure  arising from changes in interest
rates.  The  Company's  earnings  are affected by changes in short-term interest
rates  as a result of borrowings under its credit facilities which bear interest
based  on  floating  rates.

     At  June  30,  2002 the Company had approximately $16.7 million of variable
rate  debt  obligations  outstanding  with  a  weighted average interest rate of
4.02%.   A  hypothetical  10%  change  in  the effective interest rate for these
borrowings,  assuming debt levels at June 30, 2002 would change interest expense
by  approximately  $67,000.

     The Company entered into an interest rate swap effective February 27, 2001,
as  amended,  designated  as  a  cash  flow  hedge, to manage interest rate risk
relating  to the financing of the construction of the Company's new headquarters
and  to  fulfill bank requirements.  The swap agreement has a notional principal
amount  of $8.125 million with a fixed pay rate of 5.84% which began November 1,
2001  and will end November 19, 2007.  The swap's notional amount amortizes over
a  term  of  twenty  years to parallel the terms of the term loan.  Statement of
Financial  Accounting  Standards  ("SFAS")  No.  133, "Accounting for Derivative
Instruments  and  Hedging  Activities" requires that for cash flow hedges, which
hedge  the  exposure  to  variable  cash  flow  of a forecasted transaction, the
effective  portion  of  the derivative's gain or loss be initially reported as a
component  of  other  comprehensive  income in the equity section of the balance
sheet  and  subsequently  reclassified  into  earnings  when  the  forecasted
transaction  affects earnings.  Any ineffective portion of the derivative's gain
or  loss  is  reported  in  earnings immediately.  At June 30, 2002 there was no
hedge  ineffectiveness.  The  Company's  expectation  is  that  the  hedging
relationship  will  be  highly effective at achieving offsetting changes in cash
flows.

                                ECONOMIC FACTORS

     The  costs  of  operations, including labor, supplies, utilities, financing
and  rental  costs,  to  the  Company  and its franchisees, can be significantly
affected  by  inflation and other economic factors.  Increases in any such costs
would  result  in  higher costs to the Company and its franchisees, which may be
partially  offset  by  price increases and increased efficiencies in operations.
The  Company's  revenues  are also affected by local economic trends where units
are  concentrated.  The  Company  intends to pursue franchise development in new
markets  in  the  United  States  and  other countries, which would mitigate the
impact  of  local  economic  factors.

                     CONTRACTUAL OBLIGATIONS AND COMMITMENTS

     The  following  chart  summarizes all of the Company's material obligations
and  commitments  to make future payments under contracts such as debt and lease
agreements  as  of  June  30,  2002  (in  thousands):

<TABLE>
<CAPTION>



                                          Less Than 1   1-3     4-5    After 5
<S>                                  <C>      <C>     <C>       <C>     <C>
                                      Total . Year     Years   Years     Years
-----------------------------------  -------  ------  --------  ------
Bank debt . . . . . . . . . . . . .  $16,747  $1,656  $  7,948  $  406  $6,737
Operating lease obligations (1) . .    4,605   1,399     2,741     465       -
Capital lease obligations (2) . . .      365     229       123      13       -
                                     -------  ------  --------  ------  ------
Total contractual cash obligations.  $21,717  $3,284  $ 10,812  $  884  $6,737
                                     =======  ======  ========  ======  ======

</TABLE>




(1)  Includes  a  lease  dated  March  21, 2002 the Company entered into for new
tractors.  Per  the terms of the lease the obligations begin upon receipt of the
tractors  which  is  estimated  to be October 2002. The above table reflects the
obligations  beginning  at  that  time.

(2)  Does  not  include  amount  representing  interest.


                   CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Management's discussion and analysis is based on the Company's consolidated
financial  statements  and  related footnotes contained within this report.  The
Company's  more  critical  accounting  policies used in the preparation of those
consolidated  financial  statements  are  discussed  below.

     The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect  the  amounts reported in the financial statements and
accompanying  notes.  Significant  estimates  made  by  management  include  the
allowance  for  doubtful  accounts,  inventory  valuation,  deferred  tax  asset
valuation  allowances,  and  legal  accruals.   Actual results could differ from
those  estimates.

     The  Company's  Norco  division  sells  food,  supplies  and  equipment  to
franchisees  on trade accounts under terms common in the industry.  Revenue from
such  sales  is  recognized  upon shipment.  Norco sales are reflected under the
caption "food and supply sales." Shipping and handling costs billed to customers
are  recognized  as  revenue.

     Franchise  revenue  consists  of  income  from license fees, royalties, and
Territory  sales.  License  fees  are  recognized  as income when there has been
substantial performance of the agreement by both the franchisee and the Company,
generally  at  the  time the unit is opened.  Royalties are recognized as income
when  earned.

     Territory  sales  are  the  fees  paid  by  selected experienced restaurant
operators  to  the  Company  for  the  right to develop Pizza Inn restaurants in
specific  geographical  territories.  When  the  Company  has  no  continuing
substantive  obligations of performance to the area developer or master licensee
regarding  the  fee,  the  Company  recognizes  the  fee  to  the extent of cash
received.  If  continuing  obligations exist, fees are recognized ratably during
the  performance  of  those  obligations.

     Inventories,  which consist primarily of food, paper products, supplies and
equipment  located at the Company's distribution center, are stated at the lower
of  FIFO  (first-in,  first-out) cost or market.  Provision is made for obsolete
inventories  and  is based upon management's assessment of the market conditions
for  its  products.

     Accounts  receivable  consist primarily of receivables from food and supply
sales  and  franchise  royalties.  The  Company records a provision for doubtful
receivables  to  allow  for  any amounts which may be unrecoverable and is based
upon  an  analysis  of  the  Company's  prior  collection  experience,  customer
creditworthiness,  and  current  economic  trends.

     Notes  receivable  primarily  consist  of  notes  from  franchisees for the
purchase  of  area  development  and  master  license  territories  and  trade
receivables.  These  notes  generally  have terms ranging from one to five years
and  interest  rates  of 8% to 12%. The Company records a provision for doubtful
receivables  to  allow  for  any amounts which may be unrecoverable and is based
upon  an  analysis  of  the  Company's  prior  collection  experience,  customer
creditworthiness,  and  current  economic  trends.

     The  Company  has  recorded  a valuation allowance to reflect the estimated
amount  of deferred tax assets that may not be realized based upon the Company's
analysis  of  existing  tax  credits  by  jurisdiction  and  expectations of the
Company's  ability to utilize these tax attributes through a review of estimated
future  taxable  income  and  establishment  of tax strategies.  These estimates
could  be  impacted  by  changes in future taxable income and the results of tax
strategies.

                        TRANSACTIONS WITH RELATED PARTIES

One  of  the  individuals  nominated  by the Company and elected to serve on its
Board  of Directors is a franchisee.  This franchisee currently operates a total
of  12  restaurants located in Arkansas.  Purchases by this franchisee comprised
6%  of  the Company's total food and supply sales in fiscal 2002.  Royalties and
license fees and area development sales from this franchisee comprised 3% of the
Company's  total  franchise  revenues  in fiscal 2002.  As franchised units, his
restaurants  pay  royalties to the Company and purchase a majority of their food
and supplies from the Company's distribution division.  As of June 30, 2002, his
accounts  and  note  payable  to  the  Company  were  $685,669.

The  Company  believes the above transactions were at the same prices and on the
same  terms  available  to  non-related  third  parties.

In  October 1999, the Company loaned $1,949,698 to C. Jeffery Rogers in the form
of  promissory  note due in June 2004 to acquire 700,000 shares of the Company's
common  stock through the exercise of vested stock options previously granted to
him  in  1995  by  the  Company.  The  note  bears interest at the same floating
interest rate the Company pays on its revolving credit line with Wells Fargo and
is collateralized by a second lien in certain real property and existing Company
stock  owned  by  C.  Jeffery  Rogers.  The  note is reflected as a reduction to
stockholders'  equity.

In  October 1999, the Company loaned $557,056 to Ronald W. Parker in the form of
promissory  note  due  in  June  2004 to acquire 200,000 shares of the Company's
common  stock through the exercise of vested stock options previously granted to
him  in  1995  by  the  Company.  The  note  bears interest at the same floating
interest rate the Company pays on its revolving credit line with Wells Fargo and
is  collateralized  by certain real property and existing Company stock owned by
Ronald W. Parker.  The note is reflected as a reduction to stockholders' equity.

In  July  2000, the Company loaned $302,581 to Ronald W. Parker in the form of a
promissory  note  due  in  June  2004 to acquire 200,000 shares of the Company's
common  stock through the exercise of vested stock options previously granted in
1995  by the Company.  In October 2000, a $164,647 principal payment was made on
the  note.  The  note  bears  interest  at  the  same floating interest rate the
Company pays on its revolving credit line with Wells Fargo and is collateralized
by  certain  real property and existing Company stock owned by Ronald W. Parker.
The  note  is  reflected  as  a  reduction  to  stockholders'  equity.

The  Board of Directors of the Company, based upon a review of certain financial
information  provided  by C. Jeffery Rogers, determined that the collection of a
promissory  note previously signed with C. Jeffery Rogers, of approximately $1.9
million  is  doubtful  at June 30, 2002.  The Company recorded the charge in the
fourth quarter of fiscal 2002 to fully reserve for the possible nonpayment.  The
Company  intends,  to the extent legally permissible, to enforce this obligation
under  the  relevant  terms  of  the  Promissory  Note and the Pledge Agreement.

                      EQUITY COMPENSATION PLAN INFORMATION

A  summary  of equity compensation under all of the Company's stock option plans
follows:


<TABLE>
<CAPTION>



                       Number of Securities to    Weighted-average       Number of Securities
<S>                    <C>                      <C>                    <C>
                       be issued upon exercise  exercise price of      remaining available for
Plan. . . . . . . . .  of outstanding options,  outstanding options,   future issuance under
Category. . . . . . .  warrants, and rights     warrants, and rights   equity compensation plans
---------------------  -----------------------  ---------------------  -------------------------
Equity Compensation
plans approved by . .                1,591,233  $                3.76                    677,384
security holders

Equity compensation
plans not approved by                        -                      -                          -
security holders

Total . . . . . . . .                1,591,233  $                3.76                    677,384
                       =======================  =====================  =========================

</TABLE>




                            FORWARD-LOOKING STATEMENT

     This  report  contains  certain forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) relating to the
Company  that are based on the beliefs of the management of the Company, as well
as  assumptions and estimates made by and information currently available to the
Company's  management.  When  used  in  the  report,  the  words  "anticipate,"
"believe," "estimate," "expect," "intend" and other similar expressions, as they
relate  to  the  Company  or  the Company's management, identify forward-looking
statements.  Such  statements  reflect  the  current  views  of the Company with
respect  to  future  events  and are subject to certain risks, uncertainties and
assumptions  relating to the operations and results of operations of the Company
as  well  as  its  customers and suppliers, including as a result of competitive
factors  and  pricing  pressures,  shifts  in  market  demand,  general economic
conditions and other factors including but not limited to, changes in demand for
Pizza Inn products or franchises, the impact of competitors' actions, changes in
prices  or supplies of food ingredients, and restrictions on international trade
and  business.  Should  one or more of these risks or uncertainties materialize,
or  should  underlying  assumptions or estimates prove incorrect, actual results
may  vary  materially  from  those  described  herein  as anticipated, believed,
estimated,  expected  or  intended.

<PAGE>

                                 PIZZA INN, INC.



ITEM  8  -  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA


Index  to  Financial  Statements  and  Schedules:



FINANCIAL  STATEMENTS                                           PAGE  NO.


Report  of  Independent  Accountants.                                         16

Consolidated  Statements  of  Operations  for  the  years  ended
     June  30,  2002,  June  24,  2001,  and  June  25,  2000.                17

Consolidated  Statements  of  Comprehensive  Income  for  the years
ended   June  30,  2002,  June  24,  2001,  and  June  25,  2000              17

Consolidated  Balance  Sheets  at  June  30,  2002  and  June  24,  2001      18

Consolidated  Statements  of  Shareholders'  Equity  for  the  years
     ended  June  30,  2002,  June  24,  2001,  and  June  25,  2000.         19

Consolidated  Statements  of  Cash  Flows  for  the  years  ended June 30, 2002,
     June  24,  2001,  and  June  25,  2000.                                  20

Notes  to  Consolidated  Financial  Statements.                               22



     FINANCIAL  STATEMENT  SCHEDULES


     Schedule  II   -  Consolidated  Valuation  and  Qualifying  Accounts     35

     All  other  schedules  are  omitted  because  they  are not applicable, not
     required  or  because  the  required  information  is  included  in  the
     consolidated financial  statements  or  notes  thereto.

 SIGNATURES
Certifications                                                                40
SECTION  906  CERTIFICATION  OF  THE  CEO
SECTION  906  CERTIFICATION  OF  THE  PRINCIPAL  ACCOUNTING  OFFICER


<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS

To  the  Board  of  Directors
and  Shareholders  of  Pizza  Inn,  Inc.

In our opinion, the consolidated financial statements listed in the accompanying
index  present fairly, in all material respects, the financial position of Pizza
Inn,  Inc.  and  its  subsidiaries  at  June 30, 2002 and June 24, 2001, and the
results  of their operations and their cash flows for each of the three years in
the  period  ended  June  30,  2002  in  conformity  with  accounting principles
generally  accepted  in  the  United  States  of  America.  In  addition, in our
opinion,  the  financial  statement  schedule  listed  in the accompanying index
presents  fairly,  in  all  material respects, the information set forth therein
when  read  in  conjunction  with the related consolidated financial statements.
These  financial  statements  and  financial  statement  schedule  are  the
responsibility  of the Company's management; our responsibility is to express an
opinion  on these financial statements and financial statement schedule based on
our  audits.  We  conducted  our  audits  of these statements in accordance with
auditing  standards  generally  accepted  in the United States of America, which
require  that we plan and perform the audit to obtain reasonable assurance about
whether  the  financial  statements are free of material misstatement.  An audit
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the  financial  statements, assessing the accounting principles
used  and  significant  estimates made by management, and evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.



PRICEWATERHOUSECOOPERS  LLP
Dallas,  Texas
September  27,  2002


<TABLE>
<CAPTION>

                                                          PIZZA INN, INC.
                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                             (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)



<S>                                                                    <C>                       <C>                      <C>
                                                                                            YEAR ENDED
                                                                                    ------------------------
                                                                        JUNE 30,                 JUNE 24,                 JUNE 25,
                                                                           2002                     2001                      2000
                                                        ------------------------  -----------------------  -----------------------
REVENUES:
  Food and supply sales. . . . . . . . . . . . . . . .  $                57,727   $               57,020   $                59,130
  Franchise revenue. . . . . . . . . . . . . . . . . .                    5,528                    5,373                     5,698
  Restaurant sales . . . . . . . . . . . . . . . . . .                    2,134                    2,346                     2,352
  Other income . . . . . . . . . . . . . . . . . . . .                    1,253                      529                       460
                                                        ------------------------  -----------------------  -----------------------
                                                                         66,642                   65,268                    67,640
                                                        ------------------------  -----------------------  -----------------------

COSTS AND EXPENSES:
  Cost of sales. . . . . . . . . . . . . . . . . . . .                   54,146                   53,783                    55,910
  Franchise expenses . . . . . . . . . . . . . . . . .                    2,865                    2,648                     2,684
  General and administrative expenses. . . . . . . . .                    4,709                    3,870                     3,682
  Provision for bad debt (see Note J). . . . . . . . .                    2,367                      210                       225
  Interest expense (net of capitalized interest of
    $178, $102, and $0, respectively). . . . . . . . .                      832                      836                       750
                                                        ------------------------  -----------------------  -----------------------
                                                                         64,919                   61,347                    63,251
                                                        ------------------------  -----------------------  -----------------------

INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . .                    1,723                    3,921                     4,389

  Provision for income taxes . . . . . . . . . . . . .                      586                    1,441                     1,505
                                                        ------------------------  -----------------------  -----------------------

NET INCOME . . . . . . . . . . . . . . . . . . . . . .                 1,137                    2,480                    2,884
                                                        ========================  =======================  =======================

BASIC EARNINGS PER COMMON SHARE. . . . . . . . . . . .                   0.11                     0.23                     0.25
                                                        ========================  =======================  =======================

DILUTED EARNINGS PER COMMON SHARE. . . . . . . . . . .                   0.11                     0.23                     0.25
                                                        ========================  =======================  =======================

DIVIDENDS DECLARED PER COMMON SHARE. . . . . . . . . .                       -                    0.12                     0.24
                                                        ========================  =======================  =======================

WEIGHTED AVERAGE COMMON SHARES . . . . . . . . . . . .                   10,092                   10,635                    11,316
                                                        ========================  =======================  =======================

WEIGHTED AVERAGE COMMON AND
  POTENTIALLY DILUTIVE COMMON SHARES . . . . . . . . .                   10,095                   10,639                    11,441
                                                        ========================  =======================  =======================

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)

                                                                                          YEAR ENDED
                                                                   ------------------------------------------------------
                                                                      JUNE 30, . . .  . . . . .  JUNE 24,                JUNE 25,
                                                                           2002                     2001                     2000
                                                        ------------------------  -----------------------  -----------------------

    Net Income . . . . . . . . . . . . . . . . . . . .  $                 1,137   $                2,480   $                 2,884
    Interest rate swap loss (net of tax of $129, $38,
        and $0, respectively). . . . . . . . . . . . .                     (251)                     (73)                        -
    Comprehensive Income . . . . . . . . . . . . . . .  $                   886   $                2,407   $                 2,884
                                                        ========================  =======================  =======================
<FN>

                                   See accompanying Notes to Consolidated Financial Statements.
</TABLE>

<TABLE>
<CAPTION>

                                                 PIZZA INN, INC.
                                           CONSOLIDATED BALANCE SHEETS
                                       (IN THOUSANDS, EXCEPT SHARE AMOUNTS)


                                                                           JUNE 30,               JUNE 24,
ASSETS                                                                       2002                   2001
                                                                     ---------------------  ---------------------
CURRENT ASSETS
<S>                                                                  <C>                    <C>
  Cash and cash equivalents . . . . . . . . . . . . . . . . . . . .  $                770   $                540
  Accounts receivable, less allowance for doubtful
    accounts of $829 and $729, respectively . . . . . . . . . . . .                 3,867                  4,839
  Notes receivable, current portion, less allowance
    for doubtful accounts of $354 and $263, respectively. . . . . .                   332                    958
  Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . .                 1,526                  2,063
  Deferred taxes, net . . . . . . . . . . . . . . . . . . . . . . .                 1,297                  1,285
  Prepaid expenses and other. . . . . . . . . . . . . . . . . . . .                   905                    578
                                                                     ---------------------  ---------------------
      Total current assets. . . . . . . . . . . . . . . . . . . . .                 8,697                 10,263
Property, plant and equipment, net. . . . . . . . . . . . . . . . .                13,567                  6,594
Property under capital leases, net. . . . . . . . . . . . . . . . .                   337                    576
Deferred taxes, net . . . . . . . . . . . . . . . . . . . . . . . .                 1,347                  1,897
Long-term notes receivable, less
  allowance for doubtful accounts of $20 and $9, respectively . . .                   191                      9
Deposits and other. . . . . . . . . . . . . . . . . . . . . . . . .                   475                    533
                                                                     ---------------------  ---------------------
                                                                     $             24,614   $             19,872
                                                                     =====================  =====================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable - trade. . . . . . . . . . . . . . . . . . . . .  $              1,527   $              3,245
  Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . .                 2,529                  2,000
  Current portion of long-term debt . . . . . . . . . . . . . . . .                 1,656                  1,250
  Current portion of capital lease obligations. . . . . . . . . . .                   229                    486
                                                                     ---------------------  ---------------------
    Total current liabilities . . . . . . . . . . . . . . . . . . .                 5,941                  6,981

LONG-TERM LIABILITIES
  Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . .                15,091                 10,934
  Long-term capital lease obligations . . . . . . . . . . . . . . .                   136                    227
  Other long-term liabilities . . . . . . . . . . . . . . . . . . .                   517                    865
                                                                     ---------------------  ---------------------
                                                                                   21,685                 19,007
                                                                     ---------------------  ---------------------

COMMITMENTS AND CONTINGENCIES (See Note I)

SHAREHOLDERS' EQUITY
  Common Stock, $.01 par value; authorized 26,000,000
    shares; issued 14,955,819 and 14,955,119 shares, respectively;
    outstanding 10,058,174 and 10,319,638 shares, respectively. . .                   150                    150
  Additional paid-in capital. . . . . . . . . . . . . . . . . . . .                 7,824                  7,823
  Loans to officers, less allowance for doubtful
    accounts of $1,750 and $0, respectively . . . . . . . . . . . .                  (575)                (2,325)
  Retained earnings . . . . . . . . . . . . . . . . . . . . . . . .                15,338                 14,201
  Accumulated other comprehensive loss. . . . . . . . . . . . . . .                  (324)                   (73)
  Treasury stock at cost
    Shares in treasury: 4,897,645 and 4,635,481, respectively . . .               (19,484)               (18,911)
                                                                     ---------------------  ---------------------
    Total shareholders' equity. . . . . . . . . . . . . . . . . . .                 2,929                    865
                                                                     ---------------------  ---------------------
                                                                     $             24,614   $             19,872
                                                                     =====================  =====================
<FN>

                           See accompanying Notes to Consolidated Financial Statements.
</TABLE>




<TABLE>
<CAPTION>

                                                     PIZZA INN, INC.
                                     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                     (IN THOUSANDS)
                                                                                            ACCUM.
                                                           ADDITIONAL                        OTHER     TREASURY
                                 COMMON STOCK              PAID-IN    LOANS TO    RETAINED    COMP.     STOCK
                                 -------------
                                 SHARES          AMOUNT    CAPITAL    OFFICERS    EARNINGS    LOSS      AT COST    TOTAL
                                 -------------  --------  ---------  ----------  ----------  ------  ---------  --------
<S>                              <C>            <C>       <C>        <C>         <C>         <C>     <C>        <C>

BALANCE, JUNE 27, 1999. . . .      11,408          $ 149   $   7,321  $      -   $  14,375   $    -  $(15,786)  $ 6,059
                                 -------------  --------  ---------  ----------  ----------  ------  ---------  --------

Stock options exercised . . . .        47              1          83          -         (1)       -        61       144
Loans to officers for exercise
     of stock options . . . . .       900              -           -     (2,250)    (1,296)       -     3,546         -
Tax benefits associated
    with stock options. . . . .         -              -          303         -          -        -         -       303
Employee incentive options. . .         -              -            1         -          -        -         -         1
Dividends paid. . . . . . . . .         -              -            -         -     (2,799)       -         -    (2,799)
Acquisition of treasury
     stock (see Note K) . . .      (1,710)             -            -         -          -        -    (6,103)   (6,103)
Net income. . . . . . . . . . .         -              -            -         -      2,884        -         -     2,884
                              ------------       --------    --------- --------- ----------   ------ ---------  --------

BALANCE, JUNE 25, 2000. . . . .    10,645       $    150    $   7,708 $  (2,250) $  13,163   $    -  $(18,282)  $   489
                                 -------------  --------  ---------  ----------  ----------  ------  ---------  --------
<FN>

Stock options exercised               215              -           37         -      (199)         -      700       538
Loans  to  officers  for
    exercise of stock options           -              -            -      (240)        -          -        -      (240)
Principal  repayment  of  loans
    by officers                         -              -            -       165         -          -        -       165
Tax  benefits  associated
    with stock options                  -              -           77         -         -          -        -        77
Employee incentive options              1              -            1         -         -          -        -         1
Dividends paid                          -              -            -         -    (1,243)         -        -    (1,243)
Acquisition  of  treasury
    stock (see Note K)               (541)             -            -         -         -          -    (1,329)  (1,329)
Interest rate swap loss                                                                                                -
    (net of tax of $38)                 -              -            -         -         -        (73)        -      (73)
Net income                              -              -            -         -     2,480          -         -    2,480
                           --------------   -------------   ----------  -------     -----    --------   ------  --------

BALANCE, JUNE 24, 2001             10,320        $   150   $    7,823  $ (2,325) $ 14,201   $    (73)$ (18,911) $    865
                                 --------        --------  ----------- --------- --------  ---------- --------- --------

Employee incentive options              -              -            1         -         -          -         -         1
Acquisition  of  treasury
    stock (see Note K)               (262)             -            -         -         -          -      (573)    (573)
Allowance  for
    doubtful accounts                   -              -            -     1,750         -          -         -    1,750
Interest  rate  swap  loss
    (net of tax of $129)                -              -            -         -         -       (251)        -     (251)
Net income                              -              -            -         -     1,137          -         -    1,137
                                ----------    -----------   ----------  --------    -----      ------    ------  -------
BALANCE, JUNE 30, 2002             10,058        $   150   $    7,824   $  (575) $ 15,338$    $ (324) $(19,484) $ 2,929
                                 ========       ========   ========== ========== ========= ========== ========= ========


                             See  accompanying  Notes  to  Consolidated  Financial  Statements.
</TABLE>



<TABLE>
<CAPTION>

                                                         PIZZA INN, INC.
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                          (IN THOUSANDS)


                                                                                           YEAR ENDED
                                                                                       -----------------------
                                                                     JUNE 30,                 JUNE 24,                  JUNE 25,
                                                                      2002                        2001                     2000
                                                        -----------------------  -----------------------  -----------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                        <C>                      <C>                      <C>
  Net income . . . . . . . . . . . . . . . . . . . . .  $                1,137   $                2,480   $                2,884
    Adjustments to reconcile net income to
      cash provided by operating activities:
      Depreciation and amortization. . . . . . . . . .                   1,337                    1,343                    1,210
      Provision for bad debt . . . . . . . . . . . . .                   2,367                      210                      225
      Deferred income taxes. . . . . . . . . . . . . .                     538                    1,247                    1,127
    Changes in assets and liabilities:
      Notes and accounts receivable. . . . . . . . . .                     799                     (263)                    (196)
      Inventories. . . . . . . . . . . . . . . . . . .                     537                      847                     (517)
      Accounts payable - trade . . . . . . . . . . . .                    (825)                     102                     (390)
      Accrued expenses . . . . . . . . . . . . . . . .                     240                      102                      111
      Deferred franchise revenue . . . . . . . . . . .                      38                      (10)                    (109)
      Prepaid expenses and other . . . . . . . . . . .                    (608)                     362                      233
                                                        -----------------------  -----------------------  -----------------------
      CASH PROVIDED BY OPERATING ACTIVITIES. . . . . .                   5,560                    6,420                    4,578
                                                        -----------------------  -----------------------  -----------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Capital expenditures . . . . . . . . . . . . . . .                  (8,952)                  (4,713)                    (754)
    Proceeds from sale of assets . . . . . . . . . . .                      24                        -                        -
                                                        -----------------------  -----------------------  -----------------------
      CASH USED FOR INVESTING ACTIVITIES . . . . . . .                  (8,928)                  (4,713)                    (754)
                                                        -----------------------  -----------------------  -----------------------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Repayments of long-term bank debt and
      capital lease obligations, net . . . . . . . . .                  (3,738)                  (4,184)                  (5,391)
    Borrowings of long-term debt . . . . . . . . . . .                   7,909                    4,642                   10,300
    Dividends paid . . . . . . . . . . . . . . . . . .                       -                   (1,243)                  (2,799)
    Proceeds from exercise of stock options. . . . . .                       -                      298                      144
    Officer loan payment . . . . . . . . . . . . . . .                       -                      165                        -
    Purchases of treasury stock. . . . . . . . . . . .                    (573)                  (1,329)                  (6,103)
                                                        -----------------------  -----------------------  -----------------------
      CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES                   3,598                   (1,651)                  (3,849)
                                                        -----------------------  -----------------------  -----------------------

Net increase (decrease) in cash and cash equivalents .                     230                       56                      (25)
Cash and cash equivalents, beginning of period . . . .                     540                      484                      509
                                                        -----------------------  -----------------------  -----------------------
Cash and cash equivalents, end of period . . . . . . .                    770                     540                     484
                                                        -----------------------  -----------------------  -----------------------
<FN>

                                   See accompanying Notes to Consolidated Financial Statements.
</TABLE>

<TABLE>
<CAPTION>

                    SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
                                     (IN THOUSANDS)



                                                                 YEAR ENDED
                                                                  -----------
                                                     JUNE 30,    JUNE 24,   JUNE 25,
                                                       2002        2001       2000
                                                    -----------  ---------  ---------
<S>                                                      <C>          <C>        <C>
CASH PAYMENTS FOR:
  Interest . . . . . . . . . . . . . . . . . . .  $       992  $     876  $     582
  Income taxes . . . . . . . . . . . . . . . . .           53         65         75


NONCASH FINANCING AND INVESTING
ACTIVITIES:
  Capital lease obligations incurred . . . . . .  $       156  $       -  $     158
  Stock issued to officers in exchange for loans            -        303      2,507

</TABLE>


                                 PIZZA INN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  A  -  ORGANIZATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:

DESCRIPTION  OF  BUSINESS:

Pizza Inn, Inc. (the "Company"), a Missouri corporation incorporated in 1983, is
the  successor  to  a  Texas  company of the same name which was incorporated in
1961.  The Company is the franchisor and food and supply distributor to a system
of  restaurants  operating  under  the  trade  name  "Pizza  Inn"  .

On  June  30,  2002  the  Pizza Inn system consisted of 429 locations, including
three  Company-operated  units  (one  of  which  is  temporarily closed) and 426
franchised  units.  On June 30, 2002 the Company had franchises in 20 states and
11  foreign countries.  Domestic units are located predominantly in the southern
half of the United States, with Texas, North Carolina and Mississippi accounting
for  approximately  32%,  16%,  and  8%,  respectively,  of  the  total.  Norco
Restaurant  Services  ("Norco"),  a  division  of  the Company, distributes food
products,  equipment,  and  other supplies to units in the United States and, to
the  extent  feasible,  in  other  countries.

PRINCIPLES  OF  CONSOLIDATION:

The  consolidated  financial  statements include the accounts of the Company and
its  wholly-owned  subsidiaries.  All  appropriate  intercompany  balances  and
transactions  have  been  eliminated.  Certain  prior  year  amounts  have  been
reclassified  to  conform  with  current  year  presentation.

CASH  AND  CASH  EQUIVALENTS:

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

INVENTORIES:

Inventories,  which  consist  primarily  of  food,  paper products, supplies and
equipment  located at the Company's distribution center, are stated at the lower
of  FIFO  (first-in,  first-out) cost or market.  Provision is made for obsolete
inventories.

PROPERTY,  PLANT  AND  EQUIPMENT:

Property,  plant  and  equipment,  including  property under capital leases, are
stated  at  cost  less  accumulated  depreciation  and amortization. Repairs and
maintenance  are  charged  to  operations  as  incurred;  major  renewals  and
betterments  are capitalized. Internal and external costs incurred to develop or
purchase  internal-use  computer  software  during  the  application development
stage,  including  upgrades  and enhancements, are capitalized. Upon the sale or
disposition  of  a  fixed  asset,  the  asset  and  the  related  accumulation
depreciation  or amortization are removed from the accounts and the gain or loss
is  included  in  operations.  The  Company  capitalizes  interest on borrowings
during  the  active  construction period of major capital projects.  Capitalized
interest  is  added  to  the cost of the underlying asset and amortized over the
useful  life  of  the asset.  As of June 30, 2002, interest of $280,000 has been
capitalized  in  connection  with  the  construction  of  the  Company's  new
headquarters,  training  center,  and  distribution  facility.

Depreciation  and  amortization is computed on the straight-line method over the
useful  lives  of the assets or, in the case of leasehold improvements, over the
term  of the lease, if shorter.  The useful lives of the assets range from three
to  thirty-  nine  years.  It is the Company's policy to periodically review the
net  realizable  value  of  its  long-lived assets when certain indicators exist
through  an  assessment of the estimated gross future cash flows related to such
assets.  In  the  event that assets are found to be carried at amounts which are
in excess of estimated gross future cash flows, then the assets will be adjusted
for  impairment  to a level commensurate with a discounted cash flow analysis of
the  underlying assets.  The Company believes no impairment of long-lived assets
exists  at  June  30,  2002.





ACCOUNTS  RECEIVABLE:

Accounts  receivable consist primarily of receivables from food and supply sales
and  franchise  royalties.  The  Company  records  a  provision  for  doubtful
receivables  to  allow  for  any amounts which may be unrecoverable and is based
upon  an  analysis  of  the  Company's  prior  collection  experience,  customer
creditworthiness,  and  current  economic  trends.

NOTES  RECEIVABLE:

Notes receivable primarily consist of notes from franchisees for the purchase of
area  development and master license territories and the refinancing of existing
trade  receivables.  These  notes  generally have terms ranging from one to five
years,  with  interest  rates of 8% to 12%.  The Company records a provision for
doubtful  receivables to allow for any amounts which may be unrecoverable and is
based  upon  an  analysis of the Company's prior collection experience, customer
creditworthiness,  and  current  economic  trends.

INCOME  TAXES:

Income  taxes are accounted for using the asset and liability method pursuant to
Statement  of  Financial  Accounting  Standards  No. 109, "Accounting for Income
Taxes"  ("SFAS 109").  Deferred taxes are recognized for the tax consequences of
"temporary  differences"  by  applying enacted statutory tax rates applicable to
future years to differences between the financial statement and carrying amounts
and  the  tax  bases of existing assets and liabilities.  The effect on deferred
taxes  for  a  change  in  tax  rates is recognized in income in the period that
includes  the  enactment  date.  In  addition, the Company recognizes future tax
benefits  to  the  extent that realization of such benefits are more likely than
not.

DISTRIBUTION  DIVISION  OPERATIONS:

The  Company's  Norco division sells food, supplies and equipment to franchisees
on  trade  accounts under terms common in the industry.  Revenue from such sales
is  recognized upon shipment.  Norco sales are reflected under the caption "food
and  supply  sales."  Shipping  and  handling  costs  billed  to  customers  are
recognized  as  revenue.

FRANCHISE  REVENUE:

Franchise  revenue  consists  of  income  from license fees, royalties, and area
development  and  foreign  master  license  (collectively,  "Territory")  sales.
License  fees  are  recognized  as  income  when  there  has  been  substantial
performance  of  the agreement by both the franchisee and the Company, generally
at the time the unit is opened.  Royalties are recognized as income when earned.
For the years ended June 30, 2002, June 24, 2001 and June 25, 2000, 93%, 96% and
96%,  respectively,  of  franchise revenue was comprised of recurring royalties.

Territory  sales  are the fees paid by selected experienced restaurant operators
to  the  Company  for  the  right  to  develop Pizza Inn restaurants in specific
geographical  territories.  When  the  Company  has  no  continuing  substantive
obligations  of  performance  to the area developer or master licensee regarding
the  fee,  the  Company  recognizes  the fee to the extent of cash received.  If
continuing obligations exist, fees are recognized ratably during the performance
of  those  obligations.  Territory fees recognized as income for the years ended
June  30,  2002,  June  24,  2001  and  June  25, 2000 were $131,000, $0 and $0,
respectively.

DISCLOSURE  ABOUT  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS:

The  carrying  amounts of short-term investments, accounts and notes receivable,
and  debt approximate fair value.  The fair value of the Company's interest rate
swap  is  based  on  pricing  models  using  current  market  rates.

USE  OF  MANAGEMENT  ESTIMATES:

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the reported amounts of assets and liabilities, and related revenues and
expenses  and  disclosure  of  gain  and  loss  contingencies at the date of the
financial  statements.  Actual  results  could  differ  from  those  estimates.

FISCAL  YEAR:

The  Company's  fiscal year ends on the last Sunday in June.  Fiscal year ending
June  30,  2002,  contained  53  weeks,  June  24,  2001  and June 25, 2000 both
contained  52  weeks.


NEW  PRONOUNCEMENTS:

In  October  2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting  for  the Impairment of Long-lived Assets" which supersedes SFAS No.
121,  "Accounting  for  the  Impairment  of Long-lived Assets and for Long-lived
Assets to be Disposed of" and the accounting and reporting provisions of APB No.
30,  "Reporting the Results of Operations - Reporting the Effects of Disposal of
a  Segment  of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events  and transactions" for the disposal of a segment of a business.  SFAS No.
144  retains  many  of  the  provisions  of  SFAS No. 121, but addresses certain
implementation  issues  associated  with that Statement.  We will adopt SFAS No.
144  beginning  in  fiscal  year 2003.  The Company anticipates adoption will be
immaterial  on  the  financial  statements.

NOTE  B  -  PROPERTY,  PLANT  AND  EQUIPMENT:

Property,  plant  and equipment and property under capital leases consist of the
following  (in  thousands):

<TABLE>
<CAPTION>


                                     USEFUL            JUNE 30,                 JUNE 24,
<S>                                <C>          <C>                      <C>
                                      LIVES . .  .        2002                     2001
                            ------------------        -----------  -----------------------
Property, plant and equipment:
Equipment, furniture and fixtures   3 - 7 yrs   $                5,192   $                4,932
Building. . . . . . . . . . . . .  5 - 39 yrs                   10,557                        -
Land. . . . . . . . . . . . . . .           -                    1,945                    1,984
Construction in progress. . . . .           -                        -                    3,279
Leasehold improvements. . . . . .       7 yrs                    1,646                    1,595
                                                -----------------------  ----------------------
                                                                19,340                   11,790
Less:  accumulated depreciation .                               (5,773)                 (5,196)
                                                            -----------     -------------------
                                                $               13,567                  6,594
                                                =======================  ======================
Property under capital leases:
Real Estate . . . . . . . . . . .      20 yrs   $                  118   $                  118
Equipment . . . . . . . . . . . .   3 - 7 yrs                    1,635                    2,120
                                                -----------------------  ----------------------
                                                                 1,753                    2,238
Less:  accumulated amortization .                               (1,416)                 (1,662)
                                                             -----------   --------------------
                                                                  337                     576
                                                =======================  ======================

</TABLE>




Depreciation and amortization expense was $1,337,000, $1,343,000, and $1,210,000
for  the  years  ended  June  30,  2002,  June  24,  2001,  and  June  25, 2000,
respectively.

NOTE  C  -  ACCRUED  EXPENSES:

Accrued  expenses  consist  of  the  following  (in  thousands):

<TABLE>
<CAPTION>


                                                JUNE 30,               JUNE 24,
<S>                                                  <C>                    <C>
                                                    2002                   2001
                                   ---------------------  ---------------------
Compensation. . . . . . . . . . .  $                 968  $                 889
Taxes . . . . . . . . . . . . . .                    405                    252
Legal and other professional fees                    346                    197
Accrued rent. . . . . . . . . . .                    304                      -
Other . . . . . . . . . . . . . .                    506                    662
                                   ---------------------  ---------------------

                                                  2,529                 2,000
                                   =====================  =====================


</TABLE>

NOTE  D  -  LONG-TERM  DEBT:

In  August 1997, the Company signed an agreement (the "Loan Agreement") with its
current  lender, Wells Fargo, to refinance its debt under a new revolving credit
facility.  The revolving credit note is collateralized by essentially all of the
Company's  assets.  The  Loan  Agreement  contains  covenants which, among other
things,  require  the  Company  to satisfy certain financial ratios and restrict
additional  debt.

The  Company  entered  into  an  agreement  effective December 21, 2001 with its
current  lender to extend the term of its existing $9.5 million revolving credit
line  through  December  31,  2003,  and  to modify certain financial covenants.
Interest  on the revolving credit line is payable monthly.  Interest is provided
for  at a rate equal to prime less an interest rate margin from 1.0% to 0.0% or,
at  the  Company's  option, at the LIBOR rate plus 1.25% to 2.25%.  The interest
rate  margin is based on the Company's performance under certain financial ratio
tests.  A  0.375% to 0.5% annual commitment fee is payable on any unused portion
of  the  revolving  credit line. For the years ending June 30, 2002 and June 24,
2001,  the  Company's interest rates were 3.59% and 5.25%, respectively, using a
LIBOR  rate  basis.  Amounts  outstanding  under  the  revolving credit line for
fiscal  years  2002  and  2001 were $6.5 million and $7.7 million, respectively.

The  Company  entered into an agreement effective June 30, 2002 with its current
lender to modify certain debt covenants.  The Company was in compliance with all
of  its  debt  covenants  as  of  June  30,  2002.

The  Company  entered into a term note effective March 31, 2000 with its current
lender.  The  $5,000,000  term note had outstanding balances of $2.3 million and
$3.5  million  at  June  30,  2002 and June 24, 2001, respectively, and requires
monthly  principal  payments  of $104,000 with the balance maturing on March 31,
2004.  Interest  on the term loan is also payable monthly.  Interest is provided
for  at  a  rate equal to prime less an interest rate margin of 0.75% or, at the
Company's  option,  at  the LIBOR rate plus 1.5%.  For the years ending June 30,
2002  and  June  24,  2001,  the  Company's interest rates were 3.38% and 5.69%,
respectively.

The  Company  entered into an agreement effective December 28, 2000, as amended,
with  its  current  lender  to provide up to $8.125 million of financing for the
construction of the Company's new headquarters, training center and distribution
facility.  The  construction loan converted to a term loan effective January 31,
2002  with  the  unpaid  principal balance to mature on December 28, 2007.  This
term  loan will amortize over a term of twenty years, with principal payments of
$34,000  due  monthly.  Interest  on  this  term  loan  is also payable monthly.
Interest  is  provided for at a rate equal to prime less an interest rate margin
of 0.75% or, at the Company's option, to the LIBOR rate plus 1.5%. For the years
ending  June 30, 2002 and June 24, 2001, the Company's interest rates were 3.34%
and  6.50%, respectively.  The Company, to fulfill bank requirements, has caused
the  outstanding  principal  amount  to  be  subject to a fixed interest rate by
utilizing  an  interest  rate  swap  agreement  as  discussed below.  The $8.125
million  term  loan  had an outstanding balance of $8.0 million at June 30, 2002
and  $916,000  at  June  24,  2001.

     The Company entered into an interest rate swap effective February 27, 2001,
as  amended,  designated  as  a  cash  flow  hedge, to manage interest rate risk
relating  to the financing of the construction of the Company's new headquarters
and  to  fulfill bank requirements.  The swap agreement has a notional principal
amount  of $8.125 million with a fixed pay rate of 5.84% which began November 1,
2001  and will end November 19, 2007.  The swap's notional amount amortizes over
a  term  of  twenty  years to parallel the terms of the term loan. SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" requires that for
cash flow hedges, which hedge the exposure to variable cash flow of a forecasted
transaction, the effective portion of the derivative's gain or loss be initially
reported  as  a component of other comprehensive income in the equity section of
the  balance  sheet  and  subsequently  reclassified  into  earnings  when  the
forecasted  transaction  affects  earnings.  Any  ineffective  portion  of  the
derivative's gain or loss is reported in earnings immediately.  At June 30, 2002
there  was  no  hedge  ineffectiveness.  The  Company's  expectation is that the
hedging  relationship  will  continue  to  be  highly  effective  at  achieving
offsetting  changes  in  cash  flows.

PIBCO,  Ltd.,  a wholly-owned insurance subsidiary of the Company, in the normal
course  of  operations,  arranged  for  the  issuance  of a letter of credit for
$230,000  to  reinsurers  to secure loss reserves. At June 30, 2002 and June 24,
2001  this  letter  of  credit was secured under the Company's revolving line of
credit.  Loss  reserves  for approximately the same amount have been recorded by
PIBCO,  Ltd. and are reflected as current liabilities in the Company's financial
statements.







NOTE  E  -  INCOME  TAXES:

Income  tax  expense  consists  of  the  following  (in  thousands):


<TABLE>
<CAPTION>


                                          JUNE 30,                JUNE 24,               JUNE 25,
<S>                         <C>                      <C>                    <C>
                                              2002                    2001                   2000
                            -----------------------  ---------------------  ---------------------

Federal:
  Current. . . . . . . . .  $                  (81)  $                 156  $                 378
  Deferred . . . . . . . .                     667                   1,285                  1,127
                            -----------------------  ---------------------  ---------------------
Provision for income taxes                     586                   1,441                  1,505
                            =======================  =====================  =====================

</TABLE>

The  effective  federal  income  tax rate varied from the statutory rate for the
years  ended  June  30,  2002,  and June 24, 2001 and June 25, 2000 as reflected
below.

<TABLE>
<CAPTION>


                                                  JUNE 30,                JUNE 24,                JUNE 25,
                                                     2002                    2001                    2000
                                   ------------------------  ---------------------  ----------------------
<S>                                <C>                       <C>                    <C>
          (in thousands)

Federal income taxes based on 34%
  of book income. . . . . . . . .  $                   586   $               1,333  $               1,492
Permanent adjustments . . . . . .                     (187)                     70                    (46)
Change in valuation allowance . .                      187                      16                   (182)
Expired credits . . . . . . . . .                        -                      22                    241
                                    -----------------------  ---------------------  ----------------------
                                                      586                  1,441                 1,505
                                   ========================  =====================  ======================

</TABLE>

The tax effects of temporary differences which give rise to the net deferred tax
assets  (liabilities)  consisted  of  the  following  (in  thousands):


<TABLE>
<CAPTION>


                                        JUNE 30,                JUNE 24,
                                          2002                    2001
                                 ----------------------  ----------------------
<S>                              <C>                     <C>
Reserve for bad debt. . . . . .  $                 381   $                 381
Reserve for bad debt - officers                    663                       -
Depreciable assets. . . . . . .                    671                     678
Deferred fees . . . . . . . . .                     65                      79
Other reserves. . . . . . . . .                     29                      46
NOL carryforwards . . . . . . .                      -                     954
Interest rate swap loss . . . .                    167                      38
Credit carryforwards. . . . . .                    893                   1,044
                                 ----------------------  ----------------------

Gross deferred tax asset. . . .  $               2,869   $               3,220

Valuation allowance . . . . . .                   (225)                    (38)
                                 ----------------------  ----------------------

Net deferred tax asset. . . . .                  2,644                   3,182
                                 ======================  ======================

</TABLE>

As  of  June  30,  2002,  the  Company  had  $213,000  of  foreign  tax  credit
carryforwards expiring between 2004 and 2007 and $680,000 of minimum tax credits
that  can  be  carried  forward  indefinitely.  The  valuation  allowance  was
established  under  SFAS 109, since it is more likely than not that a portion of
the  foreign  tax  credit carryforwards will expire before they can be utilized.



NOTE  F  -  LEASES:

The  real  property  occupied  by the Company-operated restaurants is leased for
initial  terms  ranging  from  five  to  twenty-five  years with renewal options
ranging  from  three  to  fifteen  years.  Some  of the lease agreements contain
either  provisions  requiring additional rent if sales exceed specified amounts,
or  escalation  clauses  based  on  changes  in  the  Consumer  Price  Index.

The  Company  continues  to  lease  20,677  square feet in Dallas, Texas that it
previously occupied as its corporate office. The lease expires in April 2003 but
the  Company is actively marketing the premises for a subtenant.  Full provision
of  all remaining rent expense at the Company's former corporate headquarters of
approximately  $304,000  was  recorded  in the current year due to the continued
depressed  leasing  markets.

The  Company's  distribution  division currently leases a significant portion of
its  transportation equipment under operating and capital leases with terms from
five  to  seven  years.  Some  of  the leases include fair market value purchase
options  at  the  end  of  the  term.

Future  minimum  rental  payments  under  non-cancelable  leases with initial or
remaining  terms  of  one  year  or  more  at  June  30, 2002 are as follows (in
thousands):

<TABLE>
<CAPTION>


                                            CAPITAL   OPERATING
<S>                                        <C>        <C>
                                           LEASES     LEASES
                                           ---------  ---------

2003. . . . . . . . . . . . . . . . . . .  $    250       1,399
2004. . . . . . . . . . . . . . . . . . .       108       1,068
2005. . . . . . . . . . . . . . . . . . .        12         921
2006. . . . . . . . . . . . . . . . . . .        12         752
2007. . . . . . . . . . . . . . . . . . .        12         371
Thereafter. . . . . . . . . . . . . . . .         1          94
                                           ---------  ---------
                                                395. .$  4,605
                                                       =======
Less amount representing interest . . . .       (30)
                                           ---------
Present value of total obligations under
    capital leases. . . . . . . . . . . .       365
Less current portion. . . . . . . . . . .      (229)
                                           ---------
Long-term capital lease obligations . . .  $    136
                                           =========


</TABLE>

Rental  expense  consisted  of  the  following  (in  thousands):

<TABLE>
<CAPTION>


                     YEAR ENDED    YEAR ENDED    YEAR ENDED
                      JUNE 30,      JUNE 24,      JUNE 25,
                        2002          2001          2000
                    ------------  ------------  ------------
<S>                 <C>           <C>           <C>
Minimum rentals. .  $     1,773   $     1,566   $     1,438
Contingent rentals           21            19            15
Sublease rentals .          (99)         (102)          (96)
                    ------------  ------------  ------------
                    $     1,695   $     1,483   $     1,357
                    ============  ============  ============

</TABLE>


NOTE  G  -  EMPLOYEE  BENEFITS:

The  Company  has  a  tax  advantaged savings plan which is designed to meet the
requirements  of  Section 401(k) of the Internal Revenue Code (the "Code").  The
current plan is a modified continuation of a similar savings plan established by
the Company in 1985.  Employees who have completed six months of service and are
at  least  21  years  of  age are eligible to participate in the plan. Effective
January 1, 2002, as amended by the Economic Growth and Tax Relief Reconciliation
Act  (EGTRRA),  the plan provides that participating employees may elect to have
between  1%  -  100%  of their compensation deferred and contributed to the plan
subject to certain IRS limitations.  From January 1, 1999 through July 31, 2000,
the Company contributed on behalf of each participating employee an amount equal
to  100%  of the first 3% and 50% of the next 3% of the employee's contribution.
From August 1, 2000 through December 31, 2000, the Company contributed on behalf
of  each  participating  employee  an  amount  equal  to  50% of up to 6% of the
employee's  contribution.  Effective January 1, 2001, the Company contributes on
behalf  of each participating employee an amount equal to 50% of up to 4% of the
employee's  contribution.  Separate  accounts  are  maintained  with  respect to
contributions  made  on behalf of each participating employee. Employer matching
contributions  and earnings thereon are invested in Common Stock of the Company.
The plan is subject to the provisions of the Employee Retirement Income Security
Act,  as  amended, and is a profit sharing plan as defined in Section 401 of the
Code.  The  Company  is  the  administrator  of  the  plan.

For  the  years  ended  June  30,  2002, June 24, 2001, and June 25, 2000, total
matching  contributions  to  the  tax  advantaged savings plan by the Company on
behalf  of  participating  employees  were  $88,770,  $77,000,  and  $185,591,
respectively.

NOTE  H  -  STOCK  OPTIONS:

On  September  1, 1992, the Company adopted the 1992 Stock Award Plan (the "1992
Plan").  All  officers,  employees and elected outside directors are eligible to
participate.  The  Company's  1992  Plan is a combined nonqualified stock option
and  stock  appreciation  rights  arrangement.  A total of two million shares of
Pizza  Inn, Inc. Common Stock were originally authorized to be awarded under the
1992 Plan.  A total of 973,073 options were actually granted under the 1992 Plan
through  December  1993.  In  January 1994, the 1993 Stock Award Plan ("the 1993
Plan")  was approved by the Company's shareholders with a plan effective date of
October 13, 1993.  Officers and employees of the Company are eligible to receive
stock  options  under the 1993 Plan.  Options are granted at market value of the
stock  on the date of grant, are subject to various vesting periods ranging from
six  months  to  three years with exercise periods up to eight years, and may be
designated  as  incentive options (permitting the participant to defer resulting
federal  income  taxes).  Originally,  a  total  of two million shares of Common
Stock  were authorized to be issued under the 1993 Plan.  In December 1996, 1997
and  1998,  the  Company's  shareholders  approved  amendments  to the 1993 plan
increasing  by  500,000  shares, in each year, the aggregate number of shares of
common  stock  issuable  under  the  plan.  In  December,  2000,  the  Company's
Shareholders  approved  amendments to the 1993 plan increasing by 100,000 shares
the  aggregate  number  of  shares  of  common  stock  issuable  under the plan.

The 1993 Outside Directors Stock Award Plan (the "1993 Directors Plan") was also
adopted  by the Company effective as of October 13, 1993.  Elected Directors who
are  not employed by the Company are eligible to receive stock options under the
1993  Directors  Plan.  Options  for  common  stock equal to twice the number of
shares  of common stock acquired during the previous fiscal year are granted, up
to  20,000  shares  per  year, to each outside director.  Options are granted at
market value of the stock on the first day of the fiscal year, which is also the
date  of  grant, and various vesting periods ranging from one to four years with
exercise  periods up to nine years.  A total of 200,000 shares of Company Common
Stock  are  authorized  to  be  issued  pursuant  to  the  1993  Directors Plan.

A  summary  of stock option transactions under all of the Company's stock option
plans  and  information  about  fixed-price  stock  options  follows:

SUMMARY  OF  STOCK  OPTION  TRANSACTIONS


<TABLE>
<CAPTION>


                                      June 30, 2002                  June 24, 2001         June 25, 2000
                                   ---------------                  --------------         ---------------
                                                    Weighted-                      Weighted-        Weighted-
                                                     Average                       Average            Average
                                                     Exercise                      Exercise          Exercise
                                      Shares           Price           Shares       Price     Shares    Price
                                  ---------------  --------------  ---------------  ------  ----------  ------
<S>                               <C>              <C>             <C>              <C>     <C>         <C>
Outstanding at beginning of year       2,210,033   $         3.82       2,123,306   $ 3.91  3,247,972   $ 3.50

Granted. . . . . . . . . . . . .           4,000   $         2.12         464,160   $ 2.83     94,000   $ 3.57
Exercised. . . . . . . . . . . .               -   $         0.00        (215,000)  $ 2.50   (947,913)  $ 2.53
Canceled/Expired . . . . . . . .        (622,800)  $         3.96        (162,433)  $ 3.82   (270,753)  $ 4.38
                                  ---------------  --------------  ---------------  ------  ----------  ------

Outstanding at end of year . . .       1,591,233   $         3.76       2,210,033   $ 3.82  2,123,306   $ 3.91
                                  ===============  ==============  ===============  ======  ==========  ======

Exercisable at end of year . . .       1,358,233   $         4.02       1,696,873   $ 4.07  1,872,616   $ 3.88

Weighted-average fair value of
options granted during the year.                   $         0.68                   $ 0.93              $ 0.75


</TABLE>

FIXED  PRICE  STOCK  OPTIONS

The  following  table  provides  information  on options outstanding and options
exercisable  at  June  30,  2002:

<TABLE>
<CAPTION>



                                 Options Outstanding                                     Options Exercisable
                                 -------------------                                     --------------------
                                           Weighted-
                                             Average
                        Shares              Remaining           Weighted-          Shares          Weighted-
Range of              Outstanding          Contractual           Average        Exercisable         Average
Exercise Prices    at June 30, 2002        Life (Years)      Exercise Price   at June 30, 2002  Exercise Price
----------------  -------------------  --------------------  ---------------  ----------------  ---------------
<S>               <C>                  <C>                   <C>              <C>               <C>
2.00 - 3.25 . .              230,800                  4.77  $          2.20            39,800  $          3.12
3.33 - 4.25 . .              884,443                  2.11  $          3.52           842,443  $          3.52
4.38 - 5.50 . .              475,990                  1.90  $          4.97           475,990  $          4.97
                  -------------------                                         ----------------
2.00 - 5.50 . .            1,591,233                  2.43  $          3.76         1,358,233  $          4.02
                  ===================                                         ================
</TABLE>


Statement  of  Financial  Accounting  Standards  (SFAS) No. 123, "Accounting for
Stock-Based  Compensation,"  encourages  but does not require a fair value based
method  of  accounting for employee stock options or similar equity instruments.
SFAS No. 123 allows an entity to elect to continue to measure compensation costs
under  Accounting  Principles  Board Opinion (APB) No. 25, "Accounting for Stock
Issued  to  Employees,"  but requires pro forma disclosure of net earnings as if
the  fair  value  based  method  of  accounting  had  been  applied.

The  Company  elected  to  follow  APB  No.  25,  and related Interpretations in
accounting  for  employee  stock  options  because  the  alternative  fair value
accounting  provided  for  under  SFAS  No.  123,  "Accounting  for  Stock Based
Compensation,"  requires  use of option valuation models that were not developed
for  use  in  valuing  employee  stock  options.  Under  APB No. 25, because the
exercise price of our employee stock options equals or exceeds the fair value of
the  underlying  stock  on  the  date  of  grant,  no  compensation  expense  is
recognized.

Pro forma information regarding net income and earnings per share is required to
be  determined  as  if  the  Company had accounted for its stock options granted
subsequent to June 25, 1995 under the fair value method of SFAS 123, "Accounting
for  Stock-Based  Compensation".  The  fair  value  of options granted in fiscal
2000,  2001  and  2002  was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted average assumptions:  risk-free
interest rates ranging from 4.2% to 6.6%, expected volatility of 39.4% to 50.8%,
expected  dividend  yield  of  0%  to  8.9%  and expected lives of 2 to 6 years.

For  purposes  of  pro  forma disclosures, the estimated fair value of the stock
options  is  amortized over the option vesting periods.  The Company's pro forma
information  follows  (in thousands, except for earnings per share information):

<TABLE>
<CAPTION>


                                     June 30, 2002                June 24, 2001                June 25, 2000
                                    --------------               --------------                --------------
                             As Reported      Pro Forma      As Reported    Pro Forma   As Reported   Pro Forma
                            --------------  --------------  --------------  ----------  ------------  ----------
<S>                         <C>             <C>             <C>             <C>         <C>           <C>
Net income . . . . . . . .  $        1,137  $        1,079  $        2,480  $    2,288  $      2,884  $    2,872
Basic earnings per share .  $         0.11  $         0.11  $         0.23  $     0.22  $       0.25  $     0.25
Diluted earnings per share  $         0.11  $         0.11  $         0.23  $     0.22  $       0.25  $     0.25


</TABLE>

The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of  future  amounts  as the pro forma amounts above do not include the impact of
additional  awards  anticipated  in  future  years.

NOTE  I  -  COMMITMENTS  AND  CONTINGENCIES:

The Company is subject to various claims and contingencies related to employment
agreements,  lawsuits,  taxes, food product purchase contracts and other matters
arising  out  of  the  normal  course of business.  Management believes that any
liabilities  arising  from  these claims and contingencies are either covered by
insurance  or  would  not have a material adverse effect on the Company's annual
results  of  operations  or  financial  condition.

On January 18, 2002, the Company was served with a lawsuit filed by Blakely-Witt
&  Associates,  Inc.  alleging  Pizza  Inn sent or caused to be sent unsolicited
facsimile  advertisements.  The plaintiff has requested this matter be certified
as a class action. We plan to vigorously defend our position in this litigation.
We  cannot assure you that we will prevail in this lawsuit and our defense could
be  costly  and consume the time of our management. We are unable to predict the
outcome  of  this  case.  However,  an  adverse  resolution of this matter could
materially  affect  our  financial  position  and  results  of  operations.

On  April  30, 1998, Mid-South Pizza Development, Inc., an area developer of the
Company  ("Mid-South")  entered  into  a  promissory  note  whereby, among other
things,  Mid-South  borrowed  $1,330,000 from a third party lender (the "Loan").
The  proceeds  of  the  Loan,  less transaction costs, were used by Mid-South to
purchase area developer rights from the Company for certain counties in Kentucky
and  Tennessee.  As  of  June 30, 2002 the outstanding principal balance of this
loan  was  approximately  $849,000.  As  part of the terms and conditions of the
Loan,  the  Company  was required to guaranty the obligations of Mid-South under
the  Loan.  In  the  event  such guaranty ever required payment, the Company has
personal guarantees from certain Mid-South principals and a security interest in
certain  personal  property.  In  the event the personal guarantees and security
interest  pledged  do not sufficiently fulfill the obligation, the Company would
assume the obligation.  As of this date, the obligation could be fully offset by
the  assumption  of  the  area development rights which are currently pledged to
Mid-South's  third  party  lender.

 NOTE  J  -  RELATED  PARTIES:

One  of  the  individuals  nominated  by the Company and elected to serve on its
Board  of Directors is a franchisee.  This franchisee currently operates a total
of  12  restaurants located in Arkansas.  Purchases by this franchisee comprised
6%  of  the Company's total food and supply sales in fiscal 2002.  Royalties and
license fees and area development sales from this franchisee comprised 3% of the
Company's  total  franchise  revenues  in fiscal 2002.  As franchised units, his
restaurants  pay  royalties to the Company and purchase a majority of their food
and supplies from the Company's distribution division.  As of June 30, 2002, his
accounts  and  note  payable  to  the  Company  were  $685,669.

The  Company  believes the above transactions were at the same prices and on the
same  terms  available  to  non-related  third  parties.

In  October 1999, the Company loaned $1,949,698 to C. Jeffery Rogers in the form
of  promissory  note due in June 2004 to acquire 700,000 shares of the Company's
common  stock through the exercise of vested stock options previously granted to
him  in  1995  by  the  Company.  The  note  bears interest at the same floating
interest rate the Company pays on its revolving credit line with Wells Fargo and
is collateralized by a second lien in certain real property and existing Company
stock  owned  by  C.  Jeffery  Rogers.  The  note is reflected as a reduction to
stockholders'  equity.

In  October 1999, the Company loaned $557,056 to Ronald W. Parker in the form of
promissory  note  due  in  June  2004 to acquire 200,000 shares of the Company's
common  stock through the exercise of vested stock options previously granted to
him  in  1995  by  the  Company.  The  note  bears interest at the same floating
interest rate the Company pays on its revolving credit line with Wells Fargo and
is  collateralized  by certain real property and existing Company stock owned by
Ronald W. Parker.  The note is reflected as a reduction to stockholders' equity.

In  July  2000, the Company loaned $302,581 to Ronald W. Parker in the form of a
promissory  note  due  in  June  2004 to acquire 200,000 shares of the Company's
common  stock through the exercise of vested stock options previously granted in
1995  by the Company.  In October 2000, a $164,647 principal payment was made on
the  note.  The  note  bears  interest  at  the  same floating interest rate the
Company pays on its revolving credit line with Wells Fargo and is collateralized
by  certain  real property and existing Company stock owned by Ronald W. Parker.
The  note  is  reflected  as  a  reduction  to  stockholders'  equity.

In  June  2002,  the  Board  of Directors of the Company, based upon a review of
certain  financial information provided by an C. Jeffery Rogers, determined that
the collection of the promissory note previously loaned to C. Jeffery Rogers, of
approximately  $1.9 million is doubtful.  The Company recorded the charge in the
fourth quarter of fiscal 2002 to fully reserve for the possible nonpayment.  The
Company  intends,  to the extent legally permissible, to enforce this obligation
under  the  relevant  terms  of  the  Promissory  Note and the Pledge Agreement.

NOTE  K  -  TREASURY  STOCK:

For  the  period  of  September  1995  through  June 2002, the Company purchased
5,244,161 shares of its own Common Stock from time to time on the open market at
a  total  cost  of $21.4 million.  In April 1999, the Company received a gift of
4,945  shares  from  a  vendor which was recorded at current market value in the
amount  of  $15,000.  The purchases of common shares described above were funded
from  working  capital,  and  reduced  the  Company's  outstanding  shares  by
approximately  34%.

NOTE  L  -  EARNINGS  PER  SHARE:

The  Company computes and presents earnings per share ("EPS") in accordance with
SFAS  128,  "Earnings  Per Share".  Basic EPS excludes the effect of potentially
dilutive securities while diluted EPS reflects the potential dilution that would
occur  if  securities  or  other contracts to issue common stock were exercised,
converted  or  resulted  in the issuance of common stock that then shared in the
earnings  of  the  entity.

The following table shows the reconciliation of the numerator and denominator of
the  basic  EPS  calculation to the numerator and denominator of the diluted EPS
calculation  (in  thousands,  except  per  share  amounts).


<TABLE>
<CAPTION>


                                                  INCOME        SHARES      PER SHARE
<S>                                            <C>           <C>            <C>
                                                (NUMERATOR)  (DENOMINATOR)  AMOUNT
                                               ------------  -------------  ----------
YEAR ENDED JUNE 30, 2002
BASIC EPS
Income Available to Common Shareholders . . .  $      1,137         10,092  $     0.11
Effect of Dilutive Securities - Stock Options                            3
                                                                ------------
DILUTED EPS
Income Available to Common Shareholders
& Assumed Conversions . . . . . . . . . . . .  $      1,137         10,095  $     0.11
                                               ============  =============  ==========

YEAR ENDED JUNE 24, 2001
BASIC EPS
Income Available to Common Shareholders . . .  $      2,480         10,635  $     0.23
Effect of Dilutive Securities - Stock Options                            4
                                                               ------------
DILUTED EPS
Income Available to Common Shareholders
& Assumed Conversions . . . . . . . . . . . .  $      2,480         10,639  $     0.23
                                               ============  =============  ==========

YEAR ENDED JUNE 25, 2000
BASIC EPS
Income Available to Common Shareholders . . .  $      2,884         11,316  $     0.25
Effect of Dilutive Securities - Stock Options                          125
                                                               ------------
DILUTED EPS
Income Available to Common Shareholders
& Assumed Conversions . . . . . . . . . . . .  $      2,884         11,441  $     0.25
                                               ============  =============  ==========

</TABLE>

Options  to purchase 1,591,233 shares of common stock at exercise prices ranging
from  $2.00  to  $5.50  per share were outstanding at June 30, 2002 but were not
included  in  the computation of diluted EPS because the option's exercise price
was  greater  than  the  average  market  price of the common shares. Options to
purchase 2,195,033 and 1,194,773 shares of common stock during fiscal years 2001
and 2000, respectively, were excluded from the computation of EPS in those years
because  their  inclusion  would  result  in  an  anti-dilutive  effect  on EPS.

NOTE  M  -  SEGMENT  REPORTING:

The  Company  has  two reportable operating segments as determined by management
using  the  "management" approach as defined in SFAS No. 131, "Disclosures about
Segments  of  an  Enterprise  and Related Information".  (1)  Food and Equipment
Distribution,  and  (2)  Franchise  and  Other.  These  segments are a result of
differences  in  the  nature  of  the  products  and  services  sold.  Corporate
administration costs, which include, but are not limited to, general accounting,
human  resources,  legal  and credit and collections, are partially allocated to
the  two  operating  segments.  Other  revenue  consists  of nonrecurring items.

The  Food  and  Equipment Distribution segment sells and distributes proprietary
and  non-proprietary  items to franchisees and to two company-owned and operated
stores.  Inter-segment  revenues  consist  of sales to the company-owned stores.
Assets  for  this  segment  include  tractor/trailers,  equipment, furniture and
fixtures.

The Franchise and Other segment includes income from royalties, license fees and
area  development  and  foreign  master  license  sales.  The  Franchise segment
includes  the two company-owned stores, which are used as prototype and training
facilities.  Assets  for  this segment include equipment, furniture and fixtures
for  the  company  stores.

Corporate  administration  and  other  assets primarily include the deferred tax
asset,  cash  and  short  term  investments,  as  well as furniture and fixtures
located  at  the  corporate  office.


Summarized  in  the  following  tables  are  net  sales  and operating revenues,
depreciation  and  amortization  expense,  interest  expense,  interest  income,
operating  profit, capital expenditures, and assets for the Company's reportable
segments  for  the  years ended June 30, 2002, June 24, 2001, and June 25, 2000:

<TABLE>
<CAPTION>


                                       JUNE 30,    JUNE 24,    JUNE 25,
                                         2002        2001        2000
                                      ----------  ----------  ----------
<S>                                   <C>         <C>         <C>
         (In thousands)
 NET SALES AND OPERATING REVENUES:
 Food and Equipment Distribution . .  $  57,727   $  57,020   $  59,130
 Franchise and Other . . . . . . . .      7,662       7,719       8,050
 Intersegment revenues . . . . . . .        806         861         828
                                      ----------  ----------  ----------
   Combined. . . . . . . . . . . . .     66,195      65,600      68,008
 Other revenues. . . . . . . . . . .      1,253         529         460
 Less intersegment revenues. . . . .       (806)       (861)       (828)
                                      ----------  ----------  ----------
   Consolidated revenues . . . . . .  $  66,642   $  65,268   $  67,640
                                      ==========  ==========  ==========

 DEPRECIATION AND AMORTIZATION:
 Food and Equipment Distribution . .  $     854   $     992   $     874
 Franchise and Other . . . . . . . .        120         227         120
                                      ----------  ----------  ----------
   Combined. . . . . . . . . . . . .        974       1,219         994
 Corporate administration and other.        363         124         216
                                      ----------  ----------  ----------
   Depreciation and amortization . .  $   1,337   $   1,343   $   1,210
                                      ==========  ==========  ==========

 INTEREST EXPENSE:
 Food and Equipment Distribution . .  $     520   $     533   $     495
 Franchise and Other . . . . . . . .          5           6           6
                                      ----------  ----------  ----------
   Combined. . . . . . . . . . . . .        525         539         501
 Corporate administration and other.        307         297         249
                                      ----------  ----------  ----------
   Interest Expense. . . . . . . . .  $     832   $     836   $     750
                                      ==========  ==========  ==========

 INTEREST INCOME:
 Food and Equipment Distribution . .  $      34   $      25   $      66
 Franchise and Other . . . . . . . .          -           -           -
                                      ----------  ----------  ----------
   Combined. . . . . . . . . . . . .         34          25          66
 Corporate administration and other.         99         208         126
                                      ----------  ----------  ----------
   Interest Income . . . . . . . . .  $     133   $     233   $     192
                                      ==========  ==========  ==========

 OPERATING PROFIT:
 Food and Equipment Distribution (1)  $   2,772   $   3,190   $   2,709
 Franchise and Other (1) . . . . . .      3,306       2,685       3,790
 Intersegment profit . . . . . . . .        235         256         225
                                      ----------  ----------  ----------
   Combined. . . . . . . . . . . . .      6,313       6,131       6,724
 Other revenue . . . . . . . . . . .      1,253         376         223
 Less intersegment profit. . . . . .       (235)       (256)       (225)
 Corporate administration and other.     (5,608)     (2,330)     (2,333)
                                      ----------  ----------  ----------
   Income before taxes . . . . . . .  $   1,723   $   3,921   $   4,389
                                      ==========  ==========  ==========
<FN>

 (1)           Does  not  include  full  allocation  of corporate administration
</TABLE>


<TABLE>
<CAPTION>


                                       JUNE 30,   JUNE 24,   JUNE 25,
<S>                                    <C>        <C>        <C>
                                            2002       2001       2000
                                       ---------  ---------  ---------
         (In thousands)
 CAPITAL EXPENDITURES:
 Food and Equipment Distribution. . .  $   8,499  $   4,438  $     413
 Franchise and Other. . . . . . . . .         82        227        138
                                       ---------  ---------  ---------
   Combined . . . . . . . . . . . . .      8,581      4,665        551
 Corporate administration and other .        371         48        203
                                       ---------  ---------  ---------
   Consolidated capital expenditures.  $   8,952  $   4,713  $     754
                                       =========  =========  =========

 ASSETS:
 Food and Equipment Distribution. . .  $  12,908  $  13,575  $  10,279
 Franchise and Other. . . . . . . . .      1,079      1,193      1,361
                                       ---------  ---------  ---------
 Combined . . . . . . . . . . . . . .     13,987     14,768     11,640
 Corporate administration and other .     10,627      5,104      6,051
                                       ---------  ---------  ---------
 Consolidated assets. . . . . . . . .  $  24,614  $  19,872  $  17,691
                                       =========  =========  =========

 GEOGRAPHIC INFORMATION (REVENUES):
 United States. . . . . . . . . . . .  $  66,124  $  64,666  $  66,383
 Foreign countries. . . . . . . . . .        518        602      1,257
                                       ---------  ---------  ---------
   Consolidated total . . . . . . . .  $  66,642  $  65,268  $  67,640
                                       =========  =========  =========

</TABLE>

NOTE  N  -  QUARTERLY  RESULTS  OF  OPERATIONS  (UNAUDITED):
The  following  summarizes the unaudited quarterly results of operations for the
fiscal  years  ended  June  30, 2002 and June 24, 2001 (in thousands, except per
share  amounts):

<TABLE>
<CAPTION>


                                                                       Quarter Ended
                                                                       --------------
<S>                                               <C>             <C>            <C>         <C>
                                                  September 23,   December 23,   March 24,   June 30,
                                                            2001           2001        2002       2002
                                                  --------------  -------------  ----------  ----------
FISCAL YEAR 2002
Revenues . . . . . . . . . . . . . . . . . . . .  $       17,308  $      15,987  $   15,286  $  18,061

Gross Profit . . . . . . . . . . . . . . . . . .           1,126          1,380       1,173      2,036

Net Income (Loss). . . . . . . . . . . . . . . .             590            567         478       (498)

Basic earnings (loss) per share on net income. .            0.06           0.06        0.05      (0.05)

Diluted earnings (loss) per share on net income.            0.06           0.06        0.05      (0.05)

                                                                       Quarter Ended
                                                                     -----------------
<S>                                               <C>             <C>            <C>         <C>
                                                   September 24,. .  December 24, March 25,    June 24,
                                                            2000           2000        2001       2001
                                                  --------------  -------------  ----------  ----------
FISCAL YEAR 2001
Revenues . . . . . . . . . . . . . . . . . . . .  $       17,155  $      15,787  $   15,742  $  16,584

Gross Profit . . . . . . . . . . . . . . . . . .           1,440          1,434       1,299      1,410

Net Income . . . . . . . . . . . . . . . . . . .             646            529         604        701

Basic earnings per share on net income . . . . .            0.06           0.05        0.06       0.07

Diluted earnings per share on net income . . . .            0.06           0.05        0.06       0.07

</TABLE>

<TABLE>
<CAPTION>


                                                   SCHEDULE II
PIZZA INN, INC.
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
(In thousands)


                                                                      ADDITIONS
                                                    BALANCE AT   CHARGED TO   CHARGED TO                       BALANCE
                                                    BEGINNING     COST AND       OTHER                         AT END
                                                    OF PERIOD      EXPENSE     ACCOUNTS    DEDUCTIONS  (1)   OF PERIOD
                                                   ------------  -----------  -----------  ----------------  ----------
<S>                                                <C>           <C>          <C>          <C>               <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS
  AND NOTES RECEIVABLE
Year Ended June 30, 2002. . . . . . . . . . . . .  $      1,001  $     2,367  $         -  $          (415)  $    2,953

Year Ended June 24, 2001. . . . . . . . . . . . .  $      1,102  $       210  $         -  $          (311)  $    1,001

Year Ended June 25, 2000. . . . . . . . . . . . .  $      1,032  $       225  $         -  $          (155)  $    1,102



VALUATION ALLOWANCE FOR DEFERRED TAX
  ASSET

Year Ended June 30, 2002. . . . . . . . . . . . .  $         38  $       187  $         -  $            -    $      225

Year Ended June 24, 2001. . . . . . . . . . . . .  $         22  $        16  $         -  $            -    $       38

Year Ended June 25, 2000. . . . . . . . . . . . .  $        204  $         -  $         -  $          (182)  $       22


(1)  Write-off of receivables, net of recoveries

</TABLE>












ITEM  9  -  CHANGES  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING  AND  FINANCIAL  DISCLOSURE

     There  are  no  events  to  report  under  this  item.


PART  III

ITEM  10  -  DIRECTORS  AND  EXECUTIVE  OFICERS  OF  THE  REGISTRANT

     The  information  required  by  this  Item  is  included  in  the Company's
definitive  Proxy Statement to be filed pursuant to Regulation 14a in connection
with  the  Company's  annual meeting of shareholders to be held in December 2002
(the  "Proxy  Statement"),  and  is  incorporated  herein  by  reference.

ITEM  11  -  EXECUTIVE  COMPENSATION

     The  information  required  by this Item is included in the Proxy Statement
and  is  incorporated  herein  by  reference.

ITEM  12  -  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT

     The  information  required  by this Item is included in the Proxy Statement
and  is  incorporated  herein  by  reference.

ITEM  13  -  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  information  required  by this Item is included in the Proxy Statement
and  is  incorporated  herein  by  reference.
<PAGE>
PART  IV

ITEM  14  -  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS  ON  8-K


(a)     1.     The  financial statements filed as part of this report are listed
in  the  Index  to
     Financial  Statements  and  Schedules  under  Part II, Item 8 of this Form
10-K.

     2.     The  financial  statement schedules filed as part of this report are
listed  in  the  Index
     to  Financial  Statements and Schedules under Part II, Item 8 of this Form
10-K.

     3.     Exhibits:

3.1     Restated  Articles  of  Incorporation  as filed on September 5, 1990 and
amended on February 16,1993 (filed as Exhibit 3.1 to the Company's Annual Report
on  Form 10-K for the fiscal year ended June 27, 1993 and incorporated herein by
reference).

          3.2     Amended  and  Restated  By-Laws  as  adopted  by  the Board of
Directors  on  July  11,  2000.

          4.1     Provisions  regarding  Common  Stock  in  Article  IV  of  the
Restated  Articles  of  Incorporation,  as  amended (filed as Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the fiscal year ended June 27, 1999 and
incorporated  herein  by  reference).

4.2     Provisions  regarding  Redeemable  Preferred  Stock  in Article V of the
Restated  Articles  of  Incorporation,  as amended (filed as Exhibit 3.1 to this
Report  and  incorporated  herein  by  reference).

10.1     Second  amended  and  Restated  Loan  Agreement between the Company and
Wells  Fargo  Bank  (Texas), N.A. dated March 31, 2000 (filed as Exhibit 10.1 to
the  Company's  Quarterly Report on Form 10-Q for the fiscal quarter ended March
26,  2000  and  incorporated  herein  by  reference).

10.2     First  Amendment  to  the  Second Amendment and Restated Loan Agreement
between  the  Company and Wells Fargo Bank (Texas), N.A. dated December 28, 2000
(filed  as  Exhibit  10.1 to the Company's Quarterly Report on Form 10-Q for the
fiscal  quarter  ended  December 24, 2000 and incorporated herein by reference).

10.3     Second  Amendment  to  the  Second  Amended and Restated Loan Agreement
between  the  Company and Wells Fargo Bank (Texas), N.A. dated January 31, 2002,
but  effective  December  23,  2001  (filed  as  Exhibit  10.1  to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended December 23, 2001 and
incorporated  herein  by  reference).

10.4     Third  Amendment  to  the  Second  Amended  and Restated Loan Agreement
between the Company and Wells Fargo Bank (Texas), N.A. dated September 26, 2002,
but  effective  June  30,  2002.

10.5     Construction  Loan  Agreement  between the Company and Wells Fargo Bank
(Texas)  N.A.  dated  December  28, 2000 (filed as Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended December 24, 2000 and
incorporated  herein  by  reference).

10.6     Promissory  Note  between the Company and Wells Fargo Bank (Texas) N.A.
dated December 28, 2000 (filed as Exhibit 10.3 to the Company's Quarterly Report
on  Form  10-Q  for  the fiscal quarter ended December 24, 2000 and incorporated
herein  by  reference).

10.7     Promissory  Note between the Company and Wells Fargo Bank (Texas), N.A.
dated  January 31, 2002 (filed as Exhibit 10.2 to the Company's Quarterly Report
on  Form  10-Q  for  the fiscal quarter ended December 23, 2001 and incorporated
herein  by  reference).

10.8     Stock  Purchase  Agreement  between  the  Company  and Kleinwort Benson
Limited  dated  April   28,  1995  (filed  as  Exhibit  10.14  to  the Company's
Quarterly  Report  on  Form 10-Q for the fiscal quarter ended March 26, 1995 and
incorporated  herein  by  reference).

10.9     Redemption  Agreement  between the Company and Kleinwort Benson Limited
dated  June  24,  1994  (filed as Exhibit 10.4 to the Company's Annual Report on
Form  10-K  for  the  fiscal year ended June 26, 1994 and incorporated herein by
reference.)

10.10     Form  of  Executive  Employment Contract (filed as Exhibit 10.4 to the
Company's  Quarterly  Report  on Form 10-Q for the fiscal quarter ended December
24,  2000  and  incorporated  herein  by  reference).

10.11     Amended Employment Agreement between the Company and C. Jeffrey Rogers
dated April 20, 2001 (filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended March 25, 2001 and incorporated herein by
reference).*

10.12     Severance  agreement  between  the Company and C. Jeffery Rogers dated
August  21,  2002.

10.13     1993  Stock  Award  Plan  of the Company (filed as Exhibit 10.9 to the
Company's Annual Report on Form 10-K for the fiscal year ended June 26, 1994 and
incorporated  herein  by  reference).*

10.14     1993  Outside  Directors  Stock  Award  Plan  of the Company (filed as
Exhibit  10.10  to  the Company's Annual Report on Form 10-K for the fiscal year
ended  June  26,  1994  and  incorporated  herein  by  reference).*

10.15     1992  Stock  Award  Plan  of the Company (filed as Exhibit 10.6 to the
Company's Annual Report on Form 10-K for the fiscal year ended June 27, 1993 and
incorporated  herein  by  reference).*

          21.0     List of Subsidiaries of the Company (filed as Exhibit 21.0 to
the Company's Annual Report on Form 10-K for the fiscal year ended June 26, 1994
and  incorporated  herein  by  reference).

23.0     Consent  of  Independent  Accountants.

99.1     Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section
1350,  as  Adopted  Pursuant  to  Section 906 of the Sarbanes-Oxley Act of 2002.

99.2     Certification  of  Principal  Financial  Officer, Pursuant to 18 U.S.C.
Section  1350,  as  Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

*     Denotes  a  management  contract or compensatory plan or arrangement filed
pursuant  to  Item  14  (c)  of  this  report.



(b)     Form  8-K  filed  under  Item  5  -  Other  Events

On  August  22, 2002, Pizza Inn, Inc. filed a report on Form 8-K that C. Jeffery
Rogers,  the  Company's  Chief Executive Officer, had resigned his position with
the  Company.



<PAGE>
SIGNATURES

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

Date:   September  27,  2002     By:      /s/  Shawn  M.  Preator
                                                   Shawn  Preator
                                                   Vice  President  of  Finance
                                                   Treasurer
                                                (Principal  Accounting  Officer)

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

Name  and  Position          Date
-------------------          ----
/s/Steve  A.  Ungerman          September  27,  2002
Steve  A.  Ungerman
Director  and  Chairman  of  the  Board

/s/Butler  E.  Powell          September  27,  2002
---------------------
Butler  E.  Powell
Director

/s/Ramon  D.  Phillips          September  27,  2002
Ramon  D.  Phillips
Director

/s/F.  Jay  Taylor          September  27,  2002
F.  Jay  Taylor
Director

/s/Bobby  L.  Clairday          September  27,  2002
Bobby  L.  Clairday
Director

/s/B.  Keith  Clark          September  27,  2002
B.  Keith  Clark
Senior  Vice  President
General  Counsel
Director

/s/Ronald  W.  Parker          September  27,  2002
Ronald  W.  Parker
President  and  Chief  Executive  Officer
(Principal  Executive  Officer)




<PAGE>
 CERTIFICATION

I,  Ronald  W. Parker, President and Chief Executive Officer of Pizza Inn, Inc.,
certify  that:


1.     I  have  reviewed  this  annual  report  on Form 10-K of Pizza Inn, Inc.;

2.     Based  on  my  knowledge,  this annual report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;  and

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report.





            September 27, 2002                              /s/ Ronald W. Parker
                                                            --------------------
                                                                Ronald W. Parker
                                                         Chief Executive Officer
<PAGE>
                                  CERTIFICATION

I, Shawn M. Preator, Vice President of Finance (Principal Accounting Officer) of
Pizza  Inn,  Inc.,  certify  that:


1.     I  have  reviewed  this  annual  report  on Form 10-K of Pizza Inn, Inc.;

2.     Based  on  my  knowledge,  this annual report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;  and

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report.





            September 27, 2002                              /s/ Shawn M. Preator
                                                            --------------------
                                                                Shawn M. Preator
                                                       Vice President of Finance
                                                    Principal Accounting Officer

<PAGE>