--------------------------------------------------------------------------------


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


 X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
        EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED OCTOBER 6, 2002          COMMISSION FILE NUMBER 333-90817



                                  SBARRO, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


         NEW YORK                                          11-2501939
(STATE OR OTHER JURISDICTION OF                     (I.R.S. EMPLOYER I.D. NO.)
INCORPORATION OR ORGANIZATION)

 401 BROAD HOLLOW ROAD, MELVILLE, NEW YORK                      11747
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                  (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:        (631) 715-4100

     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, AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.

YES      X                 NO
    ----------                -----------


THE  NUMBER  OF  SHARES  OF COMMON  STOCK OF THE  REGISTRANT  OUTSTANDING  AS OF
NOVEMBER 14, 2002 WAS 7,064,328.


--------------------------------------------------------------------------------


<PAGE>


                                  SBARRO, INC.

                                 FORM 10-Q INDEX



                                                                           PAGES
                                                                           -----

PART I.  FINANCIAL INFORMATION
         ---------------------

Item 1.  Consolidated Financial Statements:

         Balance Sheets - October 6, 2002 (unaudited) and
         December 30, 2001. . . . . . . . . . . . . . . . . . . . . . . . . .3-4

         Statements of Operations (unaudited) - Forty Weeks and Twelve
         Weeks ended October 6, 2002 and October 7, 2001 . . . . . . . . . . 5-6

         Statements of Cash Flows (unaudited) - Forty Weeks ended
         October 6, 2002 and October 7, 2001 . . . . . . . . . . . . . . . . 7-8

         Notes to Unaudited  Consolidated Financial Statements -
           October 6, 2002. . . . . . . . . . . . . . . . . . . . . . . . . 9-26

Item 2.  Management's Discussion and Analysis of Financial Condition and
             Results of Operations . . . . . . . . . . . . . . . . . . . . 27-36

Item 3.  Qualitative and Quantitative Disclosures of Market Risk . . . . . . .36

Item 4.  Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . .37


PART II. OTHER INFORMATION
         -----------------

Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . 37






                                      Pg. 2


<PAGE>



                          PART I. FINANCIAL INFORMATION

ITEM 1.     FINANCIAL INFORMATION


                          SBARRO, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
                                                                (IN THOUSANDS EXCEPT SHARE DATA)
                                                           ------------------------------------------
                                                           OCTOBER 6, 2002          DECEMBER 30, 2001
                                                           ---------------          -----------------
                                                             (UNAUDITED)
CURRENT ASSETS:
<S>                                                             <C>                      <C>
     CASH AND CASH EQUIVALENTS                                  $30,479                  $36,952
     RESTRICTED CASH FOR UNTENDERED SHARES                           21                       45
     RECEIVABLES, NET OF ALLOWANCE FOR DOUBTFUL
         ACCOUNTS OF $175 (NOTE 7):
         FRANCHISE                                                2,495                    2,162
         OTHER                                                    1,584                    2,797
                                                               --------                 --------
                                                                  4,079                    4,959

     INVENTORIES                                                  2,796                    3,537
     LOANS RECEIVABLE FROM SHAREHOLDERS                           3,232                        -
     PREPAID EXPENSES                                             8,749                    1,242
                                                               --------                 --------
       TOTAL CURRENT ASSETS                                      49,356                   46,735

PROPERTY AND EQUIPMENT, NET                                     121,080                  132,303

INTANGIBLE ASSETS:
   TRADEMARKS AND TRADENAMES, NET (NOTE 2)                      195,916                  195,916
   GOODWILL, NET (NOTE 2)                                         9,204                    9,204
   DEFERRED FINANCING COSTS, NET                                  6,881                    7,707

LOANS RECEIVABLE FROM SHAREHOLDERS                                2,800                    6,032

OTHER ASSETS                                                      7,539                    6,865
                                                               --------                 --------
                                                               $392,776                 $404,762
                                                               ========                 ========

</TABLE>

                                   (CONTINUED)

                                      PG. 3


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                               (IN THOUSANDS EXCEPT SHARE DATA)
                                                           -----------------------------------------
                                                           OCTOBER 6, 2002         DECEMBER 30, 2001
                                                           ---------------         -----------------
                                                            (UNAUDITED)
CURRENT LIABILITIES:
<S>                                                                 <C>                      <C>
     AMOUNTS DUE FOR UNTENDERED SHARES                              $21                      $45
     ACCOUNTS PAYABLE                                            10,263                    9,107
     ACCRUED EXPENSES                                            17,681                   24,648
     ACCRUED INTEREST PAYABLE                                     1,708                    8,181
     CURRENT PORTION OF MORTGAGE PAYABLE                            152                      140
                                                               --------                 --------
         TOTAL CURRENT LIABILITIES                               29,825                   42,121

DEFERRED RENT                                                     8,864                    8,479

LONG-TERM DEBT, NET OF ORIGINAL ISSUE
         DISCOUNT (NOTE 5)                                      267,880                  267,718

CONTINGENCIES (NOTE 8)

SHAREHOLDERS' EQUITY:
     PREFERRED STOCK, $1 PAR VALUE; AUTHORIZED
        1,000,000 SHARES; NONE ISSUED                                 -                        -
     COMMON STOCK, $.01 PAR VALUE; AUTHORIZED
        40,000,000 SHARES; ISSUED AND OUTSTANDING
        7,064,328 SHARES AT OCTOBER 6, 2002 AND
        DECEMBER 30, 2001                                            71                       71
     ADDITIONAL PAID-IN CAPITAL                                      10                       10
     RETAINED EARNINGS                                           86,126                   86,363
                                                               --------                 --------
                                                                 86,207                   86,444
                                                               --------                 --------
                                                               $392,776                 $404,762
                                                               ========                 ========

</TABLE>


            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


                                      PG. 4


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               (IN THOUSANDS)
                                                                  -----------------------------------------
                                                                         FOR THE FORTY WEEKS ENDED:
                                                                  -----------------------------------------
                                                                  OCTOBER 6, 2002           OCTOBER 7, 2001
                                                                  ---------------           ---------------
REVENUES:
<S>                                                                   <C>                       <C>
     RESTAURANT SALES                                                 $254,454                  $273,928
     FRANCHISE RELATED INCOME                                            7,636                     7,652
     REAL ESTATE AND OTHER                                               4,334                     4,407
                                                                      --------                  --------
       TOTAL REVENUES                                                  266,424                   285,987
                                                                      --------                  --------

COSTS AND EXPENSES:
     RESTAURANT OPERATING EXPENSES:
     COST OF FOOD AND PAPER PRODUCTS                                    49,864                    56,155
     PAYROLL AND OTHER EMPLOYEE BENEFITS                                71,867                    75,868
     OTHER OPERATING COSTS                                              89,152                    90,306
     DEPRECIATION AND AMORTIZATION (NOTE 2)                             15,784                    24,094
     GENERAL AND ADMINISTRATIVE                                         17,985                    24,053
     PROVISION FOR RESTAURANT CLOSINGS (NOTE 4)                          2,911                     2,817
                                                                      --------                  --------
       TOTAL COSTS AND EXPENSES                                        247,563                   273,293
                                                                      --------                  --------
OPERATING INCOME BEFORE MINORITY INTEREST                               18,861                    12,694
MINORITY INTEREST                                                          (36)                       26
                                                                      --------                  --------
     OPERATING INCOME                                                   18,825                    12,720
                                                                      --------                  --------

OTHER INCOME (EXPENSE):
     INTEREST EXPENSE                                                  (23,905)                  (24,123)
     INTEREST INCOME                                                       390                       640
     EQUITY IN NET INCOME OF
          UNCONSOLIDATED AFFILIATES                                        692                       185
     INSURANCE RECOVERY, NET (NOTE 3)                                    7,162                         -
                                                                      --------                  --------
       NET OTHER EXPENSE                                               (15,661)                  (23,298)
                                                                      --------                  --------

INCOME (LOSS) BEFORE INCOME TAXES                                        3,164                   (10,578)
INCOME TAXES  (NOTE 6)                                                     276                       280
                                                                      --------                  --------

NET INCOME (LOSS)                                                       $2,888                  $(10,858)
                                                                      ========                  ========
</TABLE>


            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                      PG. 5


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                (IN THOUSANDS)
                                                                   ------------------------------------------
                                                                           FOR THE TWELVE WEEKS ENDED:
                                                                   ------------------------------------------
                                                                   OCTOBER 6, 2002            OCTOBER 7, 2001
                                                                   ---------------            ---------------
REVENUES:
<S>                                                                   <C>                        <C>
     RESTAURANT SALES                                                 $ 78,006                   $85,206
     FRANCHISE RELATED INCOME                                            2,561                     2,430
     REAL ESTATE AND OTHER                                               1,319                     1,138
                                                                      --------                   -------
       TOTAL REVENUES                                                   81,886                    88,774
                                                                      --------                   -------

COSTS AND EXPENSES:
     RESTAURANT OPERATING EXPENSES:
      COST OF FOOD AND PAPER PRODUCTS                                   15,010                    17,648
      PAYROLL AND OTHER EMPLOYEE BENEFITS                               21,811                    23,237
      OTHER OPERATING COSTS                                             26,775                    26,754
     DEPRECIATION AND AMORTIZATION (NOTE 2)                              3,872                     7,117
     GENERAL AND ADMINISTRATIVE                                          5,286                     7,734
     PROVISION FOR RESTAURANT CLOSINGS (NOTE 4)                            682                     1,352
                                                                      --------                   -------
       TOTAL COSTS AND EXPENSES                                         73,436                    83,842
                                                                      --------                   -------
OPERATING INCOME BEFORE MINORITY INTEREST                                8,450                     4,932
MINORITY INTEREST                                                          ( 3)                       28
                                                                      --------                   -------
     OPERATING INCOME                                                    8,447                     4,960
                                                                      --------                   -------

OTHER INCOME (EXPENSE):
     INTEREST EXPENSE                                                   (7,165)                   (7,238)
     INTEREST INCOME                                                       130                       147
     EQUITY IN NET INCOME OF
       UNCONSOLIDATED AFFILIATES                                           147                        60
     INSURANCE RECOVERY, NET (NOTE 3)                                    7,162                         -
                                                                      --------                   -------
       NET OTHER INCOME (EXPENSE)                                          274                    (7,031)
                                                                      --------                   -------

INCOME (LOSS) BEFORE INCOME TAXES                                        8,721                    (2,071)
INCOME TAXES  (NOTE 6)                                                      75                        80
                                                                      --------                   -------

NET INCOME (LOSS)                                                       $8,646                   $(2,151)
                                                                      ========                   =======
</TABLE>


            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                      PG. 6


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               (IN THOUSANDS)
                                                                   -----------------------------------------
                                                                           FOR THE FORTY WEEKS ENDED:
                                                                   -----------------------------------------
                                                                   OCTOBER 6, 2002           OCTOBER 7, 2001
                                                                   ---------------           ---------------
OPERATING ACTIVITIES:

<S>                                                                      <C>                     <C>
NET INCOME (LOSS)                                                        $2,888                  $(10,858)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET
      CASH PROVIDED BY OPERATING ACTIVITIES:
       DEPRECIATION AND AMORTIZATION                                     16,939                    25,211
       PROVISION FOR RESTAURANT CLOSINGS                                  2,046                     2,061
       INCREASE IN DEFERRED RENT, NET                                       403                       607
       MINORITY INTEREST                                                     36                       (26)
       EQUITY IN NET INCOME OF
         UNCONSOLIDATED AFFILIATES                                         (692)                     (185)
       DIVIDENDS RECEIVED FROM
         UNCONSOLIDATED AFFILIATE                                           311                       244

CHANGES IN OPERATING ASSETS AND LIABILITIES:
      DECREASE (INCREASE) IN RECEIVABLES                                    881                    (1,657)
      DECREASE IN INVENTORIES                                               741                       504
      INCREASE IN PREPAID EXPENSES                                       (7,507)                   (6,313)
      INCREASE IN OTHER ASSETS                                             (181)                     (140)
      DECREASE IN ACCOUNTS PAYABLE
         AND ACCRUED EXPENSES                                            (6,012)                   (2,703)
      DECREASE IN ACCRUED INTEREST PAYABLE                               (6,473)                   (6,223)
                                                                       --------                  ---------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                 3,380                       522


</TABLE>




                                   (CONTINUED)


                                      PG. 7


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                               (IN THOUSANDS)
                                                                  ------------------------------------------
                                                                           FOR THE FORTY WEEKS ENDED:
                                                                  ------------------------------------------
                                                                  OCTOBER 6, 2002            OCTOBER 7, 2001
                                                                  ---------------            ---------------
INVESTING ACTIVITIES:

<S>                                                                    <C>                      <C>
PURCHASES OF PROPERTY AND EQUIPMENT                                    $(6,611)                 $(14,453)
                                                                       -------                   -------
    NET CASH USED IN INVESTING ACTIVITIES                               (6,611)                  (14,453)
                                                                       -------                   -------

FINANCING ACTIVITIES:

MORTGAGE PRINCIPAL REPAYMENTS                                             (117)                     (107)
PURCHASE OF MINORITY INTEREST IN JOINT VENTURE                               -                    (1,000)
LOANS TO SHAREHOLDERS                                                        -                    (3,932)
REPAYMENT OF SHAREHOLDER LOANS                                               -                       700
TAX DISTRIBUTIONS RELATED TO THE PRIOR FISCAL   YEAR                    (3,125)                   (7,564)
DIVIDENDS                                                                    -                    (5,000)
                                                                       -------                   -------
    NET CASH USED IN FINANCING ACTIVITIES                               (3,242)                  (16,903)
                                                                       -------                   -------

DECREASE IN CASH AND CASH EQUIVALENTS                                   (6,473)                  (30,834)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                        36,952                    42,319
                                                                       -------                   -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                             $30,479                   $11,485
                                                                       =======                   =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION:

CASH PAID DURING THE PERIOD FOR INCOME TAXES                              $626                      $791
                                                                       =======                   =======

CASH PAID DURING THE PERIOD FOR INTEREST                               $29,247                   $29,241
                                                                       =======                   =======

</TABLE>

            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                      PG. 8


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION:

     The  accompanying  unaudited  consolidated  financial  statements have been
     prepared in accordance with the  instructions  for Form 10-Q and Regulation
     S-X related to interim period financial  statements and, therefore,  do not
     include  all  information  and  footnotes  required by  generally  accepted
     accounting  principles.  However,  in the  opinion of our  management,  all
     adjustments  (consisting  of normal  recurring  adjustments  and  accruals)
     considered necessary for a fair presentation of our consolidated  financial
     position at October 6, 2002 and our consolidated  results of operations for
     each of the forty and twelve week periods ended October 6, 2002 and October
     7, 2001 and cash flows for the forty weeks in each of the respective  years
     have been included.  The results of operations for interim  periods are not
     necessarily  indicative  of the results that may be expected for the entire
     year.  Reference  should  be  made  to  the  annual  financial  statements,
     including footnotes thereto, included in our Annual Report on Form 10-K for
     the fiscal year ended December 30, 2001.

     Certain items in the financial  statements presented have been reclassified
     to conform to the fiscal 2002 presentation.

2.   RECENT ACCOUNTING PRONOUNCEMENTS:

     In July 2001, the Financial  Accounting  Standards  Board  ("FASB")  issued
     Statements of Financial  Accounting  Standards  ("SFAS") No. 141, "Business
     Combinations,"  and No. 142,  "Goodwill and Other Intangible  Assets." SFAS
     No. 141 requires all business combinations initiated after June 30, 2001 to
     be accounted for using the purchase  method.  SFAS No. 142 became effective
     with respect to our Company with the beginning of fiscal 2002. SFAS No. 142
     requires that the amortization of goodwill (which was $4.2 million and $1.3
     million in the forty and twelve weeks ended October 7, 2001,  respectively)
     cease on December 31,  2001.  Under SFAS No. 142,  goodwill and  intangible
     assets  with  indefinite  lives are no longer  amortized  but are  reviewed
     annually  for  impairment  (or more  frequently  if  impairment  indicators
     arise).  Separable intangible assets that are not deemed to have indefinite
     lives continue to be amortized  over their useful lives.  We have completed
     our initial  impairment test on goodwill and intangible assets  (trademarks
     and  tradenames)  with  indefinite  lives  acquired  prior to July 1,  2001
     ($205.1  million,  net of accumulated  amortization  of $19.3  million,  at
     October 6, 2002) and concluded that there had been no impairment at January
     1, 2002.





                                      Pg. 9

<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.   RECENT ACCOUNTING PRONOUNCEMENTS:

     The effect of the adoption of SFAS No. 142 on the reported net loss for the
     fiscal 2001 periods presented in this report is as follows:

<TABLE>
<CAPTION>
                                                    Forty Weeks Ended                Twelve Weeks Ended
                                                    -----------------                ------------------
                                           Oct. 6, 2002        Oct. 7, 2001     Oct. 6, 2002      Oct. 7, 2001
                                           ------------        ------------     ------------      ------------
                                                      (in thousands)                     (in thousands)
<S>                                        <C>                 <C>              <C>               <C>
     Reported net income (loss)            $2,888              $(10,858)        $8,646            $(2,151)
     Add back:  Amortization of
     goodwill and intangible assets
     with indefinite lives                      -                 4,177              -              1,246

     Adjusted net income (loss)            $2,888              $ (6,681)        $8,646              $(905)

</TABLE>

     In  August  2001,  the FASB  issued  SFAS No.  143,  "Accounting  for Asset
     Retirement  Obligations." This statement  addresses financial and reporting
     obligations  associated with the retirement of tangible  long-lived  assets
     and the associated asset retirement  costs. It applies to legal obligations
     associated  with the  retirement of long-lived  assets that result from the
     acquisition,  construction,  development  and/or  the normal  operation  of
     long-lived assets,  except for certain obligations of lessees. SFAS No. 143
     became  effective  with respect to us with the beginning of fiscal 2002 and
     has not had a material effect on our financial position and operations.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
     Impairment or Disposal of Long-lived  Assets."  This  statement  supersedes
     SFAS No. 121,  "Accounting for the Impairment of Long-lived  Assets and for
     Long-lived  Assets to be  Disposed  Of," and  Accounting  Principles  Board
     Opinion No. 30, "Reporting Results of  Operations-Reporting  the Effects of
     Disposal  of a  Segment  of  a  Business  and  Extraordinary,  Unusual  and
     Infrequently Occurring Events and Transactions." This Statement retains the
     fundamental  provisions of SFAS No. 121 for  recognition and measurement of
     impairment,  but amends the accounting and reporting standards for segments
     of a business to be disposed of. SFAS No. 144 became effective with respect
     to us with the  beginning of fiscal 2002.  The adoption of SFAS No. 144 has
     not had a material impact on our financial  position and operating results.
     We will continue to assess impairment of the assets of our restaurants on a
     restaurant-by-restaurant basis.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
     No. 4, 44, and 64,  Amendment  of FASB  Statement  No.  13,  and  Technical
     Corrections."  This statement  eliminates the prior  requirement that gains
     and losses on debt extinguishment must be classified as extraordinary items
     in the income statement and contains other nonsubstantive corrections to


                                     Pg. 10


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.   RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED):

     authoritative  accounting  literature in SFAS No. 4, 44 and 64. The changes
     in SFAS  145  related  to debt  extinguishment  will  be  effective  for us
     beginning  with our 2003 fiscal year and the other  changes were  effective
     for us beginning  with  transactions  after May 15, 2002.  Adoption of this
     standard  has not had,  and we do not expect that it will have,  a material
     effect on our financial position and results of operations.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
     Associated with Exit or Disposal  Activities,"  which addresses  accounting
     for  restructuring  and similar  costs.  SFAS No. 146  supersedes  previous
     accounting  guidance,  principally  Emerging Issues Task Force (EITF) Issue
     No. 94-3.  SFAS No. 146 requires that the  liability  for costs  associated
     with an exit or  disposal  activity be  recognized  when the  liability  is
     incurred.  Under EITF No. 94-3, a liability for an exit cost was recognized
     at the date of a company's  commitment  to an exit plan.  SFAS No. 146 also
     establishes that the liability should initially be measured and recorded at
     fair value. Accordingly,  SFAS No. 146 may affect the timing of recognizing
     future  restructuring costs (including our future accounting for restaurant
     closing  costs)  as well  as the  amount  recognized.  We  will  adopt  the
     provisions of SFAS No. 146 for  restructuring  activities  initiated  after
     December 29, 2002.

3.   EFFECT OF EVENTS OF SEPTEMBER 11, 2001:

     As a result of the events of September 11, 2001, a  Sbarro-owned  location,
     as well as a  franchise  location,  that had  operated  in the World  Trade
     Center in New York City were destroyed.  Although the Sbarro-owned location
     generated  substantial sales revenues and operating  income,  the effect on
     the results  for the third  quarter and year to date of fiscal 2001 was not
     material to our consolidated results as a whole. The franchise location did
     not  generate  significant  royalty  revenues.  In  addition,  a number  of
     airports  were  closed due to the events of  September  11 causing  airport
     Sbarro-owned  and  franchise  units to close for  periods of time and those
     airport  locations  and a number of downtown  locations  have  continued to
     experience a period of reduced  sales  through the third  quarter of fiscal
     2002.

     In September  2002, we reached an agreement to settle,  for $9.65  million,
     our  claim  with  our  insurance  company  for  the  reimbursement  of  the
     depreciated cost of the assets destroyed at the Sbarro-owned  location,  as
     well as for lost income under our business interruption insurance coverage.
     The proceeds of the settlement,  less the $1.5 million advance  received in
     May 2002, was received in September 2002.  Approximately $7.2 million,  net
     of related  expenses,  of the settlement  relates to  reimbursement of lost
     income under our business  interruption  insurance coverage and is included
     in our statement of operations for the forty and twelve weeks ended October
     6, 2002.



                                     Pg. 11


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.   PROVISION FOR RESTAURANT CLOSINGS:

     During the forty and twelve  weeks  ended  October 6, 2002,  we  recorded a
     provision  for  restaurant  closings  of $2.9  million  and  $0.7  million,
     respectively. Of the provision, approximately $1.6 million and $0.7 million
     were  recorded  in the second and third  fiscal  quarters  of fiscal  2002,
     respectively,  for the net book value of the property  and  equipment to be
     abandoned and anticipated closing costs of approximately thirty low volume,
     unprofitable Sbarro quick service locations that we planned to close in the
     third and fourth  quarter of fiscal 2002  (twenty-five  of those units have
     been closed to date). The net book value of  approximately  one-half of the
     units to be closed  was  included  in the  provision  for asset  impairment
     recorded in fiscal  2001.  The balance of the  provision in both periods of
     fiscal 2002 relate to costs that either were not included in the  provision
     for asset impairment recorded in the fourth quarter of fiscal 2001 or which
     were not absorbed by amounts  received from  landlords in  connection  with
     such closings.

5.   LONG-TERM DEBT:

     We were in compliance  with the various  covenants in the indenture for our
     senior notes,  our bank credit  agreement and our mortgage as of October 6,
     2002.

     We are subject to various  covenants  under the  Indenture  under which our
     senior  notes are issued and under our bank  credit  agreement.  One of the
     covenants  limits our ability to borrow funds  (except  under  specifically
     permitted  arrangements,  such as up to $75.0  million of revolving  credit
     loans) unless our consolidated interest ratio coverage (as defined),  after
     giving pro forma effect to the interest on the new borrowing,  for the four
     most recently ended fiscal quarters is at least 2.5 to 1. Another  covenant
     limits our ability to make "restricted  payments,"  including,  among other
     things,  dividend payments (other than as distributions pursuant to the Tax
     Payment  Agreement) and  investments  in, among other things,  unrestricted
     subsidiaries,  to specified amounts determined under a formula contained in
     the  Indenture  provided  that that ratio is at least 2.0 to 1 after giving
     pro forma effect to the  restricted  payment.  As of October 6, 2002,  that
     ratio was 2.23 to 1. As a result, we are not presently able to borrow funds
     (other than  specifically  permitted  indebtedness,  including  up to $75.0
     million  of  revolving  credit  loans).  Additionally,  under  the  formula
     contained in the Indenture,  we may not presently make restricted  payments
     other than certain permitted investments.

6.   INCOME TAXES:

     During the first quarter of fiscal 2002, we made tax  distributions,  based
     on our tax basis income for fiscal 2001,  of $3.1 million  compared to $7.6
     million  of tax  distributions,  based on our tax basis  income  for fiscal
     2000,  during  the  first  quarter  of  fiscal  2001.  There  were  no  tax
     distributions  during the second or third quarters of either fiscal 2002 or
     fiscal 2001.


                                     Pg. 12


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.   RELATED PARTY AND OTHER TRANSACTIONS:

     As of July 14, 2002, we sold the assets of a Sbarro-owned  location that we
     intended to close to a corporation whose shareholder is the  brother-in-law
     of our Chairman of the Board and President  for fair value of $88,900.  The
     sales price resulted in a loss of approximately $64,000 that is included in
     the provision for restaurant  closings in the statement of  operations.  At
     the same time, that corporation  entered into a franchise agreement with us
     with an initial  franchise fee, a continuing  royalty  percentage and other
     terms and  conditions  that are  similar to those in effect for most of our
     other  new  franchisees.  We  received  promissory  notes  for  each of the
     purchase price and initial  franchise fee that are payable over seven years
     and bear  interest on the unpaid  principal  balances  at 7%  interest  per
     annum.

     As of March 28, 2002, we sold, for nominal  consideration,  the assets of a
     Mama Sbarro  location to an  unrelated  third  party.  The  purchaser  also
     entered into a joint  venture  agreement  with Sbarro that provides for the
     quarterly distribution to us of a 50% profit participation,  as defined, if
     any.  Losses  incurred  in any year only  offset  income of the year of the
     loss. The location was closed for renovation for the majority of the second
     quarter and, to date, has not generated distributable income. A second unit
     was  sold to the  same  unrelated  third  party  under  similar  terms  and
     conditions,  including the profit participation  agreement,  as of July 31,
     2002.  In addition,  we are to lend up to $50,000 to the  purchaser for the
     remodeling of the second  location sold which is  anticipated to re-open by
     the end of the 2002 fiscal year.  Any loan is to be repaid monthly from the
     cash flow of the  restaurant,  together with interest at the Citibank prime
     rate  (4.75% at October  6,  2002)  plus 2% with a maturity  date of August
     2007.  Approximately  $19,000 has been advanced to date. The net book value
     of  both  of  these  locations  had  been  included  in the  provision  for
     restaurant impairment recorded in fiscal 2001.

8.   CONTINGENCIES:

     On December  20,  1999,  fourteen  current and former  general  managers of
     Sbarro  restaurants in California  amended a complaint  against us filed in
     the Superior Court of California for Orange County.  The complaint  alleges
     that the plaintiffs  were improperly  classified as exempt  employees under
     the  California  wage and hour  law.  The  plaintiffs  are  seeking  actual
     damages,  punitive damages and costs of the lawsuit,  including  reasonable
     attorney's fees, each in unspecified amounts.  Plaintiffs filed a motion to
     certify the lawsuit as a class action,  but the court denied the motion. We
     have separately settled with two of the managers for immaterial amounts.

     On September 6, 2000,  eight other current and former  general  managers of
     Sbarro  restaurants  in  California  filed a  complaint  against  us in the
     Superior Court of California for Orange County alleging that the plaintiffs
     were improperly  classified as exempt  employees under  California wage and
     hour law. The plaintiffs are seeking actual damages,  punitive  damages and
     costs  of the  lawsuit,  including  reasonable  attorney's  fees,  each  in
     unspecified amounts. Plaintiffs are


                                     Pg. 13


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.   CONTINGENCIES (CONTINUED):

     represented by the same counsel who is  representing  the plaintiffs in the
     case discussed in the preceding paragraph.

     On March 22, 2002,  five former general  managers of Sbarro  restaurants in
     California filed a complaint against us in the Superior Court of California
     for Los Angeles  County.  The complaint  alleges that the  plaintiffs  were
     required  to  perform  labor  services   without  proper  premium  overtime
     compensation  from at least May of 1999.  The plaintiffs are seeking actual
     damages,   punitive  damages  and  attorney's  fees  and  costs,   each  in
     unspecified  amounts.  In addition,  plaintiffs have requested class action
     status for all  managerial  employees who worked  overtime  and/or were not
     otherwise paid regular wages due and owing from May 1999 to present.

     We believe that we have  substantial  defenses to the claims in each of the
     actions and are vigorously defending these actions.

     In addition,  from time to time, we are a party to certain claims and legal
     proceedings  in the  ordinary  course of  business,  none of which,  in our
     opinion,  would have a material adverse effect on our financial position or
     results of operations.

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS:

     Certain  subsidiaries have guaranteed amounts  outstanding under our senior
     notes and bank credit agreement.  Each of the guaranteeing  subsidiaries is
     our  direct or  indirect  wholly  owned  subsidiary  and each has fully and
     unconditionally  guaranteed the senior notes and the credit  agreement on a
     joint and several basis.

     The following condensed consolidating financial information presents:

     (1)  Condensed   consolidating   balance  sheets  as  of  October  6,  2002
          (unaudited)   and  December  30,  2001  and  condensed   consolidating
          statements  of income for the forty and twelve weeks ended  October 6,
          2002  (unaudited)  and October 7, 2001  (unaudited) and cash flows for
          the forty weeks ended October 6, 2002  (unaudited) and October 7, 2001
          (unaudited)  of (a)  Sbarro,  Inc.,  the  parent,  (b)  the  guarantor
          subsidiaries as a group, (c) the nonguarantor  subsidiaries as a group
          and (d) the Company on a consolidated basis, and

     (2)  Elimination entries necessary to consolidate Sbarro, Inc., the parent,
          with the guarantor and nonguarantor subsidiaries.

     The  principal  elimination  entries  eliminate  intercompany  balances and
     transactions.  Investments in subsidiaries  are accounted for by the parent
     on the cost method.

                                     Pg. 14


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):

                           CONSOLIDATING BALANCE SHEET
                              AS OF OCTOBER 6, 2002
                        (IN THOUSANDS EXCEPT SHARE DATA)
                                   (UNAUDITED)

                                     ASSETS

<TABLE>
<CAPTION>
                                                           GUARANTOR      NONGUARANTOR                    CONSOLIDATED
                                            PARENT       SUBSIDIARIES     SUBSIDIARIES    ELIMINATIONS       TOTAL
                                            ------       ------------     ------------    ------------       -----

<S>                                             <C>            <C>               <C>           <C>              <C>
Current assets:
   Cash and cash equivalents                  $24,839         $4,823             $817                         $30,479
   Restricted cash for untendered                  21              -                -                              21
     shares
   Receivables less allowance for
     doubtful accounts of $175:
     Franchise                                  2,495              -                -                           2,495
     Other                                        382          1,038              164                           1,584
                                             --------       --------          -------                        --------
                                                2,877          1,038              164                           4,079

   Inventories                                  1,085          1,388              323                           2,796
   Loans receivable from shareholders           3,232              -                -                           3,232
   Prepaid expenses                             6,623          1,868              258                           8,749
                                             --------       --------          -------                        --------
     Total current assets                      38,677          9,117            1,562                          49,356

Intercompany receivables                       13,168        300,874                -       $(314,042)              -

Investment in subsidiaries                     65,469              -                -         (65,469)              -

Property and equipment, net                    44,253         65,609           11,218               -         121,080

Intercompany receivables - long term            3,608              -                -          (3,608)              -

Intangible assets:
   Trademarks and tradenames, net             195,916              -                -               -         195,916
   Goodwill, net                                9,324              -                -            (120)          9,204
   Deferred financing costs, net                6,601            280                -               -           6,881


Loans receivable from shareholders              2,800              -                -               -           2,800

Other assets                                    8,844          1,710             (658)         (2,357)          7,539
                                             --------       --------          -------       ---------        --------

                                             $388,660       $377,590          $12,122       $(385,596)       $392,776
                                             ========       ========          =======       =========        ========

</TABLE>


                                     Pg. 15


<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):

                           CONSOLIDATING BALANCE SHEET
                              AS OF OCTOBER 6, 2002
                        (IN THOUSANDS EXCEPT SHARE DATA)
                                   (UNAUDITED)

                      LIABILITIES AND SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                           GUARANTOR     NONGUARANTOR                     CONSOLIDATED
                                             PARENT      SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS       TOTAL
                                             ------      ------------    ------------     ------------       -----

<S>                                                <C>         <C>             <C>            <C>                  <C>
Current liabilities:
   Amounts due for untendered shares              $21                                                             $21
   Accounts payable                             9,691            $230           $342                           10,263
   Accrued expenses                            16,095            (784)         2,370                           17,681
   Accrued interest payable                     1,708               -              -                            1,708
   Current portion of mortgage payable              -             152              -                              152
                                             --------       --------          -------                        --------
     Total current liabilities                 27,515            (402)         2,712                           29,825

Intercompany payables                         300,874               -         13,168        $(314,042)              -

Deferred rent                                   8,209               -            655                -           8,864

Long-term debt, net of
   original issue discount                    252,361          15,519              -                -         267,880

Intercompany payables - long term                   -           3,608              -           (3,608)              -

Shareholders' equity (deficit):
   Preferred stock, $1 par value;
     authorized 1,000,000 shares; none
     issued                                         -               -              -                -               -
   Common stock, $.01 par value:
     authorized 40,000,000 shares;
     issued and outstanding 7,064,328
     shares                                        71               -              -                -              71
   Additional paid-in capital                      10          65,469          2,477          (67,946)             10
   Retained earnings (deficit)               (200,380)        293,396         (6,890)               -         86,126
                                             --------         -------         ------          -------          ------

                                             (200,299)        358,865         (4,413)         (67,946)         86,207
                                             --------         -------         ------          -------          ------

                                             $388,660        $377,590        $12,122        $(385,596)       $392,776
                                             ========        ========        =======        =========        ========

</TABLE>


                                     Pg. 16



<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):

                           CONSOLIDATING BALANCE SHEET
                             AS OF DECEMBER 30, 2001
                        (IN THOUSANDS EXCEPT SHARE DATA)
                                     ASSETS



<TABLE>
<CAPTION>
                                                           GUARANTOR      NONGUARANTOR                    CONSOLIDATED
                                            PARENT       SUBSIDIARIES     SUBSIDIARIES    ELIMINATIONS       TOTAL
                                            ------       ------------     ------------    ------------       -----

<S>                                             <C>            <C>               <C>           <C>              <C>
Current assets:
   Cash and cash equivalents                  $29,673         $5,437           $1,842                         $36,952
   Restricted cash for untendered                  45              -                -                              45
     shares
   Receivables less allowance for
     doubtful accounts of $175:
     Franchise                                  2,162              -                -                           2,162
     Other                                      2,069            613              115                           2,797
                                             --------       --------          -------                        --------
                                                4,231            613              115                           4,959

   Inventories                                  1,413          1,771              353                           3,537
   Prepaid expenses                             1,916           (530)            (144)                          1,242
                                             --------       --------          -------                        --------
     Total current assets                      37,278          7,291            2,166                          46,735

Intercompany receivables                       12,079        281,438                -       $(293,517)              -

Investment in subsidiaries                     65,469              -                -         (65,469)              -

Property and equipment, net                    46,554         73,659           12,090               -         132,303

Intercompany receivables - long term            3,900              -                -          (3,900)              -

Intangible assets:
   Trademarks and tradenames, net             195,916              -                -               -         195,916
   Goodwill, net                                9,204              -                -               -           9,204
   Deferred financing costs, net                7,398            309                -               -           7,707

Loans receivable from shareholders              6,032              -                -               -           6,032

Other assets                                    8,065          1,852             (576)         (2,476)          6,865
                                             --------       --------          -------       ---------        --------
                                             $391,895       $364,549          $13,680       $(365,362)       $404,762
                                             ========       ========          =======       =========        ========

</TABLE>



                                     Pg. 17
<PAGE>


                         SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):


                           CONSOLIDATING BALANCE SHEET
                             AS OF DECEMBER 30, 2001
                        (IN THOUSANDS EXCEPT SHARE DATA)
                      LIABILITIES AND SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                           GUARANTOR     NONGUARANTOR                     CONSOLIDATED
                                             PARENT      SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS       TOTAL
                                             ------      ------------    ------------     ------------       -----

<S>                                          <C>          <C>             <C>            <C>                  <C>
Current liabilities:
   Amounts due for untendered shares              $45                                                             $45
   Accounts payable                             8,014            $164           $929                            9,107
   Accrued expenses                            19,392           1,824          3,432                           24,648
   Accrued interest payable                     8,181               -              -                            8,181
   Current portion of mortgage payable              -             140              -                              140
                                             --------       --------          -------                        --------
     Total current liabilities                 35,632           2,128          4,361                           42,121

Intercompany payables                         281,438               -         12,078        $(293,516)              -

Deferred rent                                   7,512               -            967                -           8,479

Long-term debt, net of
   original issue discount                    252,070          15,648              -                -         267,718

Intercompany payables - long term                   -           3,900              -           (3,900)              -

Shareholders' equity (deficit):
   Preferred stock, $1 par value;
     authorized 1,000,000 shares; none
     issued                                         -               -              -                -               -
   Common stock, $.01 par value:
     authorized 40,000,000 shares;
     issued and outstanding 7,064,328
     shares                                        71               -              -                -              71
   Additional paid-in capital                      10          65,469          2,477          (67,946)             10
   Retained earnings (deficit)               (184,838)        277,404         (6,203)               -          86,363
                                             --------        --------        -------        ---------        --------

                                             (184,757)        342,873         (3,726)         (67,946)         86,444
                                             --------        --------        -------        ---------        --------

                                             $391,895        $364,549        $13,680        $(365,362)       $404,762
                                             ========        ========        =======        =========        ========

</TABLE>



                                     Pg. 18

<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):


                      CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE FORTY WEEKS ENDED OCTOBER 6, 2002
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           GUARANTOR     NONGUARANTOR                     CONSOLIDATED
                                             PARENT      SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS       TOTAL
                                             ------      ------------    ------------     ------------       -----
<S>                                           <C>             <C>             <C>             <C>             <C>
Revenues:
   Restaurant sales                          $106,043        $130,493        $17,918                         $254,454
   Franchise related income                     7,636               -              -                            7,636
   Real estate and other                        2,115           2,910              -            $(691)          4,334
   Intercompany charges                             -          11,091              -          (11,091)              -
                                             ---------        -------          -----       ----------          ------
         Total revenues                       115,794         144,494         17,918          (11,782)        266,424
                                             ---------        -------          -----       ----------          ------

Cost and expenses:
   Restaurant operating expenses:
       Cost of food and paper products         19,614          25,419          4,831                -          49,864
       Payroll and other employee
         benefits                              28,110          37,233          6,524                -          71,867
       Other operating costs                   37,388          45,970          5,794                -          89,152
   Depreciation and amortization                6,823           8,032            929                -          15,784
   General and administrative                   9,301           9,028            347             (691)         17,985
   Provision for restaurant closings            2,770               -            141                -           2,911
   Intercompany charges                        11,091               -              -          (11,091)               -
                                             ---------        -------          -----       ----------          ------
       Total costs and expenses               115,097         125,682         18,566          (11,782)        247,563
                                             ---------        -------          -----       ----------          ------

Operating income (loss) before minority
   interest                                       697          18,812           (648)               -          18,861
                                             ---------        -------          -----       ----------          ------
Minority interest                                   -                -           (36)               -             (36)
                                             ---------        -------          -----       ----------          ------
Operating income (loss)                           697          18,812           (684)               -          18,825

Other (expense) income:
   Interest expense                           (22,774)         (1,131)             -                -         (23,905)
   Interest income                                390               -              -                -             390
   Equity in net income  of
     unconsolidated affiliates
                                                  692               -              -                -             692
   Insurance recovery, net                      7,162               -              -                            7,162
                                             ---------        -------          -----       ----------          ------

Net other expense                             (14,530)         (1,131)             -                -         (15,661)
                                             ---------        -------          -----       ----------          ------

(Loss) income before income taxes             (13,833)         17,681           (684)               -           3,164
Income taxes (benefit)                         (1,352)          1,690            (62)               -             276
                                             ---------        -------          -----       ----------          ------

Net (loss) income                            $(12,481)        $15,991          $(622)      $        -          $2,888
                                             =========        =======          =====       ==========          =======


</TABLE>


                                     Pg. 19
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):


                      CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE FORTY WEEKS ENDED OCTOBER 7, 2001
                                 (IN THOUSANDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                           GUARANTOR     NONGUARANTOR                     CONSOLIDATED
                                             PARENT      SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS       TOTAL
                                             ------      ------------    ------------     ------------       -----

<S>                                           <C>             <C>             <C>              <C>            <C>
Revenues:
   Restaurant sales                          $114,395        $139,009        $20,524                         $273,928
   Franchise related income                     7,652               -              -                            7,652
   Real estate and other                        2,070           2,337              -                            4,407
   Intercompany charges                             -           8,538              -          $(8,538)              -
                                             --------         -------        -------      -----------        --------
         Total revenues                       124,117         149,884         20,524           (8,538)        285,987
                                             --------         -------        -------      -----------        --------

Cost and expenses:
   Restaurant operating expenses:
       Cost of food and paper products         21,233          29,263          5,659                -          56,155
       Payroll and other employee
         benefits                              29,151          39,778          6,939                -          75,868
       Other operating costs                   37,482          45,634          7,190                -          90,306
   Depreciation and amortization               12,447          10,509          1,138                -          24,094
   General and administrative                  11,582          11,670            801                -          24,053
   Provision for restaurant closings            2,423               -            394                -           2,817
   Intercompany charges
                                                8,538               -              -           (8,538)              -
                                             --------         -------        -------      -----------        --------
       Total costs and expenses               122,856         136,854         22,121           (8,538)        273,293
                                             --------         -------        -------      -----------        --------

Operating income (loss) before minority
   interest                                     1,261          13,030         (1,597)               -          12,694
Minority interest                                   -                -            26                -              26
                                             --------         -------        -------      -----------        --------
Operating income (loss)                         1,261          13,030         (1,571)               -          12,720
                                             --------         -------        -------      -----------        --------

Other (expense) income:
   Interest expense                           (23,012)         (1,111)        (1,437)           1,437         (24,123)
   Interest income                              2,077               -              -           (1,437)            640
   Equity in net income  of
     unconsolidated affiliates                    185               -               -               -             185
                                             --------         -------        -------      -----------        --------

 Net other expense                            (20,750)         (1,111)        (1,437)               -         (23,298)
                                             --------         -------        -------      -----------        --------

(Loss) income before income taxes             (19,489)         11,919         (3,008)               -         (10,578)
Income taxes (benefit)                             67             315           (102)               -             280
                                             --------         -------        -------      -----------        --------

Net (loss) income                            $(19,556)        $11,604        $(2,906)     $         -        $(10,858)
                                             ========         =======        =======      ===========        ========

</TABLE>




                                     Pg. 20


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):


                      CONSOLIDATING STATEMENT OF OPERATIONS
                   FOR THE TWELVE WEEKS ENDED OCTOBER 6, 2002
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           GUARANTOR     NONGUARANTOR                     CONSOLIDATED
                                             PARENT      SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS       TOTAL
                                             ------      ------------    ------------     ------------       -----
<S>                                            <C>             <C>             <C>             <C>             <C>
Revenues:
   Restaurant sales                           $33,246         $39,588         $5,172                          $78,006
   Franchise related income                     2,561               -              -                            2,561
   Real estate and other                          651             875              -            $(207)          1,319
   Intercompany charges                             -           3,651              -           (3,651)              -
                                               ------          ------          -----       ----------          ------
         Total revenues                        36,458          44,114          5,172           (3,858)         81,886
                                               ------          ------          -----       ----------          ------

Cost and expenses:
   Restaurant operating expenses:
       Cost of food and paper products          6,786           6,733          1,491                -          15,010
       Payroll and other employee
         benefits                               8,018          11,919          1,874                -          21,811
       Other operating costs                   12,392          12,738          1,645                -          26,775
   Depreciation and amortization                1,706           1,875            291                -           3,872
   General and administrative                   2,604           2,742            147             (207)          5,286
   Provision for restaurant closings              700               -            (18)               -             682
   Intercompany charges                         3,651               -              -           (3,651)              -
                                               ------          ------          -----       ----------          ------
       Total costs and expenses                35,857          36,007          5,430           (3,858)         73,436
                                               ------          ------          -----       ----------          ------

Operating income (loss) before minority
   interest                                       601           8,107           (258)               -           8,450
Minority interest                                   -               -            (3)                -              (3)
                                               ------          ------          -----       ----------          ------
Operating income (loss)                           601           8,107           (261)               -           8,447
                                               ------          ------          -----       ----------          ------

Other (expense) income:
   Interest expense                            (6,827)           (338)             -                -          (7,165)
   Interest income                                130               -              -                -             130
   Equity in net income  of
     unconsolidated affiliates
                                                  147               -              -                -             147
    Insurance recovery, net                     7,162               -              -                -           7,162
                                               ------          ------          -----       ----------          ------

Net other income (expense)                        612            (338)             -                -             274
                                               ------          ------          -----       ----------          ------

Income before income taxes                      1,213           7,769           (261)               -           8,721
Income taxes (benefit)                         (1,209)          1,331            (47)               -              75
                                               ------          ------          -----       ----------          ------

Net income (loss)                              $2,422          $6,438          $(214)      $        -          $8,646
                                               ======          ======          =====       ==========          ======

</TABLE>




                                     Pg. 21


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):


                      CONSOLIDATING STATEMENT OF OPERATIONS
                   FOR THE TWELVE WEEKS ENDED OCTOBER 7, 2001
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           GUARANTOR     NONGUARANTOR                     CONSOLIDATED
                                             PARENT      SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS       TOTAL
                                             ------      ------------    ------------     ------------       -----
<S>                                            <C>             <C>             <C>             <C>             <C>
Revenues:
   Restaurant sales                           $35,145         $43,600         $6,461                          $85,206
   Franchise related income                     2,430               -              -                            2,430
   Real estate and other                          479             659              -                            1,138
   Intercompany charges                               -         2,193              -          $(2,193)              -
                                              -------         -------         ------          --------        -------
         Total revenues                        38,054          46,452          6,461           (2,193)         88,774
                                              -------         -------         ------          --------        -------
Cost and expenses:
   Restaurant operating expenses:
       Cost of food and paper products          6,621           9,209          1,818                -          17,648
       Payroll and other employee
         benefits                               8,659          12,351          2,227                -          23,237
       Other operating costs                   10,514          14,173          2,067                -          26,754
   Depreciation and amortization                3,566           3,172            379                -           7,117
   General and administrative                   4,911           2,456            367                -           7,734
   Provision for restaurant closings            1,208               -            144                -           1,352
   Intercompany charges                         2,193               -              -           (2,193)              -
                                              -------         -------         ------          --------        -------
       Total costs and expenses                37,672          41,361          7,002           (2,193)         83,842
                                              -------         -------         ------          --------        -------

Operating income (loss) before minority
   Interest                                       382           5,091           (541)               -           4,932
Minority interest                                   -               -             28                -              28
                                              -------         -------         ------          --------        -------
Operating income (loss)                           382           5,091           (513)               -           4,960
                                              -------         -------         ------          --------        -------

Other (expense) income:
   Interest expense                            (6,927)           (311)          (572)             572          (7,238)
   Interest income                                719               -              -             (572)            147
   Equity in net income  of
     unconsolidated affiliates
                                                   60               -              -                -              60
                                              -------         -------         ------          --------        -------

Net other expense                              (6,148)           (311)          (572)               -          (7,031)
                                              -------         -------         ------          --------        -------

(Loss) income  before income taxes             (5,766)          4,780         (1,085)               -          (2,071)
Income taxes (benefit)                             29             109            (58)               -              80
                                              -------         -------         ------          --------        -------
Net (loss) income                             $(5,795)         $4,671        $(1,027)      $        -         $(2,151)
                                              =======          ======        ========      ===========        =======

</TABLE>


                                     Pg. 22


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):

                      CONSOLIDATING STATEMENT OF CASH FLOWS
                    FOR THE FORTY WEEKS ENDED OCTOBER 6, 2002
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                           GUARANTOR     NONGUARANTOR                     CONSOLIDATED
OPERATING ACTIVITIES:                        PARENT      SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS       TOTAL
---------------------                        ------      ------------    ------------     ------------       -----

<S>                                              <C>              <C>             <C>           <C>              <C>
Net (loss) income                            $(12,481)        $15,991          $(622)                          $2,888
Adjustments to reconcile net (loss)
   income to net cash (used in)
   provided by operating activities:
     Depreciation and amortization              7,816           8,194            929                           16,939
     Provision for restaurant closings          2,046               -              -                            2,046
     Increase in deferred rent, net               495            (120)            28                              403
     Minority interest                              -               -             36                               36
     Equity in income of
      unconsolidated affiliates                  (692)              -              -                             (692)
     Dividends received from
       unconcolidated affiliates                  311               -              -                              311
     Changes in operating assets
     and liabilities:
     Decrease (increase) in receivables         1,355            (425)           (49)                             881
     Decrease (increase) in inventories           328             383             30                              741
     Increase in prepaid assets                (4,707)         (2,398)          (402)                          (7,507)
     (Increase) decrease in other assets         (406)            262             83            $(120)           (181)
     (Decrease) increase in accounts
       payable and accrued expenses            (3,149)         (1,027)        (1,956)             120          (6,012)
     Decrease in accrued interest
       payable                                 (6,473)              -              -                -          (6,473)
                                              --------         -------        -------         --------         --------
Net cash (used in) provided by
    operating activities                      (15,557)         20,860         (1,923)               -           3,380
                                              --------         -------        -------         --------         --------

Investing activities:
---------------------
Purchases of property and equipment            (4,795)         (1,629)          (187)               -          (6,611)
                                              --------         -------        -------         --------         --------

Net cash used in investing activities          (4,795)         (1,629)          (187)               -          (6,611)
                                              --------         -------        -------         --------         --------


</TABLE>


                                     Pg. 23

<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):

                      CONSOLIDATING STATEMENT OF CASH FLOWS
                       FOR THE FORTY ENDED OCTOBER 6, 2002
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                         GUARANTOR      NONGUARANTOR                    CONSOLIDATED
                                           PARENT       SUBSIDIARIES    SUBSIDIARIES    ELIMINATIONS        TOTAL
                                           ------       ------------    ------------    ------------        -----
<S>                                          <C>             <C>               <C>           <C>            <C>
Financing activities:
---------------------
Mortgage principal repayments                      -           (117)              -                -           (117)
Distributions to shareholders                 (3,125)             -               -                -         (3,125)
Intercompany balances                         18,643        (19,728)          1,085                -              -
                                             -------         ------         -------          --------        -------
Net cash provided by
   (used in) financing activities             15,518        (19,845)          1,085                -         (3,242)
                                             -------         ------         -------          --------        -------

Decrease in cash and
  cash equivalents                            (4,834)          (614)         (1,025)               -         (6,473)
Cash and cash equivalents at
  beginning of period                         29,673          5,437           1,842                -         36,952
                                             -------         ------         -------          --------        -------
Cash and cash equivalents at
  end of period                              $24,839         $4,823            $817          $     -        $30,479
                                             =======         ======         =======          ========       =======

Supplemental disclosure of cash flow information:
Cash paid during the period for
  income taxes                                  $375           $250         $     1          $     -           $626
                                             =======         ======         =======          ========       =======
Cash paid during the period for              $28,145         $1,108         $29,247          $     -        $29,247
  interest                                   =======         ======         =======          ========       =======

</TABLE>



                                     Pg. 24


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.       GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):


                      CONSOLIDATING STATEMENT OF CASH FLOWS
                    FOR THE FORTY WEEKS ENDED OCTOBER 7, 2001
                                 (IN THOUSANDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                         GUARANTOR      NONGUARANTOR                    CONSOLIDATED
OPERATING ACTIVITIES:                      PARENT       SUBSIDIARIES    SUBSIDIARIES    ELIMINATIONS        TOTAL
---------------------                      ------       ------------    ------------    ------------        -----

<S>                                          <C>             <C>             <C>                          <C>
Net (loss) income                            $(19,556)       $11,604         $(2,906)                     $(10,858)
Adjustments to reconcile net (loss)
  income to net cash (used in)
  provided  by operating activities:
  Depreciation and amortization                13,533         10,540           1,138                        25,211
  Provision for restaurant closing              2,061              -               -                         2,061
  Increase in deferred rent, net                  833           (226)              -                           607
  Minority interest                                 -              -             (26)                          (26)
  Equity in income of unconsolidated
    affiliates                                   (185)             -               -                          (185)
  Dividends received from
    unconsolidated affiliates                     244              -               -                           244
  Changes in operating assets and
    liabilities:
    (Increase) decrease in receivables         (1,495)          (176)             14                        (1,657)
    Decrease (increase) in inventories            266            309             (71)                          504
    Increase in prepaid expenses               (4,160)        (2,073)            (80)                       (6,313)
    Decrease (increase) in other assets         3,830         (4,156)            186                          (140)
    (Decrease) increase in accounts
    payable and accrued expenses               (5,966)         3,263           -                            (2,703)
    Decrease in accrued interest payable       (6,223)             -               -                        (6,223)
                                             --------        -------         -------                      --------

Net cash (used in) provided by
  operating activities                        (16,818)        19,085          (1,745)                          522
                                             --------        -------         -------                      --------
Investing activities:
---------------------
Purchase of property and equipment             (2,099)        (9,036)         (3,318)                      (14,453)
                                             --------        -------         -------                      --------

Net cash used in investing activities          (2,099)        (9,036)         (3,318)                      (14,453)
                                             --------        -------         -------                      --------

</TABLE>



                                     Pg. 25

<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.   GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS (CONTINUED):


                      CONSOLIDATING STATEMENT OF CASH FLOWS
                    FOR THE FORTY WEEKS ENDED OCTOBER 7, 2001
                                 (IN THOUSANDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                         GUARANTOR       NONGUARANTOR                    CONSOLIDATED
                                             PARENT     SUBSIDIARIES     SUBSIDIARIES    ELIMINATIONS        TOTAL
                                             ------     ------------     ------------    ------------        -----

<S>                                             <C>            <C>            <C>                              <C>
Financing activities:
---------------------
Mortgage principal repayments                                  (107)                                           (107)
Purchase of minority interest in
  joint venture                              $(1,000)             -                                          (1,000)
Loans to shareholders, net                    (3,232)             -                                          (3,232)
Distributions to shareholders                (12,564)             -                                         (12,564)
Intercompany balances                          4,128         (9,550)          5,422                               -
                                             -------         ------           -----                         -------
Net cash (used in) provided
   by financing activities                   (12,668)        (9,657)          5,422                         (16,903)
                                             -------         ------           -----                         -------

(Decrease) increase in cash and
  cash equivalents                           (31,585)           392             359                         (30,834)
Cash and cash equivalents at
  Beginning of period                         36,963          4,232           1,124                          42,319
                                             -------         ------           -----                         -------
Cash and cash equivalents at
  end of period                               $5,378         $4,624          $1,483                         $11,485
                                             =======         ======           =====                         =======
Supplemental disclosure of cash flow
  information:
Cash paid during the period for
  income taxes                                  $321           $463           $   7                            $791
                                             =======         ======           =====                         =======
Cash paid during the period for
  Interest                                   $28,111         $1,130           $   -                         $29,241
                                             =======         ======           =====                         =======

</TABLE>


                                     Pg. 26


<PAGE>


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

RESULTS OF OPERATIONS
---------------------

The following table provides information  concerning the number of Company-owned
and franchised restaurants in operation during each indicated period:

<TABLE>
<CAPTION>
                                                         40 WEEKS ENDED             12 WEEKS ENDED            FISCAL YEAR
                                                       10/6/02     10/7/01      10/6/02       10/7/01       2001       2000
                                                       -------     -------      -------       -------       ----       ----
<S>                                                     <C>         <C>          <C>          <C>          <C>       <C>
      Company-owned restaurants:
        Opened during period                               8           4            5            1            9         13
        Acquired from (sold to) franchisees during
        period-net                                        (4)          -           (3)           -            -          1
        Closed during period (1)                         (41)        (36)         (22)          (7)         (43)       (16)
                                                         ----        ----         ----         ----         ----       ----
        Open at end of period (2)                        585         604          585          604          602        636

      Franchised restaurants:
        Opened during period                              28          22           13            9           42         36
        Purchased from (sold to) Company during
        period-net                                         4           -            3            -            -         (1)
        Closed or terminated during period               (18)        (12)          (5)          (7)         (20)       (18)
                                                         ----        ----         ----         ----         ----       ----
        Open at end of period                            328         313          328          313          325        303

      All restaurants:
        Opened during period                              36          26           18           10           51         49
        Closed or terminated during period (1)           (31)        (48)         (13)         (14)         (63)       (34)
                                                         ----        ----         ----         ----         ----       ----
        Open at end of period (2)                        913         917          913          917          927        939

      Kiosks (all franchised) open at  end of
        period                                             4           5            4            5            4          5

</TABLE>
--------------------------------
(1)  In addition, we have closed five and are planning to close approximately an
     additional  five low volume,  unprofitable  Sbarro  locations in the fourth
     quarter  of  fiscal  2002.  See  Note 4 of  the  "Notes  to  the  Unaudited
     Consolidated  Financial  Statements"  for  information on the effect of the
     planned closings on our consolidated financial statements.
(2)  Excludes  35,  36, 37 and 33 other  concept  units as of  October  6, 2002,
     October  7,  2001,  the end of  fiscal  2001  and the end of  fiscal  2000,
     respectively  (see  Note 7 of the  "Notes  to  the  Unaudited  Consolidated
     Financial Statements").


                                     Pg. 27


<PAGE>


Our  business  is subject to  seasonal  fluctuations,  the effect of weather and
economic  conditions and consumer  confidence in shopping safety.  Earnings have
been highest in our fourth fiscal  quarter due primarily to increased  volume in
shopping  malls during the holiday  shopping  season.  Historically,  the fourth
fiscal  quarter has  accounted  for  approximately  40% of annual  operating net
income before amortization of intangible assets and any provision for restaurant
closings or asset  impairment.  This percentage  fluctuates due to the length of
the holiday shopping period between  Thanksgiving and New Year's Day, the number
of weeks in our fourth quarter,  weather and economic conditions and our results
of operations in earlier quarters.

Our  consolidated  EBITDA for the forty  weeks  ended  October 6, 2002 was $42.5
million and our EBITDA  margin was 15.9%,  compared to $37.0  million and 12.9%,
respectively, for the forty weeks ended October 7, 2001. Our consolidated EBITDA
for the twelve  weeks  ended  October 6, 2002 was $19.6  million  and our EBITDA
margin was 24.0%,  compared to $12.1  million and 13.7%,  respectively,  for the
twelve weeks ended October 7, 2001.  EBITDA for the forty and twelve weeks ended
October 6, 2002 includes the insurance recovery of $7.2 million,  net. Excluding
this item,  the EBIDTA for the forty and twelve weeks ended  October 6, 2002 was
$35.3 million and $12.5 million, respectively, and the EBITDA margins were 13.2%
and 15.2%,  respectively.  EBITDA  represents  earnings before interest  income,
interest expense, taxes, depreciation and amortization. EBITDA margin represents
EBITDA divided by total  revenues.  EBITDA should not be considered in isolation
from,  or as a substitute  for, net income,  cash flow from  operations or other
cash  flow  statement  data  prepared  in  accordance  with  generally  accepted
accounting  principles ("GAAP") or as a measure of a company's  profitability or
liquidity.  Rather,  EBITDA  is  presented  because  it  is  a  widely  accepted
supplemental  financial  measure,  and we believe that it provides  relevant and
useful  information.  Our  calculation  of  EBITDA  may not be  comparable  to a
similarly titled measure reported by other companies, since all companies do not
calculate this non-GAAP measure in the same manner. Our EBITDA  calculations are
not intended to represent cash provided by (used in) operating  activities since
they do not  include  interest  and taxes and  changes in  operating  assets and
liabilities,  nor are they  intended to  represent a net  increase in cash since
they  do not  include  cash  provided  by  (used  in)  investing  and  financing
activities.

Restaurant  sales  decreased  7.1% to $254.5  million  for the forty weeks ended
October 6, 2002 from $273.9  million  for the forty weeks ended  October 7, 2001
and  decreased  8.5% to $78.0 million for the twelve weeks ended October 6, 2002
from $85.2  million in the twelve weeks ended  October 7, 2001.  The decrease in
sales for the forty  weeks ended  October 6, 2002  resulted  from $17.0  million
lower  sales of Sbarro  quick  service  units and $2.4  million  lower  sales of
consolidated  other concept  units.  Of the decline in Sbarro quick service unit
restaurant sales for the forty weeks,  approximately $11.3 million resulted from
a 4.8%  decrease in  comparable  unit sales to $222.4  million.  The decrease in
sales for the twelve weeks ended  October 6, 2002  reflects  $6.0 million  lower
sales of Sbarro quick service units and $1.2 million lower sales of consolidated
other  concept  units.  Of the decline in Sbarro quick  service unit  restaurant
sales for the twelve  weeks,  approximately  $4.3 million  resulted  from a 5.9%
decrease in comparable  unit sales to $69.0  million.  We believe the decline in
comparable   restaurant   sales  in  both  reported   fiscal  2002  periods  was
attributable  to a reduction  in shopping  mall  traffic  related to the general
economic  downturn in the United States and the further  impact of the events of
September  11,  2001  offset,  in  part,  by  price  increases  of 0.7% and 3.3%
implemented in late March 2001 and

                                     Pg. 28


<PAGE>


mid-June 2001, respectively. Comparable restaurant sales are made up of sales at
locations that were open during the entire current and prior fiscal years. Since
the end of the first  quarter  of fiscal  2001,  we closed 55 more units than we
opened,  causing the  remaining  $5.7 million and $1.7 million net  reduction in
Sbarro  quick  service  unit  sales  for  the  forty  weeks  and  twelve  weeks,
respectively,  ended  October 6, 2002.  The units closed since the  beginning of
fiscal 2001,  with the exception of our high volume owned unit  destroyed in the
collapse of the World Trade Center on September  11, 2001,  were  generally  low
volume,  unprofitable,  units that did not have a material impact on our results
of operations. In addition, during fiscal 2002, we have closed four consolidated
other  concept  units,  which  resulted in a reduction  of $2.9 million and $1.1
million  in net  sales  at those  locations  for the  forty  and  twelve  weeks,
respectively, of fiscal 2002.

Excluding  approximately  $0.3  million  related to the  termination  of an area
development  agreement  for Egypt  during  the  first  quarter  of fiscal  2001,
franchise  related  income  increased  4.1% to $7.6  million for the forty weeks
ended October 6, 2002 from $7.3 million in the comparable fiscal 2001 period and
5.4% to $2.6  million  for the  twelve  weeks  ended  October  7, 2002 from $2.4
million in the twelve week period ended October 7, 2001.  The increases for both
the forty and twelve week periods ended October 6, 2002 were due to increases in
both royalty and non-royalty revenues.  The increase in non-royalty revenues was
due to an increase in the number of unit openings in fiscal 2002 and an increase
in the average initial franchising fee per unit opened, resulting in an increase
in total  initial  franchise  fees,  and  franchise  transfer fees in the second
fiscal  quarter of 2002,  partially  offset by a reduction in income  recognized
from  existing  area  development  agreements  in both the forty and twelve week
periods  of  fiscal  2002  than in both of the  same  periods  of  fiscal  2001.
Continuing  royalty revenues from new locations opened in fiscal 2002 and fiscal
2001 offset a reduction in royalty revenues from pre-existing  units caused by a
reduction in comparable unit sales at both domestic and international locations.

Real estate and other revenues  decreased 1.6% and increased  15.9% in the forty
and twelve weeks of 2002, respectively, from the same periods in fiscal 2001 due
to changes in certain vendor rebates.

Cost of food and paper products as a percentage of restaurant  sales improved to
19.6% for the forty  weeks ended  October 6, 2002 from 20.5% for the  comparable
2001  period and  improved to 19.2% for the twelve  weeks ended  October 6, 2002
from  20.7%  for the  comparable  2001  fiscal  period.  The  improvements  were
primarily due to the benefit  derived from closing  locations in fiscal 2002 and
2001 that were not able to function as  efficiently  as our other quick  service
locations  due to their  low sales  volume  and to the  effect of lower  average
cheese prices in fiscal 2002.  Cheese prices,  which were, on average,  slightly
higher in first  quarter  of 2002,  were  significantly  lower in the second and
third quarters of 2002, than in the comparable periods in 2001. The benefit from
the  decrease in cheese  prices was $1.5  million and $0.9 million for the forty
and twelve  weeks of fiscal 2002 from the same  periods in fiscal  2001.  Cheese
prices to date in the fourth quarter of fiscal 2002 continue to be significantly
lower than in the comparable period in fiscal 2001.

Payroll and other employee  benefits  decreased by $4.0 million but increased to
28.2% from

                                     Pg. 29


<PAGE>


27.7% as a percentage of  restaurant  sales for the forty weeks ended October 6,
2002  compared  to the same  period in fiscal  2001.  For the twelve week period
ended  October 6, 2002,  these costs  decreased by $1.4 million but increased to
28.0% from 27.3% as a percentage of restaurant  sales compared to the comparable
twelve week period in fiscal 2001.  The dollar  decreases  were primarily due to
the effect of steps taken to reduce payroll costs  beginning in late fiscal 2001
and the closing the locations in fiscal 2002 and 2001. The percentage  increases
were due to the reduced level of sales in each of the 2002 periods reported.

Other operating  expenses  decreased by $1.1 million,  but increased to 35.0% of
restaurant  sales,  in the forty weeks  ended  October 6, 2002 from 33.0% in the
forty weeks ended October 7, 2001.  These  expenses,  as a dollar  amount,  were
flat,  but  increased to 34.3% of  restaurant  sales,  in the twelve weeks ended
October 6, 2002 from 31.4% in the twelve weeks ended October 7, 2001. The dollar
decline the forty week period was due to the fewer  Sbarro-owned units operating
in our system. The percentage  increases in both periods of fiscal 2002 compared
to the fiscal 2001  periods  were due to lower  sales  volume and the effects of
higher rent and other occupancy  related expenses  resulting from the renewal of
existing  leases at the end of their terms at higher rental rates  compounded by
the reduced level of sales. In addition, we have been experiencing  increases in
repair and maintenance costs compared to fiscal 2001, a portion of which relates
to the cost of a number of nationwide maintenance contracts entered into in late
fiscal 2001 or early fiscal 2002 for the repair of our  property and  equipment.
Also,  as  the  average  age of  our  locations  increase,  overall  repair  and
maintenance  costs have been increasing.  These factors were offsetting  factors
against dollar savings effected from the closing of low volume units.

Depreciation and amortization expense decreased by $8.3 million and $3.2 million
for the forty  and  twelve  weeks,  respectively,  of fiscal  2002 from the same
periods in fiscal 2001.  For the forty weeks of this fiscal year,  the reduction
was due primarily to a $4.2 million reduction in amortization  expense resulting
from SFAS No. 142, "Goodwill and Other Intangible Assets" becoming applicable to
us as of the  beginning of fiscal 2002,  as well as a $1.6 million  reduction in
depreciation and amortization  related to locations that closed since the end of
the first  quarter of fiscal 2001.  For the twelve week period ended  October 6,
2002, the reduction of amortization due to the  applicability to the use of SFAS
142 was $1.2 million and the reduction in depreciation and amortization  related
to closed locations was $0.2 million.  The balance of the change in depreciation
and amortization  expense in each of the fiscal 2002 reported periods relates to
locations that had been included in the provision for asset impairment in fiscal
2001 for which no  depreciation  was taken in fiscal  2002 and to  decreases  in
depreciation and amortization for locations that became fully depreciated during
either fiscal 2002 and 2001. Under SFAS No. 142, we no longer amortize  goodwill
and  intangible  assets with  indefinite  lives,  but rather review those assets
annually for impairment  (or more  frequently if impairment  indicators  arise).
Separate intangible assets that are not deemed to have indefinite lives continue
to be amortized  over their useful lives.  We have  completed our  evaluation of
goodwill and intangible assets (trademarks and tradenames) with indefinite lives
acquired prior to July 1, 2001 ($205.1 million, net of accumulated  amortization
of $19.3 million at October 6, 2002).  The  evaluation did not have an impact on
our financial position and results of operations.  Due to the seasonal nature of
the Sbarro quick service locations, we generally measure asset impairment of our
restaurant  locations  after our full fiscal  year  results,  unless  impairment
indications arise earlier.

                                     Pg. 30


<PAGE>


General  and  administrative  expenses  were  $18.0  million,  or 6.8% of  total
revenues,  for the forty weeks ended October 6, 2002, compared to $24.1 million,
or 8.4% of total  revenues,  for the forty  weeks ended  October 7, 2001.  Those
costs were $5.3 million,  or 6.5% of total revenues,  for the twelve weeks ended
October 6, 2002,  compared to $7.7 million,  or 8.7% of total revenues,  for the
twelve weeks ended October 7, 2001. The reductions in general and administrative
costs for both  periods of fiscal 2002  reflect  decreases  in field  management
costs and a reduction in corporate staff costs due to a cost containment program
which we implemented beginning in the fourth quarter of fiscal 2001.

During the forty  weeks  ended  October 6, 2002,  we  recorded a  provision  for
restaurant  closings  of $2.9  million.  For the same forty  weeks that ended on
October  7 in  fiscal  2001,  we  recorded  a  provision  of $2.8  million.  The
provisions  for the twelve weeks ended  October 6, 2002 and October 7, 2001 were
$0.7  million and $1.4  million,  respectively.  Of the  provisions  recorded in
fiscal 2002,  approximately  $0.7 million was recorded in the third  quarter (in
addition to the $1.6 million  recorded in the second quarter of fiscal 2002) for
the net book value of the property and  equipment to be abandoned at, and record
the anticipated closing costs of, approximately thirty low volume,  unprofitable
Sbarro  quick  service  locations  that we have  planned  to close by the end of
fiscal 2002  (twenty-five of those units have been closed to date). The net book
value  of  approximately  one-half  of the  units  closed  was  included  in the
provision  for asset  impairment  recorded  in fiscal  2001.  The balance of the
provisions recorded in fiscal 2001 relate to costs that either were not included
in the provision for asset  impairment  recorded in the fourth quarter of fiscal
2001 or which were not absorbed by amounts received from landlords in connection
with such closings.  The $1.4 million provision recorded in the third quarter of
fiscal  2001  relates  to the write  off of the  remaining  book  value of quick
service store closings.

Minority interest represents the share of the minority holders' interests in the
combined profit or loss reported for the applicable  period of the joint venture
in which we have a majority interest. In early fiscal 2002, we closed one of the
two  locations  owned by this  joint  venture.  The  closed  unit had a  nominal
operating  loss in the first  quarter  of fiscal  2002.  The  provision  for the
closing of this unit, which was not material,  was made in the fourth quarter of
fiscal 2001.

Interest  expense of $23.9  million and $24.1  million for the forty weeks ended
October 6, 2002 and October 7, 2001, respectively,  and of $7.2 million for each
of the third fiscal quarters of 2002 and 2001, relate to the 11%, $255.0 million
senior notes issued to finance our going private  transaction in September 1999,
the 8.4%, $16.0 million mortgage loan on our corporate headquarters entered into
in the first quarter of 2001 (the principal of which is being repaid at the rate
of $0.1 million per quarter),  and fees for unused borrowing  capacity under our
credit agreement. Of these amounts, $1.1 million and $0.4 million in each of the
forty  weeks and  twelve  weeks  ended  October  6, 2002 and  October  7,  2001,
respectively,  represented  non-cash  charges for the  accretion of the original
issue discount on our senior notes and the  amortization  of deferred  financing
costs on the senior notes, bank credit agreement and the mortgage loan.

Interest  income for the forty week period ended  October 6, 2002 and October 7,
2001  was  approximately  $0.4  million  and  $0.6  million,  respectively.

                                     Pg. 31


<PAGE>


Interest income was approximately $0.1 million for the third quarter of both the
2002 and 2001 fiscal years.  Higher cash available for investment in each of the
forty and twelve  weeks in fiscal  2002 as compared to fiscal 2001 was offset by
the lower interest rates in effect.  The Indenture  under which our senior notes
are issued and our bank credit  agreement  limit the type of  investments we may
make.

Equity in the net income of  unconsolidated  affiliates  represents our share of
earnings  and  losses  in  those  new  concepts  in  which we have a 50% or less
ownership  interest.  The increase of $0.5  million and $0.1 million  during the
forty and twelve weeks ended  October 6, 2002 as compared to the same periods in
fiscal 2001,  was primarily a result of improved  performance  of our steakhouse
joint venture.  We have  determined  that we will continue to develop and expand
the steakhouse joint venture locations but are evaluating the disposition of the
other concepts in which we have a 50% or less ownership interest.

In September  2002, we reached an agreement to settle,  for $9.65  million,  our
claim with our insurance  company for the  reimbursement of the expected cost of
the  assets  destroyed  at  the   Sbarro-owned   World  Trade  Center  location,
depreciated for lost income under our business interruption  insurance coverage.
We received  the  remaining  amount of such  settlement,  less the $1.5  million
advance received in May 2002, in September 2002. Approximately $7.2 million, net
of related expenses,  of the settlement  relates to reimbursement of lost income
under our  business  interruption  insurance  coverage  and is  included  in our
statement of operations for the forty and twelve weeks ended October 6, 2002.

We have elected to be taxed under the provisions of Subchapter S of the Internal
Revenue Code and, where applicable and permitted,  under similar state and local
income tax provisions.  Under the provisions of Subchapter S,  substantially all
taxes on our income is paid by our shareholders  rather than us. Our tax expense
of $0.3  million  for both the forty  week  periods  ended  October  6, 2002 and
October 7, 2001 and $0.1 million for both twelve week periods then ended was for
taxes owed to jurisdictions  that do not recognize S corporation  status or that
tax entities based on factors other than income.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

We have  historically  not  required  significant  working  capital  to fund our
existing  operations and have financed our capital  expenditures and investments
in our joint  ventures  through cash generated  from  operations.  At October 6,
2002, we had unrestricted cash and cash equivalents of $30.5 million and working
capital of $19.5 million  compared to unrestricted  cash and cash equivalents of
$11.5 and a working capital deficit of $2.4 million at October 7, 2001.

Net cash provided by operating  activities  was $3.4 million for the forty weeks
ended  October 6, 2002 and $0.5  million for the forty  weeks  ended  October 7,
2001.  The $5.5 million  increase in EBITDA and $2.5 million  difference  in the
change in accounts  receivable  (primarily  due to the receipt during the second
quarter of fiscal  2002 of the $1.5  million  advance  for our  insurance  claim
related to the World Trade Center, that had been recognized as a receivable, and
an increase in amounts owed by franchisees due to the higher number of locations
open in fiscal

                                     Pg. 32


<PAGE>


2002) was offset by an  increase in prepaid  expenses  of $1.2  million and $3.3
million  lower  amount of accounts  payable and accrued  expenses in fiscal 2002
than at fiscal 2001 year-end.  Accounts  payable and accrued expenses at October
6, 2002  approximated  those  balances  at October 7,  2001.  Year-end  accounts
payable and accrued expenses are traditionally highest at the end of each of the
Company's fiscal years which occurs at the end of the peak holiday season.

Net cash used in  investing  activities  has  historically  been  primarily  for
capital  expenditures,  including those made by our consolidated other concepts.
Net cash used in investing  activities declined from $14.5 million for the forty
weeks ended October 7, 2001 to $6.6 million for the forty weeks ended October 6,
2002  primarily  due to a  decline  in  quick  service  new  unit  openings  and
renovation  activity, a reduction in expenditures for consolidated other concept
locations as the  development  of these  concepts has slowed,  and the impact of
nationwide  maintenance  contracts  we entered  into during late fiscal 2001 and
early fiscal 2002. Investing activities in the forty weeks ended October 6, 2002
include $1.3 million, paid as part of previously committed costs of $2.3 million
relating to an upgrade of our computer systems.

Net cash used in financing activities was $3.2 million for the forty weeks ended
October 6, 2002  compared  to net cash used of $16.9  million in the  comparable
2001  period.  The  reduction  in amount of cash used was due to a $4.4  million
reduction in tax distributions made under a tax payment  agreement,  the absence
in fiscal 2002 of $3.2 million of loans (net of $0.7 million of loan repayments)
and the  absence  of $5.0  million  of  dividends  (outside  of the Tax  Payment
Agreement) made to our shareholders in the fiscal 2001 period and the absence of
the  $1.0  million  purchase  price  paid  by us as part  of the  settlement  of
litigation  in the fiscal 2001 period for the 20% interest in the Umberto of New
Hyde Park concept that we did not own.

We incur annual cash interest expense of  approximately  $29.7 million under our
senior notes and mortgage  loan and may incur  additional  interest  expense for
borrowings  under our bank credit  agreement.  In addition to debt  service,  we
expect  that our other  liquidity  needs will  relate to  capital  expenditures,
working capital, investments in joint ventures, distributions to shareholders to
the extent  permitted  under the  Indenture  for the  senior  notes and the bank
credit  agreement  and general  corporate  purposes.  We believe that  aggregate
restaurant  capital  expenditures  and our  investments in joint ventures during
fiscal 2002 will be significantly  lower than levels in fiscal 2001 due to fewer
scheduled store openings,  lower  renovation  activity,  lower  expenditures for
other concept locations and the maintenance contract referred to earlier.

We expect our primary  sources of  liquidity to meet our needs will be cash flow
from operations.  The closing of the Sbarro quick service  locations through the
end of fiscal 2002 is expected,  after  termination  payments to  landlords,  to
increase  liquidity as these units were low volume,  under performing units that
had negative EBITDA.  Also, at October 15, 2002, we had $28.1 million of undrawn
availability  under our bank credit  agreement,  net of  outstanding  letters of
credit and guarantees of  reimbursement  obligations  aggregating  approximately
$1.9 million.

We are subject to various  covenants  under the Indenture under which our senior
notes are  issued  and under our bank  credit  agreement.  One of the  covenants
limits  our  ability  to  borrow  funds  (except  under  specifically  permitted

                                     Pg. 33



<PAGE>

arrangements,  such as up to $75.0 million of revolving credit loans) unless our
consolidated interest ratio coverage (as defined), after giving pro forma effect
to the interest on the new  borrowing,  for the four most recently  ended fiscal
quarters  is at least 2.5 to 1.  Another  covenant  limits  our  ability to make
"restricted payments," including,  among other things,  dividend payments (other
than as distributions pursuant to the Tax Payment Agreement) and investments in,
among other things,  unrestricted subsidiaries,  to specified amounts determined
under a formula contained in the Indenture  provided that that ratio is at least
2.0 to 1 after giving pro forma effect to the restricted  payment. As of October
6, 2002,  that ratio was 2.23 to 1. As a result,  we are not  presently  able to
borrow funds (other than specifically  permitted  indebtedness,  including up to
$75.0  million of  revolving  credit  loans).  Additionally,  under the  formula
contained in the Indenture,  we may not presently make restricted payments other
than certain permitted investments.


The Tax Payment  Agreement  was entered  into as part of our  election  that our
shareholders,  rather  than us,  be  taxed on our  taxable  income  pursuant  to
Subchapter S of the Internal  Revenue Code and, where  applicable and permitted,
under similar state and local tax provisions.  The Tax Payment Agreement permits
us, regardless of whether we can make restricted payments,  to make periodic tax
distributions  to our shareholders in amounts intended to approximate the income
taxes,  including  estimated taxes,  that would be payable by them if their only
income were their pro rata share of our taxable income and that income was taxed
at the highest applicable Federal and New York state marginal income tax rates.

Our contractual  obligations and other  commercial  commitments  with respect to
both our Sbarro  quick  service and the other  concepts  (both those in which we
have a  majority  or  minority  interest)  do not  differ  materially  from  the
information disclosed in the Form 10-K for the 2001 fiscal year. Our bank credit
agreement  was amended in March 2002 to (a) increase the required  maximum ratio
of  Consolidated  Senior  Debt (as  defined)  at the end of a fiscal  quarter to
Consolidated EBITDA (as defined) for the four fiscal quarters then ended that we
may have to ratios  ranging  from 7.25 to 1 through the third  quarter of fiscal
2002 to 4.50 to 1 after the third  quarter of fiscal  2003,  and (b) to decrease
the  required  minimum  ratio of  Consolidated  EBITDA (as defined) for the four
quarters ended on the  measurement  date to  Consolidated  Interest  Expense (as
defined) for the four quarters ended on the  measurement  date that we may have,
to ratios  ranging  from 1.25 to 1 through  the third  quarter of fiscal 2002 to
2.00 to 1 after the third quarter of fiscal 2003.

CRITICAL ACCOUNTING POLICIES AND CONTRACTUAL OBLIGATIONS
---------------------------------------------------------

Accounting  policies are an integral  part of the  preparation  of our financial
statements in accordance with accounting  principles  generally  accepted in the
United States of America.  Understanding  these  policies,  therefore,  is a key
factor in  understanding  our  reported  results  of  operations  and  financial
position.  Certain critical accounting policies require us to make estimates and
assumptions  that  affect  the  amounts  of assets,  liabilities,  revenues  and
expenses reported in the financial  statements.  Due to their nature,  estimates
involve judgments based upon available information. Therefore, actual results or
amounts  could differ from  estimates and the  difference  could have a material
impact on our consolidated financial statements. During the

                                     Pg. 34



<PAGE>


forty weeks ended October 6, 2002, there were no material changes to the matters
discussed under the headings  "Critical  Accounting  Policies" and  "Contractual
Obligations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal
year ended December 30, 2001.

FORWARD LOOKING STATEMENTS
--------------------------

This report  contains  certain  forward-looking  statements  about our financial
condition,   results  of  operations,   future  prospects  and  business.  These
statements  appear in a number of places in the  report and  include  statements
regarding our intent,  belief,  expectation,  strategies or  projections at that
time. These statements generally contain words such as "may," "should," "seeks,"
"believes,"  "expects," "intends," "plans," "estimates,"  "projects," "strategy"
and similar expressions or the negative of those words.

Forward-looking  statements  are subject to a number of known and unknown  risks
and  uncertainties  that could cause actual  results to differ  materially  from
those projected,  expressed or implied in the forward-looking statements.  These
risks and uncertainties,  many of which are not within our control,  include but
are not limited to:

o    general economic, weather and business conditions;
o    the  availability  of suitable  restaurant  sites in  appropriate  regional
     shopping malls and other locations on reasonable rental terms;
o    changes in consumer tastes;
o    changes in  population  and  traffic  patterns,  including  the effect that
     terrorist  or other  events may have on the  willingness  of  consumers  to
     frequent malls,  airports or downtown areas which are the predominant areas
     in which our restaurants are located;
o    our ability to continue to attract franchisees;
o    the success of the our present,  and any future,  joint  ventures and other
     expansion opportunities;
o    the  availability  of food  (particularly  cheese and  tomatoes)  and paper
     products at current prices;
o    our ability to pass along cost increases to our customers;
o    no material increase occurring in the Federal minimum wage;
o    the continuity of services of members of our senior management team;
o    our  ability  to attract  and retain  competent  restaurant  and  executive
     managerial personnel;
o    competition;
o    the level of, and our ability to comply with, government regulations;
o    our ability to generate  sufficient cash flow to make interest payments and
     principal under our senior notes and bank credit agreement;
o    our ability to comply with covenants contained in the Indenture under which
     the  senior  notes are  issued and in our bank  credit  agreement,  and the
     effects which the  restrictions  imposed by those covenants may have on our
     ability to operate our business; and
o    our ability to  repurchase  senior  notes to the extent  required  and make
     repayments  under our bank credit  agreement to the extent  required in the
     event we make certain asset sales or experience a change of control.

                                     Pg. 35



<PAGE>


You are cautioned not to place undue reliance on these  statements,  which speak
only as of the date of this report.  We do not undertake any  responsibility  to
release publicly any revisions to these forward-looking  statements to take into
account  events or  circumstances  that  occur  after  the date of this  report.
Additionally,  we do not  undertake  any  responsibility  to  update  you on the
occurrence of any unanticipated  events which may cause actual results to differ
from those expressed or implied by the forward-looking  statements  contained in
this report.

ITEM 3.     QUALITATIVE AND QUANTITATIVE DISCLOSURES OF MARKET RISK

We have historically invested our cash on hand in short term, fixed rate, highly
rated and  highly  liquid  instruments  which are  reinvested  when they  mature
throughout  the year.  The  Indenture  under  which our Senior  Notes are issued
limits us to similar  investments.  Although  our existing  investments  are not
considered  at risk with  respect to changes in  interest  rates or markets  for
these  instruments,  our  rate of  return  on  short-term  investments  could be
affected at the time of reinvestment as a result of intervening events.

Future   borrowings   under  our  bank  credit  agreement  (none  are  currently
outstanding) will be at rates that float with the market and, therefore, will be
subject to fluctuations in interest rates.  Our $255.0 Senior Notes bear a fixed
interest  rate of 11.0% per  annum.  We are not a party to, and do not expect to
enter into,  any  interest  rate swaps or other  instruments  to hedge  interest
rates.

We have not, and do not expect to,  purchase  future,  forward,  option or other
instruments to hedge against  fluctuations  in the prices of the  commodities we
purchase.  As a result, our future commodities  purchases are subject to changes
in the prices of such commodities.

All of our transactions  with foreign  franchisees have been denominated in, and
all  payments  have been made in,  United  States  dollars,  reducing  the risks
attendant in changes in the values of foreign  currencies.  As a result, we have
not,  and  do not  expect  to,  purchase  future  contracts,  options  or  other
instruments to hedge against changes in values of foreign currencies.










                                     Pg. 36



<PAGE>



ITEM 4.     CONTROLS AND PROCEDURES

(a)  Evaluation of disclosure controls and procedures

Within 90 days prior to the date of this report,  an evaluation  was carried out
of the effectiveness of the design and operation of our "disclosure controls and
procedures,"  as defined in, and  pursuant  to,  Rule  13a-14 of the  Securities
Exchange  Act of 1934 by our  Chairman  of the Board,  President  and  principal
executive  officer  and Vice  President,  Controller  and  principal  accounting
officer (the person performing the function of our principal financial officer).
Based on that evaluation these officers  concluded that, as of the date of their
evaluation, our disclosure controls and procedures were effective to ensure that
material information relating to us and our subsidiaries is made known to them.

(b)  Changes in internal controls

There were no significant  changes in our internal  controls or in other factors
that could  significantly  affect  these  internal  controls  subsequent  to the
evaluation discussed above.


                           PART II. OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

99.01     Certification  of Principal  Executive  Officer  pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

99.02     Certification of Vice President,  Controller and Principal  Accounting
          Officer, the person performing the function of our principal financial
          officer,  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.

(b)       Reports on Form 8-K:

          The only  Report on Form 8-K filed by the  Company  during the quarter
          covered by this report was dated August 23, 2002 reporting  under Item
          7,  Financial   State-ments,   Pro  Forma  Financial  Information  and
          Exhibits. No financial statements were filed with that report.



                                     Pg. 37




<PAGE>




                                    SIGNATURE
                                    ---------


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                  SBARRO, INC.
                                  Registrant


Date:  November 18, 2002      By: /s/ MARIO SBARRO
                                  ----------------------------------------------
                                  Mario Sbarro
                                  Chairman of the Board and President (Principal
                                  Executive Officer)


Date:  November 18, 2002      By: /s/ STEVEN B. GRAHAM
                                  ----------------------------------------------
                                  Steven B. Graham
                                  Vice President and Controller (Principal
                                  Accounting Officer)

















                                     Pg. 38



<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mario Sbarro, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Sbarro, Inc.;

2. Based on my  knowledge,  this  Quarterly  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 Quarterly
Report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this Quarterly  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 Quarterly Report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  Quarterly
          Report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this Quarterly Report (the "Evaluation Date"); and

     c)   presented  in  this  Quarterly   Report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;





                                     Pg. 39


<PAGE>


5. The registrant's other certifying officer and I have disclosed,  based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors:

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6. The  registrant's  other  certifying  officer  and I have  indicated  in this
Quarterly  Report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: November 18, 2002           /s/ MARIO SBARRO
                                  ----------------------------------------------
                                  Mario Sbarro,
                                  Chairman of the Board and President
                                  (Principal Executive Officer)















                                     Pg. 40


<PAGE>



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven B. Graham, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Sbarro, Inc.;

2. Based on my  knowledge,  this  Quarterly  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 Quarterly
Report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this Quarterly  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 Quarterly Report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  Quarterly
          Report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this Quarterly Report (the "Evaluation Date"); and

     c)   presented  in  this  Quarterly   Report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;





                                     Pg. 41


<PAGE>


5. The registrant's other certifying officer and I have disclosed,  based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors:

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6. The  registrant's  other  certifying  officer  and I have  indicated  in this
Quarterly  Report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: November 14, 2002           /s/ STEVEN B. GRAHAM__
                                  ----------------------------------------------
                                  Steven B. Graham,
                                  Vice President and Controller
                                  (Principal Accounting Officer and person
                                  performing the function of our
                                  principal financial officer)














                                     Pg. 42


<PAGE>



                                  EXHIBIT INDEX


99.01     Certification  of Principal  Executive  Officer  pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

99.02     Certification  of Vice  President,  Controller,  Principal  Accounting
          Officer, the person performing the function of our principal financial
          officer,  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.















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