SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C.  20549

                                    FORM 10-K
(Mark  One)
[X]     ANNUAL  REPORT  PURSUANT  TO  SECTION  13  OR  15(D)  OF  THE SECURITIES
EXCHANGE  ACT  OF  1934     FOR  THE  FISCAL  YEAR  ENDED  JUNE  27,  1999.
[ ]  Transition  report  pursuant  to  Section  13  or  15(d)  of the Securities
Exchange  Act  of  1934  for     the  transition  period  from  _____  to _____.

                         COMMISSION FILE NUMBER 0-12919

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

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

5050  QUORUM  DRIVE
SUITE  500
DALLAS,  TEXAS                                      75240
(Address  of  principal  executive  offices)     (Zip  Code)

     Registrant's telephone number, including area code:     (972) 701-9955
      Securities Registered Pursuant to Section 12(b) of the Act:     NONE
           Securities Registered Pursuant to Section 12(g) of the Act:
                        COMMON STOCK, PAR VALUE $.01 EACH
                                (Title of Class)

     At  September  9,  1999,  there  were 11,102,738 shares of the registrant's
Common Stock outstanding,  and the aggregate market value of registrant's Common
Stock  held by non-affiliates was $27,914,586, based upon the average of the bid
and  ask  prices.

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

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

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

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

     Portions  of  the  registrant's  definitive  Proxy  Statement,  to be filed
pursuant  to  Section 14(a) of the Securities Exchange Act of 1934 in connection
with the registrant's annual meeting of shareholders in December 1999, have been
incorporated  by  reference  in  Part  III  of  this  report.


<PAGE>

                                     PART I

ITEM  1  -  BUSINESS

GENERAL

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



     On  September  9,  1999,  the  Pizza  Inn  system  consisted  of 518 units,
including  three  Company operated units (which are used for product testing and
franchisee training, in addition to serving customers) and 515 franchised units.
The  domestic  units  are  comprised  of  276  full  service  units,  45
delivery/carry-out  units  and  132  Express units.  The international units are
comprised  of 20 full service units, 28 delivery/carry-out units and 17  Express
units.  Pizza  Inn  units  are  currently  located  in  21 states and 13 foreign
countries.  Domestic units are located predominantly in the southern half of the
United  States,  with  Texas,  North  Carolina  and  Arkansas  accounting  for
approximately  29%,  16% and 11% of the total, respectively.  Norco Distributing
Company  ("Norco"),  a  division  of  the  Company,  distributes  food products,
equipment,  and  other supplies to units in the United States and, to the extent
feasible,  in  other  countries.

PIZZA  INN  RESTAURANTS

     Full  service  restaurants  ("Full-Service")  offer  dine-in  and carry-out
service  and,  in  most  cases,  also offer delivery service.  These restaurants
serve  pizza  on  three different crusts (The Original Thin Crust, New York Pan,
and Italian Crust), with standard toppings and special combinations of toppings.
They also offer pasta, salad, sandwiches, desserts and beverages, including beer
and  wine  in  some  locations.  They  are  generally  located  in free standing
buildings in close proximity to offices, shopping centers and residential areas.
The  current standard Full-Service units are between 3,300 and 4,400 square feet
in  size  and  seat  130  to  180  customers.  The interior decor is designed to
promote  a  contemporary,  family  style  atmosphere.

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

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

<PAGE>

FRANCHISING

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

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

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

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

FOOD  AND  SUPPLY  DISTRIBUTION

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

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



ADVERTISING

     The  Pizza  Inn  Advertising Plan ("PIAP") is a non-profit corporation that
creates and produces print advertisements, television and radio commercials, and
in-store  promotional  materials along with related advertising services for use
by  its  members.  Each  operator of a Full-Service or Delco unit, including the
Company,  is  entitled  to  membership  in  PIAP.  Nearly  all  of the Company's
existing  franchise  agreements  for  Full-Service  and  Delco units require the
franchisees  to  become  members  of PIAP.  Members contribute 1% of their gross
sales.  PIAP  is  managed  by  a  Board  of  Trustees,  comprised  of franchisee
representatives  who are elected by the members each year.  The Company does not
have  any  ownership  interest  in  PIAP.  The  Company  provides  certain
administrative,  marketing  and  other  services to PIAP and is paid by PIAP for
such  services.  On  September  9,  1999,  the  Company-operated  stores  and
substantially all of its franchisees were members of PIAP.  Operators of Express
units  do  not  participate  in PIAP; however, they contribute up to 1% of their
gross  sales  directly  to  the  Company  to  help  fund  Express unit marketing
materials  and  similar  expenditures.

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

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

TRADEMARKS  AND  QUALITY  CONTROL

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

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

TRAINING

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

WORKING  CAPITAL  PRACTICES

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

GOVERNMENT  REGULATION

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

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

EMPLOYEES

     On  September  9,  1999,  the  Company  had  approximately  214  employees,
including 57 in the Company's corporate office, 81 at its Norco division, and 26
full-time  and 50 part-time employees at the Company operated restaurants.  None
of  the  Company's  employees  are  currently  covered  by collective bargaining
agreements.  The  Company  believes  that  its employee relations are excellent.

COMPETITION

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

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

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

SEASONALITY

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


<PAGE>
ITEM  2  -  PROPERTIES

     The  Company  leases  23,402 square feet in Dallas, Texas for its corporate
office  and  76,700  square feet in Grand Prairie, Texas for its Norco warehouse
and  office  facilities.  The leases expire in 2003 and 2000, respectively.  The
Company  also  leases  2,736  square  feet  in  Addison,  Texas for its training
facility  and  test  kitchen  with  a  term  expiring  in  2001.

     On  September  9,  1999,  all  three  of  the  Company  operated  Pizza Inn
restaurants  (all  located  in  Texas)  were leased.  The Company operated units
range  in  size  from  approximately 1,500 to 3,600 square feet and incur annual
minimum  rent  between  $12.50  and  $22.00 per square foot.  Most of the leases
require  payment  of  additional rent based upon a percentage of gross sales and
require  the  Company  to pay for repairs, insurance and real estate taxes.  The
leases  are  renewable  and  will  expire  in  2000,  2004,  and  2007.



ITEM  3  -  LEGAL  PROCEEDINGS

     On  September  21,  1989,  the  Company,  Pizza  Inn,  Inc.  (a  Delaware
corporation)  and Memphis Pizza Inns, Inc. filed for protection under the United
States  Bankruptcy  Code  in the United States Bankruptcy Court for the Northern
District of Texas, Dallas Division.  The plan of reorganization, as confirmed by
the  court,  became  effective  on  September  5,  1990.  The  court  retained
jurisdiction  to help ensure that the plan of reorganization was carried out and
to  hear  any  disputes that arose during the five year term of the plan. In May
1996,  the  court  issued  its final order finding that the proceedings had been
completed  and  closed  the  bankruptcy  cases.

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

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

     No  matters  were submitted to a vote of security holders during the fourth
quarter  of  the  Company's  fiscal  year  1999.


<PAGE>

                                     PART II

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

     On  September  9,  1999,  there  were  2,846  stockholders of record of the
Company's  Common  Stock.

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




<TABLE>
<CAPTION>



                                          Actual Trade
                                         Executed Price
                                         ----------------
<S>                                      <C>       <C>
                                         High      Low
                                         --------  --------
          1999
          First Quarter Ended 9/27/98 .   5 13/16  4  3/4
          Second Quarter Ended 12/27/98  .5 1/4    4  1/4
          Third Quarter Ended 3/28/99 .   4 3/4    3
          Fourth Quarter Ended 6/27/99.   4 1/8    2 29/32

          1998
          First Quarter Ended 9/28/97 . .. 4  7/8    3  3/4
          Second Quarter Ended 12/28/97    5  15/16  4 9/16
          Third Quarter Ended 3/29/98 .    6   5/16  5  1/4
          Fourth Quarter Ended 6/28/98.    6   5/8   5  1/4
</TABLE>
During fiscal 1999 the Board of Directors of the Company declared quarterly cash
dividends  of  $0.06 per share.  For the year ended June 27, 1999 cash dividends
declared  were approximately $2.1 million or $0.18 per share.  On June 28, 1999,
the  Company's Board of Directors declared a cash dividend of approximately $0.7
million  or  $0.06  per  share.  Any  determination to pay cash dividends in the
future will be at the discretion of the Company's Board of Directors and will be
dependent upon the Company's results of operations, financial condition, capital
requirements,  contractual  restrictions  and  other  factors  deemed  relevant.


<PAGE>
 ITEM  6  -  SELECTED  FINANCIAL  DATA

The following table contains certain selected financial data for the Company for
each  of the last five fiscal years through June 27, 1999, and should be read in
conjunction  with  the  financial  statements  and  schedules  in Item 8 of this
report.  Earnings per share data for all periods presented have been restated to
reflect  the  computation  of  earnings  per  share in accordance with SFAS 128.


<TABLE>
<CAPTION>


                                                                       Year Ended
                                                                      ------------
                                                   June 27,    June 28,   June 29,   June 30,   June 25,
                                                     1999        1998       1997       1996       1995
                                                 ------------  ---------  ---------  ---------  ---------
(In thousands, except per share amounts)
<S>                                              <C>           <C>        <C>        <C>        <C>        <C>
SELECTED INCOME STATEMENT DATA:
  Total revenues. . . . . . . . . . . . . . . .  $    66,294   $  68,640  $  69,123  $  69,441  $  62,044

  Income before taxes . . . . . . . . . . . . .        4,096       7,023      6,860      5,921      4,845
  Net income. . . . . . . . . . . . . . . . . .        2,752       4,880      4,528      3,908      3,198
  Basic earnings per common share . . . . . . .          .24         .38        .35        .30        .24
  Diluted earnings per common share . . . . . .          .23         .36        .33        .28        .22
  Dividends declared per common share .       (1)        .18        .24          -          -          -

SELECTED BALANCE SHEET DATA:
  Total assets. . . . . . . . . . . . . . . . .       18,586      21,773     24,310     24,419     25,803
  Long-term debt and capital lease obligations.        6,944       5,454      7,789      7,902     11,039
<FN>

(1)     On  June  28,  1999  the  Company's  Board  of  Directors  declared  a
     quarterly  dividend  of  $.06  per  share  on  the  Company's  common
     stock,  payable  to  shareholders  of  record  on  July  9,  1999.
</TABLE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

                              RESULTS OF OPERATIONS

FISCAL  1999  COMPARED  TO  FISCAL  1998

          Diluted  earnings  per  share  dropped  36%  from $0.36 to $0.23.  Net
income  decreased  44%  to  $2,752,000  from  $4,880,000  in  the prior year, on
revenues  of  $66.3  million versus $68.6 million the previous year.  Net income
and earnings per share decreased because of lower revenues from area development
territory  sales,  fewer vendor incentives, a lower volume of food product sales
from  slightly  lower  chainwide  sales  and  higher  cost  of  sales  due  to
extraordinarily  higher  cheese  prices  from  July  1998  through January 1999.
Restaurant  cost  of  sales,  as a percentage of sales, throughout the Company's
franchise  community  was  up  approximately  3  percentage  points,  due  to
extraordinarily  higher cheese prices during these seven months.  This increased
cost also caused an adverse effect on chainwide sales as the result of decreased
discretionary  franchisee  advertising as well as delayed new store openings and
remodelings.  Foreign  economic  factors  also  continued  to  adversely  affect
international  sales  and  new  store  openings  in  foreign  markets.

     Food and supply sales by the Company's distribution division were down less
than  1%  or  $390,000  as  compared to last year sales.  The slight decrease in
volume  was  offset  by  a significant increase in cheese prices.  International
sales  decreased  $182,000  in  fiscal  1999  due  to  economic  troubles  in
international  markets which resulted in fewer net store openings abroad than in
the  prior  fiscal  year.

     Franchise  revenue,  which  include royalties, license fees and income from
area  development  and foreign master license (collectively, "Territory") sales,
decreased  13%  or  $849,000  in fiscal 1999.  Area development income decreased
$560,000  in  fiscal  1999  primarily  due to economic troubles in international
markets.  Royalty  revenue  was  down  $173,000  compared  to  last year, mainly
resulting  from  a 1.5% decrease in chainwide sales and a slightly lower average
royalty  rate  due  to both more restaurants within area development territories
and  a  lower  ratio of full service units to Delco/Express units.  License fees
decreased  $116,000  in  fiscal  1999.

     Restaurant  sales,  which  consist  of  revenue  generated by Company-owned
stores,  for  the  year decreased 15% or $397,000 compared to the same period of
the  prior  year.  This was due to the lease expiration and closing of one Delco
store  in  August  1998.  Comparable  store sales growth at Company-owned stores
increased  6%  for  the  year.

     Other  income  consists  of  primarily  interest  income  and non-recurring
revenue  items.  Other  income decreased 71% or $710,000 in fiscal 1999.  Fiscal
1998  included  vendor  incentives, the gain on the sale of a Territory, and the
sale  of  a  state  liquor  license.

     Cost  of  sales  increased  4%  or  $2,146,000  during  fiscal  1999.  As a
percentage  of  sales,  cost  of  sales increased to 92% in fiscal 1999 from 87%
compared  to  last year.  Cost of sales increased primarily due to significantly
higher  cheese  prices  and  an  increase  in  allocation  of corporate services
expenses  related to the Company's distribution center, offset by a lower volume
of  food  product  sold.

     Franchise  expenses  include  selling,  general and administrative expenses
(primarily  wages and travel expenses), directly related to the sale and service
of  franchises  and Territories.  These costs decreased 15% or $468,000 compared
to  last  year.  This  was  due  to  an  increase in corporate services expenses
allocation  to  the distribution center resulting in a corresponding decrease in
franchise  expenses.

     General  and  administrative expenses decreased 25% or $1,126,000 in fiscal
1999.  This  is  the  result  of  an increase in the corporate services overhead
allocation  to  the distribution center resulting in a corresponding decrease in
general  and  administrative  expenses.  This  decrease  was partially offset by
higher  legal  and  tax  expenses  in  fiscal  1999.

     Interest expense increased 4% or $22,000 in the current year as a result of
slightly  higher  debt levels and capital lease interest expense on new computer
equipment.

     During fiscal 1999, a total of 73 new Pizza Inn franchise units were opened
for  business,  52  domestic, and 21 international.  Domestically, 38 units were
closed  by  franchisees  or  terminated  by  the  Company  typically  because of
unsatisfactory  standards  of  operation  or  performance.  Similarly,  26
international  units  were  closed.


FISCAL  1998  COMPARED  TO  FISCAL  1997

     Diluted  earnings  per share for fiscal year ended June 28, 1998 grew 9% to
$0.36  from $0.33.  Net income increased 8% to $4.9 million from $4.5 million in
the  prior year.  Pre-tax income increased 2% to $7.0 million from $6.9 million.
The  Company  considers pre-tax income to be the best measure of its performance
due  to  the significant benefit of its net operating loss carryforwards.  These
carryforwards,  which  total  $14.9  million at June 28, 1998, reduce the income
taxes  paid  by  the  Company  from  the  34% statutory rate to approximately 2%
alternative  minimum tax rate.  Additionally, the Company was able to reduce its
effective  tax rate from 34% to 31% primarily due to the recognition of business
tax  credits  in  the  amount  of  $263,000.

     Food  and  supply sales by the Company's distribution division were down 2%
or  $1,066,000  as  compared  to  last  year.  The decrease was primarily due to
reductions  in  international  sales of equipment and food.  Total international
sales  declined $1.5 million primarily due to advance equipment purchases during
fiscal  year  1997  for new store openings in fiscal year 1998.  These decreases
were  partially  offset  by  an  increase  of  $555,000  in  domestic  sales.

     Franchise  revenue,  which includes royalties, license fees and income from
area  development  and foreign master license (collectively, "Territory") sales,
decreased 4% or $282,000 in fiscal 1998.  This was primarily due to lower income
from  international  master  license  sales  in the current year.  Proceeds from
Territory  sales  vary  depending  on  size,  demographics  and  current  market
development  in  the Territories.  The timing and recognition of Territory sales
may  vary  significantly  from year to year.  Current year sales include partial
recognition  of  proceeds  from  the  sale  of  new  Territory  rights for South
Carolina,  Virginia,  Puerto Rico, Brazil, the Palestinian territories and South
Korea.  Current  year  royalties  increased 3% or $159,000, primarily due to the
repurchase of area developer rights in Tennessee and portions of Kentucky, which
resulted in full royalties being paid directly to the Company through March 1998
when  the  rights  were  subsequently  resold.

     Restaurant  sales,  which  consist  of  retail  sales  by  Company operated
training  restaurants,  remained  at  the same level compared to the prior year,
despite  the  transfer  of  a  unit  in  December  1997  to a franchisee.  These
restaurants'  sales  on  a  comparable  basis  increased  12%.

     Other  income,  which  increased  $877,000,  consists primarily of interest
income  and  non-recurring  revenue  items.  This  was  primarily  the result of
vendors'  incentives  including  the  non-cash  transfer  of the Company's stock
valued at $602,000, the gain on the sale of a Territory, and the sale of a state
liquor  license.

     Cost of sales decreased 1% or $515,000 during fiscal 1998 due to a decrease
in  food  and supply sales.  As a percent of sales, cost of sales increased from
86%  during  fiscal  1997  to  87%  in fiscal 1998 primarily due to increases in
transportation  costs  and  an  increase  in  allocation  of  corporate services
overhead.

     Franchise  expenses  include  selling,  general and administrative expenses
(primarily  wages and travel expenses), directly related to the sale and service
of  franchises  and Territories.  These costs increased 8% or $231,000 from last
year  primarily  due  to  increases  in  number of field support employees and a
vacant  executive  position  in  fiscal  1997  which  was filled in fiscal 1998.

     General and administrative expenses decreased 7% or $322,000 in the current
year  primarily  due  to  the  Company's  reversal  of  previously  established
contingent  reserves  for  foreign  litigation  related  to the Company's former
master  licensee  in  Korea  and  an increase in the corporate services overhead
allocation  to  the distribution center resulting in a corresponding decrease in
general  and  administrative  expenses.

     Interest  expense decreased 24% or $160,000 in fiscal 1998 as the result of
lower  debt  balances  and  lower  average  interest  rates.

     During fiscal 1998, a total of 82 new Pizza Inn franchise units were opened
for  business,  66  domestic units and 16 international units.  Domestically, 54
units  were closed by franchisees or terminated by the Company typically because
of  unsatisfactory  standards  of  operation  or  performance.  Similarly,  5
international  units  were  closed.



                               FINANCIAL CONDITION

     Cash and cash equivalents decreased $1.8 million in fiscal 1999.  Cash flow
generated from operations and additional borrowings were used to purchase shares
of  the  Company's  own  stock  and pay cash dividends on its common stock.  The
Company  increased  its  borrowings by $1.0 million in fiscal 1999.  The Company
used  $5.8  million  to  reacquire 1.1 million shares of its own common stock at
prevailing  prices on the open market. The Company also used $2.1 million to pay
cash  dividends  on  its  common  stock  in  fiscal  1999.

     At  June  27,  1999  the  net  deferred tax asset balance was $5.6 million.
During  1999,  the  Company decreased the net deferred tax asset by $240,820 for
general  business  tax  credits due to expire in 2000 through an addition to the
tax  valuation  allowance.  The Company believes that it is more likely than not
that  these  credits  will  not  be  realized.  In  fiscal  1999,  the valuation
allowance  and  corresponding asset were also decreased due to the expiration of
general  business  credits.


     Management believes that future operations will generate sufficient taxable
income,  along  with the reversal of temporary differences, to fully realize the
deferred  tax  asset,  net  of  a valuation allowance of $204,000 related to the
potential expiration of certain tax credit carryforwards.  Future taxable income
at the same level as fiscal 1999 would be sufficient for full realization of the
net  tax  asset.  Additionally, management believes that taxable income based on
recent  growth  trends  of  the  Company's  franchise  base  should be more than
sufficient  to  enable  the  Company  to  realize its deferred tax asset without
reliance  on  material,  non-routine  income.

     While  the  Company  expects  to  realize  substantial  benefit  from  the
utilization of its net operating loss carryforwards (which currently total $10.3
million  and  expire  in  2005)  to  reduce  its  federal tax liability, current
accounting  standards  dictate  that  this  benefit  can not be reflected in the
Company's  results  of  operations.  In  accordance  with  SFAS  109,  the
carryforwards,  when  utilized, are reflected as a reduction of the deferred tax
asset  rather  than  a  reduction  of  income  tax expense.  This has caused the
Company to reflect an amount for federal income tax expense on its statements of
operations  at an effective corporate rate of 32%, 31%, and 34% for fiscal years
1999,  1998 and 1997, respectively.  However, the actual amount of taxes paid at
the  alternative minimum tax rate of approximately 2% is significantly less than
the  corporate  rate  reflected  on  the  Company's  statement  of  operations.
Historically,  the  differences between pre-tax earnings for financial reporting
purposes  and  taxable  income  for  tax  purposes  have  consisted of temporary
differences  arising  from  the  timing  of depreciation, deductions for accrued
expenses  and deferred revenues, as well as permanent differences as a result of
the  exercise  of  stock  options  deducted  for income tax purposes but not for
financial  reporting  purposes.

     Under  the  Internal  Revenue Code, the utilization of net operating losses
and credit carryforwards could be limited if certain changes in ownership of the
Company's  Common  Stock were to occur.  The Company's Articles of Incorporation
contain  certain  restrictions  which are intended to reduce the likelihood that
such  changes  in  ownership  would  occur.

                         LIQUIDITY AND CAPITAL RESOURCES

     Cash  provided by operations totaled $5,841,000 in fiscal 1999 and was used
primarily  to  reacquire  the  Company's  common  stock, to pay dividends on its
common  stock,  and  to  fund  capital  expenditures.

     The Company increased its borrowing by $1.0 million to $5.7 million at June
27,  1999 from $4.7 million at June 28, 1998.

     During fiscal 1999 the Company purchased 1,132,900 shares of its own common
stock  on  the  open  market  for  a total price of $5.8 million and acquired an
additional  4,945  shares as a gift from a vendor.  This brings the total number
of  shares  in treasury to 3,519,231 as of June 27, 1999.  All reacquired shares
will  be  held  as  treasury  stock  until  retired.

     Capital  Expenditures  of $640,000 during fiscal 1999 included $414,000 for
upgrading  the  Company's  computer  system (including compliance with Year 2000
issues).

     The Company's future requirements for cash relate primarily to the periodic
purchase  of its own common stock, capital expenditures, payment of dividends on
its  common  stock,  and repayment of debt.  The Company currently considers its
common stock to be undervalued and plans to aggressively purchase its own shares
on  the  open  market  during  fiscal  year  2000.  For the period June 28, 1999
through  September  9, 1999 the Company has purchased 317,600 shares for a total
amount of $1,076,711.  Although the existing loan agreement does not require the
Company  to make any scheduled debt reductions, the Company plans to reduce bank
debt  in  fiscal  2000.  Anticipated  capital  expenditures  include information
system  upgrades,  a  partial company store remodel, and miscellaneous equipment
and  improvements  at the Corporate office, Norco, and the company-owned stores.
During  fiscal  1999,  the  Board  of  Directors  of  the  Company declared cash
dividends  on  the Company's common stock of approximately $2.1 million or $0.18
per  share.  On  June  28,  1999  the  Company's  Board  of Directors declared a
quarterly  cash  dividend  payable  to shareholders of record on July 9, 1999 of
approximately  $0.7 million or $0.06 per share.  Declaration of future dividends
will  be  at  the  discretion  of  the  Board  of  Directors.



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

                                ECONOMIC FACTORS

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

     The  Company  has  assessed  its  computerized  systems  to determine their
ability  to  correctly  identify  the  year  2000  and is devoting the necessary
internal  and  external  resources to replace, upgrade or modify all significant
systems  related  to  the  year 2000.  The Company's assessment, purchase of new
equipment,  installation  of  new  software,  conversion and testing of data are
completed.  The  Company  fully  implemented  the new system in May 1999 and has
begun  processing  information.

     Because  third party computer failures could also have a material impact on
our  ability to conduct business, confirmations were requested from our material
vendors  and  suppliers to certify that plans are being developed to address and
become  compliant  with  the  year  2000  issues.  As of June 27, 1999, 80% have
replied  and  are  comfortable  with  their  preparations for the year 2000. The
Company  believes  that any year 2000 impact on its franchisee base will have no
material  effect  on  the  Company  since  sales  information  is  not currently
communicated  through computer systems.  Through the assessment of the Company's
non-information  technology  systems,  management  has  determined  that  no
modifications  are  required for year 2000 compliance in this area.  The Company
will continue to assess and develop contingency plans, if needed, throughout the
remainder  of  1999.

     New software, testing, and conversion of systems and applications have been
completed  and  implemented.  Total system upgrades are expected to position the
Company  for  anticipated  future  growth  and  enhance  corporate  service
capabilities.  The  cost   of  these  upgrades  will  total  approximately  $1.2
million.  Of  this  cost, approximately $900,000 already has been incurred as of
June  27,  1999.  All  of  the  above  capital expenditures are funded through a
36-month  capitalized  lease.


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

<PAGE>

<TABLE>
<CAPTION>



                          PIZZA INN, INC.


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements and Schedules:

FINANCIAL STATEMENTS                                                                     PAGE NO.
<S>                                                                                   <C>
Report of Independent Accountants.                                                                 14

Consoldiated Statements of Operations for the years ended
  June 27, 1999, June 28, 1998, and June 29, 1997.                                                 15

Consolidated Balance Sheets at June 27, 1999 and June 28, 1998.                                    16

Consolidated Statements of Shareholders' Equity for the years
  ended June 27, 1999, June 28, 1998 and June 29, 1997.                                            17

Consolidated Statements of Cash Flows for the years ended
  June 27, 1999, June 28, 1998, and June 29, 1997.                                                 18

Notes to  Consolidated Financial Statements                                                        20


  FINANCIAL STATEMENT SCHEDULES
------------------------------------------------------------------------------------

        Schedule II - Consolidated Valuation and Qualifying Accounts                               33
                                                                                      ---------------

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






<PAGE>




                        REPORT OF INDEPENDENT ACCOUNTANTS
                        ---------------------------------

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

In our opinion, the consolidated financial statements listed in the accompanying
index  present fairly, in all material respects, the financial position of Pizza
Inn,  Inc.  and  its  subsidiaries  at  June 27, 1999 and June 28, 1998, and the
results  of their operations and their cash flows for each of the three years in
the period ended June 27, 1999, in conformity with generally accepted accounting
principles.  In  addition,  in  our  opinion,  the  financial statement schedule
listed  in the accompanying index presents fairly, in all material respects, the
information  set  forth  therein  when  read  in  conjunction  with  the related
consolidated financial statements.  These financial statements and the financial
statement  schedule  are  the  responsibility  of  the Company's management; our
responsibility  is  to  express an opinion on these financial statements and the
financial  statement  schedule based on our audits.  We  conducted our audits of
these statements in accordance with generally accepted auditing standards, which
require  that we plan and perform the audit to obtain reasonable assurance about
whether  the  financial  statements are free of material misstatement.  An audit
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the  financial  statements, assessing the accounting principles
used  and  significant  estimates made by management, and evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  the  opinion  expressed  above.




PRICEWATERHOUSECOOPERS  LLP


Dallas,  Texas
August  6,  1999



<TABLE>
<CAPTION>

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



                                       YEAR ENDED
                                       -----------
                                        JUNE 27,    JUNE 28,   JUNE 29,
REVENUES:                                 1999        1998       1997
                                       -----------  ---------  ---------
<S>                                    <C>          <C>        <C>
  Food and supply sales                $    58,101  $  58,491  $  59,557
  Franchise revenue                          5,619      6,468      6,750
  Restaurant sales                           2,287      2,684      2,696
  Other income                                 287        997        120
                                       -----------  ---------  ---------
                                            66,294     68,640     69,123
                                       -----------  ---------  ---------

COSTS AND EXPENSES:
  Cost of sales                             55,265     53,119     53,634
  Franchise expenses                         2,741      3,209      2,978
  General and administrative expenses        3,431      4,557      4,879
  Provision for bad debt                       237        230        110
  Interest expense                             524        502        662
                                       -----------  ---------  ---------
                                            62,198     61,617     62,263
                                       -----------  ---------  ---------

INCOME BEFORE INCOME TAXES                   4,096      7,023      6,860

  Provision for income taxes                 1,344      2,143      2,332
                                       -----------  ---------  ---------

NET INCOME                             $     2,752  $   4,880  $   4,528
                                       ===========  =========  =========

BASIC EARNINGS PER COMMON SHARE        $      0.24  $    0.38  $    0.35
                                       ===========  =========  =========

DILUTED EARNINGS PER COMMON SHARE      $      0.23  $    0.36  $    0.33
                                       ===========  =========  =========

DIVIDENDS DECLARED PER COMMON SHARE    $      0.18  $    0.24  $       -
                                       ===========  =========  =========

WEIGHTED AVERAGE COMMON SHARES              11,678     12,692     12,873
                                       ===========  =========  =========

WEIGHTED AVERAGE COMMON AND
  DILUTIVE POTENTIAL COMMON SHARES          12,154     13,468     13,707
                                       ===========  =========  =========
<FN>

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





<PAGE>

<TABLE>
<CAPTION>

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


                                                           JUNE 27,   JUNE 28,
ASSETS                                                       1999       1998
                                                           ---------  ---------
CURRENT ASSETS
<S>                                                        <C>        <C>
  Cash and cash equivalents                                $     509  $   2,335
  Accounts receivable, less allowance for doubtful
    accounts of $808 and $825, respectively                    4,588      6,021
  Notes receivable, current portion, less allowance
    for doubtful accounts of $144 and $174, respectively         814        741
  Inventories                                                  2,393      1,953
  Prepaid expenses and other                                     591        556
                                                           ---------  ---------
      Total current assets                                     8,895     11,606
Property, plant and equipment, net                             1,754      1,921
Property under capital leases, net                             1,587        761
Deferred taxes, net                                            5,556      6,705

  Long-term notes receivable, less
    allowance for doubtful accounts of $80 and $8,
    respectively                                                 380        436
  Deposits and other                                             414        344
                                                           ---------  ---------
                                                           $  18,586  $  21,773
                                                           =========  =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable - trade                                 $   2,641  $   2,014
  Accrued expenses                                             1,795      2,507
  Current portion of capital lease obligations                   428        125
                                                           ---------  ---------
    Total current liabilities                                  4,864      4,646

LONG-TERM LIABILITIES
  Long-term debt                                               5,700      4,700
  Long-term capital lease obligations                          1,244        754
  Other long-term liabilities                                    719        756
                                                           ---------  ---------
                                                              12,527     10,856
                                                           ---------  ---------

COMMITMENTS AND CONTINGENCIES (See Note I)

SHAREHOLDERS' EQUITY
  Common Stock, $.01 par value; authorized 26,000,000
    shares; outstanding 11,407,945 and 12,528,436
    shares, respectively (after deducting shares in
    treasury:  1999 - 3,519,231; 1998 -2,381,386)                114        125
  Additional paid-in capital                                   4,765      4,911
  Retained earnings                                            1,180      5,881
                                                           ---------  ---------
    Total shareholders' equity                                 6,059     10,917
                                                           ---------  ---------
                                                           $  18,586  $  21,773
                                                           =========  =========
<FN>

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

<TABLE>
<CAPTION>

                                                      PIZZA INN, INC.
                                      CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                      (IN THOUSANDS)



                                             ADDITIONAL
                                            COMMON STOCK       PAID-IN         RETAINED
                                               SHARES          AMOUNT          CAPITAL         EARNINGS         TOTAL
                                            -------------  ---------------  --------------  --------------  --------------
<S>                                         <C>            <C>              <C>             <C>             <C>

BALANCE, JUNE 30, 1996                            12,877   $          129   $       3,684   $       4,293   $       8,106

Stock options exercised                              267                2             503               -             505
Acquisition of treasury stock                       (430)              (4)           (126)         (1,788)         (1,918)
Net income                                             -                -               -           4,528           4,528
                                            -------------  ---------------  --------------  --------------  --------------

BALANCE, JUNE 29, 1997                            12,714   $          127   $       4,061   $       7,033   $      11,221

Stock options exercised                              414                4           1,247               -           1,251
Tax benefits associated
    with stock options                                 -                -            (179)              -            (179)
Dividends declared                                     -                -               -          (3,052)         (3,052)
Acquisition of treasury stock                       (600)              (6)           (218)         (2,980)         (3,204)
Net income                                             -                -               -           4,880           4,880
                                            -------------  ---------------  --------------  --------------  --------------

BALANCE, JUNE 28, 1998                            12,528   $          125   $       4,911   $       5,881   $      10,917


Stock options exercised                               17                -              52               -              52
Tax benefits associated
    with stock options                                 -                -             233               -             233
Dividends declared                                     -                -               -          (2,092)         (2,092)
Acquisition of treasury stock (see Note K)        (1,137)             (11)           (431)         (5,361)         (5,803)
Net income                                             -                -               -           2,752           2,752
                                            -------------  ---------------  --------------  --------------  --------------

BALANCE, JUNE 27, 1999                            11,408   $          114   $       4,765   $       1,180   $       6,059
                                            =============  ===============  ==============  ==============  ==============


<FN>

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


<TABLE>
<CAPTION>

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


                                                                       YEAR ENDED
                                                                   -------------------
                                                                        JUNE 27,             JUNE 28,            JUNE 29,
                                                                          1999                 1998                1997
                                                                   -------------------  ------------------  ------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                <C>                  <C>                 <C>
  Net income                                                       $            2,752   $           4,880   $           4,528
    Adjustments to reconcile net income to
      cash provided by operating activities:
      Depreciation and amortization                                               871                 902                 707
      Provision for bad debt                                                      237                 230                 110
      Income from transfer of Pizza Inn stock (see Note K)                        (15)               (602)                  -
      Deferred Income Taxes                                                     1,149               1,787               2,195
    Changes in assets and liabilities:
      Restricted cash and short-term investments                                    -                   -                 360
      Notes and accounts receivable                                             1,179                  25                (762)
      Inventories                                                                (440)                271                (305)
      Accounts payable - trade                                                    627                 532                (849)
      Accrued expenses                                                           (717)               (782)                (94)
      Deferred franchise revenue                                                    5                (388)               (147)
      Prepaid expenses and other                                                  193                (587)                (23)
                                                                   -------------------  ------------------  ------------------
      CASH PROVIDED BY OPERATING ACTIVITIES                                     5,841               6,268               5,720
                                                                   -------------------  ------------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Capital expenditures                                                         (640)               (362)               (628)
    Acquisition of area development territory                                       -                (986)                  -
    Proceeds from sale of re-acquired area development territory                    -                 986                   -
    Proceeds from sales of assets                                                   -                  65                   -
                                                                   -------------------  ------------------  ------------------
      CASH USED FOR INVESTING ACTIVITIES                                         (640)               (297)               (628)
                                                                   -------------------  ------------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Repayments of long-term bank debt and
      capital lease obligations                                                  (199)             (2,325)             (2,000)
    Borrowings of long-term debt                                                1,000                   -                   -
    Dividends paid                                                             (2,092)             (2,292)                  -
    Proceeds from exercise of stock options                                        52               1,251                 505
    Purchases of treasury stock                                                (5,788)             (2,602)             (1,918)
                                                                   -------------------  ------------------  ------------------
      CASH USED FOR FINANCING ACTIVITIES                                       (7,027)             (5,968)             (3,413)
                                                                   -------------------  ------------------  ------------------

Net increase (decrease) in cash and cash equivalents                           (1,826)                  3               1,679
Cash and cash equivalents, beginning of period                                  2,335               2,332                 653
                                                                   -------------------  ------------------  ------------------
Cash and cash equivalents, end of period                           $              509   $           2,335   $           2,332
                                                                   -------------------  ------------------  ------------------
<FN>

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


<TABLE>
<CAPTION>

                  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
                                    (IN THOUSANDS)



                                      YEAR ENDED
                                      -----------
                                       JUNE 27,    JUNE 28,   JUNE 29,
                                         1999        1998       1997
                                      -----------  ---------  ---------
<S>                                   <C>          <C>        <C>
CASH PAYMENTS FOR:
  Interest                            $       551  $     526  $     612
  Income taxes                                 20        160        150


NONCASH FINANCING AND INVESTING
ACTIVITIES:
  Capital lease obligations incurred  $       992  $       -  $       -

</TABLE>



                                 PIZZA INN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  A  -  ORGANIZATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:

DESCRIPTION  OF  BUSINESS:

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

On  June 27, 1999 the Pizza Inn system consisted of     516 locations, including
three Company operated units and 513 franchised units.  The Company is currently
franchised  in  21  states and 13 foreign countries.  Domestic units are located
predominantly  in  the  southern  half  of  the United States, with Texas, North
Carolina  and  Arkansas  accounting  for  approximately  29%,  16%,  and  11%,
respectively, of the total.  Norco Distributing Company ("Norco"), a division of
the  Company,  distributes food products, equipment, and other supplies to units
in  the  United  States  and,  to  the  extent  feasible,  in  other  countries.

PRINCIPLES  OF  CONSOLIDATION:

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

CASH  AND  CASH  EQUIVALENTS:

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

INVENTORIES:

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

PROPERTY,  PLANT  AND  EQUIPMENT:

Property,  plant  and  equipment,  including  property under capital leases, are
stated  at  cost less accumulated depreciation.  Depreciation is computed on the
straight-line  method  over  the  useful  lives of the assets or, in the case of
leasehold  improvements,  over  the  term  of the lease, if shorter.  The useful
lives of the assets range from three to eight years.  It is the Company's policy
to  periodically  review  the  net realizable value when indicators exist of its
long-lived  assets  through  an  assessment  of  the estimated future cash flows
related  to  such  assets.  In  the event that assets are found to be carried at
amounts  which  are  in  excess  of  estimated gross future cash flows, then the
assets will be adjusted for impairment to a level commensurate with a discounted
cash flow analysis of the underlying assets.  The Company believes no impairment
of  long-lived  assets  exists  at  June  27,  1999.



ACCOUNTS  RECEIVABLE:

Accounts receivable consist primarily of receivables from food and supply sales
and  franchise  royalties.  The  Company  records  a  provision  for  doubtful
receivables  to allow for any amounts which may be unrecoverable.  For the years
ended  June  27,  1999, June 28, 1998, and June 29, 1997 provisions of $237,000,
$230,000  and  $110,000  were  recorded,  respectively.

 NOTES  RECEIVABLE:

Notes receivable primarily consist of notes from franchisees for the purchase of
area  development and master license territories and the refinancing of existing
trade  receivables.  These  notes  generally have terms ranging from one to five
years,  with  interest  rates of 8% to 12%.  The Company records a provision for
doubtful  receivables  to  allow  for  any  amounts  which may be unrecoverable.

INCOME  TAXES:

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

TREASURY  STOCK:

The  excess  of  the  cost of shares acquired for the treasury over par value is
allocated  to  additional  paid-in  capital  based  on  the  per share amount of
additional capital for all shares in the same issue, with any difference charged
to  retained  earnings.  All  reacquired  shares  will be held in treasury until
retired.

DISTRIBUTION  DIVISION  OPERATIONS:

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

FRANCHISE  REVENUE:

Franchise  revenue  consists  of  income  from license fees, royalties, and area
development  and  foreign  master  license  (collectively,  "Territory")  sales.
License  fees  are  recognized  as  income  when  there  has  been  substantial
performance  of  the agreement by both the franchisee and the Company, generally
at the time the unit is opened.  Royalties are recognized as income when earned.
For the years ended June 27, 1999, June 28, 1998 and June 29, 1997, 93%, 84% and
78%,  respectively,  of  franchise revenue was comprised of recurring royalties.

Territory  sales  are the fees paid by selected experienced restaurant operators
to  the  Company  for  the  right  to  develop Pizza Inn restaurants in specific
geographical  territories.  When  the  Company  has  no  continuing  substantive
obligations  of  performance  to the area developer or master licensee regarding
the  fee,  the  Company  recognizes  the fee to the extent of cash received.  If
continuing obligations exist, fees are recognized ratably during the performance
of  those  obligations.  Territory fees recognized as income for the years ended
June  27,  1999,  June  28,  1998  and June 29, 1997 were $106,000, $666,000 and
$1,154,000  respectively.

DISCLOSURE  ABOUT  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS:

The  carrying  amounts of short-term investments, accounts and notes receivable,
and  debt  approximate  fair  value.



USE  OF  MANAGEMENT  ESTIMATES:

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

FISCAL  YEAR:

The  Company's  fiscal year ends on the last Sunday in June.  Fiscal years ended
June  27,  1999,  June  28,  1998  and  June  29,  1997  all contained 52 weeks.

NEW  PRONOUNCEMENTS:

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
No.  133,  "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133")  effective  for  fiscal  years  beginning  after  June 15, 1999, which was
extended  to  June  15,  2000.  SFAS  133  establishes  accounting and reporting
standards for derivative instruments embedded in other contracts and for hedging
activities.  The  adoption  of this statement in 2001 is not expected to have an
affect  on  the  Company's  financial  statements.



<PAGE>
NOTE  B  -  PROPERTY,  PLANT  AND  EQUIPMENT:

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



<TABLE>
<CAPTION>


                                                   JUNE 27,                JUNE 28,
<S>                                <C>                     <C>
                                                    1999                     1998
                                   ----------------------  -----------------------
Property, plant and equipment:
Equipment, furniture and fixtures  $               4,259   $                3,992
Leasehold improvements                             1,336                    1,326
                                   ----------------------  -----------------------
                                                   5,595                    5,318
Less:  accumulated depreciation                   (3,841)                  (3,397)
                                   ----------------------  -----------------------
                                                  1,754                  1,921
                                   ======================  =======================
Property under capital leases:
Real Estate                        $                 118   $                  118
Equipment                                          2,393                    1,396
                                   ----------------------  -----------------------
                                                   2,511                    1,514
Less:  accumulated amortization                     (924)                    (753)
                                   ----------------------  -----------------------
                                                  1,587                     761
                                   ======================  =======================
</TABLE>
Depreciation  and  amortization expense was $871,000, $902,000, and $707,000 for
the  years  ended June 26, 1999, June 28, 1998, and June 29, 1997, respectively.

NOTE  C  -  ACCRUED  EXPENSES:

Accrued  expenses  consist  of  the  following  (in  thousands):


<TABLE>
<CAPTION>


                                                  JUNE 27,               JUNE 28,
<S>                                <C>                    <C>
                                                    1999                   1998
                                   ---------------------  ---------------------
Compensation                       $                 944  $                 824
Legal and other professional fees                    116                     35
Deferred franchise revenue                           242                    237
Accrued dividends payable                              -                    760
Other                                                493                    651
                                   ---------------------  ---------------------

                                                  1,795                 2,507
                                   =====================  =====================
</TABLE>

NOTE  D  -  LONG-TERM  DEBT:

In  August 1997, the Company signed an agreement (the "Loan Agreement") with its
current  lender, Wells Fargo, to refinance its debt under a new revolving credit
facility.  The  revolving credit note was scheduled to mature in August 1999 and
was  secured  by  essentially  all of the Company's assets.  Amounts outstanding
under  the  Loan Agreement were $5.7 million and $4.7 million at fiscal year end
1999  and  1998,  respectively.

Interest  on the revolving credit line is payable monthly.  Interest is provided
for at a rate equal to prime plus an interest rate margin from -1.0% to 0.0% or,
at  the  Company's  option,  at  the  Eurodollar  rate plus 1.25% to 2.25%.  The
interest  rate  margin  is  based  on  the  Company's  performance under certain
financial  ratio tests.  As of June 27, 1999, the Company was in compliance with
all  of  its  debt  covenants.  A  0.5%  annual commitment fee is payable on any
unused  portion  of the revolving credit line.  As of June 27, 1999 and June 28,
1998,  the Company's effective interest rates were 6.17% and 6.91%, respectively
(with  a  Eurodollar  rate  basis).

The  Loan  Agreement  contains  covenants which, among other things, require the
Company  to  satisfy  certain  financial  ratios  and  restrict additional debt.

PIBCO,  Ltd.,  a wholly owned insurance subsidiary of the Company, in the normal
course  of  operations,  arranged  for  the  issuance  of a  letter of credit to
reinsurers  to  secure  loss  reserves.  At June 27, 1999 and June 28, 1998 this
letter of credit was secured under the Company's revolving line of credit.  Loss
reserves for approximately the same amount have been recorded by PIBCO, Ltd. and
are  reflected  as  current  liabilities  in the Company's financial statements.


In  September  1998,  the Company signed an agreement with its current lender to
extend  the  term  of  its  existing  $9.5 million revolving credit line through
August  2000 and to modify certain financial covenants.  In accordance with SFAS
6,  "Classification  of  Short-Term  Obligations Expected to be Refinanced", the
entire  balance  outstanding  under  the  Loan  Agreement  at  June 27, 1999 was
classified  as  long-term  to  reflect  the  provisions  of  the Loan Agreement.

NOTE  E  -  INCOME  TAXES:

The  effective  federal  income tax rate did not vary from the statutory rate of
34%  for the year ended June 29,1997.  However, the effective federal income tax
rate  varied  from the statutory rate for the years ended June 27, 1999 and June
28,  1998  as  follows:



<TABLE>

<CAPTION>


                                         JUNE 27,              JUNE 28,
                                           1999                  1998
                                   --------------------  --------------------
                                                 (in thousands)
<S>                                <C>                   <C>
Federal income taxes based on 34%
  of book income                   $             1,393   $             2,388
Permanent adjustments                             (290)                 (102)
Change in valuation allowance                     (535)                 (638)
Expired credits                                    776                   375
Other                                                -                   120
                                   --------------------  --------------------
                                   $             1,344   $             2,143
                                   ====================  ====================
</TABLE>

Income  tax  expense  consists  of  the  following  (in  thousands):
<TABLE>
<CAPTION>


                                 JUNE 27,             JUNE 28,             JUNE 29,
                                   1999                 1998                 1997
                            -------------------  -------------------  -------------------
<S>                         <C>                  <C>                  <C>
Federal:
  Current                   $               195  $               356  $               137
  Deferred                                1,149                1,787                2,195
                            -------------------  -------------------  -------------------
Provision for income taxes  $             1,344  $             2,143  $             2,332
                            ===================  ===================  ===================
</TABLE>
The tax effects of temporary differences which give rise to the net deferred tax
assets  (liabilities)  consisted  of  the  following  (in  thousands):


<TABLE>
<CAPTION>


                                JUNE 27,              JUNE 28,
                                  1999                  1998
                          --------------------  --------------------
<S>                       <C>                   <C>
Reserve for bad debt      $               391   $               382
Depreciable assets                        610                   507
Deferred fees                              72                    70
Other reserves                             88                  (212)
NOL carryforwards                       3,510                 5,100
Credit carryforwards                    1,089                 1,597
                          --------------------  --------------------

Gross deferred tax asset  $             5,760   $             7,444

Valuation allowance                      (204)                 (739)
                          --------------------  --------------------

Net deferred tax asset    $             5,556   $             6,705
                          ====================  ====================
</TABLE>

As  of  June  27,  1999,  the  Company  had  $10.3 million of net operating loss
carryforwards  that  expire  in  2005.  The Company also had $263,000 of general
business  credit  carryforwards  expiring  between  2000  and  2001, $177,000 of
foreign tax credit carryforwards expiring between 2003 and 2004, and $649,000 of
minimum  tax  credits  that  can be carried forward indefinitely.  The valuation
allowance  was  established  upon  adoption of SFAS 109, since it is more likely
than  not that a portion of certain of the general business credit carryforwards
will  expire  before  they  can  be  utilized.

In fiscal 1999, the Company decreased the net deferred tax asset by $240,820 for
general  business  tax  credits  that are not expected to be utilized through an
addition to the tax valuation allowance.  These general business tax credits are
due  to  expire in 2000 and will not be utilized prior to their expiration.  The
Company  believes that it is more likely than not that these credits will not be
realized.  This  reduction  is  included  in  the  provision  for  income  tax.
Additionally, the valuation allowance and corresponding asset were decreased due
to  the  expiration  of  general  business  credits.

Under  the  Internal  Revenue  Code,  the  utilization of net operating loss and
credit  carryforwards  could  be  limited if certain changes in ownership of the
Company's  Common  Stock were to occur.  The Company's Articles of Incorporation
contain  certain  restrictions  which are intended to reduce the likelihood that
such  changes  in  ownership  would  occur.


<PAGE>
NOTE  F  -  LEASES:

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

The  Company leases 23,402 square feet in Dallas, Texas for its corporate office
and  76,700  square  feet  in  Grand  Prairie, Texas for its Norco warehouse and
office  facilities.  The  leases  expire  in  2003  and 2000, respectively.  The
Company  also  leases  2,736  square  feet  in  Addison,  Texas for its training
facility  with  a  term  expiring  in  2001.


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

In  August 1998, the Company entered into a new 36 month capital lease agreement
for  computer  software  and  hardware  equipment.

Future  minimum  rental  payments  under  non-cancelable  leases with initial or
remaining  terms  of  one  year  or  more  at  June  27, 1999 are as follows (in
thousands):



<TABLE>
<CAPTION>


                                            CAPITAL   OPERATING
                                            LEASES      LEASES
                                           ---------  ----------
<S>                                        <C>        <C>
2000                                       $    565   $    1,255
2001                                            565        1,121
2002                                            572        1,006
2003                                             90          607
2004                                            108          191
Thereafter                                       39          175
                                           ---------
                                              1,939     $  4,355
                                                       =========
Less amount representing interest              (267)
                                           ---------
Present value of total obligations under
    capital leases                            1,672
Less current portion                           (428)
                                           ---------
Long-term capital lease obligations        $  1,244
                                           =========
</TABLE>
Rental  expense  consisted  of  the  following  (in  thousands):

<TABLE>
<CAPTION>


                     YEAR ENDED    YEAR ENDED    YEAR ENDED
                      JUNE 27,      JUNE 28,      JUNE 29,
                        1999          1998          1997
                    ------------  ------------  ------------
<S>                 <C>           <C>           <C>
Minimum rentals     $     1,339   $     1,193   $     1,117
Contingent rentals           13            15            11
Sublease rentals            (99)          (87)          (90)
                    ------------  ------------  ------------
                    $     1,253         1,121         1,038
                    ============  ============  ============
</TABLE>

<PAGE>
NOTE  G  -  EMPLOYEE  BENEFITS:

The  Company  has  a  tax  advantaged savings plan which is designed to meet the
requirements  of  Section 401(k) of the Internal Revenue Code (the "Code").  The
current plan is a modified continuation of a similar savings plan established by
the Company in 1985.  Employees who have completed six months of service and are
at  least  21  years  of  age are eligible to participate in the plan.  The plan
provides  that  participating  employees may elect to have between 1% and 15% of
their  compensation  deferred and contributed to the plan.  From January 1, 1993
through January 1, 1998, the Company contributed on behalf of each participating
employee  an  amount  equal  to  50%  of  the first 3% and 25% of next 3% of the
employee's  contribution.  From  January  1,  1998  through January 1, 1999, the
Company  contributed on behalf of each participating employee an amount equal to
100%  up  to  6%  of the employee's contribution. Effective January 1, 1999, the
Company  contributes on behalf of each participating employee an amount equal to
100%  of  the  first  3%  and 50% of the next 3% of the employee's contribution.
Separate accounts are maintained with respect to contributions made on behalf of
each  participating  employee.  The  plan  is  subject  to the provisions of the
Employee  Retirement Income Security Act and is a profit sharing plan as defined
in  Section  401  of  the  Code.  The  Company is the administrator of the plan.
Participants  may  direct  elective  deferrals and earnings thereon and employer
matching contributions and earnings thereon prior to January 1, 1998.  Effective
January  1,  1998,  employer  matching  contributions  and  earnings thereon are
invested  in  Common  Stock  of  the  Company.

For  the  years  ended  June  27,  1999, June 28, 1998, and June 29, 1997, total
matching  contributions  to  the  tax  advantaged savings plan by the Company on
behalf  of  participating  employees  were  $205,922,  $116,862,  and  $58,774,
respectively.

NOTE  H  -  STOCK  OPTIONS:

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

The 1993 Outside Directors Stock Award Plan (the "1993 Directors Plan") was also
adopted  by the Company effective as of October 13, 1993.  Directors who are not
employed  by  the  Company  are eligible to receive stock options under the 1993
Directors  Plan.  Options  are  granted,  up  to 20,000 shares per year, to each
outside  director  who  purchased a matching number of shares of Common Stock of
the  Company  during the preceding year.  Options are granted at market value of
the  stock on the first day of the fiscal year, which is also the date of grant,
and  vesting  and  exercise  periods  begin  after one year.  A total of 200,000
shares  of Company Common Stock are authorized to be issued pursuant to the 1993
Directors  Plan.




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

SUMMARY  OF  STOCK  OPTION  TRANSACTIONS



<TABLE>
<CAPTION>


                                             June 27, 1999            June 28, 1998            June 29, 1997
                                            ---------------          --------------           ---------------
                                                     Weighted-                     Weighted-          Weighted
                                                      Average                      Average             Average
                                                      Exercise                     Exercise           Exercise
                                      Shares           Price           Shares       Price     Shares    Price
                                  ---------------  --------------  ---------------  ------  ----------  ------
<S>                               <C>              <C>             <C>              <C>     <C>         <C>
Outstanding at beginning of year       2,675,366   $         3.27       3,143,639   $ 3.08  2,608,356   $ 2.82

Granted                                  655,290   $         4.79         110,000   $ 4.85    876,783   $ 3.56
Exercised                                (17,084)  $         2.97        (413,773)  $ 2.14   (266,500)  $ 1.90
Canceled                                 (65,600)  $         4.68        (164,500)  $ 3.58    (75,000)  $ 3.74
                                  ---------------  --------------  ---------------  ------  ----------  ------

Outstanding at end of year             3,247,972   $         3.50       2,675,366   $ 3.27  3,143,639   $ 3.08
                                  ===============  ==============  ===============  ======  ==========  ======

Exercisable at end of year             2,745,448   $         3.42       2,274,916   $ 3.15  2,076,856   $ 2.84

Weighted-average fair value of
options granted during the year   $                          1.30   $                 1.25  $             0.89
</TABLE>

FIXED  PRICE  STOCK  OPTIONS

The  following  table  provides  information  on options outstanding and options
exercisable  at  June  27,  1999:


<TABLE>
<CAPTION>



                                      Options Outstanding                               Options Exercisable
                                      -------------------                               --------------------
                                            Weighted-
                                             Average
                        Shares              Remaining           Weighted-          Shares          Weighted-
Range of              Outstanding          Contractural          Average        Exercisable         Average
Exercise Prices    at June 27, 1999        Life (Years)      Exercise Price   at June 27, 1999  Exercise Price
----------------  -------------------  --------------------  ---------------  ----------------  ---------------
<S>               <C>                  <C>                   <C>              <C>               <C>
2.25 - 3.25                1,245,766                  1.12  $          2.54         1,162,666  $          2.51
3.44 - 4.25                1,320,116                  3.91  $          3.91         1,173,616  $          3.79
4.38 - 5.25                  682,090                  5.47  $          4.46           409,166  $          4.95
                  -------------------                                         ----------------
2.25 - 5.25                3,247,972                  3.17  $          3.50         2,745,448  $          3.42
                  ===================                                         ================
</TABLE>
Pro forma information regarding net income and earnings per share is required to
be  determined  as  if  the  Company had accounted for its stock options granted
subsequent to June 25, 1995 under the fair value method of SFAS 123, "Accounting
for  Stock-Based  Compensation".  The  fair  value  of options granted in fiscal
1997,  1998  and  1999  was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted average assumptions:  risk-free
interest rates ranging from 5.0% to 6.5%, expected volatility of 40.3% to 50.8%,
expected  dividend  yield  of  4.4%  to 8.9% and expected lives of 2 to 6 years.

<PAGE>

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


<TABLE>
<CAPTION>


                                     June 27, 1999                 June 28, 1998              June 29, 1997
                                     --------------                --------------              --------------
                              As Reported      Pro Forma      As Reported    Pro Forma   As Reported   Pro Forma
                            --------------  --------------  --------------  ----------  ------------  ----------
<S>                         <C>             <C>             <C>             <C>         <C>           <C>
Net income                  $        2,752  $        2,291  $        4,880  $    4,460  $      4,528  $    3,981
Basic earnings per share    $         0.24  $         0.20  $         0.38  $     0.35  $       0.35  $     0.31
Diluted earnings per share  $         0.23  $         0.19  $         0.36  $     0.33  $       0.33  $     0.29
</TABLE>

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

NOTE  I  -  COMMITMENTS  AND  CONTINGENCIES:

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

 NOTE  J  -  RELATED  PARTIES:

One  of  the  individuals  nominated  by the Company and elected to serve on its
Board  of Directors is a franchisee.  This franchisee currently operates a total
of  15  restaurants  located in Arkansas, Texas and Missouri.  Purchases by this
franchisee comprised  5% of the Company's  total food and supply sales in fiscal
1999.  Royalties  and  license  fees  and  area  development  sales  from  this
franchisee  comprised  3%  of  the  Company's total franchise revenues in fiscal
1999.  As  franchised  units,  his  restaurants pay royalties to the Company and
purchase  a  majority of their food and supplies from the Company's distribution
division.  As  of  June  27,  1999, his accounts and note payable to the Company
were  $860,464.

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

NOTE  K  -  TREASURY  STOCK:

For  the  period  of  September  1995  through  June 1999, the Company purchased
2,730,241 shares of its own Common Stock from time to time on the open market at
a  total cost of $13.4 million. In May 1998, the Company acquired 102,478 shares
in  connection  with  entering into a new contract with a vendor.  This non-cash
treasury  share acquisition was recorded in other income at current market value
in  the amount of $602,000.  In April 1999, the Company received a gift of 4,945
shares from a vendor which was recorded at current market value in the amount of
$15,000.

The purchases of common shares described above were funded from working capital,
and  reduced  the  Company's  outstanding  shares  by  approximately  19%.  All
reacquired  shares  will  be  held  as  treasury  until  retired.

NOTE  L  -  EARNINGS  PER  SHARE:

Effective December 28, 1997, the Company adopted SFAS 128, "Earnings Per Share",
which  establishes  standards  for  computing  and presenting earnings per share
(EPS).  Basic  EPS  excludes the effect of potentially dilutive securities while
diluted  EPS  reflects  the potential dilution that would occur if securities or
other  contracts  to issue common stock were exercised, converted or resulted in
the  issuance  of  common  stock that then shared in the earnings of the entity.
SFAS  128  requires  restatement  of  earnings  per  share  for  prior  periods.



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


<TABLE>
<CAPTION>


                                                  INCOME        SHARES      PER SHARE
                                               (NUMERATOR)   (DENOMINATOR)    AMOUNT
                                               ------------  -------------  ----------
YEAR ENDED JUNE 27, 1999
BASIC EPS
<S>                                   <C>           <C>            <C>
Income Available to Common Shareholders        $      2,752         11,678  $     0.24
Effect of Dilutive Securities - Stock Options                          476
                                                                ------------
DILUTED EPS
Income Available to Common Shareholders
& Assumed Conversions                          $      2,752         12,154  $     0.23
                                               ============  =============  ==========

YEAR ENDED JUNE 28, 1998
BASIC EPS
Income Available to Common Shareholders        $      4,880         12,692  $     0.38
Effect of Dilutive Securities - Stock Options                          776
                                                                ------------
DILUTED EPS
Income Available to Common Shareholders
& Assumed Conversions                          $      4,880         13,468  $     0.36
                                               ============  =============  ==========

YEAR ENDED JUNE 29, 1997
BASIC EPS
Income Available to Common Shareholders        $      4,528         12,873  $     0.35
Effect of Dilutive Securities - Stock Options                          834
                                                               ------------
DILUTED EPS
Income Available to Common Shareholders
& Assumed Conversions                          $      4,528         13,707  $     0.33
                                               ============  =============  ==========
</TABLE>


Options  to purchase 2,002,106 shares of common stock at exercise prices ranging
from  $3.44  to  $5.50  per share were outstanding at June 27, 1999 but were not
included  in  the computation of diluted EPS because the option's exercise price
was greater than the average market price of the common shares.  No options were
excluded  from  the calculation of diluted EPS during fiscal year 1998.  Options
to purchase 812,633 shares of common stock during fiscal year 1997 were excluded
from the computation of diluted EPS in 1997 because their inclusion would result
in  an  antidilutive  effect  on  EPS.





NOTE  M  -  SEGMENT  REPORTING:

Effective  June  27,  1999, the Company adopted SFAS No. 131, "Disclosures about
Segments  of  an  Enterprise  and  Related  Information".

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

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

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

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

Summarized  in  the  following  tables  are  net  sales  and operating revenues,
depreciation  and  amortization  expense,  interest  expense,  interest  income,
operating  profit  (loss),  capital  expenditures,  and assets for the Company's
reportable  segments  for the years ended June 27, 1999, June 28, 1998, and June
29,  1997:




<TABLE>
<CAPTION>


                                                      JUNE 27,                     JUNE 28,                    JUNE 29,
                                                         1999                         1998                        1997
                                      ---------------------------  --------------------------  --------------------------
(In thousands)
NET SALES AND OPERATING REVENUES:
<S>                                           <C>                          <C>                         <C>
 Food and Equipment Distribution      $                   58,101   $                  58,491   $                  59,557
 Franchise and Other                                       7,906                       9,152                       9,446
 Intersegment revenues                                       847                       1,015                       1,015
                                      ---------------------------  --------------------------  --------------------------
   Combined                                               66,854                      68,658                      70,018
 Other revenues                                              287                         997                         120
 Less intersegment revenues                                 (847)                     (1,015)                     (1,015)
                                      ---------------------------  --------------------------  --------------------------
   Consolidated revenues                                  66,294                      68,640                      69,123
                                      ===========================  ==========================  ==========================

 DEPRECIATION AND AMORTIZATION:
 Food and Equipment Distribution      $                      579   $                     491   $                     482
 Franchise and Other                                         129                         272                         132
                                      ---------------------------  --------------------------  --------------------------
   Combined                                                  708                         763                         614
 Corporate administration and other                          163                         139                          93
                                      ---------------------------  --------------------------  --------------------------
   Depreciation and amortization                           871                         902                        707
                                      ===========================  ==========================  ==========================

 INTEREST EXPENSE:
 Food and Equipment Distribution      $                      344   $                     325   $                     424
 Franchise and Other                                           8                           8                           8
                                      ---------------------------  --------------------------  --------------------------
   Combined                                                  352                         333                         432
 Corporate administration and other                          172                         169                         230
                                      ---------------------------  --------------------------  --------------------------
   Interest Expense                                          524                         502                         662
                                      ===========================  ==========================  ==========================

 INTEREST INCOME:
 Food and Equipment Distribution      $                       72   $                      90   $                      67
 Franchise and Other                                           -                           -                           -
                                      ---------------------------  --------------------------  --------------------------
   Combined                                                   72                          90                          67
 Corporate administration and other                           11                          38                          54
                                      ---------------------------  --------------------------  --------------------------
   Interest Income                                            83                         128                         121
                                      ===========================  ==========================  ==========================

 OPERATING PROFIT :
 Food and Equipment Distribution (1)  $                    3,071   $                   4,597   $                   4,571
 Franchise and Other (1)                                   2,813                       3,442                       4,061
 Intersegment profit                                         216                         266                         224
                                      ---------------------------  --------------------------  --------------------------
   Combined                                                6,100                       8,305                       8,856
 Other profit or loss                                        287                         997                         120
 Less intersegment profit                                   (216)                       (266)                       (224)
 Corporate administration and other                       (2,075)                     (2,013)                     (1,892)
                                      ---------------------------  --------------------------  --------------------------
   Income before taxes                                     4,096                       7,023                       6,860
                                      ===========================  ==========================  ==========================
<FN>

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



<TABLE>
<CAPTION>


                                                        JUNE 27,                   JUNE 28,                   JUNE 29,
                                                           1999                       1998                       1997
                                       -------------------------  -------------------------  -------------------------
<S>                                    <C>                        <C>                        <C>
         (In thousands)
 CAPITAL EXPENDITURES:
 Food and Equipment Distribution       $                     391  $                     116  $                     173
 Franchise and Other                                          66                         36                        179
                                       -------------------------  -------------------------  -------------------------
   Combined                                                  457                        152                        352
 Corporate administration and other                          183                        210                        276
                                       -------------------------  -------------------------  -------------------------
   Consolidated capital expenditures                         640                        362                        628
                                       =========================  =========================  =========================

 ASSETS:
 Food and Equipment Distribution       $                  10,402  $                   9,963  $                  10,207
 Franchise and Other                                         999                      1,700                      2,379
                                       -------------------------  -------------------------  -------------------------
 Combined                                                 11,401                     11,663                     12,586
 Corporate administration and other                        7,185                     10,110                     11,724
                                       -------------------------  -------------------------  -------------------------
 Consolidated assets                                      18,586                     21,773                     24,310
                                       =========================  =========================  =========================

 GEOGRAPHIC INFORMATION (REVENUES):
 United States                         $                  64,990  $                  66,692  $                  64,922
 Foreign countries                                         1,304                      1,948                      4,201
                                       -------------------------  -------------------------  -------------------------
   Consolidated total                                     66,294                     68,640                     69,123
                                       =========================  =========================  =========================
</TABLE>


NOTE  N  -  QUARTERLY  RESULTS  OF  OPERATIONS  (UNAUDITED):

The  following  summarizes the unaudited quarterly results of operations for the
fiscal  years  ended  June  27, 1999 and June 28, 1998 (in thousands, except per
share  amounts):



<TABLE>
<CAPTION>


                                                                Quarter Ended
                                                                --------------
                                             September 27,   December 27,   March 28,   June 27,
                                                   1998           1998          1999       1999
                                          --------------  -------------  ----------  ---------
FISCAL YEAR 1999
REVENUES
<S>                                         <C>             <C>            <C>         <C>
                                          $       16,584  $      17,363  $   16,017  $  16,330

Gross Profit                                         793          1,162       1,313      1,352

Net Income                                           470            705         800        777

Basic earnings per share on net income              0.04           0.06        0.07       0.07

Diluted earnings per share on net income            0.04           0.06        0.07       0.07

                                                                Quarter Ended
                                                                ---------------
                                              September 28,   December 28,   March 29,  June 28,
FISCAL YEAR 1998                                    1997           1997        1998       1998
                                          --------------  -------------  ----------  ---------
Revenues                                  $       17,050  $      17,070  $   16,864  $  17,656

Gross Profit                                       1,793          1,914       1,505      2,313

Net Income                                         1,091          1,185       1,179      1,425

Basic earnings per share on net income              0.09           0.09        0.09       0.11

Diluted earnings per share on net income            0.08           0.09        0.09       0.11
</TABLE>

<TABLE>
<CAPTION>


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

                                                                      ADDITIONS
                                                                      ------------
                                                   BALANCE AT       CHARGED TO     CHARGED TO                    BALANCE
                                                   BEGINNING         COST AND        OTHER                        AT END
                                                   OF PERIOD          EXPENSE       ACCOUNTS    DEDUCTIONS (1) OF  PERIOD
                                                 ------------  -----------  -----------  ---------------  -----------
<S>                                              <C>           <C>          <C>          <C>              <C>
YEAR ENDED JUNE 27, 1999
Allowance for doubtful                           $      1,007  $       237  $         -  $         (212)  $     1,032
accounts and notes receivable

YEAR ENDED JUNE 28, 1998
Allowance for doubtful                           $      1,121  $       230  $         -  $         (344)  $     1,007
accounts and notes receivable

YEAR ENDED JUNE 29, 1997
Allowance for doubtful                           $        963  $       110  $         -  $           48   $     1,121
accounts and notes receivable
<FN>

(1)  Write-off  of  receivables,  net  of  recoveries.
</TABLE>

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

     There  are  no  events  to  report  under  this  item.


 PART  III


ITEM  10  -  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     The  information  required  by  this  Item  is  included  in  the Company's
definitive  Proxy Statement to be filed pursuant to Regulation 14A in connection
with  the  Company's  annual meeting of shareholders to be held in December 1999
(the  "Proxy  Statement"),  and  is  incorporated  herein  by  reference.

ITEM  11  -  EXECUTIVE  COMPENSATION

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

ITEM  12  -  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT

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

ITEM  13  -  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

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


<PAGE>
                                     PART IV

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


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

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

     3.     Exhibits:

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

          3.2     Amended  and  Restated  By-Laws  as  adopted  by  the Board of
Directors  on July 30, 1993 (filed as Exhibit 3.2 to the Company's Annual Report
on  Form 10-K for the fiscal year ended June 27, 1993 and incorporated herein by
reference).

          4.1     Provisions  regarding  Common  Stock  in  Article  IV  of  the
Restated  Articles  of  Incorporation,  as  amended (filed as Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the fiscal year ended June 28, 1998 and
incorporated  herein  by  reference).

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

          10.1     Amended  and  Restated Loan Agreement between the Company and
Wells  Fargo  Bank (Texas), N.A. dated August 28, 1997 (filed as Exhibit 10.1 to
the Company's Annual Report on Form 10-K for the fiscal year ended June 29, 1997
and  incorporated  herein  by  reference).

          10.2     First  Amendment  to  Amended  and  Restated  Loan  Agreement
between  the Company and Wells Fargo Bank (Texas), N.A. dated September 14, 1998
(filed  as  Exhibit  10.2  to  the  Company's Annual Report on Form 10-K for the
fiscal  year  ended  June  28,  1998  and  incorporated  herein  by  reference).

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

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

          10.5     Employment  Agreement  between  the  Company  and  C. Jeffrey
Rogers  dated October 23, 1997 (filed as Exhibit 10.1 to the Company's Quarterly
Report  on  Form  10-Q  for  the  fiscal  quarter  ended  September 28, 1997 and
incorporated  herein  by  reference).*

          10.6     Employment Agreement between the Company and Ronald W. Parker
dated  October 23, 1997 (filed as Exhibit 10.2 to the Company's Quarterly Report
on  Form  10-Q  for the fiscal quarter ended September 28, 1997 and incorporated
herein  by  reference).*

          10.7     1993  Stock  Award Plan of the Company (filed as Exhibit 10.9
to  the  Company's Annual Report on Form 10-K for the fiscal year ended June 26,
1994  and  incorporated  herein  by  reference).*

          10.8     1993 Outside Directors Stock Award Plan of the Company (filed
as Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year
ended  June  26,  1994  and  incorporated  herein  by  reference).*

          10.9     1992  Stock  Award Plan of the Company (filed as Exhibit 10.6
to  the  Company's Annual Report on Form 10-K for the fiscal year ended June 27,
1993  and  incorporated  herein  by  reference).*

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

          23.0     Consent  of  Independent  Accountants.

          27.0     Financial Data Schedule


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

(b)     No  reports  were  filed  on  Form  8-K during the fourth quarter of the
Company's  fiscal  year  1999.

<PAGE>
                                   SIGNATURES

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

Date:   September    22     ,  1999     By:      /s/  Shawn  Preator
          Shawn  Preator
          Controller  and  Treasurer
          (Principal  Accounting  Officer)

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

                  NAME  AND  POSITION                          DATE
-------------------------------------

/s/Steve  A.  Ungerman     September   22    ,  1999
----------------------     -------------------------
Steve  A.  Ungerman
Director  and  Chairman  of  the  Board

/s/C.  Jeffrey  Rogers     September     22  ,  1999
----------------------     -------------------------
C.  Jeffrey  Rogers
Director,  Vice  Chairman,  President  and
Chief  Executive  Officer
(Principal  Executive  Officer)

/s/Butler  E.  Powell     September       22,  1999
---------------------     -------------------------
Butler  E.  Powell
Director

/s/Ramon  D.  Phillips     September      22 ,  1999
----------------------     -------------------------
Ramon  D.  Phillips
Director

/s/F.  Jay  Taylor     September    22   ,  1999
------------------     -------------------------
F.  Jay  Taylor
Director

/s/Bobby  L.  Clairday     September  22     ,  1999
----------------------     -------------------------
Bobby  L.  Clairday
Director

/s/Ronald  W.  Parker     September     22  ,  1999
---------------------     -------------------------
Ronald  W.  Parker
Director,  Executive  Vice  President  and
Chief  Operating  Officer
(Principal  Financial  Officer)