--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

FOR THE QUARTER ENDED OCTOBER 9, 2005           COMMISSION FILE NUMBER 333-90817


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

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

401 BROAD HOLLOW ROAD, MELVILLE, NEW YORK                             11747-4714
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                          (ZIP CODE)

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

         INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
*YES      X                NO
    --------------           ---------------

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS
DEFINED IN RULE 12B-2 OF THE EXCHANGE ACT).   YES               NO    X
                                                 -----------       -------

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN
RULE 12B-2 OF THE EXCHANGE ACT). YES            NO   X
                                    ---------     ----------

THE NUMBER OF SHARES OF COMMON STOCK OF THE REGISTRANT OUTSTANDING AS OF
NOVEMBER 21, 2005 WAS 7,064,328.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
*THIS FORM 10-Q IS VOLUNTARILY SUBMITTED PURSUANT TO A REQUIREMENT CONTAINED IN
THE INDENTURE GOVERNING SBARRO, INC.'S SENIOR NOTES DUE 2009.


<PAGE>


                                  SBARRO, INC.

                                 FORM 10-Q INDEX
                                 ---------------


PART I.      FINANCIAL INFORMATION                                         PAGES


Consolidated Financial Statements:

     Balance Sheets - October 9, 2005 (unaudited) and January 2, 2005........3-4

     Statements of Operations (unaudited) - Forty Weeks and Twelve
        Weeks ended October 9, 2005 and October 3, 2004......................5-6

     Statements of Cash Flows (unaudited) - Forty Weeks ended
          October 9, 2005 and October 3, 2004................................7-8

     Notes to Unaudited Consolidated Financial Statements...................9-24

Management's Discussion and Analysis of Financial Condition and Results
    of Operations..........................................................25-34

Qualitative and Quantitative Disclosures of Market Risk.......................35

Controls and Procedures....................................................35-36

PART II.     OTHER INFORMATION................................................36






                                     Page 2
<PAGE>


PART I - FINANCIAL INFORMATION


ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS


                          SBARRO, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                     ASSETS
<TABLE>
<CAPTION>
                                                                                      (IN THOUSANDS)
                                                                       OCTOBER 9, 2005           JANUARY 2, 2005
                                                                       ---------------           ---------------
                                                                         (UNAUDITED)
<S>                                                                          <C>                       <C>
Current assets:
     Cash and cash equivalents                                               $43,549                   $63,000
     Receivables, net of allowance for doubtful
        accounts of $431 at October 9, 2005 and  January 2, 2005:
           Franchise                                                           2,048                     1,846
           Other                                                               1,894                     1,680
                                                                               -----                  --------
                                                                               3,942                     3,526

      Inventories                                                              2,035                     2,809
      Prepaid expenses                                                         9,821                     3,877
      Current portion of loans receivable from
          shareholders and officers                                                -                        46
                                                                          ----------                 ---------
          Total current assets                                                59,347                    73,258

Property and equipment, net                                                   83,689                    88,465
Trademarks                                                                   195,916                   195,916
Goodwill                                                                       9,204                     9,204
Deferred financing costs, net                                                  3,810                     4,521
Loans receivable from shareholders and officers,
      less
           current portion                                                     5,595                     5,602
Other assets                                                                   7,123                     7,647
                                                                          ----------                ----------
                                                                            $364,684                  $384,613
                                                                          ==========                ==========
</TABLE>


            See notes to unaudited consolidated financial statements.



                                     Page 3
<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (CONTINUED)

                       LIABILITIES & SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                            (IN THOUSANDS EXCEPT SHARE DATA)
                                                                       OCTOBER 9, 2005           JANUARY 2, 2005
                                                                       ---------------           ---------------
                                                                         (UNAUDITED)
<S>                                                                           <C>                      <C>
Current liabilities:
     Accounts payable                                                         $8,309                   $11,593
     Accrued expenses                                                         19,865                    20,748
     Accrued interest payable                                                  1,708                     8,181
     Current portion of mortgage payable                                         194                       182
                                                                            --------                  ---------
             Total current liabilities                                        30,076                    40,704

Deferred rent                                                                 10,171                    10,226

Long-term debt, net of original issue
     discount                                                                268,478                   268,349

Commitments and Contingencies

Shareholders' equity:
     Preferred stock, $1 par value; authorized
          1,000,000 shares; none issued                                            -                         -
     Common stock, $.01 par value; authorized
          40,000,000 shares; issued and outstanding
          7,064,328 shares                                                        71                        71
     Additional paid-in capital                                                   10                        10
     Retained earnings                                                        55,878                    65,253
                                                                          ----------                ----------
     Total shareholders' equity                                               55,959                    65,334
                                                                          ----------                ----------
                                                                            $364,684                  $384,613
                                                                          ==========                ==========
</TABLE>




            See notes to unaudited consolidated financial statements.





                                     Page 4
<PAGE>



                          SBARRO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                               FOR THE FORTY WEEKS ENDED
                                                                                    (IN THOUSANDS)
                                                                       OCTOBER 9, 2005           OCTOBER 3, 2004
                                                                       ---------------           ---------------
<S>                                                                         <C>                       <C>
Revenues:
     Restaurant sales                                                       $236,318                  $233,587
     Franchise related income                                                  9,285                     8,885
     Real estate and other                                                     4,884                     4,762
                                                                          ----------                ----------
            Total revenues                                                  250,487                    247,234
                                                                          ----------                ----------

Costs and expenses:
     Cost of food and paper products                                          49,026                    52,015
     Payroll and other employee benefits                                      66,198                    66,109
     Other operating costs                                                    88,133                    86,039
     Depreciation and amortization                                            12,239                    12,388
     General and administrative costs                                         19,867                    18,798
     Asset impairment and restaurant closings                                    300                       560
                                                                          ----------                ----------
         Total costs and expenses                                            235,763                   235,909
                                                                          ----------                ----------

Operating income                                                              14,724                    11,325
                                                                          ----------                ----------

Other (expense) income:
     Interest expense                                                        (23,679)                  (23,697)
     Interest income                                                             869                       468
     Equity in net income (loss) of unconsolidated
       affiliates                                                               (254)                      678
                                                                          ----------                ----------
         Net other expense                                                   (23,064)                  (22,551)
                                                                          ----------                ----------

Loss before income taxes                                                      (8,340)                  (11,226)

Income taxes                                                                   1,035                       520
                                                                          ----------                ----------

Net loss                                                                     ($9,375)                 ($11,746)
                                                                          ==========                ==========
</TABLE>

            See notes to unaudited consolidated financial statements.


                                     Page 5
<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               FOR THE TWELVE WEEKS ENDED
                                                                                    (IN THOUSANDS)
                                                                       OCTOBER 9, 2005           OCTOBER 3, 2004
                                                                       ---------------           ---------------

<S>                                                                        <C>                       <C>
Revenues:
     Restaurant sales                                                      $74,533                   $74,057
     Franchise related income                                                2,927                     2,894
     Real estate and other                                                   1,866                     1,355
                                                                         ----------                ----------
            Total revenues                                                  79,326                    78,306

Costs and expenses:
     Cost of food and paper products                                        15,280                    16,069
     Payroll and other employee benefits                                    21,120                    20,258
     Other operating costs                                                  26,375                    26,578
     Depreciation and amortization                                           3,609                     3,726
     General and administrative costs                                        5,613                     5,328
     Asset impairment and restaurant closings                                  100                       185
                                                                         ----------                ----------
         Total costs and expenses                                           72,097                    72,144
                                                                         ----------                ----------

Operating income                                                             7,229                     6,162


Other (expense) income:
     Interest expense                                                       (7,102)                   (7,114)
     Interest income                                                           251                       144
     Equity in net loss of unconsolidated affiliates                          (230)                      (70)
                                                                         ----------                ----------
         Net other expense                                                  (7,081)                   (7,040)
                                                                         ----------                ----------

Income (loss) before income taxes                                              148                      (878)

Income taxes                                                                   471                       151
                                                                         ----------                ----------


Net loss                                                                     ($323)                  ($1,029)
                                                                         ==========                ==========
</TABLE>



            See notes to unaudited consolidated financial statements.


                                     Page 6
<PAGE>



                          SBARRO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                                          FOR THE FORTY WEEKS ENDED
                                                                                                (IN THOUSANDS)
                                                                                    OCTOBER 9, 2005      OCTOBER 3, 2004
                                                                                    ---------------      ---------------
<S>                                                                                        <C>                  <C>
OPERATING ACTIVITIES:
       Net Loss                                                                            ($9,375)             ($11,746)
       Adjustments to reconcile net loss to net cash
          used in operating activities:
             Depreciation and amortization                                                  12,239                12,388
             Amortization of senior notes discount                                             321                   292
             Amortization of deferred financing costs                                          711                   740
             Asset impairment and restaurant closings                                          300                   560
             Decrease in deferred rent, net                                                     55                   282
             Equity in net (income) loss of unconsolidated affiliates                          254                  (678)
                                                                                              ----                 -----
                                                                                             4,505                 1,838

       Changes in operating assets and liabilities
             Increase in receivables                                                          (416)                 (400)
             Decrease in inventories                                                           774                   191
             Increase in prepaid expenses                                                   (5,944)               (6,770)
             Decrease in other assets                                                           22                   207
             Decrease in accounts payable and accrued expenses                              (3,694)               (2,225)
             Decrease in accrued interest expenses                                          (6,473)               (6,473)
                                                                                            -------               -------

                  Net cash used in operating activities                                   ($11,226)             ($13,632)
                                                                                          =========             =========

</TABLE>



                                   (Continued)



                                     Page 7
<PAGE>





                          SBARRO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                          FOR THE FORTY WEEKS ENDED
                                                                                                (IN THOUSANDS)
                                                                                    OCTOBER 9, 2005      OCTOBER 3, 2004
                                                                                    ---------------      ---------------

<S>                                                                                       <C>                   <C>
INVESTING ACTIVITIES:
       Purchase of property plant and equipment                                           ($9,029)              ($6,206)
       Proceeds from sale of joint venture property and equipment                             300                     -
       Distribution received from unconsolidated affiliates                                   603                   305
                                                                                              ----                  ---

             Net cash used in investing activities                                         (8,126)               (5,901)


FINANCING ACTIVITIES:
       Mortgage principal repayment                                                          (151)                 (139)
       Tax distributions                                                                        -                  (682)
       Reduction in loans receivable from officers                                             52                   506
                                                                                               ---                  ---

             Net cash used in financing activities                                            (99)                 (315)
                                                                                              ----                 -----

       Decrease in cash and cash equivalent                                               (19,451)              (19,848)

       Cash and cash equivalents at beginning of period                                    63,000                56,409
                                                                                           ------                ------

       Cash and cash equivalents at end of period                                         $43,549               $36,561
                                                                                          =======               =======


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

       Cash paid for:
             Income taxes                                                                  $1,448                  $285
                                                                                           ======                  ====
             Interest                                                                     $29,118               $29,138
                                                                                          =======               =======
</TABLE>


            See notes to unaudited consolidated financial statements.



                                     Page 8
<PAGE>


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


1.       BASIS OF PRESENTATION:

         The accompanying  unaudited consolidated financial statements have been
         prepared  in  accordance  with  the  instructions  for  Form  10-Q  and
         Regulation  S-X related to interim  period  financial  statements  and,
         therefore,  do not include all  information  and footnotes  required by
         generally accepted accounting principles in the United States. However,
         in the opinion of our management, all adjustments (consisting of normal
         recurring  adjustments  and accruals)  considered  necessary for a fair
         presentation of our consolidated  financial position at October 9, 2005
         and  consolidated  results of  operations  and cash flows for the forty
         weeks ended October 9, 2005 and October 3, 2004 have been included. The
         results  of  operations  for  interim   periods  are  not   necessarily
         indicative  of the results  that may be expected  for the entire  year.
         Reference should be made to the annual financial statements,  including
         footnotes  thereto,  included in our Annual Report on Form 10-K for the
         year ended January 2, 2005.

         Certain  items  in  the  financial   statements   presented  have  been
         reclassified to conform to the 2005 presentation.

2.       RECENT ACCOUNTING PRONOUNCEMENTS

         The Financial  Accounting  Standards  Board ("FASB")  issued FASB Staff
         Position (FSP) FAS 13-1, "Accounting for Rental Costs Incurred during a
         Construction   Period."   This  FSP   affects   companies   engaged  in
         construction  activities on buildings  and/or grounds  accounted for as
         operating  leases. It requires the expensing of rental costs associated
         with these leases,  starting on the date the lessee is given control of
         the premises  effective for reporting  periods beginning after December
         15,  2005.  We  previously  had a policy of  capitalizing  rental costs
         during construction and have changed our policy effective  immediately.
         We do not  anticipate  that this change will have a material  effect on
         our consolidated financial statements.

3.       DEBT:

         SENIOR NOTES:

         The $255  million  of 11%  senior  notes that we issued in 1999 are due
         September 15, 2009.  Interest is payable  semi-annually on March 15 and
         September  15 of each year.  Our payment  obligations  under the senior
         notes  are  jointly,   severally,   unconditionally   and   irrevocably
         guaranteed  by all of  Sbarro's  current  Restricted  Subsidiaries  (as
         defined in the  indenture  under which the senior notes are issued) and
         are to be similarly  guaranteed by our future Restricted  Subsidiaries.
         The senior notes and the  subsidiary  guarantees  are senior  unsecured
         obligations of Sbarro and the guaranteeing subsidiaries,  respectively,
         ranking equally in right of payment to all of our and their  respective
         present and future senior debt, including amounts outstanding under the
         bank line of credit agreement discussed below.



                                     Page 9
<PAGE>

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

         The indenture  permits  redemption of the senior notes at our option at
         varying  redemption  prices and requires us to offer to purchase senior
         notes in the  event of a  Change  of  Control  and in  connection  with
         certain Asset Sales (each as defined).

         The  indenture  contains  various  covenants  that limit our ability to
         borrow  funds,  other  than  certain  permitted  indebtedness,  to make
         "restricted payments" including, among other things, dividend payments,
         and  to  make   investments   in,  among  other  things,   unrestricted
         subsidiaries.  The  indenture  permits  us  to  make  distributions  to
         shareholders  pursuant  to a tax payment  agreement  between us and our
         shareholders   that  is  designed  to  approximate  the  income  taxes,
         including estimated taxes, that would be payable by our shareholders if
         their only income were their  pro-rata  share of our taxable income and
         such income were taxed at the highest  applicable  federal and New York
         State marginal income tax rates.

         Among other covenants,  the indenture requires that, in order for us to
         borrow,  our  consolidated  interest  ratio coverage (as defined in the
         indenture),  after  giving pro forma  effect to the interest on the new
         borrowing,  for the four most recently ended fiscal quarters must be at
         least 2.5 to 1. As of October 9, 2005, that ratio was 1.4 to 1.00. As a
         result,  we are not  presently  able to  borrow  funds  except  for the
         specifically  permitted  indebtedness,  including  up to $75 million of
         revolving credit loans.

         In order to make restricted  payments,  that ratio must be at least 2.0
         to 1, after giving pro forma effect to the  restricted  payment and, in
         any event, is limited in dollar amount pursuant to a formula  contained
         in the  indenture.  We refer to the amount that is available  for us to
         make dividends and other restricted payments as the "restricted payment
         availability."   We  cannot  make   restricted   payments  (other  than
         distributions  pursuant to the tax payment agreement) until we meet the
         2.0 to 1  consolidated  interest  ratio  coverage  and we increase  the
         restricted  payment  availability by approximately  $36.6 million,  and
         then only to the extent of any excess over that amount.

         LINE OF CREDIT:

         In July 2005,  we  obtained a three year line of credit  from  Commerce
         Bank to replace our former uncommitted revolving credit facility. Under
         the  Commerce  Bank line of credit,  we  currently  have the ability to
         borrow up to $10 million,  with a sub-limit for letters of credit of $5
         million.  Interest  applicable to the loans under the line of credit is
         at the bank's  LIBOR rate plus 1.5% at the time of any  borrowings  for
         interest periods of 1, 2, 3 or 6 months. The line expires in July 2008.
         The credit facility  contains  various  covenants,  including a minimum
         coverage  ratio of at least 1.0 to 1.0 at the end of each  quarter on a
         rolling four quarter basis.  The minimum  coverage ratio is primarily a
         ratio of EBITDA (less unfinanced  capital  expenditures) to the current
         maturity of long term  indebtedness  and  interest  expense.  There are
         currently $2.1 million of letters of credit  outstanding  under the new
         facility.






                                    Page 10
<PAGE>

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


         MORTGAGE:

         In March 2000,  one of our  subsidiaries  obtained a $16 million,  8.4%
         loan due in 2010,  secured by a mortgage on our corporate  headquarters
         building.  The loan is payable in monthly installments of principal and
         interest of $0.1 million. The outstanding principal balance of the loan
         as of  October  9,  2005 was  $15.2  million.  The  mortgage  agreement
         contains various covenants, including a requirement that the subsidiary
         maintain a minimum  ratio of EBITDA to annual debt  service of at least
         1.2 to 1.0.

         We were in  compliance  with all  covenants  in the  indenture  for the
         senior notes, line of credit and mortgage as of October 9, 2005.



         GUARANTEE ARRANGEMENTS PERTAINING TO OTHER CONCEPTS:

         We are party to separate financial  guarantees to a bank for two of our
         other joint venture  concepts.  One of these joint venture concepts was
         not in compliance  with its covenants with respect to the twelve months
         ended  October 9, 2005.  Our guarantee is limited to the percent of our
         investment in this  concept.  A waiver of this  noncompliance  has been
         obtained.  There can be no assurance  that this joint  venture  concept
         will not need to obtain  amendments or additional  waivers of covenants
         under its debt agreement.  To varying degrees,  our guarantee  involves
         elements of performance  and credit risk. The possibility of our having
         to honor our guarantee is largely  dependent upon the future  operation
         of the other concepts.



                                    Page 11
<PAGE>

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


4.       GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS:

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

         The following condensed consolidating financial information presents:

         (1)      Condensed unaudited consolidating balance sheets as of October
                  9,  2005 and  January  2,  2005 and  unaudited  statements  of
                  operations  for the forty weeks and twelve weeks ended October
                  9, 2005 and October 3, 2004 and  unaudited  statements of cash
                  flows for the forty weeks ended October 9, 2005 and October 3,
                  2004 of (a)  Sbarro,  Inc.,  the  parent,  (b)  the  guarantor
                  subsidiaries as a group, (c) the nonguarantor  subsidiaries as
                  a group and (d) Sbarro on a consolidated basis.

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

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




                                    Page 12
<PAGE>


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


                           CONSOLIDATING BALANCE SHEET
                              AS OF OCTOBER 9, 2005
                                 (IN THOUSANDS)
                                   (UNAUDITED)
                                     ASSETS


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

<S>                                             <C>           <C>                <C>             <C>               <C>
Current assets:

  Cash and cash equivalents                     $  38,213        $   4,153        $   1,183              -         $  43,549
  Receivables less allowance for
      doubtful accounts of $431
      Franchise                                     2,048                -                -              -             2,048
      Other                                           451            1,149              294              -             1,894
                                                ---------        ---------        ---------      ---------         ---------
                                                    2,499            1,149              294              -             3,942

  Inventories                                         905            1,074               56              -             2,035
  Prepaid expenses                                  7,702            2,129              (10)             -             9,821
                                                ---------        ---------        ---------      ---------         ---------
      Total current assets                         49,319            8,505            1,523              -            59,347

  Intercompany receivables                          2,403          444,770           (4,371)      (442,802)                -

  Investment in subsidiaries                       67,570            1,945                -        (69,515)                -

  Property and equipment, net                      33,301           47,450            2,938              -            83,689
  Trademarks, net                                 195,916                -                -              -           195,916
  Goodwill                                          9,204                -                -              -             9,204
  Deferred financing costs, net                     3,644              166                -              -             3,810
  Loans receivable from shareholders and            5,595                -                -              -             5,595
         officers
  Other assets                                      5,561            1,537               25              -             7,123
                                                ---------        ---------        ---------      ---------         ---------
                                                $ 372,513        $ 504,373        $     115      $(512,317)        $ 364,684
                                                =========        =========        =========      =========         =========


</TABLE>



                                    Page 13
<PAGE>

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

                           CONSOLIDATING BALANCE SHEET
                                   (CONTINUED)
                              AS OF OCTOBER 9, 2005
                        (IN THOUSANDS EXCEPT SHARE DATA)
                                   (UNAUDITED)
                        LIABILITIES & SHAREHOLDERS EQUITY



<TABLE>
<CAPTION>
                                                                  GUARANTOR     NONGUARANTOR                   CONSOLIDATED
                                                    PARENT       SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS        TOTAL
                                                    ------       ------------   ------------   ------------        -----
<S>                                             <C>           <C>                <C>             <C>               <C>
Current liabilities:
     Accounts payable                               $   7,747      $     123      $     439              -          8,309
     Accrued expenses                                  16,863          2,622            380              -         19,865
     Accrued interest payable                           1,708              -              -              -          1,708
     Current portion of mortgage payable                    -            194              -              -            194
                                                    ---------      ---------      ---------      ---------      ---------
         Total current liabilities                     26,318          2,939            819              -         30,076

     Intercompany payables                            442,802              -              -       (442,802)             -

     Deferred rent                                      9,860              -            311              -         10,171

     Long-term debt, net of original issue
         discount                                     253,499         14,979              -              -        268,478


  Shareholders' equity (deficit):
     Preferred stock, $1 par value;
       authorized 1,000,000 shares;
       none issued                                          -              -              -              -              -
     Common stock, $.01 par value;
       authorized 40,000,000 shares;
       issued and outstanding 7,064,328
       shares                                              71              -              -              -             71
     Additional paid-in capital                       (65,479)       133,671          3,018        (71,200)            10
     Retained earnings (deficit)                     (294,559)       352,784         (4,033)         1,686         55,878
                                                    ---------      ---------      ---------      ---------      ---------

                                                     (359,967)       486,455         (1,015)       (69,514)        55,959
                                                    ---------      ---------      ---------      ---------      ---------
                                                    $ 372,512      $ 504,373      $     115      $(512,316)     $ 364,684
                                                    =========      =========      =========      =========      =========

</TABLE>





                                    Page 14
<PAGE>

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


                           CONSOLIDATING BALANCE SHEET
                              AS OF JANUARY 2, 2005
                                 (IN THOUSANDS)
                                     ASSETS


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

<S>                                             <C>              <C>            <C>            <C>              <C>
Current assets:

    Cash and cash equivalents                   $57,150          $4,680         $1,170         $      -         $63,000
    Receivables, net of allowance for
      doubtful accounts of $431
           Franchise                              1,846               -              -                -           1,846
           Other                                     53           1,053            574                -           1,680
                                                     --           -----            ---      -----------           -----
                                                  1,899           1,053            574                -           3,526

     Inventories                                  1,204           1,465            140                -           2,809
     Prepaid expenses                             4,020            (199)            56                -           3,877
     Current portion of loans receivable
           from shareholders and officers            46               -              -                -              46
                                               --------       ---------      ---------      -----------          ------
           Total current assets                  64,319           6,999          1,940                -          73,258

Intercompany receivables                            406         439,364         (1,875)        (437,895)              -

Investment in subsidiaries                       67,570           1,944              -          (69,514)              -

Property and equipment, net                      33,307          50,799          4,359                -          88,465
Trademarks, net                                 195,916               -              -                -         195,916
Goodwill, net                                     9,204               -              -                -           9,204
Deferred financing costs, net                     4,326             195              -                -           4,521
Loans receivable from officers, less
    current portion                               5,602               -              -                -           5,602
Other assets                                      5,906           1,720             21                -           7,647
                                                  -----           -----             --         --------           -----
                                               $386,556        $501,021         $4,445        $(507,409)       $384,613
                                               ========        ========         ======        ==========       ========
</TABLE>








                                    Page 15
<PAGE>

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


                           CONSOLIDATING BALANCE SHEET
                                   (CONTINUED)
                              AS OF JANUARY 2, 2005
                        (IN THOUSANDS EXCEPT SHARE DATA)
                       LIABILITIES & SHAREHOLDERS' EQUITY


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

<S>                                                     <C>               <C>             <C>             <C>             <C>
Current liabilities:
     Accounts payable                                   $10,877           $190            $526            $    -         $11,593
     Accrued expenses                                    16,802          2,474           1,472                 -          20,748
     Accrued interest payable                             8,181              -               -                 -           8,181
     Current portion of mortgage payable                     -             182               -                 -             182
                                                        -------         ------       ---------          --------         -------
         Total current liabilities                       35,860          2,846           1,998                 -          40,704
                                                        -------         ------       ---------          --------         -------

Intercompany payables                                   437,895              -               -          (437,895)              -
                                                        -------         ------       ---------          --------         -------

Deferred rent                                             9,811              -             415                 -          10,226
                                                        -------         ------       ---------          --------         -------

Long-term debt, net of original issue discount          253,207         15,142               -                 -         268,349
                                                        -------         ------       ---------          --------         -------


Shareholders' equity (deficit):
     Preferred stock, $1 par value;
      authorized   1,000,000 shares; None issued
     Common stock, $.01 par value: authorized
      40,000,000 shares; issued and outstanding
      7,064,328 shares                                       71              -               -                 -              71
     Additional paid-in capital                         (65,479)       133,671           3,018           (71,200)             10
     Retained earnings (deficit)                       (284,809)       349,362            (986)            1,686          65,253
                                                       ---------       -------            -----            -----          ------
                                                       (350,217)       483,033           2,032           (69,514)         65,334
                                                       ---------       -------           -----           --------         ------
                                                       $386,556       $501,021          $4,445         $(507,409)       $384,613
                                                       ========       ========          ======         ==========       ========

</TABLE>






                                    Page 16
<PAGE>

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


                      CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE FORTY WEEKS ENDED OCTOBER 9, 2005
                                 (IN THOUSANDS)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                  GUARANTOR     NONGUARANTOR                   CONSOLIDATED
                                                    PARENT       SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS        TOTAL
                                                    ------       ------------   ------------   ------------        -----
<S>                                             <C>              <C>            <C>            <C>               <C>
 Revenues:
      Restaurant sales                              $ 105,020      $ 123,576      $   7,722              -        236,318
      Franchise related income                          9,285              -              -              -          9,285
      Real estate and other                             2,675          2,192             17              -          4,884
      Intercompany charges                                 50              -              -            (50)             -
                                                    ---------      ---------      ---------      ---------      ---------

          Total revenues                              117,030        125,768          7,739            (50)       250,487
                                                    ---------      ---------      ---------      ---------      ---------

 Costs and expenses:
      Cost of food and paper products                  19,656         27,153          2,217              -         49,026
      Payroll and other employee benefits              28,819         34,447          2,932              -         66,198
      Other operating costs                            39,997         45,985          2,151              -         88,133
      Depreciation and amortization                     5,525          6,215            499              -         12,239
      General and administrative                       12,023          7,396            448              -         19,867
      Asset impairment and restaurant
           closings                                       300              -              -              -            300
      Intercompany charges                                  -             50              -            (50)             -
                                                    ---------      ---------      ---------      ---------      ---------

        Total costs and expenses                      106,320        121,246          8,247            (50)       235,763
                                                    ---------      ---------      ---------      ---------      ---------

 Operating income (loss)                               10,710          4,522           (508)             -         14,724

 Other (expense) income:
      Interest expense                                (22,582)        (1,097)             -              -        (23,679)
      Interest income                                     864              -              5              -            869
      Equity in net income of unconsolidated
          affiliates                                     (254)             -              -              -           (254)
                                                    ---------      ---------      ---------      ---------      ---------

        Net other expense                             (21,972)        (1,097)             5              -        (23,064)
                                                    ---------      ---------      ---------      ---------      ---------

 Income (loss) before income taxes                    (11,262)         3,425           (503)             -         (8,340)

 Income taxes                                           1,035              -              -              -          1,035
                                                    ---------      ---------      ---------      ---------      ---------

 Net income (loss)                                  $ (12,297)     $   3,425      $    (503)       $     -      $  (9,375)
                                                    =========      =========      =========      =========      =========

</TABLE>




                                    Page 17
<PAGE>

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


                      CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE FORTY WEEKS ENDED OCTOBER 3, 2004
                                 (IN THOUSANDS)
                                   (UNAUDITED)

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

<S>                                          <C>             <C>             <C>                             <C>
Revenues:
    Restaurant sales                         $101,279        $121,128        $11,180                -        $233,587
    Franchise related income                    8,885               -              -                -           8,885
    Real estate and other                       2,569           2,193              -                -           4,762
    Intercompany charges                        8,319               -              -          ($8,319)              -
                                              -------         -------         ------           -------        -------
       Total revenues                         121,052         123,321         11,180           (8,319)        247,234
                                              -------         -------         ------           -------        -------

Cost and expenses:
    Cost of food and paper products            21,064          27,898          3,053                -          52,015
    Payroll and other employee benefits        26,389          35,968          3,752                -          66,109
    Other operating costs                      39,812          43,041          3,186                -          86,039
    Depreciation and amortization               5,345           6,346            697                -          12,388
    General and administrative                 11,148           7,626             24                -          18,798
    Asset impairment and restaurant
            closings                              560               -              -                -             560
    Intercompany charges                            -           8,319              -           (8,319)              -
                                              -------           -----              -           -------              -
              Total costs and expenses        104,318         129,198         10,712           (8,319)        235,909
                                              -------         -------         ------           -------        -------

Operating income (loss)                        16,734          (5,877)           468                -          11,325
                                               ------          -------           ---                -          ------

Other (expense) income:
      Interest expense                        (22,588)         (1,109)             -                -         (23,697)
      Interest income                             468               -              -                -             468
      Equity in net income of
            unconsolidated affiliates             678               -              -                -             678

      Net other expense                       (21,442)         (1,109)             -                -         (22,551)
                                              -------         -------         ------           -------        -------

 Income (loss) before income taxes
     (credit)                                  (4,708)         (6,986)           468                -         (11,226)

Income taxes (credit)                             231             310            (21)               -             520
                                              -------         -------         ------           -------        -------

Net income (loss)                             ($4,939)        ($7,296)          $489                -        ($11,746)
                                              ========        ========          ====           =======       =========

</TABLE>




                                    Page 18
<PAGE>



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


                      CONSOLIDATING STATEMENT OF OPERATIONS
                   FOR THE TWELVE WEEKS ENDED OCTOBER 9, 2005
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  GUARANTOR     NONGUARANTOR                   CONSOLIDATED
                                                    PARENT       SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS        TOTAL
                                                    ------       ------------   ------------   ------------        -----
<S>                                                     <C>           <C>            <C>          <C>             <C>
Revenues:
     Restaurant sales                                   $ 33,937      $ 38,396      $  2,200             -        74,533
     Franchise related income                              2,927             -             -             -         2,927
     Real estate and other                                 1,200           665             1             -         1,866
     Intercompany charges                                     15             -             -           (15)            -
                                                        --------      --------      --------      --------      --------

         Total revenues                                   38,079        39,061         2,201           (15)       79,326
                                                        --------      --------      --------      --------      --------

Costs and expenses:
     Cost of food and paper products                       6,252         8,419           609             -        15,280
     Payroll and other employee benefits                   9,411        10,863           846             -        21,120
     Other operating costs                                12,055        13,830           490             -        26,375
     Depreciation and amortization                         1,580         1,878           151             -         3,609
     General and administrative                            3,433         2,055           125             -         5,613
     Asset impairment and restaurant
          closings                                           100             -             -             -           100
     Intercompany charges                                      -            15             -           (15)            -
                                                        --------      --------      --------      --------      --------

       Total costs and expenses                           32,831        37,060         2,221           (15)       72,097
                                                        --------      --------      --------      --------      --------

Operating income (loss)                                    5,248         2,001           (20)            -         7,229

Other (expense) income:
     Interest expense                                     (6,774)         (328)            -             -        (7,102)
     Interest income                                         249             -             2             -           251
     Equity in net income of unconsolidated
         affiliates                                         (230)            -             -             -          (230)
                                                        --------      --------      --------      --------      --------

       Net other expense                                  (6,755)         (328)            2             -        (7,081)
                                                        --------      --------      --------      --------      --------

Income (loss) before income taxes                         (1,507)        1,673           (18)            -           148

Income taxes                                                 471             -             -             -           471
                                                        --------      --------      --------      --------      --------

Net income (loss)                                       $ (1,978)     $  1,673      $    (18)     $      -      $   (323)
                                                        ========      ========      ========      ========      ========

</TABLE>


                                    Page 19
<PAGE>


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


                      CONSOLIDATING STATEMENT OF OPERATIONS
                   FOR THE TWELVE WEEKS ENDED OCTOBER 3, 2004
                                 (IN THOUSANDS)
                                   (UNAUDITED)

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

<S>                                           <C>             <C>             <C>            <C>              <C>
Revenues:
    Restaurant sales                          $32,627         $37,980         $3,450                -         $74,057
    Franchise related income                    2,894               -              -                -           2,894
    Real estate and other                         705             650              -                -           1,355
    Intercompany charges                        3,334               -              -          ($3,334)              -
                                               ------          ------          -----           -------         ------
       Total revenues                          39,560          38,630          3,450           (3,334)         78,306
                                               ------          ------          -----           -------         ------

Cost and expenses:
    Cost of food and paper products             6,650           8,506            913                -          16,069
    Payroll and other employee benefits         8,054          11,078          1,126                -          20,258
    Other operating costs                      12,535          13,045            998                -          26,578
    Depreciation and amortization               1,584           1,931            211                -           3,726
    General and administrative                  3,846           1,609           (127)               -           5,328
    Asset impairment and restaurant
        closings                                  185               -              -                -             185
    Intercompany charges                            -           3,334              -           (3,334)              -
                                               ------          ------          -----           -------         ------
         Total costs and expenses              32,854          39,503          3,121           (3,334)         72,144
                                               ------          ------          -----           -------         ------

Operating (loss) income                         6,706            (873)           329                -           6,162
                                               ------          ------          -----           -------         ------


Other (expense) income:
    Interest expense                           (6,788)           (326)             -                -          (7,114)
    Interest income                               144               -              -                -             144
    Equity in net income of
         unconsolidated affiliates                (70)              -              -                -             (70)
                                               ------          ------          -----           -------         ------
      Net other expense                        (6,714)           (326)             -                -          (7,040)
                                               ------          ------          -----           -------         ------

Income (loss) before income taxes                  (8)         (1,199)           329                -            (878)

Income taxes (credit)                              63             104            (16)               -             151
                                               ------          ------          -----           -------         ------

Net income (loss)                                ($71)        ($1,303)          $345                -         ($1,029)
                                               =======        ========          ====           =======        ========
</TABLE>







                                    Page 20
<PAGE>

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


                      CONSOLIDATING STATEMENT OF CASH FLOWS
                    FOR THE FORTY WEEKS ENDED OCTOBER 9, 2005
                                 (IN THOUSANDS)
                                   (UNAUDITED)

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

Net Loss                                                 (12,297)         3,425           (503)             -         (9,375)
Adjustments to reconcile net loss to net cash
  used in operating activities:
     Depreciation & Amortization                           5,525          6,215            499              -         12,239
     Amortization of senior notes discount                   292             29              -              -            321
     Amortization of deferred financing costs                711              -              -              -            711
     Assets impairment and restaurant closings               300              -              -              -            300
     Increase (decrease) in deferred rent, net               (23)           182           (104)             -             55
     Equity in net loss of unconsolidated affiliates         254              -              -              -            254
                                                         --------    -----------   ------------   ------------      ---------
                                                          (5,238)         9,851           (108)             -          4,505

Changes in operating assets and liabilities
  (Increase) decrease in receivables                        (600)           (96)           280              -           (416)
  (Increase) decrease in inventories                         299            391             84              -            774
  (Increase) in prepaid expenses                          (3,681)        (2,328)            65              -         (5,944)
  (Increase) decrease in other assets                         25             (1)            (2)             -             22
  Decrease in accounts payable and accrued expenses       (3,064)            80           (710)             -         (3,694)
  Increase in accrued interest expenses                   (6,473)             -              -              -         (6,473)
                                                         --------    -----------   ------------   ------------      ---------

Net cash provided by (used in) operating activities      (18,732)         7,897           (391)             -        (11,226)
                                                         --------    -----------   ------------   ------------      ---------

</TABLE>




                                    Page 21
<PAGE>

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


                      CONSOLIDATING STATEMENT OF CASH FLOWS
                                   (CONTINUED)
                    FOR THE FORTY WEEKS ENDED OCTOBER 9, 2005
                                 (IN THOUSANDS)
                                   (UNAUDITED)

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

INVESTING ACTIVITIES:
---------------------
Purchase of property plant and equipment                       ($ 5,464)     ($ 3,331)     ($   234)              -        ($ 9,029)
Proceeds from sale of joint venture property and equipment          300             -             -               -             300
Distribution received from unconsolidated affiliates                603             -             -               -             603
                                                               ---------    -----------   ------------   ------------      ---------
Net cash used in investing activities                            (4,561)       (3,331)         (234)              -          (8,126)
                                                               ---------    -----------   ------------   ------------      ---------

FINANCING ACTIVITIES:
Mortgage principal repayment                                          -          (151)            -               -            (151)
Reduction in loans receivable from officers                          52             -             -               -              52
Intercompany balances                                             4,307        (4,944)          637               -               -
                                                               ---------    -----------   ------------   ------------      ---------

Net cash used in financing activities                             4,359        (5,095)          637               -             (99)

Decrease in cash and cash equivalent                            (18,934)         (529)           12               -         (19,451)

Cash and cash equivalents at beginning of period                 57,150         4,680         1,170               -          63,000
                                                               ---------    -----------   ------------   ------------      ---------

Cash and cash equivalents at end of period                     $ 38,216      $  4,151      $  1,182         $     -        $ 43,549
                                                               =========    ===========   ============   ============      =========


</TABLE>



                                    Page 22
<PAGE>

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


                      CONSOLIDATING STATEMENT OF CASH FLOWS
                    FOR THE FORTY WEEKS ENDED OCTOBER 3, 2004
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   GUARANTOR      NONGUARANTOR                     CONSOLIDATED
                                                     PARENT      SUBSIDIARIES     SUBSIDIARIES     ELIMINATIONS        TOTAL
                                                     ------      ------------     ------------     ------------        -----
OPERATING ACTIVITIES:
---------------------
<S>                                                  <C>            <C>               <C>                 <C>       <C>
Net (loss) income                                    ($4,939)       ($7,296)          $489                $-        ($11,746)
   Adjustments to reconcile net income (loss)
      to net cash provided by (used in)
      operating activities
          Depreciation and amortization                5,258          6,433            697                 -          12,388
          Amortization of senior notes discount          292              -              -                 -             292
          Amortization of deferred financing             711             29              -                 -             740
          Asset impairment and restaurant                                                -
              closings                                   560              -              -                 -             560
   Increase in deferred rent, net                        272             66            (56)                -             282
   Equity in net income of unconsolidated
       affiliates                                       (678)             -              -                 -            (678)
                                                     --------        -------        -------           -------        --------
                                                       1,476           (768)         1,130                 -           1,838

Changes in operating assets and liabilities:
   Decrease (increase) in receivables                   (169)           (86)          (145)                -            (400)
   Increase in inventories                               138             53              -                 -             191
   Increase in prepaid expenses                       (4,024)        (2,439)          (307)                -          (6,770)
   Decrease (increase) in other assets                  (951)             -            336               822             207
   Decrease in accounts payable and accrued
       expenses                                       (1,654)           287           (121)             (737)         (2,225)
   Increase in accrued interest payable               (6,473)             -              -                 -          (6,473)
                                                     --------        -------        -------           -------        --------

 Net cash provided by (used in) operating
      activities                                     (11,657)        (2,953)           893                85         (13,632)
                                                     --------        -------        -------           -------        --------

</TABLE>





                                    Page 23
<PAGE>

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


                      CONSOLIDATING STATEMENT OF CASH FLOWS
                                   (CONTINUED)
                    FOR THE FORTY WEEKS ENDED OCTOBER 3, 2004
                                 (IN THOUSANDS)
                                   (UNAUDITED)

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

<S>                                         <C>             <C>                 <C>              <C>           <C>
INVESTING ACTIVITIES:
---------------------
Purchase of property and equipment          ($3,368)        ($2,737)            ($101)           $  -          ($6,206)
Distribution received from
     unconsolidated affiliates                  305               -                                 -              305
                                            -------          -------           -------           ----           -------
Net cash used in investing activities        (3,063)         (2,737)             (101)              -           (5,901)
                                            -------          -------           -------           ----           -------

FINANCING ACTIVITIES:
---------------------
Mortgage principal repayments                     -            (139)                -                             (139)
Tax distribution                               (682)              -                 -               -             (682)
Reduction in loans receivable
from officers                                   506               -                 -               -              506
Intercompany balances                        (2,780)          3,812              (947)            (85)               -
                                             -------          -----              -----            ----               -
   Net cash (used in) provided by
   financing activities                      (2,956)          3,673              (947)            (85)            (315)
                                             -------          -----              -----            ----            -----

Decrease in cash and                        (17,676)         (2,017)             (155)              -          (19,848)
  cash equivalents

Cash and cash equivalents at                 49,515           5,595             1,299               -           56,409
                                            -------          -------           -------           ----           -------
  beginning of period

Cash and cash equivalents at
  end of period                             $31,839          $3,578            $1,144            $  -          $36,561
                                            =======          ======            ======            ====          =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:
Cash paid  for:
    Income taxes                               $117            $141               $27               -             $285
                                            =======          ======            ======            ====          =======
    Interest                                $28,058          $1,080                 -               -          $29,138
                                            =======          ======            ======            ====          =======

</TABLE>






                                    Page 24
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES

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

The following  discussion and analysis of our financial condition and results of
operations  should  be read  in  conjunction  with  the  consolidated  financial
statements, the notes thereto and other data and information appearing elsewhere
in this report.

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

We are a leading  owner,  operator and  franchisor of quick service  restaurants
("QSR"),  serving a wide variety of Italian specialty foods. We also operate, in
certain  cases  with  joint  venture  partners,  a number  of  other  restaurant
concepts. The following table summarizes the number of Sbarro owned,  franchised
and other concept restaurants in operation during each indicated period:

<TABLE>
<CAPTION>
                                                 12 WEEKS         12 WEEKS       40 WEEKS       40 WEEKS
                                                   ENDED            ENDED          ENDED          ENDED
                                                  10/9/05          10/3/04        10/9/05       10/3/04(1)
                                                  -------          -------        -------       ----------

<S>                                                  <C>             <C>             <C>             <C>
Company-owned Sbarro
 restaurants:
   Open at beginning of period                       496             508             511             533
   Opened during period                                1               -               4               2
  Sold to franchisees                                                                 (1)             (2)
  Closed during period                                (2)             (4)            (19)            (29)
                                                    ----            ----            ----            ----
  Open at end of period                              495             504             495             504
                                                    ====            ====            ====            ====

Franchised Sbarro restaurants (2):
  Open at beginning of period                        435             407             416             364
  Opened during period                                12              17              31              63
  Acquired from Sbarro                                 -               -               1               2
  Closed or terminated during period                  (6)             (3)             (7)             (8)
                                                    ----            ----            ----            ----
  Open at end of period                              441             421             441             421
                                                    ====            ====            ====            ====

Other concepts:
  Open at beginning of period                         26              24              22              27
  Opened during period                                 -               -               4               -
  Closed during period                                (1)              -              (1)             (3)
                                                    ----            ----            ----            ----
  Open at end of period                               25              24              25              24
                                                    ====            ====            ====            ====

All restaurants:
  Open at beginning of period                        957             939             949             924
  Opened during period                                13              17              39              65
  Closed or terminated during period                  (9)             (7)            (27)            (40)
                                                    ----            ----            ----            ----
  Open at end of period                              961             949             961             949
                                                    ====            ====            ====            ====
</TABLE>
_______________________
(1) The table above reflects a reclassification  of our Umberto mall restaurants
from other concepts to company-owned Sbarro restaurants for the twelve and forty
weeks ended October 3, 2004.

(2) Includes restaurants, kiosks and carts.




                                    Page 25
<PAGE>
                          SBARRO, INC. AND SUBSIDIARIES

EXECUTIVE OVERVIEW

Sales  increased in the first three quarters of 2005 compared to the first three
quarters of 2004. Mall traffic has increased as retailers, particularly high end
mall based retailers,  are serving more customers.  In addition,  since 2004, we
re-energized  our QSR operations  while  continuing to provide a quality product
coupled  with  quality  service.   We  believe  our  strategy  resulted  in  the
significant  improvement of our operating  results,  including  higher sales and
earnings.  Selective price  increases,  higher check  averages,  improvements in
operational  controls  and  upgraded  store  management  at all levels  produced
increased sales and improved  earnings in both the third quarter and first three
quarters of 2005.

We  developed a new  concept,  Carmela's  of  Brooklyn,  which  opened its first
restaurant  in  February  2005.  Carmela's  of  Brooklyn  is expected to operate
outside of our traditional mall, hospitality and airport venues. We believe that
the continuing development of this and other concepts,  along with a combination
of our  re-energized QSR restaurants and continued growth in our franchise based
business, should lead to continued improvements in both revenues and profits.

SEASONALITY

Our  business is subject to seasonal  fluctuations,  and the effects of weather,
national security, economic and business conditions.  Earnings have been highest
in our fourth quarter due primarily to increased volume in shopping malls during
the holiday shopping season. Our annual earnings can fluctuate due to the length
of the holiday  shopping period between  Thanksgiving and New Year's Day and the
number of weeks in our fourth  quarter.  In recent  years,  our  fourth  quarter
income  has also  fluctuated  significantly  due to a number  of other  factors,
including the adverse effect of the general  economic  downturn and  significant
year end adjustments relating to asset impairment and store closing costs.

GOODWILL AND OTHER INTANGIBLE ASSETS

Due to the  seasonality  of our  business,  until we  determine  the  results of
operations  for our fourth  quarter,  we are not able to perform our annual test
for impairment on our goodwill and intangible  assets with  indefinite  lives as
required by SFAS No. 142,  "Goodwill  and Other  Intangible  Assets,"  and fully
evaluate  the  impairment  of  long-lived  assets as  required  by SFAS No. 144,
"Accounting for the Impairment and Disposal of Long-Lived  Assets." Any required
adjustments are recorded at that time unless  impairment  factors become evident
at an earlier time. We are in the process of assessing the damage of our two New
Orleans QSR restaurants which remain closed. Based on the information  currently
available we have not recorded any impairment or insurance recovery.





                                    Page 26
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


RELEVANT FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                TWELVE WEEKS ENDED                  FORTY WEEKS ENDED
                                                        ----------------------------------- -----------------------------------
                                                           OCTOBER 9,        OCTOBER 3,        OCTOBER 9,         OCTOBER 3,
                                                              2005              2004             2005                2004
                                                        ----------------- ----------------- ----------------- -----------------
                                                              (DOLLARS IN MILLIONS)              (DOLLARS IN MILLIONS)

<S>                                                           <C>               <C>               <C>               <C>
Comparable Sbarro-owned QSR sales(1)                          $71               $70               $224              $220
Comparable Sbarro-owned QSR sales
    percentage change vs. prior
    compared period(1)                                        4.2%              4.7%               4.0%              5.2%
Franchise location sales                                      $66               $62               $207              $189
Franchise revenues                                             $3                $3                 $9                $9
Cost of food and paper products as a
    percentage of restaurant sales                           20.5%             21.7%              20.8%             22.3%
Payroll and other benefits as a percentage of
    restaurant sales                                         28.3%             27.4%              28.0%             28.3%
Other operating expenses as a percentage of
    restaurant sales                                         35.4%             35.9%              37.3%             36.8%
General and administrative costs as a
    percentage of revenues                                    7.1%              7.2%               7.9%              8.0%
EBITDA (2)                                                    $11               $10                $27               $24
</TABLE>

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

(1) Comparable  Sbarro-owned QSR sales dollar and annual percentage  changes are
based on locations that were in operation on a continuing  basis for all of each
period  presented.  Comparable  Sbarro-owned  QSR sales for the 40 weeks of 2004
included the week between Christmas and New Year's, a traditionally high traffic
week,  while  the 40  weeks of 2005  did not  include  that  high  traffic  week
(negatively  impacting  sales  for  the  first  three  quarters  of 2005 by $1.9
million).  The percentage  change vs. prior comparable  period adjusted for this
unusual  week  would  have  been  5.0% for the  first  three  quarters  of 2005.
Comparable store sales were impacted by Hurricane Katrina,  Rita and Wilma. Lost
revenues  were  $228,000 or 0.1 basis  points of year to date  comparable  store
sales.


(2) EBITDA represents earnings before interest income,  interest expense, taxes,
depreciation  and  amortization.  EBITDA  should not be  considered in isolation
from,  or as a substitute  for, net income,  cash flow from  operations or other
cash  flow  statement  data  prepared  in  accordance  with  generally  accepted
accounting  principles ("GAAP") or as a measure of a company's  profitability or
liquidity.   Rather,  we  believe  that  EBITDA  provides  relevant  and  useful
information for analysts and investors in our senior notes in that EBITDA is one
of the factors in the  calculations  used to determine our  compliance  with the
ratios in the  indenture  under  which our  senior  notes  are  issued.  We also
internally  use EBITDA to  determine  whether to continue  operating  restaurant
units since it provides us with a  measurement  of whether we are  receiving  an
adequate cash return on our cash investment.



                                    Page 27
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


Our  calculation  of EBITDA may not be comparable to a similarly  titled measure
reported by other companies,  since all companies do not calculate this non-GAAP
measure  in the  same  manner.  Our  EBITDA  calculations  are not  intended  to
represent cash used in operating  activities  since they do not include interest
and taxes and changes in operating assets and liabilities, nor are they intended
to  represent  a net  increase  in cash since they do not  include  cash used in
investing and financing activities. The following table reconciles EBITDA to our
net  loss  for the  periods  presented,  which we  believe  is the  most  direct
comparable GAAP financial measure to EBITDA (in thousands):

<TABLE>
<CAPTION>
                                                                     FORTY WEEKS ENDED
                                                       OCTOBER 9, 2005             OCTOBER 3, 2004
                                                       ---------------             ---------------
<S>                                                       <C>                         <C>
     EBITDA                                               $26,709                     $24,391
     Interest expense                                     (23,679)                    (23,697)
     Interest income                                          869                         468
     Income taxes                                          (1,035)                       (520)
     Depreciation and amortization                        (12,239)                    (12,388)
                                                          --------                    --------
     Net loss                                             ($9,375)                   ($11,746)
                                                          ========                   =========


<CAPTION>
                                                                    TWELVE WEEKS ENDED
                                                       OCTOBER 9, 2005             OCTOBER 3, 2004
                                                       ---------------             ---------------
<S>                                                       <C>                          <C>
     EBITDA                                               $10,608                      $9,818
     Interest expense                                      (7,102)                     (7,114)
     Interest income                                          251                         144
     Income taxes                                            (471)                       (151)
     Depreciation and amortization                         (3,609)                     (3,726)
                                                           -------                     -------
     Net loss                                               ($323)                    ($1,029)
                                                           =======                    ========

</TABLE>

THIRD QUARTER 2005 VERSUS THIRD QUARTER 2004

Sales by QSR and consolidated  other concept  restaurants  increased 1% to $74.5
million for the twelve  weeks ended  October 9, 2005 from $74.1  million for the
twelve weeks ended October 3, 2004.  The increase in sales for the third quarter
of 2005  includes  $1.2 million or 1.7% of higher sales in our QSR  restaurants,
with  comparable  store  sales  increasing  by  4.2%.  Restaurant  sales  of our
consolidated  other concepts were slightly up for the third quarter of 2005 as a
result of opening our first  location  in  Orlando,  Florida of our new chain of
casual dining  restaurants,  largely offset by the absence of sales of a concept
restaurant sold in January 2005. We believe that improved economic conditions in
the United States,  improvement in our  operational  controls and upgraded field
and store  management,  combined with higher check averages and selective  price
increases  implemented in 2004 accounted for the  improvements.  This was offset
somewhat  by fewer  transactions  during  the  period  as,  notwithstanding  the
increased  traffic in the mall, the time customers spend in a mall appears to be
less.  Sales were also impacted by the loss of revenue of  restaurants  in areas
impacted by Hurricanes Katrina, Rita and Wilma, of approximately $228,000.




                                    Page 28
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


Franchise  related  revenues  remained  consistent at $2.9 million for the third
quarter of 2005 compared to the third quarter of 2004.  The increase in revenues
from  additional  locations  opened during the last twelve months (net of closed
locations) was offset by a slight reduction in comparable unit sales.

Cost of food and paper products as a percentage of restaurant  sales improved by
1.2 basis points to 20.5% for the twelve weeks ended  October 9, 2005 from 21.7%
for the twelve  weeks  ended  October  3, 2004.  The cost of cheese in the third
quarter of 2005 averaged approximately $1.68 per pound compared to an average of
approximately $1.72 per pound for the third quarter of 2004. This $.04 per pound
improvement  in cheese  cost  accounted  for  $81,000 or .1 basis  points of the
improvement.  Improved  operational  controls,  combined  with  selective  price
increases  implemented in 2004 were the primary  reasons for the majority of the
improvement in our cost of sales as a percentage of restaurant sales.

Payroll  and  other  employee  benefits  as a  percentage  of  restaurant  sales
increased to 28.3% in the third  quarter of 2005 from 27.4% in the third quarter
of 2004 resulting from adjustments to state unemployment rates and payments made
to employees of restaurants  temporarily  closed due to the hurricanes.  Payroll
costs increased $.9 million from the third quarter of 2004.

Other  operating  costs  decreased  by $.2  million  for the twelve  weeks ended
October  9,  2005  over the  third  quarter  of 2004  and,  as a  percentage  of
restaurant sales,  decreased to 35.4% from 35.9%. The decrease in these costs as
a percentage of restaurant sales was primarily related to the increase in sales.

General and  administrative  expenses were $5.6 million for the third quarter of
2005  compared  to $5.3  million the third  quarter of 2004.  The  increase  was
primarily  due to a $.4 million  increase in bonuses  earned over the amount for
the third quarter of 2004 as a result of our improved operating performance.

Interest  expense of $7.1  million for the third  quarters of both 2005 and 2004
relates primarily to the 11%, $255 million senior notes we issued to finance our
going  private  transaction  and the  8.4%,  $16  million  mortgage  loan on our
corporate headquarters.

Equity in the net income  (loss) of  unconsolidated  affiliates  represents  our
proportionate share of earnings and losses in those other concept restaurants in
which  we have a 50% or less  ownership  interest.  Our  equity  in the  overall
profits of those concepts  decreased by $.2 million in the third quarter of 2005
from the  third  quarter  of 2004 as a result  of a decline  in  traffic  in our
steakhouse joint venture.  This concept opened a new steakhouse in the beginning
of the third  quarter  of 2005.  There are no further  expansion  plans for this
venture.




                                    Page 29
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


YEAR TO DATE 2005 VERSUS 2004

Sales by QSR and consolidated other concept  restaurants  increased 1.2% to $236
million for the forty weeks ended October 9, 2005 from $234 million for the year
to date period ended October 3, 2004.  The increase in sales for the first three
quarters  of  2005  includes  $4.5  million  or 2% of  higher  sales  in our QSR
restaurants  while  comparable  unit sales increased by 4.0%. The forty weeks of
2004 included a week between  Christmas  and New Year's,  a  traditionally  high
traffic  week,  while the forty weeks of 2005 did not include  that high traffic
week  (negatively  impacting  sales by $1.9 million).  The increase in QSR sales
after  adjustment for this unusual week would have been 5.0% for the first three
quarters of 2005.  Restaurant  sales of our  consolidated  other  concepts  were
slightly  up for the  first  three  quarters  as a result of  opening  the first
location  in  Orlando,  Florida of our new chain of casual  dining  restaurants,
largely offset by a decrease in sales for a concept  restaurant  sold in January
2005.  We believe  that  improved  economic  conditions  in the  United  States,
improvement in our operational controls and upgraded field and store management,
combined with selective  price  increases  implemented in 2004, and higher check
averages  accounted  for the  improvements.  This was offset  somewhat  by fewer
transactions  during  the  period  as,  notwithstanding  the  increases  in mall
traffic,  the time customers spend in a mall appears to be less. Sales were also
impacted by the loss of revenue of  restaurants  in areas impacted by Hurricanes
Katrina, Rita and Wilma, of approximately $228,000.

Franchise  related  revenues  increased  to $9.3  million  for the  first  three
quarters  of 2005 from $8.9  million in the first three  quarters  of 2004.  The
increase was  attributed to additional  locations  opened during the last twelve
months (net of closed  locations) and a slight increase in comparable unit sales
for the year to date period of 2005.

Cost of food and paper products as a percentage of restaurant  sales improved by
1.5 percentage points to 20.8% for the 2005 forty week period from 22.3% for the
forty week period ended  October 3, 2004.  The cost of cheese in the first three
quarters of 2005 averaged  approximately  $1.72 per pound compared to an average
of approximately $1.84 per pound for the first three quarters of 2004. This $.12
per pound  improvement  in cheese  cost  accounted  for $.8 million or 0.3 basis
points  of  the  improvement.   Improved  operational  controls,  combined  with
selective price  increases  implemented in 2004 were the primary reasons for the
remainder of the  improvement in our cost of sales as a percentage of restaurant
sales.

Payroll and other employee benefits as a percentage of restaurant sales improved
to 28.0% in the  first  three  quarters  of 2005 from  28.3% in the first  three
quarters of 2004. The improvement was primarily a result of the increased sales.
Payroll  costs for the first  three  quarters of 2005  decreased  by $.1 million
resulting  from  better  management  of staff  levels  and less  restaurants  in
operation as compared to the first three quarters of 2004.

Other  operating  costs  increased  by $2.1  million for the year to date period
ended  October 9, 2005 over the similar  year to date  period of 2004,  and as a
percentage of restaurant  sales increased to 37.3% from 36.8%.  The increase was
primarily   related  to  an  increase  in  restaurant   management   bonuses  of
approximately  $1.6 million resulting from our improved  profits,  as well as an
increase in occupancy and other costs.




                                    Page 30
<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES


General  and  administrative  expenses  were $19.9  million  for the first three
quarters of 2005 as compared to $18.8 million for the year to date of 2004.  The
increase  was  primarily  due to $.4 million in bonuses  accrued over the amount
accrued  for the  first  three  quarters  of 2004 as a  result  of our  improved
operating performance in the third quarter.

Interest  expense of $23.7 million for the first three quarters of 2005 and 2004
relates primarily to the 11%, $255 million senior notes we issued to finance our
going  private  transaction  and the  8.4%,  $16  million  mortgage  loan on our
corporate headquarters.

Equity in the net income  (loss) of  unconsolidated  affiliates  represents  our
proportionate share of earnings and losses in those other concept restaurants in
which  we have a 50% or less  ownership  interest.  Our  equity  in the  overall
profits of those concepts  decreased by $0.9 million in the first three quarters
of 2005  from the first  three  quarters  of 2004 as a result  of a  decline  in
traffic in our steakhouse joint venture. This concept opened a new steakhouse in
the beginning of the third quarter of 2005. There are no further expansion plans
for this venture.


LIQUIDITY AND CAPITAL RESOURCES

CASH REQUIREMENTS

Our liquidity requirements relate to debt service, capital expenditures, working
capital,  investments in other  ventures,  distributions  to  shareholders  when
permitted  under the indenture for the senior notes and to repay any  borrowings
we may make under our line of credit agreement and general  corporate  purposes.
We incur annual cash  interest  expense of  approximately  $29 million under the
senior notes and mortgage  loan and may incur  additional  interest  expense for
borrowings  under our line of  credit.  We are not  required  to make  principal
payments,  absent the  occurrence of certain  events,  on our senior notes until
they mature in September  2009.  We believe that  aggregate  restaurant  capital
expenditures  and our  investments  in  joint  ventures  for  all of  2005  will
approximate $14 million.

We expect our primary source of liquidity to meet current  requirements  will be
cash flow from operations. In July 2005, we obtained a three year line of credit
from Commerce Bank to replace our former revolving  credit  facility.  Under our
new line of credit we  currently  have the  ability to borrow up to $10  million
with a sub-limit for letters of credit of $5 million. We do not presently expect
to borrow under our line of credit  except for required  letters of credit.  The
maximum  amount  available  under our line of  credit,  after  giving  effect to
outstanding letters of credit, was $7.9 million at November 21, 2005.





                                    Page 31
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS


Our contractual obligations and off-balance sheet arrangements do not materially
differ from the information disclosed in Part II, Item 7 of our Annual Report on
Form 10-K for the year ended January 2, 2005.

SOURCES AND USES OF CASH

The following table summarizes our cash and cash equivalents and working capital
as at the end of the first three quarters of 2005 and 2004, respectively and the
sources  and  uses of our  cash  flows  during  the  first  forty  weeks  of the
respective years:


<TABLE>
<CAPTION>
                                                                        FORTY WEEKS ENDED
                                                                        -----------------
                                                             OCTOBER 9, 2005         OCTOBER 3, 2004
                                                             ---------------         ---------------
                                                                          (IN MILLIONS)
                                                                          -------------

<S>                                                               <C>                         <C>
   LIQUIDITY AT THE END OF PERIOD
   ------------------------------
   Cash and cash equivalents                                      $43.5                       $36.6
   Working capital                                                $29.3                        27.7

   NET CASH FLOWS FOR THE PERIOD
   -----------------------------
   Used in operating activities                                   (11.2)                      (13.6)
   Used in investing activities                                    (8.1)                       (5.9)
   Used in financing activities                                     (.1)                        (.3)
</TABLE>

We have  not  historically  required  significant  working  capital  to fund our
existing  operations and have financed our capital  expenditures and investments
in joint ventures through cash generated from operations.

Net cash used in  operating  activities  was $11.2  million  for the forty weeks
ended  October 9, 2005  compared  to $13.6  million  used during the forty weeks
ended October 3, 2004. The decrease in net cash used in operating activities was
primarily  related  to the  reduced  net loss and a lower  increase  in  prepaid
expenses resulting from the timing of our insurance payments.

Net cash used in  investing  activities  has  historically  been  primarily  for
capital  expenditures.  Net cash used in investing  activities increased by $2.2
million to $8.1  million  for the forty  weeks  ended  October 9, 2005 from $5.9
million  for  the  forty  weeks  ended  October  3,  2004  primarily  due to the
implementation of a new point of sales system in 2005.




                                    Page 32
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


CRITICAL ACCOUNTING POLICIES AND JUDGMENTS

Accounting  policies are an integral  part of the  preparation  of our financial
statements in accordance with accounting  principles  generally  accepted in the
United States of America.  Understanding  these  policies,  therefore,  is a key
factor in  understanding  our  reported  results  of  operations  and  financial
position. Accounting policies often require us to make estimates and assumptions
that affect the amounts of assets,  liabilities,  revenues and expenses reported
in our financial  statements.  Due to their nature,  estimates involve judgments
based upon  available  information.  Therefore,  actual results or amounts could
differ from  estimates and the  difference  could have a material  impact on our
consolidated financial statements. During the forty weeks ended October 9, 2005,
there were no material  changes in our accounting  policies  discussed under the
heading "Critical  Accounting  Policies and Judgments" in Part II, Item 7 of our
Annual  Report on Form 10-K for the  fiscal  year  ended  January  2, 2005 whose
application  may have the most  significant  effect on our  reported  results of
operations  or  financial  position  and that require  judgments  estimates  and
assumptions by management  that can affect their  application  from the matters.
However,  beginning  with our next quarter,  we may be required,  under new FASB
Staff Position 13-1, to expense,  rather than  capitalize  rental costs incurred
during construction periods for new leases entered into.

CERTAIN RELATIONSHIPS AND TRANSACTIONS

During the first three quarters of 2005,  there were no changes in related party
transactions  discussed  under the heading  "Certain  Relationships  and Related
Transactions" in Part II, Item 13 of our Annual Report on Form 10-K for the year
ended January 2, 2005.

FORWARD LOOKING STATEMENTS

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

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

     o    general economic,  inflation,  national security, weather and business
          conditions;
     o    the availability of suitable restaurant sites in appropriate  regional
          shopping malls and other locations on reasonable rental terms;
     o    changes in consumer tastes;



                                    Page 33
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES

     o    changes in population and traffic patterns, including the effects that
          military  action  and  terrorism  or  other  events  may  have  on the
          willingness of consumers to frequent malls, airports or downtown areas
          which are the predominant areas in which our restaurants are located;
     o    our ability to continue to attract franchisees;
     o    the success of our present,  and any future,  joint ventures and other
          expansion opportunities;
     o    the availability of food (particularly cheese and tomatoes),  beverage
          and paper products at current prices;
     o    our ability to pass along cost increases to our customers;
     o    increases in the Federal minimum wage;
     o    the continuity of services of members of our senior management team;
     o    our ability to attract and retain  competent  restaurant and executive
          managerial personnel;
     o    competition;
     o    the level of, and our ability to comply with, government regulations;
     o    our ability to generate sufficient cash flow to make interest payments
          and principal under our senior notes and line of credit;
     o    our ability to comply with covenants  contained in the indenture under
          which the senior notes are issued, as well as the covenants  contained
          in our line of credit  facility and  mortgage,  and the ability of the
          joint  ventures in which we  participate  to comply with the covenants
          contained in their loan agreements (obligations under which agreements
          are  guaranteed  in whole or in part by us), and the effects which the
          restrictions  imposed by those  covenants  may have on our ability and
          the  ability  of  the  joint   ventures  to  operate  our   respective
          businesses; and
     o    our ability to repurchase  our senior notes to the extent  required in
          the  event we make  certain  asset  sales or  experience  a change  of
          control.

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




                                    Page 34
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


ITEM 3.    QUALITATIVE AND QUANTITATIVE DISCLOSURES OF MARKET RISK

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

Future borrowings under our line of credit (none are currently outstanding) will
be at rates  that  float  with the  market  and,  therefore,  will be subject to
fluctuations  in interest  rates.  Our $255  million  senior  notes bear a fixed
interest rate of 11%. We are not a party to, and do not expect to enter into any
interest rate swaps or other instruments to hedge interest rates.

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

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

ITEM 4.    CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES:

Our management,  with the participation of our Chief Executive Officer and Chief
Financial  Officer,  has evaluated the effectiveness of our disclosure  controls
and procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under
the Securities Exchange Act of l934, as amended (the "Exchange Act")), as of the
end of the period covered by this report.  Based on such  evaluation,  our Chief
Executive Officer and Chief Financial Officer have concluded that the disclosure
controls and procedures are not effective for the reasons specified below.

In  connection  with our 2004 year ended  closing  process  and the delay in the
filing of our Form 10-K for that year, we identified  two issues which we are in
the process of rectifying but have not yet completed:

     o    We had insufficient  staffing in the accounting and reporting function
          and certain changes in management and accounting  personnel during the
          course of the audit of our  fiscal  2004  financial  statements  which
          strained  our existing  resources.  We have  completed  the process of
          upgrading  our finance and  accounting  functions to add  personnel of
          skills and  training  that will not only enable us to  accelerate  the
          audit closing  function but also will expand the numbers of members of
          our staff with knowledge of technical accounting literature.



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<PAGE>
                          SBARRO, INC. AND SUBSIDIARIES

     o    Our existing accounting resources were further strained by our need to
          analyze  the  impact of the views of the Staff of the  Securities  and
          Exchange  Commission set forth in a letter dated February 7, 2005 from
          the Chief Accountant of the Securities and Exchange  Commission to the
          Chairman of the Center for Public  Company Audit Firms of the American
          Institute  of  Public   Accountants   concerning  the  accounting  for
          operating  leases,  which has effected many companies with significant
          leases. We evaluated our existing computer software program and are in
          process of enhancements  that can provide the requisite lease analysis
          and  are in the  process  of  updating  that  database  and  providing
          training to senior  accountants to ensure, on a prospective basis, the
          proper  accounting,  reporting,  documentation and application of SFAS
          No. 13,  "Accounting for Leases" and FASB Technical Bulletin No. 85-3,
          "Accounting for Operating Leases with Scheduled Rent Increases."



PART II - OTHER INFORMATION



ITEM 6.       EXHIBITS

         EXHIBIT
         -------
         NUMBER                             DESCRIPTION
         ------                             -----------


         31.01             Certification of Principal Executive Officer pursuant
                           to Section 302 of the Sarbanes-Oxley Act of 2002.

         31.02             Certification  of  Vice  President,  Chief  Financial
                           Officer and Principal Accounting Officer  pursuant to
                           Section 302 of the Sarbanes-Oxley Act of 2002.

         32.01             Certification of Principal Executive Officer pursuant
                           to Section 906 of the Sarbanes-Oxley Act of 2002.

         32.02             Certification  of  Vice  President,  Chief  Financial
                           Officer and Principal  Accounting  Officer  pursuant
                           to Section 906 of the Sarbanes-Oxley Act of 2002.










                                    Page 36
<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


                                   SIGNATURES
                                   ----------


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



                                           SBARRO, INC.
                                           -------------------------------------
                                           Registrant


Date:    November 21 , 2005                By:/s/ Peter Beaudrault
         ------------------                   --------------------
                                           Peter Beaudrault
                                           President and
                                           Chief Executive Officer
                                           (Principal Executive Officer)


Date:    November 21, 2005                 By: /s/ Anthony J. Puglisi
         -----------------                     ---------------------------------
                                           Anthony J. Puglisi
                                           Vice President and
                                           Chief Financial Officer
                                           (Principal Accounting Officer)








                                    Page 37
<PAGE>




                                  EXHIBIT INDEX


         EXHIBIT
         -------
         NUMBER                             DESCRIPTION
         ------                             -----------


         31.01             Certification of Principal Executive Officer pursuant
                           to Section 302 of the Sarbanes-Oxley Act of 2002.

         31.02             Certification  of  Vice  President,  Chief  Financial
                           Officer and Principal Accounting Officer  pursuant to
                           Section 302 of the Sarbanes-Oxley Act of 2002.

         32.01             Certification of Principal Executive Officer pursuant
                           to Section 906 of the Sarbanes-Oxley Act of 2002.

         32.02             Certification  of  Vice  President,  Chief  Financial
                           Officer and Principal  Accounting  Officer  pursuant
                           to Section 906 of the Sarbanes-Oxley Act of 2002.






                                    Page 38