<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               _________________
                                   FORM 10-K


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

    For the fiscal year ended DECEMBER 26, 2000
                              -----------------

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

    For the transition period from ______ TO ______


                        Commission file number 000-22753
                                               ---------

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
             (Exact name of Registrant as specified in its charter)

               Delaware                             52-2016614
               --------                             ----------
    (State or other jurisdiction of     (I.R.S. employer identification no.)
    incorporation or organization)


                           9300 E. CENTRAL, SUITE 100
                                WICHITA, KS 67206
               (Address of principal executive offices) (Zip code)

                                 (316) 634-0505
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                                      NONE

Securities registered pursuant to Section 12(g) of the Act:

                                                    Common Stock, $.01 par value

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

        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.   Yes  [X]    No

        As of March 13, 2001, the aggregate market value of the Registrant's
Common Stock held by non-affiliates of the Registrant was $17,521,422. Solely
for the purposes of this calculation, shares held by directors and officers of
the Registrant have been excluded.  Such exclusion should not be deemed a
determination or an admission by the Registrant that such individuals are in
fact, affiliates of the Registrant.

        As of March 13, 2001, there were 8,666,111 shares outstanding of the
Registrant's Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

        The information required by Part III will be incorporated by reference
to certain portions of a definitive proxy statement which is expected to be
filed by the Registrant within 120 days after the close of its fiscal year.

<PAGE>
                               TABLE OF CONTENTS
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<TABLE>
<CAPTION>

ITEM                                                                                            PAGE
----                                                                                            ----

                                     PART I

<S>                                                                                             <C>
1.      Business ..............................................................................   3
2.      Properties ............................................................................  12
3.      Legal Proceedings .....................................................................  12
4.      Submission of Matters to a Vote of Security Holders ...................................  13


                                     PART II

5.      Market for the Registrant's Common Equity and Related Stockholder Matters .............  14
6.      Selected Financial Data ...............................................................  15
7.      Management's Discussion and Analysis of Financial Condition and Results of
            Operations ........................................................................  16
7A.     Quantitative and Qualitative Disclosures About Market Risk ............................  22
8.      Financial Statements and Supplementary Data ...........................................  22
9.      Changes in and Disagreements with Accountants on Accounting and Financial
             Disclosure .......................................................................  22


                                    PART III

10.     Directors and Executive Officers of the Registrant ....................................  23
11.     Executive Compensation ................................................................  23
12.     Security Ownership of Certain Beneficial Owners and Management ........................  23
13.     Certain Relationships and Related Transactions ........................................  23

                                     PART IV

14.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K ......................  24
        Signatures ............................................................................  26

</TABLE>

                                      -2-
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                                     PART I

ITEM 1. BUSINESS
        --------

GENERAL

        Total Entertainment Restaurant Corp., a Delaware corporation ("the
Company"), owns and operates 38 entertainment restaurant locations which utilize
the Fox and Hound English Pub & Grille ("Fox and Hound"), Bailey's Sports Grille
and Bailey's Pub & Grille ("Bailey's") tradenames.  The Company's entertainment
concepts combine a comfortable and inviting social gathering place, full menu
and full service bar, state-of-the-art audio and video systems for sports
entertainment, traditional games of skill such as pocket billiards and a
late-night dining and entertainment alternative all in a single location.  The
Company's entertainment restaurant concepts appeal to a broad range of guests
who can participate in one or more aspects of the Company's total entertainment
restaurant experience.  Both the Fox and Hound and Bailey's locations encompass
the Company's multi-dimensional concept and serve both larger urban and smaller
regional markets.  The Company operates in one business segment.
        The first Bailey's unit was opened in Charlotte, North Carolina in 1989
and the first Fox and Hound unit was opened in Arlington, Texas in 1994.  As of
 March 13, 2001, the Company owns and operates 25 Fox and Hound units and 13
Bailey's units in Alabama, Arkansas, Illinois, Indiana, Georgia, Kansas,
Louisiana, Michigan, Missouri, Nebraska, North Carolina, Ohio, Pennsylvania,
South Carolina, Tennessee and Texas.

SECTION 351 EXCHANGE

        The Company was organized on February 7, 1997 for the purpose of
developing entertainment restaurant locations.  On February 20, 1997, the
Company effected an exchange (the "Exchange") of property under Section 351 of
the Internal Revenue Code of 1986, as amended (the "Code"), with the
stockholders of four corporations (the "Subsidiary Corporations") and certain
limited partners of four Texas limited partnerships (the "Subsidiary Limited
Partnerships").  Pursuant to the Exchange, the Company became the owner of the
eight then-existing Bailey's locations and the three then-existing Fox and Hound
locations.  The Company issued 8,000,000 shares of its common stock, $0.01 par
value (the "Common Stock"), in exchange for all the outstanding stock of the
Subsidiary Corporations and the outstanding limited partnership interests of the
Subsidiary Limited Partnerships not owned by the Subsidiary Corporations.  The
Subsidiary Corporations and Subsidiary Limited Partnerships thereby became
wholly-owned subsidiaries of the Company.

CONCEPT

        The Company's entertainment restaurant concept differentiates itself by
offering all of the following features in a single location:
          o SOCIAL GATHERING PLACE.  The Company's concepts provide a
            contemporary social gathering place where friends and acquaintances
            can gather regularly for food, drinks and entertainment in an
            upscale yet casual environment.
          o FOOD AND BEVERAGE.  The Company's concepts offer a full menu with a
            wide range of mid-priced appetizers, entrees and desserts served in
            generous portions.  Each location features a full service bar and a
            wide variety of domestic, imported and



                                      -3-
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            premium craft beers.  Food
            and beverages can be enjoyed in all areas of each location.
          o SPORTS ENTERTAINMENT.  The Company's concepts feature
            state-of-the-art audio and video systems for viewing sporting
            events.  Each location has numerous TV's (including several
            mega-screen TV's) with satellite and cable coverage of national,
            regional and local sporting events.
          o GAMES OF SKILL.  The Company's concepts offer traditional games of
            skill, including pocket billiards featuring tournament-quality
            tables, shuffleboard and darts.  Most locations also offer a variety
            of popular interactive games.
          o LATE-NIGHT DESTINATION.  The Company provides guests with an upscale
            entertainment and dining alternative by serving food and beverages
            during the increasingly popular late-night segment.

STRATEGY

        Management believes its unique entertainment restaurant concept will
enable the Company to distinguish itself as the leader in this market segment.
Management's strategy for attaining this leadership position is based on the
following key elements:
        TOTAL ENTERTAINMENT AND RESTAURANT EXPERIENCE.  The Company's concept
offers a social gathering place, food and beverages, sports entertainment, games
of skill and a late-night destination all in a single location.  Each location
provides guests with a multi-dimensional entertainment and restaurant experience
that enables them to participate in one or more elements of the experience.
        SEASONED MANAGEMENT TEAM.  The Company employs a seasoned management
team with experience in successfully developing and operating multi-unit
concepts in a variety of geographic markets throughout the United States.  The
Company intends to leverage this experience to secure favorable real estate
sites, control costs and implement proven operating procedures.  In addition,
the Company maintains centralized financial and accounting controls through
Franchise Services Company, a third party accounting and administrative services
company.  By employing the services and infrastructure provided by Franchise
Services Company, the Company is able to focus its energy and resources on brand
and unit development.
        GROWTH AND EXPANSION.  The Company believes its entertainment restaurant
concept will be attractive in a variety of geographic markets throughout the
United States.  The Company plans to open up to seven locations in 2001 and
between seven and ten locations in 2002.  The Company currently has four leases
executed with contingencies and one non-binding letter of intent and is
currently evaluating locations in markets that are familiar to its management
team and will be actively negotiating additional leases at a number of sites.
        FLEXIBILITY AND VERSATILITY OF CONCEPT.  The Company is implementing its
concept through both the Fox and Hound and Bailey's brand names. The Company's
concept allows for significant versatility through the reconfiguration of the
entertainment areas within each of its locations to accommodate various special
events.
        COMMITMENT TO HIGH QUALITY PRODUCTS AND SERVICES.  The Company is
committed to providing a superior experience that includes high quality menu
items, a wide variety of domestic, imported and premium craft beers,
state-of-the-art audio and video systems and tournament-quality pocket billiard
tables.  These features, combined with the Company's focus on a high level of
customer service, help build a loyal clientele and attract new guests.



                                      -4-
<PAGE>

LOCATIONS

        The following table sets forth the location, opening date and
approximate square footage of the Company's existing entertainment and
restaurant locations:

                                                      APPROXIMATE
          LOCATION             MONTH OPENED         SQUARE FOOTAGE
          --------             ------------         --------------
        FOX AND HOUND
        Arlington, TX          August 1994               6,500
        College Station, TX    September 1994            7,700
        Dallas, TX             December 1995             9,600
        Memphis #1, TN         September 1997            8,400
        Omaha, NE              December 1997             9,000
        Chicago, IL            December 1997            10,100
        Montgomery, AL         January 1998              7,700
        Cleveland, OH          May 1998                  8,500
        Evansville, IN         July 1998                 8,600
        Springfield, MO        August 1998               9,100
        San Antonio, TX        August 1998               8,400
        Erie, PA               August 1998              10,400
        Lubbock, TX            October 1998             10,600
        Dayton, OH             October 1998              8,700
        Memphis #2, TN         November 1998             7,600
        Overland Park, KS      November 1998             9,100
        Canton, OH             November 1998             9,700
        New Orleans, LA        December 1998             9,200
        Pittsburgh, PA         January 1999             10,500
        Winston-Salem, NC      January 1999              9,400
        Indianapolis, IN       February 1999             8,400
        Houston, TX            February 1999             9,100
        Baton Rouge, LA        March 1999               11,500
        Cleveland #2, OH       October 2000             13,500
        Lewisville, TX         December 2000             7,600


        BAILEY'S SPORTS GRILLE
        Charlotte, NC          October 1990              7,600
        Little Rock, AR        February 1994             8,400
        Greenville, SC         September 1994            7,000
        Nashville #1, TN       April 1995                9,400
        Knoxville, TN          December 1995             9,400
        Johnson City, TN       May 1996                  8,250
        Columbia, SC           October 1996             10,000
        Clarksville, IN        March 1997                9,200
        Nashville #2, TN       October 1997              7,500

        BAILEY'S PUB & Grille
        Atlanta, GA            October 1998              8,500
        Detroit, MI            November 1998             9,100
        Chapel Hill, NC        December 1998             9,000
        Dearborn, MI           December 2000             8,450



                                      -5-
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EXPANSION PLANS

        The Company's management team has extensive experience in the restaurant
business and has successfully developed and operated numerous restaurants in
many geographic markets throughout the United States.  The Company intends to
open up to seven entertainment restaurant locations in 2001 and between seven to
ten locations in 2002.  The Company is currently evaluating locations in markets
familiar to its management team.  However, the number of locations actually
opened and the timing thereof may vary depending upon the ability of the Company
to locate suitable sites and negotiate favorable leases.
        The Company has granted a license agreement to operate one "Fox and
Hound" concept in Lincoln, Nebraska.  This unit opened in February 2001.  The
Company may in the future franchise and/or grant additional license or joint
venture rights to the Fox and Hound and Bailey's concepts in certain limited
geographic areas of the United States.  It is expected that these franchisees,
licensees or joint venture partners will be required to develop a specific
number of locations within a specified time frame and that a license fee and/or
a royalty fee will be paid to the Company in connection with the development and
operation of each such site.  The Company has granted to Stephen P. Hartnett,
Co-Chairman, the right to operate one "Fox and Hound" concept in Dallas, Texas
without the payment of any license fee.

SELECTION CRITERIA AND LEASING

        The Company believes the site selection process is critical in
determining the potential success of each entertainment restaurant location.
Senior management devotes significant time and resources in analyzing each
prospective site and inspects and approves each location prior to final lease
execution.  A variety of factors are considered in the site selection process,
including local market demographics, site visibility, traffic count, nature of
the retail environment and accessibility and proximity to major retail centers,
office complexes, hotels and entertainment centers (e.g., stadiums, arenas,
theaters).
        The Company leases all locations, with the exception of the Bailey's
unit in Columbia, South Carolina, which is owned by the Company.  Most of the
units are located in shopping centers.  Leases are generally negotiated with
initial terms of three to five years, with multiple renewal options.  The
Company has generally required approximately 90 to 120 days after the signing of
a lease and obtaining required permits to complete construction and open a new
location.  Additional time is sometimes required to obtain certain government
approvals and licenses, such as liquor licenses.  In the future, the Company
anticipates principally leasing its locations, although it may consider
purchasing free-standing sites where it is cost-effective to do so.

UNIT ECONOMICS

        The Company's management team focuses on selecting locations with the
potential of producing significant revenues while controlling capital
expenditures and rent as a percentage of net sales.  The Company's restaurants
have historically generated a sales to investment ratio of approximately 0.8 to
1, assuming that the average minimum annual rents pursuant to operating leases
were capitalized for purposes of determining the investment.  The Company's
entertainment restaurants averaged $1,590,000 and $1,578,000 in sales during
fiscal years ended December 26, 2000 and December 28, 1999, respectively.  Of
the 38 units open at December 26, 2000, 37 were leased facilities and had an
average cash investment of $1,236,000.  The one open unit the Company owned as
of December 26, 2000 had a cost of $1,829,000



                                      -6-
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(including the costs for land acquisition, construction, equipment and
pre-opening costs).  In the future the Company anticipates most locations will
be leased rather than purchased and anticipates an average cash investment per
unit between $1.0 million and $1.5 million.

MENU

        Both Bailey's and Fox and Hound concepts offer a single menu for lunch
(weekends only in some locations), dinner and late-night dining.  The menu
features a selection of appetizers, including quesadillas, chicken wings and
nachos, soups and salads, gourmet-style sandwiches, pizzas, ribs, burgers, a
selection of grilled entrees and desserts.  Appetizers typically range in price
from $3.39 to $9.99, and entrees range from $4.99 to $14.99, with most entrees
priced below $10.00.  Each location features a full service bar and most units
have over 100 brands of ales, lagers, stouts and premium craft beers from around
the world, including over 35 on tap.  Alcoholic beverage service accounted for
approximately 59% of the Company's revenues in the fiscal year ended December
26, 2000.

AMBIANCE AND DESIGN

        FOX AND HOUND AND BAILEY'S PUB & Grille. The Fox and Hound and Bailey's
Pub & Grille entertainment restaurant concepts incorporate the tradition, spirit
 and sophistication of a contemporary social gathering place, with an elegant
yet comfortable atmosphere of finished wood, polished brass, embroidered chairs
and booths, hunter green and burgundy walls and etched glass.  Each Fox and
Hound features a full service restaurant and bar as well as state-of-the-art
audio and video technology (including several mega-screen TV's) and traditional
games of skill such as pocket billiards generously spaced to avoid crowding, d
arts and shuffleboard.  The entertainment area can be readily configured into a
comfortable "arena" for viewing national, regional and local sporting and other
television events.  All locations are also capable of accommodating business
and social organizations for special events.
        Fox and Hound is the evolution of a concept originally conceived by
Stephen P. Hartnett, Co-Chairman.  The first Fox and Hound unit was opened in
August 1994. Management believes the design of Fox and Hound plays an essential
role in its success.  The bar and primary dining room are centrally located
while the wing rooms are partitioned from the bar and dining area by etched
glass and house games of skill along with state-of-the-art audio and video
technology.  This layout provides guests with an open view of the main dining
room, bar and gaming areas.  The open kitchen is organized for efficient work
flow and is also centrally located so as to entice guests with its flavorful
aromas.
        BAILEY'S SPORTS GRILLE. The Bailey's Sports Grille concept has a casual,
relaxed atmosphere that features a full-service restaurant and bar, numerous
TV's (including several big screen TV's) with satellite and cable coverage of
sporting events, pocket billiard tables, darts, foosball and shuffleboard.  Most
locations also feature a variety of popular interactive games.  The bar and
primary dining room in each Bailey's unit is centrally located with games
situated around the perimeter.
        Bailey's is the evolution of a concept originally conceived by Dennis L.
Thompson, Co-Chairman and Thomas A. Hager, a director of the Company.  The first
Bailey's unit opened in Charlotte, North Carolina in November 1989.  There are
presently nine locations operating in five states.  Since the opening of the
first location in 1989, management has modified and improved its original
concept.  With each successive opening, the decor has been modified to a more
upscale yet casual decor.



                                      -7-
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        All locations opened since July 1997 (twenty-three Fox and Hound units,
four Bailey's Pub & Grille units and one Bailey's Sports Grille unit) have
incorporated the general layout and design of the Fox and Hound unit in Dallas,
Texas.  The Company anticipates this layout and design will be utilized for
future locations in larger urban markets while utilizing the Bailey's Sports
Grille design for smaller regional markets.

MARKETING

        The Company believes its entertainment restaurant concept attracts a
loyal clientele, and the Company relies primarily on word-of-mouth to attract
new business.  The Company does, however, advertise through traditional
marketing and advertising media in selected markets.  These media include
billboard signage, radio and print advertising, local store marketing to
households and volunteer community involvement.
        The Company's marketing efforts also seek to focus on national, regional
and local sporting events such as the Super Bowl and the NCAA basketball
tournament, which attract locally active groups of fans, supporters or alumni.
The versatile layout and design of the units can also accommodate group events.

OPERATIONS AND MANAGEMENT

        The Company's operations and management systems are based upon systems
and controls that were developed by senior management and have been successfully
used to manage a large number of restaurants located in numerous states.  The
Company strives to maintain quality and consistency in its entertainment
restaurant locations through the careful training and supervision of personnel
and the establishment of standards relating to food and beverage preparation,
maintenance of locations and conduct of personnel.
        The management of a typical unit consists of one general manager and
between two and four supporting managers depending upon unit revenue and hours
of operation.  Each general manager is responsible for the unit's day-to-day
operations and is required to follow the Company's established operating
procedures and standards.  Each entertainment restaurant location also employs a
staff of hourly employees, many of whom are part-time personnel.  Unit
management personnel participate in an eight-week training program which focuses
on various aspects of the unit's operations and customer service.  The Company
currently employs six district managers, each of which oversees between five and
seven units.  The district managers, general managers and support managers
participate in incentive cash bonus programs.  Awards under the incentive plans
are tied to achievement of specified operating targets, including achievement of
specific unit objectives and control of operating expense budgets.  Senior
management regularly visits the Fox and Hound and Bailey's locations and meets
with the respective management teams to ensure compliance with the Company's
strategies and standards of quality.
        The Company maintains financial and accounting controls for each of its
entertainment restaurant locations through the use of centralized accounting and
management information systems.  Sales and labor information are collected daily
from each location, and general managers are provided with operating statements
for their locations.  Cash is controlled through daily deposits of sales
proceeds in local operating accounts, the balances of which are wire-transferred
weekly to the Company's principal operating account.  The Company utilizes a
comprehensive peer review reporting system for its general managers.  Within 10
days after the close of each 28-day accounting period, profit and loss
statements are produced and,

                                      -8-
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subsequently, the general managers of each location meet in person with their
respective district managers to review the profit and loss statements.  The
participants offer each other feedback on their respective performances and
suggest ways of improving profitability.  The district managers then meet in
person with the senior management team to review the performance for the past
accounting period as well as set the operating agenda for the next period.  The
Company believes the peer review system enables each general manager and
district manager to benefit from the collective experience of all of the
Company's management.
        The Company believes customer service and satisfaction are keys to the
success of its operations.  The Company's commitment to customer service and
satisfaction is evidenced by several Company practices and policies, including
multiple mystery-shop visits every 28-day period by a national restaurant
evaluation firm, periodic visits by unit management to guests' tables, active
involvement of management in responding to guest comments and assigning wait
persons so as to ensure customer satisfaction.  Teamwork is emphasized for
efficient and timely service.
        Each new unit employee of the Company participates in a training program
during which the employee works under the close supervision of a manager.
Management strives to instill enthusiasm and dedication in its employees and to
create a stimulating and rewarding working environment where employees know what
is expected of them in measurable terms.  Management continuously solicits
employee feedback concerning unit operations and strives to be responsive to the
employees' concerns.

PURCHASING

        The Company's management negotiates directly with suppliers for most
food and beverage products to ensure uniform quality, adequate supplies, and to
obtain competitive prices.  The Company has in the past and may in the future
engage a purchasing consultant to assist in the negotiation of purchasing
agreements with suppliers.  Food and supplies are shipped directly to the
entertainment restaurant locations, although invoices for purchases are
forwarded to a central location for payment.  Due to the experience of the
Company's senior management in the restaurant business, the Company has been and
expects to continue to be able to purchase most of its restaurant equipment
directly from equipment manufacturers.  The Company has not experienced any
significant delays in receiving supplies or equipment.

MANAGEMENT INFORMATION SYSTEMS

        The Company utilizes an in-store computer-based management support
system which is designed to improve labor scheduling and food and beverage cost
management, provide corporate management quick access to financial data and
reduce the general manager's administrative time.  Each general manager uses the
system for production planning, labor scheduling and food and beverage cost
variance analysis.  The system generates reports on sales, bank deposits and
        variance data for the Company's management on a daily basis.
The Company generates weekly consolidated sales reports and food, beverage and
labor-cost variance reports as well as detailed profit and loss statements for
each entertainment restaurant location every four weeks.  Additionally, the
Company monitors sales mix, sales growth, labor variances and other sales trends
on a daily basis.


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<PAGE>

ACCOUNTING AND ADMINISTRATIVE SERVICES

        On July 17, 1997, the Company entered into a services agreement with
Coulter Enterprises, Inc., a company owned by Jamie B. Coulter, the Company's
former Chairman of the Board, for certain accounting and administrative
services.  The fixed annual charge, which was pro rated for 1997, was $94,000
and the per unit per 28-day period fee was $426.  For fiscal year 1998 and
through February 28, 1999, the fixed annual charge was $194,500 and the per
unit per 28-day accounting period fee was $466, plus reimbursement of all direct
out-of-pocket costs and expenses.  The increase in the fixed charge was due to
an increase in the number of entertainment restaurants operated by the Company.
        On March 1, 1999, the Company simultaneously terminated the services
agreement with Coulter Enterprises, Inc. and entered into a three-year services
agreement with Franchise Services Company ("FSC") for certain accounting and
administrative services.  The per unit per 28-day accounting fee is at a market
rate with no fixed annual charge and is to remain fixed for the entire
three-year agreement.  At the conclusion of the three-year agreement FSC, the
Company may satisfy its accounting and administrative needs by hiring employees
directly.

COMPETITION

        The entertainment and restaurant industries are highly competitive.
There are a large number of restaurants and entertainment businesses that
compete directly and indirectly with the Company.  The Company competes with
restaurants primarily on the basis of quality of food and service, ambiance and
location and competes with sports bars and entertainment complexes on the basis
of entertainment quality, ambiance and location.  Competition for sales in the
entertainment and restaurant industries is intense.  While the Company believes
its entertainment restaurant units are distinctive in design and operating
concept, it is aware of competitors that operate with similar concepts.  Many of
the Company's existing and potential competitors are well-established and have
significantly greater financial, marketing and other resources than does the
Company.  In addition to other entertainment and restaurant companies, the
Company competes with numerous businesses for suitable locations for its units.

QUARTERLY FLUCTUATIONS, SEASONALITY AND INFLATION

        As a result of the revenues associated with each new location, the
timing of new unit openings will result in significant fluctuations in quarterly
results.  The Company expects seasonality to be a factor in the operation or
results of its business in the future due to expected lower second and third
quarter revenues due to the summer season.  The primary inflationary factors
affecting the Company's operations include food, liquor and labor costs.
Significant numbers of the Company's personnel are paid at rates related to the
federal minimum wage which is currently $5.15 per hour.  Accordingly, increases
in the minimum wage will increase the company's labor costs.  As costs of food
and labor have increased, the Company has historically been able to offset these
increases through economies of scale and improved operating procedures.  To
date, inflation has not had a material impact on operating margins.


                                      -10-
<PAGE>

GOVERNMENT REGULATION

        The Company's entertainment restaurant locations are subject to numerous
federal, state and local laws affecting health, sanitation, safety and Americans
with Disabilities Act accessibility standards, as well as to state and local
licensing regulation of the sale of alcoholic beverages.  Each location has
appropriate licenses from regulatory authorities allowing it to sell liquor,
beer and wine, and each location has food service licenses from local health
authorities.  The Company's licenses to sell alcoholic beverages must be renewed
annually and may be suspended or revoked at any time for cause, including
violation by the Company or its employees of any law or regulation pertaining to
alcoholic beverage control, such as those regulating the minimum age of patrons
or employees, advertising, wholesale, purchasing, and inventory control.  The
failure of a location to obtain or retain liquor or food service licenses would
have a material adverse effect on the Company's operations.  In order to reduce
this risk, each location is operated in accordance with standardized procedures
designed to ensure compliance with all applicable codes and regulations.
        The Company may be subject in certain states to "dram-shop" statutes,
which generally provide a person injured by an intoxicated person the right to
recover damages from an establishment that wrongfully served alcoholic beverages
to the intoxicated person.  The Company carries liquor liability coverage as
part of its existing comprehensive general liability insurance.
        The development and construction of additional locations will be subject
to compliance with applicable zoning, land use and environmental regulations.
The Company's operations are also subject to federal and state minimum wage laws
governing such matters as working conditions, overtime and tip credits and other
employee matters.  Significant numbers of the company's personnel are paid at
rates related to the federal minimum wage which is currently $5.15 per hour.
Accordingly, increases in the minimum wage will increase the Company's labor
costs.
        A portion of the Company's revenues is derived from the use and
operation of video gaming machines.  In August 1999, law changes in South
Carolina resulted in a significant decrease in the revenue of video gaming
machines.  Further law changes in July 2000 completely eliminated the use of
video gaming machines in South Carolina.  Video gaming revenue was $100,253,
$350,306, and $473,036 during the fiscal years ended December 26, 2000, December
28, 1999 and December 29, 1998, respectively.

TRADEMARKS

        The Company has federally registered its "Fox and Hound" and "Bailey's
Sports Grille" service marks.  The Company's "7 Bailey's Sports Grille" and
"Serious Fun 7 Bailey's Sports Grille" design marks are also federally
registered.  The Company regards its service and design marks as having
significant value and as being an important factor in the marketing of its
entertainment restaurant concept.  The Company is aware of names and marks
similar to the service marks of the Company that are used by other persons in
certain geographic areas.  The Company believes such uses will not have a
material adverse effect on the Company as either the Bailey's or Fox and Hound
tradenames may be used if either name is unavailable.  The Company's policy is
to pursue registration of its marks whenever possible and to oppose vigorously
any infringement of its marks.


                                      -11-
<PAGE>

        However, as more fully described in Item 3 - Legal Proceedings, below, a
cancellation proceeding has recently been filed with the Trademark Trial and
Appeal Board of the U.S. Patent and Trademark Office seeking to cancel certain
of the Bailey's marks.

EMPLOYEES

        As of December 26, 2000, the Company employed approximately 1,850
persons, four of whom are executive officers, six of whom are support staff, six
of whom are multi-unit supervisors, 138 of whom are entertainment restaurant
unit management personnel and the remainder of whom are hourly entertainment
restaurant personnel.  None of the Company's employees is covered by a
collective bargaining agreement.  The Company believes its employee relations
are satisfactory.

ITEM 2. PROPERTIES
        ----------

        All of the Company's units are located in leased space with the
exception of the Bailey's unit in Columbia, South Carolina, which is owned by
the Company.  Initial lease terms range from three to ten years, with multiple
renewal options.  All of the Company's leases provide for a minimum annual rent,
and some leases call for additional rent based on sales volume at the particular
location over specified minimum levels.  Generally, the leases are net leases
which require the Company to pay the costs of insurance, taxes and a portion of
lessors' operating cost.  See "Business-Locations."
        The Company's executive offices are located at 9300 E. Central, Suite
100, Wichita, Kansas 67206.  The Company believes there is sufficient office
space available at favorable leasing terms in the Wichita, Kansas area to
satisfy the additional needs of the Company that may result from future
expansion.

ITEM 3. LEGAL PROCEEDINGS
        -----------------

        On February 28, 2001, Patrick O'Shea, David W. Faber, Ann Swanson, Stacy
Gregory, Wes L. Patterson, Dale Sproat, Mark Thagard, and Patrick Wilson filed a
complaint on their own behalf and on behalf of other similarly situated persons
against the Company, Fox & Hound of Indiana, Inc., a subsidiary of the Company,
Gary Judd, the Company's president, Steven M. Johnson, the Company's chief
executive officer, J.C. Weinberg, the Company's former chief operating officer,
and Kenneth Syvarth, the Company's vice president - operations, in the United
States District Court for the Southern District of Indiana.

        The plaintiffs, who purport to have been employees of the defendants
with the titles of manager-in-training, assistant manager, and/or general
manager, each alleged that the Company and the other defendants willfully and in
bad faith failed to pay the defendants overtime pay for hours worked in excess
of forty hours per week in violation of the provisions of the Fair Labor
Standards Act.  The plaintiffs' complaint seeks (1) declaratory judgment that
the Company and other defendants violated the plaintiffs' legal rights, (2) an
accounting of compensation to which the defendants are owed, (3) monetary
damages in the form of back pay compensation and benefits, unpaid entitlements,
liquidated damages, and pre-judgment and post-judgment interest, and (4)
attorneys' fees and costs.  The defendants, including the Company, have not yet
filed an answer to the plaintiffs' petition, but plan to do so shortly.


                                      -12-
<PAGE>

        On October 2, 2000, R&A Bailey & Company of Dublin, Ireland, filed a
notice of opposition in the Trademark Trial and Appeal Board of the U.S. Patent
and Trademark Office to the Company's U.S. service mark applications for
"BAILEY'S PUB & GRILLE" (color), "BAILEY'S PUB & GRILLE" (stylized), and
"BAILEY'S PUB & GRILLE."  Additionally, on November 14, 2000, R&A Bailey &
Company filed a petition in the Trademark Trial and Appeal Board of the U.S.
Patent and Trademark Office to cancel the Company's U.S. service mark
registrations for "7 BAILEY'S SPORTS GRILLE" (+ Design), "SERIOUS FUN 7 BAILEY'
SPORTS GRILLE" (+ Design), and "BAILEY'S SPORTS GRILLE."

        R&A Bailey & Company claims to be the owner several U.S. trademark
registrations, including "BAILEYS ORIGINAL IRISH CREAM" (+ Design), "BAILEYS,"
"BAILEYS THE ORIGINAL LIGHT CREAM," "BAILEYS" (+ Design), and "BAILEYS YUM,"
that are claimed to be used in association with liqueurs, distilled spirits, ice
cream, coffee cups, and other ceramic accessories.  R&A Bailey & Company has
alleged that the cited Company registrations and applications cause it damage,
are likely to create a likelihood of confusion, mistake, or deception, and would
likely dilute and lessen its "famous" marks in violation of the Lanham Act. R&A
Bailey & Company seeks cancellation of the Company's registrations and opposes
the registration of the Company's applications for registration of the
above-listed marks.

        On December 29, 2000, the Company through its trademark counsel filed an
answer to R&A Bailey & Company's notice of opposition, denying its allegations.
On February 16, 2001, the Company filed a Stipulated Motion to Extend Answer to
Petition in response to the petition to cancel by R&A Bailey & Company.

        Although it is not possible at this time for the Company to evaluate the
merits of these claims and lawsuits, nor their likelihood of success, management
of the Company is of the opinion that any resulting liability should not have a
material adverse effect on the Company's financial position.

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

        No matters were submitted to a vote of the holders of the Company's
Common Stock during the fourth quarter of the Company's fiscal year ended
December 26, 2000.


                                      -13-
<PAGE>

                                    PART II

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

MARKET INFORMATION

        The Company's Common Stock is traded over-the-counter on the Nasdaq
National Market System (ticker symbol: TENT).  The following table sets forth,
for the periods indicated, the high and low bid quotations for the Common Stock,
as reported by Nasdaq.  These quotations reflect the inter-dealer prices,
without retail markup, markdown or commission and may not necessarily represent
actual transactions.

                                                     Bid Prices
                                                     ----------
        Fiscal Year 1999                          High            Low
        ----------------                          ----            ---
        First Quarter                            5-7/8           2-3/4
        Second Quarter                           4-1/4           2-1/2
        Third Quarter                            3-1/16          1-1/4
        Fourth Quarter                           1-3/4           1-1/2

        Fiscal Year 2000                          High            Low
        ----------------                          ----            ---
        First Quarter                            1-3/4           1-3/8
        Second Quarter                           2-1/2           1-1/2
        Third Quarter                            2-5/16          2-3/16
        Fourth Quarter                           2-3/8           1-7/16


HOLDERS

        As of March 13, 2001, there were 81 holders of record of the Company's
Common Stock.

DIVIDENDS

        The Company has not paid any cash dividends on its Common Stock and does
 not intend to pay cash dividends on its Common Stock for the foreseeable
future.  The Company intends to retain future earnings to finance future
development.


                                      -14-
<PAGE>

Item 6.        SELECTED FINANCIAL DATA
               -----------------------

        The following selected financial data of the Company and its
predecessors should be read in conjunction with the financial statements and the
notes thereto and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this Form 10-K.  The historical
income statement data for the Company for the 52 weeks ended December 26, 2000,
December 28, 1999 and December 29, 1998 and period from February 7, 1997 through
December 30, 1997, the historical income statement data for F&H Restaurant Corp.
("FHRC") for the period from January 1, 1997 through February 20, 1997, the
historical income statement data for Fox and Hound Entertainment and Restaurant
Group ("FHERG") for the fiscal year ended December 31, 1996, the balance sheet
data for the Company as of December 26, 2000, December 28, 1999, December 29,
1998 and December 30, 1997, and the balance sheet data for FHERG as of December
31, 1996 are derived from the Company's and its predecessors' audited financial
statements.  The table also sets forth the pro forma income statement data for
the Company as if the Exchange had occurred on January 1, 1996.  The pro forma
data set forth below for the periods presented are unaudited and have been
prepared by management solely to facilitate period-to-period comparison and do
not purport to be indicative of the consolidated results of operations that
would have occurred had the Exchange occurred at January 1, 1996, or which may
be expected to occur in the future.


                                      -15-
<PAGE>

<TABLE>
<CAPTION>
                                                            Historical
                          ---------------------------------------------------------------------------------------
                                                                                                                      The Company
                                              The Company                                                 FHERG        Pro Forma
                          ------------------------------------------------------------                 ----------  -----------------
                                                                        46 weeks and        FHRC       Year ended     Year ended
                                                                                        -------------
                                       52 weeks ended                   5 days ended    51 days ended   Dec. 31,   Dec. 30, Dec. 31,
                          --------------------------------------------
                          Dec. 26, 2000  Dec. 28, 1999  Dec. 29, 1998  Dec. 30, 1997   Feb. 20, 1997      1996      1997      1996
                          -------------  -------------  -------------  -------------   -------------     ------    ------   --------
                                                              (In thousands, except per share data)
INCOME STATEMENT DATA:

<S>                             <C>          <C>             <C>          <C>             <C>            <C>      <C>      <C>
Net sales                       $55,990      $55,930         $34,114      $16,163         $   858        $ 5,507  $18,557    $14,844
Costs and expenses:
   Cost of sales                 14,790       15,349           9,429        4,287             245          1,721    4,912      4,177
   Operating expenses            28,395       28,632          15,586        7,142             393          2,759    8,281      6,747
   Depreciation and amortization  3,592        3,697           2,875          939              35            311    1,052        855
   Preopening costs                 501          487             ---          ---             ---            ---      ---        ---
   Provision for asset impairment
      and store closing           2,362        1,087             ---          ---             ---            ---      ---        ---
                                  -----        -----          ------       ------           -----          -----   ------   --------
Entertainment and restaurant costs
   and expenses                  49,640       49,252          27,890       12,368             673          4,791   14,245     11,779
Entertainment and restaurant     ------       ------          ------       ------           -----          -----   ------   --------
   operating income               6,350        6,677           6,224        3,795             185            716    4,312      3,065
General and administrative        3,768        3,900           2,609        1,794              36            296    2,014        915
      expenses
Goodwill amortization               244          244             244          210              24            ---      242        237
                                 ------       ------          ------       ------           -----          -----   ------   --------
Income  from operations           2,338        2,533           3,371        1,791             125            420    2,056      1,913
Other income (expense)           (1,148)      (1,298)           (70)          266              63            (56)     370        656
Income before provision for      ------       ------          ------       ------           -----          -----   ------   --------
   income taxes                   1,190        1,235           3,301        1,525              62            364    1,686      1,257
Provision for income taxes          342          418           1,221          545              11            ---      605        471
Minority interest                   ---          ---             ---          ---              34            ---      ---        ---
Income before cumulative effect  ------       ------          ------       ------           -----          -----   ------   --------
      of a change in accounting
      principle                     848          817           2,080          980              17            364    1,081        786
Cumulative effect of change in
        accounting principle        ---       (1,128)            ---          ---             ---            ---      ---        ---
                                 ------      --------     ----------    ---------        --------       --------  -------     ------
Net income (loss)                $  848      $  (311)     $    2,080    $     980        $     17       $    364  $ 1,081     $  786
                                 ======      ========     ==========    =========        ========       ========  =======     ======
Basic and diluted net income
      (loss) per share           $  .09      $  (.03)     $      .20    $     .11                                 $   .12     $  .10
                                 ======      ========     ==========    =========                                 =======     ======
Weighted number of shares
      outstanding                 9,323       10,348          10,415        9,182                                   9,062      8,000
                                 ======      ========     ==========    =========                                 =======     ======
<CAPTION>
                                                                        Historical
                          ---------------------------------------------------------------------------------------
                                           The Company                                                   FHERG
                          ------------------------------------------------------------                 ----------
                          December 26,    December 28,    December 29,   December 30,                December 31,
                              2000           1999              1998          1997                        1996
                          -------------   --------------  -------------  ------------                ------------
                                                                  (In thousands)
BALANCE SHEET DATA:

<S>                           <C>            <C>           <C>           <C>                            <C>
Working capital (deficit)     $ (3,435)      $  (489)      $    (947)    $  4,579                       $   (554)

Total assets                    40,128        41,352          41,284       23,224                          2,520

Notes payable, including current
      portion                   11,980        14,395          11,815          ---                            696

Stockholders'/partners' equity  20,987        22,232          23,736       21,665                          1,564

</TABLE>

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

GENERAL

        The following discussion and analysis should be read in conjunction with
the information set forth under "Selected Financial Data" and the Financial
Statements and Notes thereto included elsewhere in this Form 10-K.
        The Company began operations February 20, 1997 with three Fox and Hound
and eight Bailey's entertainment restaurant locations, and opened three Fox and
Hound and two Bailey's entertainment restaurant locations during the year ended
December 30, 1997, opened thirteen Fox and Hound and three Bailey's
entertainment restaurant locations during the year ended December 29, 1998,
opened five Fox and Hound entertainment restaurant locations and closed one Fox
and Hound and one Bailey's entertainment restaurant location
during the year ended


                                      -16-
<PAGE>

December 28, 1999, and opened two Fox and Hound and one Bailey's entertainment
restaurant locations during the year ended December 26, 2000.
        Prior to December 30, 1998, pre-opening costs which include labor costs,
costs of hiring and training personnel and certain other costs relating to
opening new restaurants, were capitalized and amortized over a 12 month period,
beginning in the period that the restaurant opened.  Effective December 30,
1998, pre-opening costs are expensed as incurred.

RESULTS OF OPERATIONS

        The following table sets forth for the periods indicated the percentages
which certain items included in the Condensed Consolidated Statement of Income
bear to net sales and other selected operating data.

<TABLE>
<CAPTION>
                                                                          Year Ended(1)
                                                             -------------------------------------
                                                              Dec. 26,      Dec. 28,     Dec. 29,
                                                                2000          1999        1998
                                                             ----------   -----------   ----------
<S>                                                             <C>          <C>          <C>
Income Statement Data:
        Net sales                                               100.0%       100.0%       100.0%
        Costs and expenses:
                Cost of sales                                    26.4         27.4         27.6
                Operating expenses                               50.7         51.2         45.7
                Depreciation and amortization                     6.4          6.6          8.4
                Preopening costs                                  1.0          1.0           --
                Provision for asset impairment
                    and store closing                             4.2          1.9           --
                                                                ------       ------       -------
                Restaurant costs and expenses                    88.7         88.1         81.7
                                                                ------       ------       -------
                Restaurant operating income                      11.3         11.9         18.3
                General and administrative                        6.7          7.0          7.6
                Goodwill amortization                             0.4          0.4          0.7
                                                                ------       ------       -------
        Income from operations                                    4.2          4.5         10.0
                Loss on disposal of assets                       (0.1)        (0.2)          --
                Other income, principally interest                 --           --          0.2
                Interest expense                                 (2.0)        (2.1)        (0.4)
                                                                ------       ------       -------
        Income before provision for income taxes                  2.1          2.2          9.8
        Provision for income taxes                                0.6          0.7          3.6
                                                                ------       ------       -------
        Income before cumulative effect of a
                change in accounting principle                    1.5          1.5          6.2
        Cumulative effect of change in
                accounting principle                               --         (2.0)          --
                                                                ------       -------      -------
        Net income (loss)                                         1.5%        (0.5)%        6.2%
                                                                ======       =======      =======

RESTAURANT OPERATING DATA:
        Number of locations at end of period                       38           35           32
        Number of store operating weeks (2)                     1,831        1,843        1,085
        Annualized average weekly sales per location (3)     $  1,590     $  1,578     $  1,634

</TABLE>
-----------------------------------
(1)     The Company operates on a 52 or 53 week fiscal year ending the last
        Tuesday in December.  The fiscal quarters for the Company consist of
        accounting periods of 12, 12, 12 and 16 or 17 weeks, respectively.
(2)     Store operating weeks represents the number of full weeks all locations
        were open during the period.
(3)     Annualized average weekly sales per location are computed by dividing
        net sales for full weeks open during the period by the number of store
        operating weeks and multiplying the result by fifty-two.


                                      -17-
<PAGE>

THE COMPANY

        FIFTY-TWO WEEKS ENDED DECEMBER 26, 2000 COMPARED TO FIFTY-TWO WEEKS
ENDED DECEMBER 28, 1999
        Net sales increased $60,000 (0.1%) for the fifty-two weeks ended
December 26, 2000 to $55,990,000 from $55,930,000 in the fifty-two weeks ended
December 28, 1999, which is attributable to a 0.8% increase in average unit
volumes ($1,590,000 versus $1,578,000) offset by a 0.7% decrease in store
operating weeks (1,831 versus 1,843).  Same store sales increased 3.8% for the
fifty-two weeks ended December 26, 2000.
        Costs of sales, primarily food and beverages, decreased $559,000 (3.6%)
for the fifty-two weeks ended December 26, 2000 to $14,790,000 from $15,349,000
in the fifty-two weeks ended December 28, 1999, and such expenses decreased as a
percentage of sales from 27.4% to 26.4%.  This decrease is attributable to
better food and beverage controls.
        Restaurant operating expenses for the fifty-two weeks ended December 26,
2000 decreased $237,000 (0.8%) to $28,395,000 from $28,632,000 in the fifty-two
weeks ended December 28, 1999, and such expenses decreased as a percentage of
net sales to 50.7% from 51.2%.   This decrease is primarily attributable to
lower hourly labor costs (1.7%) resulting from better labor controls, offset by
higher other operating expenses including maintenance costs (0.6%) and live
music costs (0.6%).
        Depreciation and amortization decreased $105,000 (2.8%) for the
fifty-two weeks ended December 26, 2000 to $3,592,000 from $3,697,000 in the
fifty-two weeks ended December 28, 1999, and such expenses decreased as a
percentage of net sales to 6.4% from 6.6%.  This decrease is due to the closing
of two units in 1999 offset by three new units opened in the fourth quarter of
2000.
        Preopening costs increased $14,000 (2.9%) for the fifty-two weeks ended
December 26, 2000 to $501,000 from $487,000 in the fifty-two weeks ended
December 28, 1999, and such expenses were 1.0% of net sales for both periods.
        Preopening costs for 2000 were related to the opening of three units in
2000 and costs related to units which will open in 2001.  Preopening costs for
1999 were related to the opening of five units in 1999.
        Provision for asset impairment and store closing increased $1,275,000
(117.3%) for the fifty-two weeks ended December 26, 2000 to $2,362,000 from
$1,087,000 in the fifty-two weeks ended December 28, 1999, and such expenses
increased as a percentage of net sales to 4.2% from 1.9%.  The provision in 2000
reflects the charge made in the fourth quarter of 2000 for the write down of
certain under-performing restaurant assets.  The Company periodically reviews
its long lived assets which are held and used in its entertainment restaurant
operations for indications of impairment (see Note 1 of Notes to Consolidated
Financial Statements).  The provision in 1999 represents the estimated costs
associated with closing the Fox and Hound location in Davenport, Iowa.  The
provision included $394,000 of future lease costs, $640,000 in abandoned
leasehold improvements and $53,000 in abandoned furniture, fixtures and
equipment.  This unit was opened in June 1998 and closed in October 1999. The
unit had been experiencing consistent negative cash flows due to low sales
volumes.
        General and administrative expenses decreased $131,000 (3.4%) for the
fifty-two weeks ended December 26, 2000 to $3,768,000 from $3,900,000 in the
fifty-two weeks ended December 28, 1999, and such expenses decreased as a
percentage of net sales to 6.7% from 7.0%.  The decrease reflects the
realignment of certain executive positions during 2000.
        The loss on disposal of assets in 2000 consisted mainly of the disposal
of certain video games in several units.  The loss on disposal of assets in 1999
consisted mainly of the disposal of POS equipment in six units which was
replaced with POS systems consistent with the systems used in each of the other
units.

                                      -18-
<PAGE>

        Interest expense decreased $94,000 (8.0%) for the fifty-two weeks ended
December 26, 2000 to $1,081,000 from $1,175,000.  This decrease reflects a
decrease in the average debt balance offset by an increase in the average
interest rate.
        The effective income tax rate on income was 28.7% for the fifty-two
weeks ended December 26, 2000 as compared to 44.0% for the fifty-two weeks ended
December 28, 1999.  This decrease was primarily due to the impact of the credit
for social security taxes paid on tips in excess of minimum wage relative to the
amount of income before taxes.

        FIFTY-TWO WEEKS ENDED DECEMBER 28, 1999 COMPARED TO FIFTY-TWO WEEKS
ENDED DECEMBER 29, 1998
        Net sales increased $21,816,000 (64.0%) for the fifty-two weeks ended
December 28, 1999 to $55,930,000 from $34,114,000 in the fifty-two weeks ended
December 29, 1998, which is attributable to a 69.9% increase in store operating
weeks (1,843 versus 1,085) and a 3.4% decrease in average unit volumes
($1,578,000 versus $1,634,000).  Same store sales decreased 0.5% for the
fifty-two weeks ended December 28, 1999.
        Costs of sales, primarily food and beverages, increased $5,920,000 (
62.8%) for the fifty-two weeks ended December 28, 1999 to $15,349,000 from
$9,429,000 in the fifty-two weeks ended December 39, 1998, and such expenses
decreased as a percentage of sales from 27.6% to 27.4%.  This decrease is
attributable to better food and beverage controls.
        Restaurant operating expenses for the fifty-two weeks ended December 28,
1999 increased $13,046,000 (83.7%) to $28,632,000 from $15,586,000 in the
fifty-two weeks ended December 29, 1998, and such expenses increased as a
percentage of net sales to 51.2% from 45.7%.  This increase is attributable to
higher labor costs (2.2%) resulting from the increase in food sales as a portion
of the overall sales mix (which has a higher labor cost compared to beverages
and entertainment), higher occupancy costs (1.1%) for units opened since June
1998, a one-time charge for a state sales tax assessment (0.6%), and higher
other operating expenses (1.4%) including maintenance costs, premium TV costs
and higher costs associated with training new managers.
        Depreciation and amortization increased $822,000 (28.6%) for the
fifty-two weeks ended December 28, 1999 to $3,697,000 from $2,875,000 in the
fifty-two weeks ended December 29, 1998, and such expenses decreased as a
percentage of net sales to 6.6% from 8.4%.  This increase is due primarily to
the change in accounting method for preopening expenses which, prior to 1999,
were capitalized and then amortized over a twelve month period.  The preopening
amortization expense included in depreciation and amortization for the fifty-two
weeks ended December 29, 1998 was $941,000 or 2.8% of sales.  Excluding the
impact of preopening amortization, depreciation and amortization expense as a
percentage of sales actually increased 1.0% due to higher depreciation costs
for units opened since June 1998.
        Preopening costs were $487,000 for the fifty-two weeks ended December
28, 1999, and such expenses were 1.0% of net sales.  Preopening costs for 1999
were related to the opening of five units in 1999.
        Provision for asset impairment and store closing was $1,087,000 or 1.9%
of sales for the fifty-two weeks ended December 28, 1999 and represents the
estimated costs associated with closing the Fox and Hound location in Davenport,
Iowa.
        General and administrative expenses increased $1,291,000 (49.5%) for th
fifty-two weeks ended December 28, 1999 to $3,900,000 from $2,609,000 in the
fifty-two weeks ended December 29, 1998, and such expenses decreased as a
percentage of net sales from 7.6% to 7.0%.  The decrease reflects the effect of
leveraging the general and administrative expenses against higher sales.  For
fiscal 1998 and through February 28, 1999, certain accounting and administrative
services were contracted from Coulter Enterprises, Inc. ("CEI"), a restaurant

                                      -19-
<PAGE>

management services company owned by the Company's former Chairman of the Board,
Jamie B. Coulter.  The service agreement provided for specified accounting and
administrative services to be provided on a cost pass-through basis.  For fiscal
1998 and through February 28, 1999, the fixed annual charge was $194,500, plus
an additional fee of $466 per restaurant per 28-day accounting period.
        On October 19, 1998, Lone Star Steakhouse & Saloon, Inc. ("Lone Star"),
a restaurant company of which Mr. Coulter is chairman and CEO, purchased certain
assets and assumed certain liabilities of CEI, including the former services
agreement with the Company.  From October 19, 1998 to February 28, 1999, such
services were provided by Lone Star.  Beginning March 1, 1999, these services
were provided by Franchise Services Company ("FSC") at a market rate.
        The loss on disposal of assets consisted mainly of the disposal of
certain POS equipment in six units which was replaced with POS systems
consistent with the systems used in each of the other units.
        The interest earned during the fifty-two weeks ended December 29, 1998
was from the investment of the net proceeds of the Initial Public Offering.  The
decrease in interest earned resulted from the prior utilization of the proceeds
from the Initial Public Offering to develop additional locations.  Interest
expense increased $1,035,000 for the fifty-two weeks ended December 28, 1999 to
$1,175,000.  This increase reflects the borrowings made to fund additional unit
development .
        The effective income tax rate on income before the cumulative effect of
a change in accounting principle for the fifty-two weeks ended December 28, 1999
was 33.8% and the effective income tax rate for the fifty-two weeks ended
December 29, 1998 was 37.0%.  This decrease was primarily due to the impact of
the credit for social security taxes paid on tips in excess of minimum wage
relative to the amount of income before taxes.

QUARTERLY FLUCTUATIONS, SEASONALITY AND INFLATION

        As a result of the revenues associated with each new location, the
timing of new unit openings will result in significant fluctuations in quarterly
results.  The Company expects seasonality to be a factor in the operation or
results of its business in the future due to expected lower second and third
quarter revenues due to the summer season.  The primary inflationary factors
affecting the Company's operations include food, liquor and labor costs.
Although a large number of the Company's restaurant personnel are paid at the
federal minimum wage level, the majority of personnel are tipped employees, and
therefore, recent as well as future minimum wage changes are likely to have very
little effect on labor costs.  As costs of food and labor have increased, the
Company has historically been able to offset these increases through economies
of scale and improved operating procedures.  To date, inflation has not had a
material impact on operating margins.

LIQUIDITY AND CAPITAL RESOURCES

        The Company was formed on February 7, 1997 and, pursuant to the Exchange
on February 20, 1997, the Company became the owner of the eight then-existing
Bailey's locations and three then-existing Fox and Hound locations.  Prior to
the Exchange, Bailey's financed its expansion primarily with loans from
stockholders and loans from banks.  Prior to the Exchange, Fox and Hound
financed its expansion primarily with partners' equity contributions and loans
from related parties.

                                      -20-
<PAGE>

        As is customary in the restaurant industry, the Company operates with
negative working capital.  Negative working capital increased $2,946,000 to
$3,435,000 as of December 26, 2000 from $489,000 as of December 28, 1999.  This
increase is attributable to an increase in accounts payable related to new unit
expansion including $1,546,000 of property and equipment additions included in
accounts payable at December 26, 2000 as well as $418,000 related to current
portion of notes payable at December 26, 2000.  The Company does not have
significant receivables or inventory and receives trade credit based upon
negotiated terms in purchasing food and supplies.  Because funds available from
cash sales are not needed immediately to pay for food and supplies, or to
finance inventory, they may be considered as a source of financing for
noncurrent capital expenditures.
        Immediately following the Initial Public Offering, the Company repaid
outstanding indebtedness to Intrust Bank, N.A., Wichita, in the principal amount
of approximately $10.8 million out of a total credit line of $12.0 million
available to the Company. This outstanding indebtedness was incurred to
refinance the debt of the acquired entities in the Exchange of approximately
$9.1 million and to finance the stockholder dividend payment to the former
stockholders of Bailey's of approximately $1.7 million.
        On September 1, 1998 the Company entered into a loan agreement with
Intrust Bank, N.A. (the "Facility") which provides for a line of credit of
$20,000,000 subject to certain limitations based on earnings before interest,
income taxes, depreciation and amortization of the past fifty-two weeks.  The
Facility requires monthly payments of interest only until November 1, 2001, at
which time equal monthly installments of principal and interest are required as
necessary to fully amortize the outstanding indebtedness plus future interest
over a period of four years.  Interest is accrued at a rate of 1/2% below the
prime rate as published in The Wall Street Journal.  Proceeds from the Facility
were used for restaurant development.  As of December 26, 2000, the Company had
borrowed $11,980,000 under the Facility.  The Company is in compliance with all
debt covenants.
        Cash flows from operations were $7,131,00 in the fifty-two weeks ended
December 26, 2000 compared to $4,903,000 in the fifty-two weeks ended December
28, 1999.  This increase is attributable to an increase in net income before the
write off of property and equipment  related to asset impairment of $3,210,000
in the fifty-two weeks ended December 26, 2000 compared to net income before the
cumulative effect of a change in accounting principle and the write off of
property and equipment related to store closure of $1,510,000 in the fifty-two
weeks ended December 28, 1999.  This increase is also attributable to an
increase in accounts payable and accrued liabilities of $1,005,000 in 2000
compared to a decrease in accounts payable and accrued liabilities of $1,078,000
in 1999.  Purchases of property and equipment were $3,005,000 for the fifty-two
weeks ended December 26, 2000 compared to $4,695,000 for the fifty-two weeks
ended December 28, 1999.
        The Company intends to open up to seven entertainment restaurant
locations in 2001 and between seven to ten locations in 2002. The Company
expects to expend approximately $7.0 to $10.0 million to open new locations over
the next 12 months.
        The Company believes the funds available from the Facility and its cash
flow from operations will be sufficient to satisfy its working capital and
capital expenditure requirements for at least the next 12 months.  There can be
no assurance, however, that changes in the Company's operating plans, the
acceleration of the Company's expansion plans, lower than anticipated revenues,
increased expenses, potential acquisitions or other events will not cause the
Company to seek additional financing sooner than anticipated, prevent the
Company from achieving the goals of its expansion strategy or prevent any newly
opened locations from

                                      -21-
<PAGE>

operating profitably.  There can be no assurance that additional financing will
be available on acceptable terms or at all.

FORWARD LOOKING STATEMENTS

        This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1936, as amended, which are intended to be
covered by the safe harbors created thereby. Although the Company believes that
the assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this report will
prove to be accurate. Factors that could cause actual results to differ from the
results discussed in the forward-looking statements include, but are not limited
to, potential increases in food and liquor costs, competition and the inability
to find suitable new locations.  In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
        ----------------------------------------------------------

        INTEREST RATE RISK

        The Company's Facility has a variable rate which is directly affected by
changes in U.S. interest rates.  The average interest rate of the Facility was
8.68% for the year ended December 26, 2000.  The following table presents the
quantitative interest rate risks at December 26, 2000:

<TABLE>
<CAPTION>
                                       Principal Amount by Expected Maturity
                                  ---------------------------------------------------
                                            (In thousands)                              Fair
                                                                        There-          Value
        (dollars in thousands)  2001    2002    2003    2004    2005    after   Total   12/26/00
        ----------------------  ----    ----    ----    ----    ----    -----   -----   --------

<S>                             <C>    <C>     <C>     <C>     <C>      <C>    <C>       <C>
        Variable rate debt      $418   $2,644  $2,892  $3,164  $2,862   $ ---  $11,980   $11,980
        Average Interest Rate-
              1/2% below prime  9.00%  9.00%   9.00%   9.00%   9.00%    9.00%

</TABLE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
        -------------------------------------------

        See the Consolidated Financial Statements listed in the accompanying
Index to Financial Statements on Page F-1 herein.  Information required for
financial schedules under Regulation S-X is either not applicable or is included
in the financial statements or notes thereto.

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

        Not applicable.


                                      -22-
<PAGE>
                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
           --------------------------------------------------

        The information required by this Item 10 will be in the Company's
definitive proxy materials to be filed with the Securities and Exchange
Commission and is incorporated in this Annual Report on Form 10-K by this
reference.

ITEM 11.   EXECUTIVE COMPENSATION
           ----------------------

        The information required by this Item 11 will be in the Company's
definitive proxy materials to be filed with the Securities and Exchange
Commission and is incorporated in this Annual Report on Form 10-K by this
reference.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
           --------------------------------------------------------------

        The information required by this Item 12 will be in the Company's
definitive proxy materials to be filed with the Securities and Exchange
Commission and is incorporated in this Annual Report on Form 10-K by this
reference.

ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
                ----------------------------------------------

        The information required by this Item 13 will be in the Company's
definitive proxy materials to be filed with the Securities and Exchange
Commission and is incorporated in this Annual Report on Form 10-K by this
reference.

                                      -23-
<PAGE>

                                     PART IV

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

                (a)    The following documents are filed as part of this report:

                       (1) Financial Statements.

                       See Index to Financial Statements which appears on
                       page F-1 herein.

                       (2)  Exhibits

                                           INDEX TO EXHIBITS
        Exhibit
         Number                                  EXHIBIT
         ------                                  -------

        *2.1    Form of Stock for Stock Exchange Agreement between the
                Registrant, the Shareholders of F&H Restaurant Corp.,
                Fox & Hound, Inc., Fox & Hound II, Inc. and Bailey's Sports
                Grille, Inc. and Certain Limited Partners of N. Collins Enter-
                tainment, Ltd., 505 Entertainment, Ltd., Midway Entertain-
                ment, Ltd. and F&H Dallas, L.P., dated February 20, 1997.

        *3.1    Certificate of Incorporation of the Registrant.

        *3.1.1  Amendment to the Certificate of Incorporation of the
                Registrant.

        *3.2    By-laws of the Registrant.

        *4.1    Specimen Certificate of the Registrant's Common Stock.

        *10.2   Form of Employment Agreement between the Registrant and
                Gary M. Judd.

        *10.3   Form of Employment Agreement between the Registrant and
                James K. Zielke.

        *10.4   Form of 1997 Incentive and Nonqualified Stock Option Plan of
                the Registrant.

        *10.5   Form of 1997 Directors' Stock Option Plan of the Registrant.

        *10.6   Form of Indemnification Agreement for officers and directors
                of the Registrant.

        *10.7   Confidentiality and Non-Competition Agreement among F&H
                Dallas, L.P., Midway Entertainment, Ltd., N. Collins Entertain-
                ment, Ltd., 505 Entertainment, Ltd. and Jamie B. Coulter, dated
                December 6, 1996.


                                      -24-
<PAGE>

        *10.8   Non-Competition, Confidentiality and Non-Solicitation Agree-
                ment between the Registrant and Dennis L. Thompson, dated
                February 20, 1997.

        *10.9   Non-Competition, Confidentiality and Non-Solicitation Agree-
                ment between the Registrant and Thomas A. Hager, dated
                February 20, 1997.

        *10.10  Lease by and between Real Alchemy I, L.P. and Midway
                Entertainment, Ltd., dated June 1, 1995.

        *10.11  First Amendment to Lease by and between Real Alchemy I,
                L.P. and Midway Entertainment, Ltd., dated December 6, 1996.

        *10.12  Amendment to Lease by and between Real Alchemy I, L.P. and
                Midway Entertainment, Ltd., dated December 6, 1996.

        *10.13  Lease by and between 505 Center, L.P. and 505 Entertainment,
                Ltd., dated January 31, 1994.

        *10.14  Amendment to Lease by and between 505 Center, L.P. and 505
                Entertainment, Ltd., dated December 6, 1996.

        **21.1  Subsidiaries of Registrant.

        **24.1  Powers of Attorney (included on the signature page of this
                Form 10-K).
---------------------------------

(b)  Reports on Form 8-K filed in the fourth quarter of 2000:

     The following reports on Form 8-K were filed by the Company during the
     quarterly period ended December 26, 2000:
        Current Report on Form 8-K dated and filed November 14, 2000, Items 4
        and 7.
        Current Report on Form 8-K dated and filed December 20, 2000, Items 4
        and 7.

  *  Incorporated by reference to the Company's Registration Statement on Form
     S-1, as amended (Commission File No. 333-23343).
**   Filed herewith.

                                      -25-
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Wichita, State of Kansas, on this 26th day of March 2001.



                                            TOTAL ENTERTAINMENT RESTAURANT CORP.
                                                        (Registrant)



                                                /s/ James K. Zielke
                                            ------------------------------------
                                                    James K. Zielke
                                                Chief Financial Officer,
                                              Treasurer, Secretary and Director
                                                (principal accounting officer)


                                      -26-
<PAGE>

                                  SIGNATORIES

Know all men by these presents, that each person whose signature appears below
hereby constitutes and appoints James K. Zielke his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to this Form 10-K and to file the same, with exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or either of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.

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


                SIGNATURE               TITLE                  DATE
                ---------               -----                  ----

        /s/ Dennis L. Thompson   Co-Chairman of the Board   March 26, 2001
        ----------------------
           Dennis L. Thompson


        /s/ Stephen P. Hartnett  Co-Chairman of the Board   March 26, 2001
        ----------------------
          Stephen P. Hartnett


        /s/ Steven M. Johnson    Chief Executive Officer    March 26, 2001
        ----------------------        and Director
           Steven M. Johnson  (principal executive officer)


        /s/ Gary M. Judd         President and Director     March 26, 2001
        ----------------------
           Gary M. Judd


        /s/ James K. Zielke      Chief Financial Officer,   March 26, 2001
        ----------------------    Treasurer, Secretary
           James K. Zielke           and Director
                              (principal accounting officer)


                                      -27-
<PAGE>

        /s/ Thomas A. Hager      Director                   March 26, 2001
        ----------------------
           Thomas A. Hager


        /s/ C. Wells Hall, III   Director                   March 26, 2001
        ----------------------
           C. Wells Hall, III


        /s/ E. Gene Street       Director                   March 26, 2001
        ----------------------
           E. Gene Street


        /s/ John D. Harkey, Jr.  Director                   March 26, 2001
        ----------------------
          John D. Harkey, Jr.


                                      -28-
<PAGE>

              SUBSIDIARIES OF TOTAL ENTERTAINMENT RESTAURANT CORP.
              ----------------------------------------------------
                              AS OF MARCH 13, 2001
                              --------------------

F & H Restaurant Corp.
TENT Finance, Inc.
Bailey's Sports Grille, Inc.
Fox & Hound, Inc.
Fox & Hound II, Inc.
Alabama Fox & Hound, Inc.
Fox & Hound of Arizona, Inc.
Fox & Hound of Colorado, Inc.
F & H Restaurant of Georgia, Inc.
Fox & Hound of Illinois, Inc.
Fox & Hound of Indiana, Inc.
F & H of Iowa, Inc.
Fox & Hound of Kansas, Inc.
Fox & Hound of Louisiana, Inc.
Fox & Hound of Michigan, Inc.
Fox & Hound of Missouri, Inc.
Fox & Hound of Nebraska, Inc.
Fox & Hound of North Carolina, Inc.
Fox & Hound of Ohio, Inc.
Pennsylvania Fox & Hound, Inc.
Fox & Hound of Tennessee, Inc.
Fox & Hound of Texas, Inc.
N. Collins Beverage, Inc.
505 Beverage, Inc.
Jackson Beverage Corporation
Raider Beverage Corporation
Rocket Beverage Corporation
Bryant Beverage Corporation
Downtown Beverage Corporation
Midway Entertainment, Ltd.
N. Collins Entertainment, Ltd.
505 Entertainment, Ltd.
Fox & Hound of San Antonio, Ltd.
Fox & Hound of Lubbock, Ltd.
Fox & Hound of Houston, Ltd.
Fox & Hound of Lewisville, Ltd.
Fox & Hound of Fort Worth, Ltd.


Exhibit 21.1

                                      -29-
<PAGE>









                       THIS PAGE INTENTIONALLY LEFT BLANK












                                      -30-
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                         PAGE
TOTAL ENTERTAINMENT RESTAURANT CORP.

<S>                                                                                      <C>
Independent Auditors' Report .........................................................   F-2
Report of Independent Certified Public Accountants ...................................   F-3
Report of Independent Auditors .......................................................   F-4
Consolidated Balance Sheets as of December 26, 2000 and December 28, 1999 ............   F-5
Consolidated Statements of Income for the years ended December 26, 2000,
     December 28, 1999, and December 29, 1998 ........................................   F-7
Consolidated Statements of Stockholders' Equity for the years ended December 26, 2000,
     December 28, 1999, and December 29, 1998 ........................................   F-8
Consolidated Statements of Cash Flows for the years ended December 26, 2000,
     December 28, 1999, and December 29, 1998 ........................................   F-9
Notes to Consolidated Financial Statements ...........................................  F-11

</TABLE>

                                      F-1
<PAGE>


                          Independent Auditors' Report


The Stockholders
Total Entertainment Restaurant Corp.

We have audited the accompanying consolidated balance sheet of Total
Entertainment Restaurant Corp. and subsidiaries as of December 26, 2000 and the
related consolidated statements of income, stockholders' equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Total
Entertainment Restaurant Corp. and subsidiaries as of December 26, 2000, and the
consolidated results of their operations and their consolidated cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States of America.



                                                            /s/ KPMG LLP
Wichita, Kansas
February 2, 2001,except
for note 11 which is as
of February 28, 2001

                                      F-2
<PAGE>


               Report of Independent Certified Public Accountants


The Stockholders
Total Entertainment Restaurant Corp.

We have audited the accompanying consolidated balance sheet of Total
Entertainment Restaurant Corp. as of December 28, 1999 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Total
Entertainment Restaurant Corp. as of December 28, 1999, and the consolidated
results of its operations and its consolidated cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.

As described in Note 1 to the financial statements, on December 30, 1998, the
Company changed its method of accounting for pre-opening costs.




                                             /s/ Grant Thornton LLP

Wichita, Kansas
January 28, 2000


                                      F-3
<PAGE>


                         Report of Independent Auditors


The Stockholders
Total Entertainment Restaurant Corp.

We have audited the accompanying consolidated statements of income,
stockholders' equity and cash flows of Total Entertainment Restaurant Corp. for
the year ended December 29, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows of
Total Entertainment Restaurant Corp. for the year ended December 29, 1998, in
conformity with accounting principles generally accepted in the United States of
America.




                                                /s/ Ernst & Young LLP

March 22, 1999
Wichita, Kansas


                                      F-4
<PAGE>



                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                           DECEMBER 26,  DECEMBER 28,
                                                               2000          1999
                                                            ----------    ----------
<S>                                                        <C>           <C>
ASSETS
Current assets:
   Cash and cash equivalents                               $ 2,244,606   $ 2,550,469
   Inventories                                               1,028,975       973,156
   Deferred income taxes                                       161,206       136,827
   Other current assets                                        579,594       435,639
                                                            ----------    ----------
Total current assets                                         4,014,381     4,096,091

Property and equipment:
   Land                                                        600,000       600,000
   Buildings                                                   670,629       670,629
   Leasehold improvements                                   21,851,941    20,720,043
   Equipment                                                13,397,524    13,189,864
   Furniture and fixtures                                    3,265,386     3,108,243
                                                            ----------    ----------
                                                            39,785,480    38,288,779
   Less accumulated depreciation and amortization            9,022,781     5,988,331
                                                            ----------    ----------
Net property and equipment                                  30,762,699    32,300,448


Other assets:
   Goodwill, net of accumulated amortization of $977,959
     ($733,796 at December 28, 1999)                         3,905,296     4,149,459
   Deferred income taxes                                     1,059,839       490,460
   Other assets                                                385,385       315,911
                                                            ----------    ----------
Total other assets                                           5,350,520     4,955,830
                                                            ----------    ----------

Total assets                                               $40,127,600   $41,352,369
                                                           ===========   ===========
</TABLE>

                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                                                                                    DECEMBER 26,   DECEMBER 28,
                                                                                        2000          1999
                                                                                     ----------    ----------
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
<S>                                                                                 <C>           <C>
   Current portion notes payable                                                    $   418,108   $        --
   Accounts payable                                                                   3,520,542     1,040,448
   Sales tax payable                                                                    442,297       359,458
   Accrued payroll                                                                      775,012       655,702
   Accrued payroll taxes                                                                242,134       355,543
   Accrued income taxes                                                               1,009,592       876,838
   Lease obligation for closed store                                                    263,924       368,476
   Other accrued liabilities                                                            777,504       928,359
                                                                                     ----------    ----------
Total current liabilities                                                             7,449,113     4,584,824


Notes payable                                                                        11,561,892    14,395,000
Deferred revenue                                                                        129,549       140,769

Stockholders' equity:
   Preferred stock, $.10 par value, 2,000,000 shares
     authorized; none issued                                                                 --            --
   Common stock, $.01 par value; 20,000,000 shares authorized;
     8,741,411 shares issued and
     outstanding (9,681,271 at December 28, 1999)                                        87,414        96,813
   Additional paid-in capital                                                        17,301,511    19,385,229
   Retained earnings                                                                  3,598,121     2,749,734
                                                                                      ----------    ----------
Total stockholders' equity                                                           20,987,046    22,231,776
                                                                                     ----------    ----------
Commitments

Total liabilities and stockholders' equity                                          $40,127,600   $41,352,369
                                                                                    ===========   ===========
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                      F-6
<PAGE>



                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                      YEAR ENDED          YEAR ENDED          YEAR ENDED
                                                                  DECEMBER 26, 2000    DECEMBER 28, 1999   DECEMBER 29, 1998
                                                                 --------------------------------------------------------------
<S>                                                                    <C>                  <C>                 <C>
Sales:
Food and beverage                                                      $50,837,163          $50,525,221         $30,009,876
Entertainment and other                                                  5,152,660            5,404,628           4,103,743
                                                                 --------------------------------------------------------------
   Total net sales                                                      55,989,823           55,929,849          34,113,619

Cost and expenses:
   Cost of sales                                                        14,789,948           15,349,274           9,428,645
   Entertainment and restaurant operating expenses                      28,394,610           28,631,590          15,585,758
   Depreciation and amortization                                         3,592,299            3,697,083           2,875,262
   Preopening costs                                                        500,739              487,475                  --
   Provision for asset impairment and store closing                      2,361,840            1,086,785                  --
                                                                 --------------------------------------------------------------
                                                                 --------------------------------------------------------------
Entertainment and restaurant costs and expenses                         49,639,436           49,252,207          27,889,665
                                                                 --------------------------------------------------------------
Entertainment and restaurant operating income                            6,350,387            6,677,642           6,223,954

General and administrative expenses:
   Related parties                                                              --               60,563             320,599
   Other                                                                 3,768,774            3,839,623           2,288,663
Goodwill amortization                                                      244,163              244,163             244,163
                                                                 --------------------------------------------------------------
Income from operations                                                   2,337,450            2,533,293           3,370,529
Other income (expense):
   Loss on disposal of assets                                              (66,902)            (123,648)                 --
   Other income (principally interest income)                                  404                  126              70,914
    Interest expense                                                    (1,080,919)          (1,174,739)           (140,376)
                                                                 --------------------------------------------------------------
Income before provision for income taxes                                 1,190,033            1,235,032           3,301,067
Provision for income taxes                                                 341,646              418,211           1,220,775
                                                                 --------------------------------------------------------------
Income before cumulative effect of a
   change in accounting principle                                          848,387              816,821           2,080,292
Cumulative effect of a change in accounting principle                           --           (1,127,536)                 --
                                                                 --------------------------------------------------------------
Net income (loss)                                                 $       848,387       $      (310,715)      $   2,080,292
                                                                 ==============================================================

Basic and diluted earnings (loss) per share:
Earnings before cumulative effect of a
   change in accounting principle                                 $           0.09      $          0.08       $        0.20
Cumulative effect of a change in accounting principle                           --                (0.11)                 --
                                                                 --------------------------------------------------------------
Basic and diluted earnings (loss) per share                       $           0.09      $         (0.03)      $        0.20
                                                                 ==============================================================
</TABLE>


                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                      F-7
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                               COMMON STOCK
                                                      -------------------------------  ADDITIONAL
                                                                                         PAID-IN          RETAINED
                                                           NUMBER         AMOUNT         CAPITAL          EARNINGS         TOTAL
                                                      ------------------------------------------------------------------------------
<S>                                                       <C>         <C>              <C>             <C>               <C>
Balance at December 30, 1997                              10,415,000  $   104,150      $20,580,764     $   980,157      $21,665,071
   Additional initial public offering expenses                    --           --           (9,586)             --           (9,586)
   Net income                                                     --           --               --       2,080,292        2,080,292
                                                      ------------------------------------------------------------------------------
Balance at December 29, 1998                              10,415,000      104,150       20,571,178       3,060,449       23,735,777
   Purchase and retirement of shares of common stock
                                                            (733,729)      (7,337)      (1,185,949)             --       (1,193,286)
   Net loss                                                       --           --               --        (310,715)        (310,715)
                                                      ------------------------------------------------------------------------------
Balance at December 28, 1999                               9,681,271       96,813       19,385,229       2,749,734       22,231,776
   Purchase and retirement of shares of common stock
                                                            (939,860)      (9,399)      (2,083,718)             --       (2,093,117)
   Net income                                                     --           --               --         848,387          848,387
                                                      ------------------------------------------------------------------------------
Balance at December 26, 2000                               8,741,411   $   87,414     $ 17,301,511     $ 3,598,121     $ 20,987,046
                                                      ==============================================================================
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                      F-8
<PAGE>




                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                         YEAR ENDED         YEAR ENDED         YEAR ENDED
                                                                        DECEMBER 26,       DECEMBER 28,       DECEMBER 29,
                                                                            2000               1999               1998
                                                                     ----------------------------------------------------------
OPERATING ACTIVITIES
<S>                                                                     <C>                <C>                 <C>
   Net income (loss)                                                    $      848,387     $     (310,715)     $   2,080,292
   Adjustments to reconcile net income (loss) to net
       cash provided by operating activities:
       Cumulative effect of a change in accounting
            principle                                                               --          1,127,536                 --
       Write off of property and equipment related
            to asset impairment and store closure                            2,361,840            692,746                 --
       Loss on disposal of assets                                               66,902            123,648                 --
       Depreciation                                                          3,611,878          3,725,250          1,917,027
       Amortization                                                            269,413            287,744          1,202,398
       Deferred taxes                                                         (593,759)          (286,212)           165,250
       Net change in operating assets and liabilities:
         Inventories                                                           (55,819)          (118,470)          (457,928)
         Preopening costs                                                           --                 --         (2,343,896)
         Other current assets                                                 (143,955)           227,108           (312,423)
         Other assets                                                         (122,368)            14,514           (212,989)
         Accounts payable                                                      934,011         (2,005,717)           851,460
         Accounts payable - affiliates                                              --            (11,451)           (13,195)
         Accrued liabilities                                                    70,639            927,396          1,487,527
         Deferred revenue                                                      (11,220)           140,769                 --
         Lease obligation for closed store                                    (104,552)           368,476                 --
                                                                     ----------------------------------------------------------
Net cash provided by operating activities                                    7,131,397          4,902,612          4,363,523

INVESTING ACTIVITIES
   Purchases of property and equipment                                      (3,005,492)        (4,694,718)       (19,758,730)
   Proceeds from disposal of assets                                             76,349             10,000                 --
   Proceeds from sale of marketable securities                                      --                 --          3,315,056
                                                                     ----------------------------------------------------------
Net cash used in investing activities                                       (2,929,143)        (4,684,718)       (16,443,674)

FINANCING ACTIVITIES
   Proceeds from revolving note payable to bank                             38,480,000         41,200,000         23,955,000
   Payments of revolving note payable to bank                              (40,895,000)       (38,620,000)       (12,140,000)
   Purchase of common stock                                                 (2,093,117)        (1,193,286)                --
   Net expenses from issuance of common stock                                       --                 --             (9,586)
                                                                     ----------------------------------------------------------
Net cash (used in) provided by financing activities                         (4,058,117)         1,386,714         11,805,414

Net (decrease) increase in cash and cash equivalents                          (305,863)         1,604,608           (274,737)
Cash and cash equivalents at beginning of year                               2,550,469            945,861          1,220,598
                                                                     ----------------------------------------------------------
Cash and cash equivalents at end of year                                 $   2,244,606     $    2,550,469     $      945,861
                                                                     ==========================================================
</TABLE>


                                       F-9
<PAGE>


                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


<TABLE>
<CAPTION>
                                                                         YEAR ENDED         YEAR ENDED         YEAR ENDED
                                                                        DECEMBER 28,       DECEMBER 29,       DECEMBER 29,
                                                                            1999               1998               1998
                                                                     ----------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<S>                                                                      <C>                <C>                <C>
Cash paid for interest                                                   $   1,208,313      $   1,171,349      $     194,801
Cash paid for income taxes                                                     802,650            190,668            561,600

SUPPLEMENTAL DISCLOSURE OF NON CASH ACTIVITY
Additions to property and equipment in accounts
   payable at year end                                                   $   1,546,083      $          --      $   1,733,580

</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-10
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1. BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES

o        BACKGROUND

Total Entertainment Restaurant Corp. (the Company) owns and operates a chain of
entertainment and restaurant locations under the Fox and Hound English Pub &
Grille (Fox & Hound), Bailey's Sports Grille and Bailey's Pub & Grille
(Bailey's) brand names. The Company's entertainment restaurant locations combine
a comfortable and inviting social gathering place, full menu and full service
bar, state-of-the-art audio and video systems for sports entertainment,
traditional games of skill such as pocket billiards and late-night dining
alternatives in a single location. The Company's entertainment restaurant
locations appeal to a broad range of guests who can participate in one or more
aspects of the Company's total entertainment restaurant experience. Fox & Hound
and Bailey's encompass the Company's multi-dimensional concept and serve both
larger urban and smaller regional markets. As of December 26, 2000, the Company
owned and operated 25 Fox & Hounds and 13 Bailey's in Alabama, Arkansas,
Georgia, Illinois, Indiana, Kansas, Louisiana, Michigan, Missouri, Nebraska,
North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee and Texas. The
Company operates in one business segment.

The company has a 52/53 week fiscal year ending on the last Tuesday in December.

o        PRINCIPLES OF CONSOLIDATION

The accompanying financial statements include the accounts of Total
Entertainment Restaurant Corp. and its wholly-owned subsidiaries. All
significant intercompany accounts have been eliminated.

o        CASH AND CASH EQUIVALENTS

The Company considers cash and cash equivalents to include currency on hand,
demand deposits with banks or financial institutions, and short-term investments
with maturities of three months or less when purchased. Cash and cash
equivalents are carried at cost, which approximates fair value.

o        CONCENTRATION OF CREDIT RISK

The Company's financial instruments exposed to credit risk consist primarily of
cash. The Company places its cash with high credit financial institutions and,
at times, such cash may be in excess of the Federal Depository insurance limit.

o        INVENTORIES

Inventories consist of food and beverages and are stated at the lower of cost
(first-in, first-out) or market.


                                      F-11
<PAGE>



                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

o        PRE-OPENING COSTS

In April 1998, the American Institute of Certified Public Accountants issued SOP
98-5, REPORTING ON THE COSTS OF START-UP ACTIVITIES, which requires costs
related to pre-opening activities be expensed as incurred. Prior to fiscal year
1999, the Company capitalized substantially all costs incurred prior to the
opening of new restaurants, excluding those costs capitalized as property and
equipment, and amortized such pre-opening costs over a one-year period. The
Company adopted the provisions of SOP 98-5 effective December 30, 1998. The
effect of adoption of SOP 98-5 was to increase income from continuing operations
in 1999 by $1,064,401 ($0.10 per share), net of tax expense of $625,125, and to
record a charge for the cumulative effect of an accounting change of $1,127,536,
net of tax benefits of $662,204, to expense costs that had been capitalized
prior to 1999. Pro forma net income and earnings per share amounts, assuming the
new accounting principle is applied retroactively, are as follows:

<TABLE>
<CAPTION>
                                                                                1998
                                                                                ----
<S>                                                                          <C>
         Net income--as reported                                             $2,080,292
         Net income--pro forma                                               $1,196,189

         Basic and diluted earnings per share--as reported                       $ 0.20
         Basic and diluted earnings per share--pro forma                         $ 0.11
</TABLE>


o        PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Maintenance repairs and renewals
which do not enhance the value of or increase the life of the assets are
expensed as incurred.

Buildings and leasehold improvements are amortized on the straight-line method
over the lesser of the life of the lease, including renewal options, or the
estimated useful lives of the assets, which range from 5 to 30 years. Equipment
and furniture and fixtures are depreciated using the straight-line method over
the estimated useful lives of the assets, which range from two to seven years.

o        GOODWILL

Goodwill represents the excess of the cost of companies acquired over the fair
value of the net assets at the date of acquisition and is being amortized over
20 years.

o        IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets and certain intangibles, including goodwill, are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company reviews
applicable intangible assets and long-lived assets related to each restaurant on
a periodic basis. When events or changes in circumstances indicate an asset may
not be recoverable, the Company estimates the future cash flows expected to
result


                                      F-12

<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

from the use of the asset. If the sum of the expected undiscounted cash flows is
less than the carrying value of the asset, an impairment loss is recognized. The
impairment loss is recognized by measuring the difference between the carrying
value of the assets and the fair market value of the assets. The Company's
estimates of fair values are based on the best information available and require
the use of estimates, judgments and projections as considered necessary. The
actual results may vary significantly. A provision for impairment amounting to
$2,361,840 has been recorded for the year ended December 26, 2000 which is
applicable to two underperforming restaurants.

o        INCOME TAXES

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Valuation allowances are established when necessary to reduce deferred
tax assets to the amounts expected to be realized. Deferred tax assets and
liabilities are measured using enacted tax rates. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

o        ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising expense for the years
ended December 26, 2000, December 28, 1999, and December 29, 1998 were $696,364,
$622,555, and $489,929, respectively.

o        ACCOUNTING FOR STOCK-BASED COMPENSATION

In accordance with APB Opinion No. 25, the Company uses the intrinsic
value-based method for measuring stock-based compensation cost which measures
compensation cost as the excess, if any, of the quoted market price of Company's
common stock at the grant date over the amount the employee must pay for the
stock. The Company's policy is to grant stock options with grant prices equal to
the fair value of the Company's common stock at the date of grant. Proceeds from
the exercise of common stock options issued to officers, directors and key
employees under the Company's stock option plans are credited to common stock to
the extent of par value and to additional paid-in capital for the excess.
Required pro forma disclosures of compensation expense determined under the fair
value method of Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation, are presented in Note 4.

o        USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from estimates.


                                      F-13
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

o        EARNINGS PER SHARE

Basic earnings per common share is calculated by dividing net income by the
average number of common shares outstanding during the year. Diluted earnings
per common share is calculated by adjusting outstanding shares, assuming
conversion of all potentially dilutive stock options.

o        RECLASSIFICATIONS

Certain reclassifications have been made to the 1999 consolidated financial
statements to conform with the 2000 presentation.

2. PREFERRED STOCK

The Company's Board of Directors has the authority to issue up to 2,000,000
shares of preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preference
and the number of shares constituting any series or the designation of such
series.

3. REVOLVING NOTE PAYABLE

On September 1, 1998 the Company entered into a loan agreement with Intrust
Bank, N.A. (the "Facility") which provides for a line of credit of $20,000,000
subject to certain limitations based on earnings before interest, income taxes,
depreciation and amortization of the past fifty-two weeks. The note is secured
by substantially all assets of the Company. The note restricts the ability of
the Company to pay dividends. The Facility requires monthly payments of interest
only until November 1, 2001, at which time equal monthly installments of
principal and interest are required as necessary to fully amortize the
outstanding indebtedness plus future interest over a period of four years.
Interest is accrued at a rate of 1/2% below the prime rate as published in The
Wall Street Journal (9.00% and 8.50% at December 26, 2000 and December 28, 1999,
respectively). Proceeds from the Facility were used for restaurant development
and acquisition of treasury stock. As of December 26, 2000 and December 28,
1999, the Company had borrowed $11,980,000 and $14,395,000, respectively, under
the Facility.

The following represents future maturities of the note:

                            2001                                     $ 418,108
                            2002                                     2,644,212
                            2003                                     2,892,257
                            2004                                     3,163,570
                            2005                                     2,861,853
                                                                ----------------
                            Total                                  $11,980,000
                                                                ================


                                      F-14
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. STOCK OPTIONS

The Company has elected to follow APB Opinion No. 25, Accounting for Stock
Issued to Employees and related interpretations in accounting for its employee
stock options because, as described below, the alternative fair value accounting
provided for under FASB Statement No. 123, Accounting for Stock-Based
Compensation, requires the use of option valuation models that were not
developed for use in valuing employee stock options. Under APB Opinion No. 25,
because the exercise price of the Company's employee stock options equals the
market price of the underlying stock on the date of grant, no compensation
expense is recognized.

o      1997 Incentive and Nonqualified Stock Option Plan

       In March 1997, the Board of Directors adopted a stock option plan
       providing for incentive and nonqualified stock options pursuant to which
       up to 1,500,000 shares of common stock will be available for issuance.
       The Plan was amended in May 1999 to increase the number of authorized
       shares reserved for issuance to 1,600,000 shares from 1,500,000 shares.
       The Plan covers the former Chairman of the Board, certain officers and
       key employees. Options granted have a vesting period of three to five
       years and a life of ten years.

o      Directors' Stock Option Plan

       In March 1997, the Board of Directors adopted a stock option plan
       providing for nondiscretionary grants to nonemployee directors pursuant
       to which up to 150,000 shares of common stock will be available for
       issuance.

Pro forma information regarding net income and earnings per share is required by
Statement No. 123, which also requires the information be determined as if the
Company has accounted for its employee stock options granted under the fair
value of that Statement. The fair value method for these options were estimated
at the date of grant using a Black-Scholes option pricing model with the
following weighted-average assumptions: risk-free interest rate ranging from
5.0% to 5.3%; no dividend yields; volatility factor ranging from .344 to .800;
and a weighted-average expected life of the option of 5 years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions, including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.


                                      F-15
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. STOCK OPTIONS (CONTINUED)

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the option's vesting period. The Company's pro
forma information is as follows:

<TABLE>
<CAPTION>
                                                 December 26,       December 28,       December 29,
                                                     2000               1999               1998
                                               ------------------ ------------------ -----------------
<S>                                                 <C>               <C>               <C>
     Pro forma net income (loss)                    $645,479          $(524,264)        $1,719,143
     Pro forma earnings (loss) per
        share--basic and diluted                       $0.07             $(0.05)             $0.17
     Weighted  average  fair value of options
       granted during the year                         $1.23              $3.05              $2.56

</TABLE>

A summary of the Company's stock option activity and related information for the
years ended December 26, 2000, December 28, 1999, and December 29, 1998 follows:

<TABLE>
<CAPTION>
                                 December 26,2000          December 28, 1999         December 29, 1998
                             ------------------------- -------------------------- ------------------------
                              Weighted                  Weighted                   Weighted
                              Average                   Average                    Average
                              Exercise                  Exercise                   Exercise
                               Price       Options       Price        Options       Price       Options
                             ----------- ------------- ----------- -------------- ----------- ------------
<S>                             <C>       <C>             <C>        <C>            <C>          <C>
Outstanding beginning           $ 5.57    1,180,903       $ 7.19     1,129,401      $ 8.87       812,746
  of year
     Granted                      1.92       58,000         4.02       638,292        3.80       432,584
     Exercised                     -              -          -               -           -             -
     Canceled                    (4.45)    (258,834)       (6.05)     (586,790)      (6.30)     (115,929)
                                         -------------             --------------             ------------
Outstanding end of year         $ 5.60      980,069       $ 5.57     1,180,903      $ 7.19     1,129,401
                                         =============             ==============             ============
</TABLE>

As of December 26, 2000, the Company's outstanding options have a weighted
average remaining contract life of 7.0 years and exercise prices ranging from
$1.56 to $9.00. There were 417,113 options exercisable at December 26, 2000 and
220,539 options exercisable at December 28, 1999.

For options outstanding as of December 26, 2000, the number of options,
weighted-average exercise price and weighted-average remaining contract life for
each group of options are as follows:

<TABLE>
<CAPTION>
                                              Options Outstanding
               ---------------------------------------------------------------------------------
                                         Number               Weighted-             Weighted-
                                     Outstanding at            Average               Average
                  Range of            December 26,            Exercise              Remaining
                   Prices                 2000                  Price             Contract Life
               ---------------------------------------------------------------------------------
<S>            <C>                       <C>                    <C>                <C>
               $1.56 to $4.00            515,890                3.23               7.64 years
               $4.13 to $5.25             75,701                4.44               6.63 years
               $7.00 to $9.00            388,478                8.96               6.33 years
                                         -------
                    Total                980,069                5.60               7.04 years

</TABLE>
                                      F-16
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. STOCK OPTIONS (CONTINUED)

The number of shares and weighted-average exercise price of options exercisable
at December 26, 2000 are as follows:

                                             Options Exercisable
                          ------------------------------------------------------
                                                    Number             Weighted-
                                                 Exercisable at         Average
                             Range of            December 26,           Exercise
                              Prices                 2000                 Price
                          ------------------------------------------------------
                          $1.56 to $4.00            100,846                3.44
                          $4.13 to $5.25             15,481                4.44
                          $7.00 to $9.00            300,786                8.99
                                                    -------
                               Total                417,113                7.48

5. RELATED PARTY TRANSACTIONS

The Company utilized an affiliate to provide certain accounting, computer, and
administrative services during 1999 and 1998. The Company incurred fees of
$60,563 and $320,599 related to these services for the years ended December 28,
1999 and December 29, 1998, respectively.

6. LEASES

The Company leases many of its facilities under noncancelable operating leases
having terms expiring between 2002 and 2011. The leases have renewal clauses of
3 to 5 years, exercisable at the option of the lessee. In addition, certain
leases contain escalation clauses based on a fixed percentage increase and
provisions for contingent rentals based on a percentage of gross revenues, as
defined by the lease. Total rental expense for the years ended December 26,
2000, December 28, 1999, and December 29, 1998 was $3,246,774, $3,196,886, and
$1,564,399, respectively, of which $243,409, $241,892, and $241,892,
respectively, was paid to a related party. There were no contingent rentals
during 2000, 1999, or 1998.

The following presents the future minimum lease payments under noncancelable
operating leases with initial terms in excess of one year for each of the next
five years and thereafter as of December 26, 2000:

                          2001                                   $4,110,465
                          2002                                    3,979,825
                          2003                                    3,314,368
                          2004                                    1,558,514
                          2005                                    1,378,120
                          Thereafter                              4,714,458
                                                              ----------------
                          Total                                 $19,055,750
                                                              ================

It is expected in the normal course of business that leases will be renewed as
they expire.


                                      F-17
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                           2000               1999              1998
                                                    --------------------------------------------------------
Numerator
Net income (loss)                                          $ 848           $ (311)             $2,080
                                                    ========================================================
<S>                                                        <C>              <C>                <C>
Denominator
  Denominator for basic (loss) earnings
     per share - weighted-average shares                   9,323            10,348             10,415

Effect of dilutive securities:
  Employee stock options                                       6                 4                 21
                                                    --------------------------------------------------------

Dilutive potential common shares
  Denominator for diluted earnings (loss) per
     share - adjusted weighted-average shares and
     assumed conversions                                   9,329            10,352             10,436
                                                    ========================================================
Basic earnings (loss) per common share                    $ 0.09           $ (0.03)            $ 0.20
                                                    ========================================================
Diluted earnings (loss) per common share                  $ 0.09           $ (0.03)            $ 0.20
                                                    ========================================================
</TABLE>

8. INCOME TAXES

The Company's provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                    DECEMBER 26,      DECEMBER 28,       DECEMBER 29,
                                                      2000                1999                1998
<S>                                                 <C>              <C>                 <C>
     Current:
         Federal                                    $ 786,663        $   534,938         $  836,853
         State                                        148,742             49,953            218,672
                                               ---------------------------------------------------------
     Total Current                                    935,405            584,891          1,055,525
     Deferred:
         Federal                                     (546,984)          (777,401)           137,563
         State                                        (46,775)           (51,483)            27,687
                                               ---------------------------------------------------------
     Total Deferred                                  (593,759)          (828,884)           165,250
                                               ---------------------------------------------------------
     Total income tax expense (benefit)             $  341,646       $  (243,993)        $1,220,775
                                               =========================================================
</TABLE>

                                      F-18
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. INCOME TAXES (CONTINUED)

The income tax effects of temporary differences that give rise to significant
portions of deferred income tax assets and liabilities at December 26, 2000 and
December 28, 1999 are as follows:

<TABLE>
<CAPTION>
                                                         December 26, 2000   December 28, 1999
                                                         --------------------------------------
<S>                                                           <C>                <C>
  Deferred tax assets:
     Preopening and organization costs                        $ 527,423          $ 760,554
     Store closure costs                                        387,452            429,795
     Asset impairment costs                                     956,545                  -
     Deferred revenue                                            52,467             57,012
     Bonuses                                                          -             26,447
     Vacation                                                    43,403             38,208
     Federal tax credit carryovers                              913,641            604,588
     Other                                                       50,256             72,226
                                                         --------------------------------------
     Total deferred tax assets                                2,931,187          1,988,830
                                                         -------------------- -----------------

  Deferred tax liabilities:
     Property and equipment                                   1,486,054          1,103,778
     Goodwill                                                   167,442            150,704
     Other                                                       56,646            107,061
                                                         --------------------------------------
  Total deferred tax liabilities                              1,710,142          1,361,543
                                                         --------------------------------------
  Net deferred tax asset (liability)                         $1,221,045       $    627,287
                                                         ======================================
</TABLE>

The federal tax credit carryovers consist of credits for social security taxes
paid on tips in excess of minimum wage of $658,119 and $327,006 at December 26,
2000 and December 28, 1999, respectively, which expire between 2018 and 2020 and
credits for alternative minimum tax of $255,522 and $255,522 at December 26,
2000 and December 28, 1999, respectively, which have no expiration date. A
valuation allowance for deferred tax assets was not considered necessary at
December 26, 2000.

A reconciliation between the reported provision for income taxes and tax
determined by applying the applicable U.S. Federal Statutory income tax rate to
income before taxes follows:

<TABLE>
<CAPTION>
                                                DECEMBER 26,         DECEMBER 28,          DECEMBER 29,
                                                    2000                 1999                  1998
                                            ---------------------------------------------------------------
                                              Amount     Rate     Amount      Rate      Amount     Rate
                                            ---------------------------------------------------------------
<S>                                         <C>          <C>    <C>            <C>     <C>          <C>
Income tax (benefit) expense at federal
      statutory rate                        $ 404,611    34.0%  $ (188,601)    34.0%   $1,122,363   34.0%
State income taxes, net of
  federal (provision) benefit                  41,199     3.5     (15,217)      2.7      141,616     4.3
Tax credits                                  (177,591)  (14.9)   (126,615)     22.8      (92,565)   (2.8)
Other items, net                               73,427     6.1      86,440     (15.5)      49,361     1.5
                                            ----------------------------------------------------------------
Actual income tax expense (benefit)         $ 341,646    28.7%  $(243,993)     44.0%  $1,220,775    37.0%
                                            ================================================================
</TABLE>

                                      F-19
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amount reported in the balance sheet for all financial instruments,
including cash and cash equivalents, certain payables, and debt instruments,
approximates its fair value.

10. QUARTERLY FINANCIAL SUMMARIES (UNAUDITED)

The following table summarizes the unaudited consolidated quarterly results of
operations for fiscal 2000 and 1999:

<TABLE>
<CAPTION>
                                            1st               2nd               3rd             4th
                                          Quarter           Quarter           Quarter          Quarter
                                       ------------------------------------------------------------------
<S>                                     <C>               <C>              <C>               <C>
   2000
   Net sales                            $13,649,790       $12,006,223      $11,282,667       $19,051,143
   Entertainment and restaurant
       operating income (a)               2,831,044         1,676,877        1,213,162           629,304
   Net income (loss) (a)                    971,316           294,971           20,221          (438,121)
   Basic and diluted earnings (loss)
       per share                               0.10              0.03             0.00             (0.05)

</TABLE>

   (a) The fourth quarter of fiscal 2000 includes a charge to earnings of
       $2,361,840 ($1,457,491 net of income tax) related to the provision for
       asset impairment in the quarter.

<TABLE>
<CAPTION>
                                            1st               2nd               3rd              4th
                                          Quarter           Quarter           Quarter          Quarter
                                       ------------------------------------------------------------------
<S>                                     <C>               <C>              <C>               <C>
   1999
   Net sales                            $14,383,519       $12,796,417      $11,440,655       $17,309,258
   Entertainment and restaurant
       operating income (loss) (a)        2,519,567         1,506,891         (139,133)        2,790,317
   Income (loss) before cumulative
       effect of a change in accounting
       principle (a)                        843,815           128,687         (940,600)          784,919
   Cumulative effect of a change in
       accounting principle (b)          (1,127,536)                -                -                 -
   Net (loss) income (a)                   (283,721)          128,687         (940,600)          784,919
   Basic and diluted (loss) earnings
       per share before cumulative
       effect of a change in accounting
       principle (b)                           0.08              0.01            (0.09)             0.08
   Basic and diluted (loss) earnings
       per share                              (0.03)             0.01            (0.09)             0.08

</TABLE>

(a)    The third  quarter of fiscal 1999  includes a charge to earnings of
       $1,086,785  ($670,655 net of income tax) related to
       the provision for store closing in the quarter.
(b)    As previously described in Note 1, the Company adopted the provisions of
       SOP 98-5 in the first quarter of 1999, which required the Company to
       expense preopening costs as incurred. The SOP required the Company to
       adopt the provisions at the beginning of the year.

                                      F-20
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.  LEGAL PROCEEDINGS

On February 28, 2001, eight former employees filed a complaint on their own
behalf and on behalf of other similarly situated persons against the Company,
Fox & Hound of Indiana, Inc., a subsidiary of the Company, and several Company
officers, in the United States District Court for the Southern District of
Indiana.

The plaintiffs alleged that the Company and the other defendants willfully and
in bad faith failed to pay the defendants overtime pay for hours worked in
excess of forty hours per week in violation of the provisions of the Fair Labor
Standards Act. The plaintiffs' complaint seeks (1) declaratory judgment that the
Company and other defendants violated the plaintiffs' legal rights, (2) an
accounting of compensation to which the defendants are owed, (3) monetary
damages in the form of back pay compensation and benefits, unpaid entitlements,
liquidated damages, and pre-judgment and post-judgment interest, and (4)
attorneys' fees and costs. The defendants, including the Company, have not yet
filed an answer to the plaintiffs' petition, but plan to do so shortly.

On October 2, 2000, R&A Bailey & Company of Dublin, Ireland, filed a notice of
opposition in the Trademark Trial and Appeal Board of the U.S. Patent and
Trademark Office to certain of the Company's U.S. service mark applications.
Additionally, on November 14, 2000, R&A Bailey & Company filed a petition in the
Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office to
cancel certain of the Company's U.S. service mark registrations. In both
instances, the service marks involved in the actions included the word
"Bailey's".

On December 29, 2000, the Company through its trademark counsel filed an answer
to R&A Bailey & Company's notice of opposition, denying its allegations. On
February 16, 2001, the Company filed a Stipulated Motion to Extend Answer to
Petition in response to the petition to cancel by R&A Bailey & Company.

Although it is not possible at this time for the Company to evaluate the merits
of these claims and lawsuits, nor their likelihood of success, management of the
Company is of the opinion that any resulting liability should not have a
material adverse effect on the Company's financial statements.

                                      F-21