SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.  20549
_______________________ FORM 10-Q (Mark One)xQUARTERLY REPORT under SECTION 13 OR 15(d)
of the SECURITIES EXCHANGE ACT OF 1934 For
the quarter endedMarch 25, 2001 OR oTRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For
the transition period from ______________ to ______________. Commission
file number 0-20792 FRESH CHOICE, INC.(Exact name of
  registrant as specified in its charter)
  Delaware
  77-0130849(State
  or other jurisdiction of
  (I.R.S.
  Employeeincorporation
  or organization)
  Identification
  No.)485 Cochrane Circle,
  Morgan Hill, California95037(Address
  of principal executives offices) (Zip Code)Registrant's
  telephone number, including area code:
  (408) 776-0799
   Former name, former address and former
fiscal year, if changed since last report. Indicate by check 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. xYesoNo APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
YEARS: Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Section
12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. oYesoNo APPLICABLE
ONLY TO CORPORATE ISSUERS:
 The number of shares of Common Stock,
$.001 par value, outstanding as of April 25, 2001 was 5,834,021.  
 FRESH CHOICE, INC.

INDEX

PART
  I - FINANCIAL INFORMATIONItem
  1 - Financial StatementsCondensed
  Consolidated Balance Sheets at March 25, 2001 and December 31, 2000Condensed
  Consolidated Statements of Income for the Twelve Weeks ended March 25, 2001
  and March 19, 2000Condensed
  Consolidated Statements of Cash Flows for the Twelve Weeks ended March 25,
  2001 and March 19, 2000Notes
  to Condensed Consolidated Financial StatementsItem
  2 - Management's Discussion and Analysis of Financial Condition and Results
  of OperationsItem
  3 - Quantitative and Qualitative Disclosures About Market RiskPART
  II - OTHER INFORMATIONItem 1 - Legal ProceedingsItem 2 - Changes in
  SecuritiesItem 3 -
  Defaults Upon Senior SecuritiesItem
  4 - Submission of Matters to a Vote of Security HoldersItem 5 - Other InformationItem 6 -
  Exhibits and Reports on Form 8-KSIGNATURESINDEX TO FORM 10-Q EXHIBITSPART I.  FINANCIAL INFORMATION

Item 1 - Financial
Statements


FRESH CHOICE, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except share and per share amounts)(Unaudited)


March 25,
  
  December 31,2001
  
  2000ASSETSCURRENT ASSETS:Cash and cash equivalents
  $4,014
  
  $2,918Receivables
  285
  
  239Inventories
  490
  
  478Prepaid expenses and other current
  assets
  443
  
  1,253Total current assets
  5,232
  
  4,888PROPERTY AND EQUIPMENT, net
  26,245
  
  26,529LEASE ACQUISITION COSTS, net
  201
  
  220DEPOSITS AND OTHER ASSETS
  533
  
  522TOTAL ASSETS
  $32,211
  
  $32,159LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES:Accounts payable
  $2,023
  
  $2,019Accrued salaries and wages
  1,670
  
  1,200Sales tax payable
  936
  
  631Other accrued expenses
  1,346
  
  1,777Store closure reserve
  22
  
  364Current portion of long-term obligations
  1,755
  
  1,805Total current liabilities
  7,752
  
  7,796CAPITAL LEASE OBLIGATIONS
  394
  
  485LONG-TERM DEBT
  115
  
  115OTHER LONG-TERM LIABILITIES
  1,645
  
  1,762Total liabilities
  9,906
  
  10,158STOCKHOLDERS' EQUITYConvertible preferred stock, $.001 par
  value; 3.5 million shares authorized; shares outstanding:  2001 and 2000 - 1,187,906
  5,175
  
  5,175Common stock - $.001 par value; 15
  million shares authorized; shares outstanding: 2001 - 5,834,021; 2000 -
  5,833,282
  42,408
  
  42,405Accumulated deficit
  (25,278)
  
  (25,579)Total stockholders' equity
  22,305
  
  22,001TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $32,211
  
  $32,159The December 31, 2000 amounts are derived from the
Company's audited financial statements.See accompanying notes to condensed consolidated financial statements.


FRESH CHOICE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts)(Unaudited)

Twelve Weeks
  EndedMarch 25,
  2001
  March 19,
  2000NET SALES
  $17,585
  $17,127COSTS AND EXPENSES:Cost of sales
  4,117
  4,135Restaurant
  operating expenses:Labor
  5,660
  5,547Occupancy
  and other
  5,216
  4,924Depreciation and
  amortization
  778
  832General and
  administrative expenses
  1,453
  1,353Total costs and
  expenses
  17,224
  16,791OPERATING INCOME
  361
  336Interest income
  47
  31Interest expense
  (99)
  (105)Interest expense, net
  (52)
  (74)INCOME BEFORE INCOME TAXES
  309
  262Provision for income taxes
  8
  7NET INCOME
  $301
  $255Basic net income per common share
  $0.05
  $0.04Shares used in computing basic per share amounts
  5,834
  5,763Diluted net income per common share
  $0.04
  $0.04Shares used in computing diluted per share
  amounts
  7,106
  7,101See accompanying notes to condensed consolidated financial statements.

FRESH CHOICE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)


Twelve Weeks
  EndedMarch 25,
  March 19,2001
  2000OPERATING ACTIVITIES:Net income
  $301
  $255Adjustments to reconcile net income to net cash provided by operating
  activities:Depreciation and amortization
  838
  897Issuance of stock options for consulting
  services
  2
  3Loss (gain) on disposal of property and
  equipment
  -
  63Deferred rent
  (117)
  (120)Change in operating assets and
  liabilities:Receivables
  (46)
  58Inventories
  (22)
  20Prepaid
  expenses and other current assets
  810
  31Accounts
  payable
  4
  (221)Accrued
  salaries and wages
  470
  96Other
  accrued expenses
  (126)
  (30)Store
  closure reserve
  (342)
  (49)Net cash provided by operating
  activities
  1,772
  1,003INVESTING ACTIVITIES:Capital expenditures
  (518)
  (521)Deposits and other assets
  (18)
  80Net cash used in investing activities
  (536)
  (441)FINANCING ACTIVITIES:Common stock sales
  1
  -Long term debt - repayments
  (50)
  (50)Capital lease obligations - repayments
  (91)
  (111)Net cash used in financing activities
  (140)
  (161)INCREASE IN CASH AND CASH EQUIVALENTS
  1,096
  401CASH AND CASH EQUIVALENTS:Beginning of period
  2,918
  2,458End of period
  $4,014
  $2,859Supplemental Disclosure of Cash Flow Information:          Cash paid during the period
  for interest
  $47
  $105See
accompanying notes to condensed consolidated financial statements

FRESH CHOICE, INC.NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
For the Twelve Weeks Ended March 25, 2001 and March 19, 2000
(Unaudited)

1.           CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

The
accompanying condensed consolidated financial statements have been prepared by
the Company without audit and reflect all adjustments, consisting of normal
recurring adjustments and accruals, which are, in the opinion of management,
necessary for a fair statement of financial position and the results of
operations for the interim periods.  The
statements have been prepared in accordance with the regulations of the
Securities and Exchange Commission, but omit certain information and footnote
disclosures necessary to present the statements in accordance with generally
accepted accounting principles.  For
further information, refer to the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000.

2.           NET
INCOME PER SHARE

Basic
earnings per share ("EPS") excludes the effect of potentially
dilutive securities and is computed by dividing the Companys net income by the
weighted average of its common shares outstanding for the period.  Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. 
The Company converts common stock options and warrants into potential
dilutive shares using the treasury stock method and converts preferred stock
into potential dilutive shares using the "if converted" method.

A
reconciliation of the components of basic and diluted net income per share
follows:

Twelve
  Weeks EndedMarch 25, 2001
  March 19, 2000(In
  thousands, except per share data)Net income
  $301
  $255SharesAverage common shares outstanding
  5,834
  5,763Stock options
  84
  150Convertible preferred stock
  1,188
  1,188Total shares and diluted shares
  7,106
  7,101Basic net income per common share
  $0.05
  $0.04Diluted net income per common share
  $0.04
  $0.04The following table presents the total dilutive
securities which the Company excluded for twelve weeks ended March 25, 2001 and
ended March 19, 2000 from the diluted EPS computation because the exercise
price of the securities exceeded the average fair value of the Companys common
stock:

Twelve Weeks EndedMarch 25, 2001
  March 19, 2000(In thousands)Potential Dilutive SecuritiesStock options excluded
  684
  388Stock warrants
  100
  1383.          INCOME TAXES

The Company recorded
an income tax provision for the first quarter of 2001, despite net operating
loss carryforwards available to offset taxable income, due to projected 2001
net income being subject to alternative minimum tax.  The Companys net deferred tax assets consist primarily of the
tax benefit related to operating loss carryforwards and asset write-downs, in
connection with store closure reserves, that are not deductible for tax
purposes until the assets are disposed. 
The Company will continue to provide a valuation allowance for its
deferred tax assets until it becomes more likely than not, in management's
assessment, that the Company's deferred tax assets will be realized.

4.           BORROWING ARRANGEMENTS

On March 25, 2001,
the Company had $1,150,000 of long-term debt borrowed under the terms of a
$4,000,000 loan and security agreement (the "Agreement"), of which
the entire amount was included in the current portion of long-term obligations
as the Agreement expires on December 29, 2001. 
As of March 25, 2001, the Company had an additional $1,450,000 available
for borrowing under the Agreement.  The
Company intends to refinance the balance on this loan with another financial
institution when or before the Agreement expires.

Borrowings under the
Agreement initially bear interest at the prime rate (8.0% at March 25, 2001)
plus 1.25% and, once repaid, can be re-borrowed unless converted to a term
loan.  The $1,500,000 term loan
converted under the Agreement on December 29, 1999 is payable at 1/60th
of the converted balance each month plus interest at 1.75% above the prime
rate.  All borrowings, including any
term loans, are fully payable on December 29, 2001.  Aggregate borrowings in excess of $2,500,000 bear an additional
0.5% interest.  The Agreement also
provides for a monthly collateral monitoring fee and a 0.5% unused line fee.

The
Agreement requires the Company to maintain a minimum net worth and debt service
coverage ratio and to not exceed maximum interest and debt to cash flow ratios
and limits its aggregate indebtedness. 
The Agreement also requires approval before paying dividends and limits
the Companys fixed asset acquisitions based on its operating cash flows.

5.           STORE CLOSURERESERVE

The store closure reserve of $364,000 at
December 31, 2000 consisted of the $32,000 remaining cash payments to be made
on an agreement to settle the lease obligation on the Companys last remaining
restaurant in Houston that was closed in 2000 and the $332,000 of cash payments
to be made for the buyout and
termination of the lease on a former Fresh Choice restaurant in the Washington
D.C. market that the Company sold in 1996.

At March 25, 2001 the
Companys store closure reserve of $22,000 consisted of the remaining cash
payments to be made on an agreement to settle the lease obligation of its last
remaining restaurant in Houston that was closed in 2000.

6.          CONVERTIBLE PREFERRED STOCK

The
Companys outstanding Series B non-voting convertible preferred stock is currently
held by one entity and is convertible, at the holders option, into Series A
voting convertible preferred stock on a one-for-one basis.  Although no Series A preferred stock is
currently outstanding, holders of Series A preferred stock, if any, would be
entitled to vote with common stockholders on all matters submitted to a vote of
stockholders.  When and if issued, the
holders of a majority of the outstanding Series A preferred stock will have a
separate right to approve certain corporate actions.

In
fiscal 1998, the Company failed to achieve a specified earnings target which
constituted an event of default of the terms of the preferred stock agreement
and which triggered the right of the Series A preferred stockholders to elect a
majority of the Companys Board of Directors. 
The holder of the Series B preferred stock has not initiated any action
to convert such shares into shares of Series A preferred stock nor has it
exercised its right to elect a majority of the Board of Directors.  In March, 2001 such holder notified the
Company that it had no intention of exercising such right; however, it has not
waived any of its rights under the agreement.

7.           RECENTLY
ISSUED ACCOUNTING STANDARDS

In June 1998, the
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." 
This statement requires companies to record derivatives on the balance
sheet as assets or liabilities measured at fair value.  SFAS No. 133, as amended by SFAS No. 137 and
SFAS No. 138, is effective for all fiscal quarters of fiscal years beginning
after June 15, 2000.  The Company
adopted this statement for its fiscal year beginning January 1, 2001. The
adoption of this statement did not impact the Companys consolidated financial
position, results of operations or cash flows.

Item 2 - Managements
Discussion and Analysis of Financial Condition and Results of Operations

The following
discussion is intended to highlight significant changes in the Company's
financial position and results of operations for the twelve weeks ended March
25, 2001.  The interim Financial
Statements and this Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the Consolidated
Financial Statements and Notes thereto for the fiscal year ended
December 31, 2000 and the related Management's Discussion and
Analysis of Financial Condition and Results of Operations, both of which are contained
in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000.

Certain statements
set forth in this discussion and analysis of financial condition and results of
operations including anticipated store openings, planned capital expenditures
and trends in or expectations regarding the Companys operations constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. 
Such statements are based on currently available operating, financial
and competitive information and are subject to various risks and
uncertainties.  Actual future results
and trends may differ materially depending on a variety of factors as set forth
under the heading "Business Risks". 
In particular, the Companys plans to open new restaurants could be
affected by the Companys ability to locate suitable restaurant sites,
construct new restaurants in a timely manner and obtain additional financing.



Liquidity and Capital
Resources

The
Companys primary capital requirements have been for the expansion of its
restaurant operations andremodeling of its restaurants.  The Company has traditionally financed these
requirements with funds from equity offerings, cash flow from operations,
landlord allowances, capital equipment leases and short-term bank debt.  The Company does not have significant
receivables or inventory and receives trade credit based upon negotiated terms
in purchasing food and supplies.

The
Company has a $4,000,000 loan and security agreement (the "Agreement")
with a finance company. The Agreement expires on December 29, 2001 and
provides for one-year renewals thereafter. 
During the twelve weeks ended March 25, 2001, the Company paid $50,000
of principal borrowed on a $1,500,000 term loan converted under the Agreement
on December 29, 1999.   On March 25, 2001, the Company had
$1,150,000 of long term debt borrowed under the terms of the Agreement, of
which the entire amount was included in the current portion of long-term
obligations as the Agreement expires on December 29, 2001.  As of March 25, 2001, the Company had an
additional  $1,450,000 available for
borrowing under the terms of the Agreement. 
The Company intends to refinance the balance on this loan with another
financial institution when or before the Agreement expires.

Borrowings under the
Agreement initially bear interest at the prime rate (8.0% at March 25, 2001)
plus 1.25% and, once repaid, can be re-borrowed unless converted to a term
loan.  The $1,500,000 term loan
converted under the Agreement on December 29, 1999 is payable at 1/60th
of the converted balance each month plus interest at 1.75% above the prime
rate.  All borrowings, including any
term loans, are fully payable on December 29, 2001.  Aggregate borrowings in excess of $2,500,000 bear an additional
0.5% interest.  The Agreement also
provides for a monthly collateral monitoring fee and a 0.5% unused line fee.

The Agreement
requires the Company to maintain a minimum net worth and debt service coverage
ratio and to not exceed maximum interest and debt to cash flow ratios and
limits its aggregate indebtedness.  The
Agreement also requires approval before paying dividends and limits the
Companys fixed asset acquisitions based on its operating cash flows.

Long-term
obligations at March 25, 2001 also included $999,000 of capital lease
obligations, of which $605,000 was included in the current portion of long-term
obligations, and a $115,000 note for site construction costs.

Operating activities
for the twelve weeks ended March 25, 2001 provided $1,772,000 of cash flows
including $810,000 from a decrease in prepaid expenses and other current
assests primarily related to the prepayment of January rents in the prior
fiscal year.  Accrued salary and wages
increased $470,000 during the quarter primarily due to the accrual of an
additional week of salary and wages in the period.  In addition, the store closure reserve decreased by $342,000
primarily due to the payment of the lease termination fee on a former Fresh
Choice restaurant in the Washington D.C. market that the Company sold in
1996.  During the same period, the
Company invested $518,000 in property and equipment including the opening of a
third Fresh Choice Express test location during the first quarter of 2001.

The store closure reserve of $22,000 at
March 25, 2001 consisted of the remaining cash payments to be made on an
agreement to settle the lease obligation on the Companys last remaining
restaurant in Houston that was closed in 2000.

The Companys
outstanding Series B non-voting convertible preferred stock is currently held
by one entity and is convertible, at the holders option, into Series A voting
convertible preferred stock on a one-for-one basis.  Although no Series A preferred stock is currently outstanding,
holders of Series A preferred stock, if any, would be entitled to vote with
common stockholders on all matters submitted to a vote of stockholders.  When and if issued, the holders of a
majority of the outstanding Series A preferred stock will have a separate right
to approve certain corporate actions.

In
fiscal 1998, the Company failed to achieve a specified earnings target (before
interest, taxes, depreciation and amortization) of at least $5,500,000 which
constituted an event of default of the terms of the preferred stock agreement
and which triggered the right of the Series A preferred stockholders to elect a
majority of the Companys Board of Directors. 
The holder of the Series B preferred stock has not initiated any action
to convert such shares into shares of Series A preferred stock nor has it
exercised its right to elect a majority of the Board of Directors.  In March, 2001 such holder notified the
Company that it has no present intention of exercising such right; however, it
has not waived any of its rights under the agreement.

The Companys
continued growth depends to a significant degree on its ability to open new
restaurants and to operate such restaurants profitably.  The Company currently has signed leases for
two new Fresh Choice restaurants in its core Northern California market, which
are expected to open in 2001. The Company continues to look for sites,
primarily in its core Northern California markets as well as in Southern
California, and expects to open a minimum of three new Fresh Choice restaurants
in 2001. In addition, the Company expects to open an additional Fresh Choice
Express test location in Texas during 2001. The Companys ability to implement
an expansion strategy will depend upon a variety of factors, including its
continued profitability and the Companys ability to obtain funds.  See "Business Risks" included
herein.  The Company believes its
operating cash requirements and fiscal 2001 capital requirements can be met
through existing cash balances, cash provided by operations and its borrowing
arrangements.  The Company is seeking
additional debt financing to provide greater flexibility as it resumes
restaurant expansion.



Impact of Inflation

Many of the Companys
employees are paid hourly rates related to the federal and state minimum wage
laws.  Accordingly, increases in the
minimum wage could materially increase the Companys labor costs.  In addition, the cost of food commodities
utilized by the Company are subject to market supply and demand pressures.  Shifts in these costs may have a significant
impact on the Companys food costs.  The
Company anticipates that increases in these costs may be offset through pricing
and other cost control efforts; however, there is no assurance that the Company
would be able to pass such costs on to its guests or that even if it were able
to do so, it could do so in a short period of time.

Business Risks

Certain
characteristics and dynamics of the Company's business and of financial markets
in general create risks to the Company's long-term success and to predictable
financial results.  These risks include:

Operating Losses and Historical Declines in Comparable
Store Sales.  The Company's
profitability began to decline in the second half of 1994.  In the fourth quarter of 1994, the Company reported
its first operating loss, and reported operating losses in both 1995 and
1996.  The Company reported a modest
profit in 1997 but again incurred an operating loss in 1998.  The Company reported a profit for 1999, 2000
and for the twelve weeks ended March 25, 2001. 
There can be no assurance that the Company will continue to be
profitable over the long or short term.

Beginning late in the
third quarter of fiscal 1994, the Company began reporting comparable store
sales declines.  Comparable store sales
continued to decline in each quarter through the end of 1998.  The Company reported comparable store sales
declines of 4.6%, 15.3%, 5.9%, 2.7% and 4.8% for fiscal years 1994, 1995, 1996,
1997 and 1998, respectively.  During
1999 and 2000, the Company reported positive comparable store sales in each
quarter and reported a comparable store sales increase of 3.5% and 7.3% for
fiscal years 1999 and 2000, respectively.  
The Company also reported a comparable store sales increase of 4.9% in
the first quarter of 2001.  There can be
no assurance that comparable store sales will continue to improve.

Expansion.  The Company believes its growth depends to a significant
degree
on its ability to open new restaurants and to operate such restaurants
profitably.  While the Company intends
to resume its expansion with three new Fresh Choice restaurants planned for
2001, there can be no assurance that these restaurants will be successful.  The Companys ability to successfully implement
an expansion strategy will depend on a variety of factors, including the
selection and availability of affordable sites, the selection and availability
of capital to finance restaurant expansion and equipment costs, the ability to
hire and train qualified management and personnel, the ability to control food
and other operating costs, and other factors, many of which are beyond the
Companys control.

The
Companys expansion plans may include entering new geographic regions in which
the Company has no previous operating experience.  There can be no assurance that the concept will be successful in
regions outside of California, Texas and Washington where tastes and restaurant
preferences may be different.

Geographic
Concentration.  As of April 25, 2001, 37 of the Company's 49
restaurants were located in California, primarily in Northern California.  Accordingly, the Company is susceptible to
fluctuations in its business caused by adverse economic conditions in this
region.  In addition, net sales at
certain of the Company's restaurants have been adversely affected when a new
Company restaurant has been opened in relatively close geographic proximity,
and such pressure may continue to depress annual comparable store sales.  There can be no assurance that expansion
within existing or future geographic markets will not adversely affect the
individual financial performance of Company restaurants in such markets or the
Company's overall results of operations. 
In addition, given the Company's present geographic concentration in
Northern California, adverse weather conditions in the region or negative
publicity relating to an individual Company restaurant could have a more
pronounced adverse affect on net sales than if the Company's restaurants were
more broadly dispersed.

Sensitivity to Econominc Conditions and Consumer
Spending.The restaurant industry historically has
been subject to substantial cyclical variation.  Currently, leading economic indicators suggest that the economy,
particularly in California, is slowing. 
A continued downturn in the general economy or a decline in consumer
spending in the restaurant industry could have a material adverse effect on the
Companys financial performance, as restaurant sales tend to decline during
recessionary periods.  A prolonged
economic downturn could alter customers purchasing decisions, which most
likely would have a material adverse impact on the Companys revenue and
results of operations.

California Energy Crisis.  California is in the midst of an energy
crisis that could disrupt the Company's operations and increase the Company's
expenses.  In the event of an acute
power shortage, when power reserves for California fall below 1.5%, electricity
providers have on some occasions implemented, and may in the future implement,
rolling blackouts.  If blackouts
interrupt the power supply to Company restaurants, such restaurants would
temporarily be unable to continue operations. 
Any such interruption in an individual Company restaurant's ability to
continue operations would result in lost revenue.  In addition, as a result of the energy crisis many of the
electricity suppliers have raised their rates substantially. Because the
Company has a large percentage of its restaurants in California, its operating
costs will be affected by this increase in electricity prices.  As a result, the Company's operating results
are likely to be affected by the current California energy crisis.

Volatility of Stock Price.  The market price of the Company's Common
Stock has fluctuated substantially since the initial public offering of the
Common Stock in December 1992. Changes in general conditions in the economy,
the financial markets or the restaurant industry, natural disasters or other
developments affecting the Company or its competitors could cause the market price
of the Company's Common Stock to fluctuate substantially.  In addition, in recent years the stock
market has experienced extreme price and volume fluctuations.  This volatility has had significant effect
on the market prices of securities issued by many companies, including the
Company, for reasons sometimes unrelated to the operating performance of these
companies.  Any shortfall in the
Company's net sales or earnings from levels expected by securities analysts could
have an immediate and significant adverse effect on the trading price of the
Company's Common Stock in any given period. 
Additionally, such shortfalls may not become apparent until late in the
fiscal quarter, which could result in an even more immediate and significant
adverse effect on the trading price of the Company's Common Stock.

Seasonality and Quarterly Fluctuations The
Company's restaurants have typically experienced seasonal fluctuations, as a
disproportionate amount of net sales and net income are generally realized in
the second and third fiscal quarters. 
In addition, the Company's quarterly results of operations have been,
and may continue to be, materially impacted by the timing of new restaurant
openings and restaurant closings.  The
fourth quarter normally includes 16 weeks of operations as compared with 12
weeks for each of the three prior quarters. 
The fourth quarter of 2000 included 17 weeks.  As a result of these factors, net sales and net income in the
fourth quarter are not comparable to results in each of the first three fiscal
quarters, and net sales and net income can be expected to decline in the first
quarter of each fiscal year in comparison to the fourth quarter of the prior
fiscal year.  Comparable store sales,
which had been negative for four consecutive years through fiscal year 1998,
may again turn negative.

Dependence on Key Personnel.  The success of the Company depends on the

efforts of key management personnel. 
The Company's success will depend on its ability to motivate and retain
its key crewmembers and to attract qualified personnel, particularly general
managers, for its restaurants.  The
Company faces significant competition in the recruitment of qualified
crewmembers.

Restaurant Industry. 
The restaurant industry is affected by changes in consumer tastes, as
well as national, regional and local economic conditions and demographic
trends.  The performance of individual
restaurants, including the Company's restaurants, may be affected by factors
such as traffic patterns, demographic considerations, and the type, number and
location of competing restaurants.  In
addition, factors such as inflation, increased food, labor and crewmember
benefit costs, and the availability of experienced management and hourly crewmembers
may also adversely affect the restaurant industry in general and the Company's
restaurants in particular.  Restaurant
operating costs are affected by increases in the minimum hourly wage,
unemployment tax rates, and various federal, state and local governmental
regulations, including those relating to the sale of food and alcoholic
beverages.  There can be no assurance
that the restaurant industry in general, and the Company in particular, will be
successful.

Competition.  The Company's restaurants compete with the rapidly
growing mid-price,
full-service casual dining segment; with traditional limited-service buffet,
soup, and salad restaurants; and, increasingly, with quick-service
outlets.  The Company's competitors
include national and regional chains, as well as local owner-operated
restaurants.  Key competitive factors in
the industry are the quality and value of the food products offered, quality
and speed of service, price, dining experience, restaurant location and the
ambiance of facilities.  Many of the
Company's competitors have been in existence longer than the Company, have a
more established market presence, and have substantially greater financial,
marketing and other resources than the Company, which may give them certain
competitive advantages.  The Company
believes that its ability to compete effectively will continue to depend in
large measure upon its ability to offer a diverse selection of high-quality,
fresh food products with an attractive price/value relationship.

Ability to Obtain Additional Financing.  The Company intends to
resume restaurant
expansion in 2001. The Companys ability to implement an expansion strategy
will depend upon a variety of factors, including its ability to obtain
funds.  The Company believes its near-term
capital requirements can be met through its existing cash balances, cash
provided by operations and its available loan and security agreement.  However, the Company is seeking additional
financing to provide greater flexibility. 
There can be no assurance that the Company will be able to obtain
additional financing when needed on acceptable terms or at all.

Control by Major
Shareholder.Crescent Real Estate Equities Limited
Partnership ("Crescent") holds 1,187,906 shares of Series B
non-voting convertible preferred stock, which is convertible into Series A
voting convertible preferred stock at any time at the option of the
holder.  Upon conversion, holders of
Series A preferred stock would be entitled to vote with common stockholders and
would have a separate right to approve certain corporate actions, such as
amending the Companys Certificate of Incorporation or Bylaws, effecting a
merger or sale of the Company, or making a fundamental change in the Companys
business activity.  In addition, because
the Company did not achieve a specified earnings target in 1998, the holders of
Series A preferred stock would have the right to elect a majority of the
Companys Board of Directors.  These
factors could have the effect of delaying, deferring or preventing a change in
control of the Company and, as a result, could discourage acquisition bids for
the Company and limit the price that investors are willing to pay for shares of
common stock.



Results of Operations

The
following table sets forth items in the Company's statements of operations as a
percentage of sales and certain operating data for the periods indicated:

Twelve Weeks
  Ended(Dollars in thousands)
  March 25, 2001
  March 19, 2000NET SALES
  $17,585
  100.0 %
  $17,127
  100.0 %COSTS AND EXPENSES:Cost of sales
  4,117
  23.4 %
  4,135
  24.1 %Restaurant
  operating expenses:Labor
  5,660
  32.2 %
  5,547
  32.4 %Occupancy
  and other
  5,216
  29.7 %
  4,924
  28.7 %Depreciation and
  amortization
  778
  4.4 %
  832
  4.9 %General and
  administrative expenses
  1453
  8.2 %
  1353
  7.9 %Total
  costs and expenses
  17,224
  97.9 %
  16,791
  98.0 %OPERATING INCOME
  361
  2.1 %
  336
  2.0 %Interest income
  47
  0.3 %
  31
  0.2 %Interest expense
  (99)
  (0.6)%
  (105)
  (0.7)%Interest expense,
  net
  (52)
  (0.3)%
  (74)
  (0.5)%INCOME BEFORE INCOME TAXES
  309
  1.8 %
  262
  1.5 %Provision for income taxes
  8
  0.1 %
  7
  - %NET INCOME
  $301
  1.7 %
  $255
  1.5 %Number of restaurants:Open at beginning
  of period
  48
  
  50Open at end of
  period
  49
  
  49The following table presents the components of
average operating income on a per restaurant basis, based on the average number
of Fresh Choice restaurants open during the period (the Companys three Fresh
Choice Express restaurants are excluded):

AVERAGE FRESH
CHOICE RESTAURANTS

Twelve Weeks
  Ended(Dollars in thousands)
  March 25,
  2001
  March 19,
  2000NET SALES
  $376
  100.0 %
  $353
  100.0 %COSTS AND EXPENSES:Cost of sales
  87
  23.2 %
  85
  24.1 %Restaurant
  operating expenses:Labor
  121
  32.1 %
  114
  32.2 %Occupancy
  and other
  112
  29.8 %
  101
  28.8 %Depreciation and
  amortization
  16
  4.4 %
  17
  4.8 %Total
  costs and expenses
  336
  89.5 %
  317
  89.9 %RESTAURANT OPERATING INCOME
  $40
  10.5 %
  $36
  10.1 %Average Fresh Choice restaurants open
  46.0
  
  48.2(This table
excludes Fresh Choice Express restaurants)



Results of
Operations:  Twelve Weeks Ended March
25, 2001
Compared to Twelve Weeks Ended March 19, 2000

Net Sales.  Net sales for the quarter ended March 25, 2001 were
$17,585,000,
an increase of $458,000, or 2.7%, from sales of $17,127,000 for the quarter
ended March 19, 2000. The primary components of the net increase in sales were:

Increase
  in comparable store sales
  $806,000Incremental
  sales from new restaurants
  186,000Absence
  of sales from closed restaurants
  (534,000)$458,000

The Company operated
an average of 48.8 restaurants in the twelve weeks ended March 25, 2001
compared to 49.2 restaurants in the twelve weeks ended March 19, 2000.  Sales at the Companys 46 comparable Fresh
Choice restaurants, which include restaurants open at least 18 months,
increased 4.9% in the first quarter of 2001 versus the first quarter of
2000.  Comparable store guest counts increased
0.9% in the first quarter, while the comparable store average check increased
4.0% to $7.47, reflecting price increases and higher priced coupon offerings.

Net sales per Fresh
Choice restaurant averaged $376,000 in the first quarter of 2001, an increase
of 6.5% over net sales per restaurant of $353,000 in the first quarter of 2000
due to comparable store sales increases as noted above and closure of lower
sales volume restaurants.

Costs and Expenses. 
Cost of sales (food and beverage costs) was 23.4% of sales in the first
quarter of 2001 compared to 24.1% in the first quarter of 2000.  Food and beverage costs declined as a
percentage of sales due to the combined effect of controlling food cost per
guest and increases in the average check.

Restaurant Operating Expenses.  Restaurant operating expenses (labor,
occupancy and other) were 61.9% of sales in the first quarter of 2001 compared
to 61.1% of sales in the first quarter of 2000, an increase of 0.8% of sales.

Labor costs as a
percentage of sales were 32.2% for the first quarter of 2001 compared to 32.4%
in the first quarter of 2000.  The labor
cost percentage was lower, despite average wage increases, due to increased
sales as well as a higher average check.

Occupancy and other
expenses as a percentage of sales were 29.7% for the first quarter of 2001
compared to 28.7% of sales in the first quarter of 2000, an increase of 1.0% of
sales.  The increase is due primarily to
increases in gas and electricity costs which were up $180,000 or 44.0% over the
prior year.  In addition advertising
increased to 3.5% of sales versus 3.0% of sales in the first quarter of
2000.  These increases were partially
offset by efficiencies on other costs resulting from the higher sales and
higher average check.

Depreciation and Amortization.  Depreciation and amortization
expenses were
4.4% of sales in the first quarter of 2001 a decrease of 0.5% of sales from the
first quarter of 2000.  The decrease
resulted from increased sales leverage and a declining depreciable asset base
for older restaurant equipment.

General and Administrative Expenses.  General and administrative
expenses were
8.2% of sales in the first quarter of 2001 compared to 7.9% of sales in the
first quarter of 2000.  The increase is
primarily the result of higher payroll and and payroll related expenses at the
Companys corporate office due primarily to wage increases and being fully
staffed in the first quarter of 2001 versus several open positions in the first
quarter of 2000.

Interest Expense, net.  Interest expense, net was  $52,000 in
the first quarter of 2001
compared to $74,000 in the first quarter of 2000. This decrease is due to
decreased borrowings and increased interest earned on its average cash
balances. Interest expense consists of fees related to securing the Companys
borrowing arrangements and interest expense on outstanding borrowings and
capital lease obligations.

Income Taxes.  The Company recorded an income tax provision for the
first
quarter of 2001, despite net operating loss carryforwards available to offset
taxable income, due to projected 2001 net income being subject to alternative
minimum tax.  The Companys net deferred
tax assets consist primarily of the tax benefit related to operating loss
carryforwards and asset write-downs, in connection with store closure reserves,
that are not deductible for tax purposes until the assets are disposed.  The Company will continue to provide a
valuation allowance for its deferred tax assets until it becomes more likely
than not, in management's assessment, that the Company's deferred tax assets
will be realized.

Item 3  - 
Quantitative and Qualitative Disclosures About Market Risk

The Company is
exposed to interest rate risk primarily through its borrowing activities.  The Company has not used derivative
financial instruments to hedge such risks. 
There is inherent roll-over risk for borrowings as they mature and are
renewed at current market rates.  The
extent of this risk is not quantifiable or predictable because of the variability
of future interest rates and business financing requirements.  If market rates were to increase immediately
by 10 percent from levels at March 25, 2001, the fair value of the Companys
borrowings would not be materially affected as borrowings are primarily subject
to variable interest rates.



PART II.OTHERINFORMATION



Item 1 - Legal Proceedings
  Not Applicable.Item 2 - Changes in Securities
  Not Applicable.Item 3 - Defaults upon Senior
  Securities
  Not Applicable.Item 4 - Submission of
  Matters to a Vote of Security Holders
  Not Applicable.Item 5 - Other Information
  Not Applicable.Item 6 - Exhibits and Reports
  on Form 8-K(a)         Exhibits.  The exhibits listed in the accompanying
index to  Form 10-Q Exhibits are
filed or incorporated by reference as part of this report.

(b)         Reports
on Form 8-K.  No reports on Form 8-K
were filed during the quarter ended March 25, 2001.

SIGNATURES

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



FRESH
  CHOICE, INC.(Registrant)/S/ Everett F. JeffersonEverett
  F. JeffersonPresident
  and Chief Executive Officer(Principal
  Executive Officer)/S/ David E. PertlDavid
  E. PertlSenior
  Vice President and Chief Financial Officer(Principal
  Financial and Accounting Officer)Dated:  May 9, 2001INDEX TO FORM 10-Q EXHIBITSEXHIBIT
  NO.
  
  DESCRIPTION3.1
  (1)
  Restated Certificate
  of Incorporation of Fresh Choice, Inc.3.2
  (8)
  Amended By-Laws of
  Fresh Choice, Inc. dated April 11, 19963.3
  (10)
  Certificate of
  Amendment of Restated Certificate of Incorporation of Fresh Choice, Inc.3.4
  (10)
  Certificate of
  Designation of Series A Voting Participating Convertible Preferred Stock of
  Fresh Choice, Inc.3.5
  (10)
  Certificate of
  Designation of Series B Non-Voting Participating Convertible Preferred Stock
  of Fresh Choice, Inc.3.6
  (10)
  Certificate of
  Designation of Series C Non-Voting Participating Convertible Preferred Stock
  of Fresh Choice, Inc.4.1
  (10)
  Registration Rights
  Agreement dated September 13, 1996 between Fresh Choice, Inc. and Crescent
  Real Estate Equities Limited Partnership10.1
  (1)
  Form of Indemnity
  Agreement for directors and officers10.2
  (2) (3)
  Second Amended and
  Restated 1988 Stock Option Plan10.3
  (2) (3)
  1992 Employee Stock
  Purchase Plan10.8
  (8)
  Preferred Stock
  Purchase Agreement with Crescent Real Estate Equities Limited Partnership
  dated April 26, 199610.18
  (6)
  Warrant to Purchase up
  to 75,000 Shares of the Company's Common Stock issued to Silicon Valley Bank
  on December 20, 199510.19
  (6)
  Common Stock Purchase
  Warrant to Purchase 100,000 Shares of the Company's Common Stock issued to
  Bain & Company, dated December 15, 199510.26
  (11) (3)
  Employment Offer
  Letter to David E. Pertl dated January 24, 199710.27
  (11) (3)
  Employment Offer
  Letter to Everett F. Jefferson dated January 30, 199710.28
  (11) (3)
  Amendment to
  Employment Offer Letter to Everett F. Jefferson dated February 10, 199710.34
  (13) (3)
  Consulting Agreement
  with Charles A. Lynch dated April 17, 199810.36
  (14)
  Loan and Security
  Agreement dated December 29, 1998 with FINOVA Capital Corporation10.37
  (14) (3)
  Form of Severance
  Agreement with Senior Vice Presidents10.39
  (15) (3)
  Officer Incentive Plan
  for fiscal year 200010.40
  (15) (3)
  Senior Vice President
  of Operations Incentive Plan for fiscal year 200010.41
  (16) (3)
  2001 Home Office
  Incentive Plan10.42
  (16) (3)
  Senior Vice President
  of Operations 2001 Incentive Plan

EXHIBIT
  NO.
  DESCRIPTION(1)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Registration Statement on Form S-1 (No. 33-53904) filed October 29,
  1992, as amended by Amendment No. 1 to Form S-1 (No. 33-53904) filed December
  7, 1992, except that Exhibit 3.1 is incorporated by reference from Exhibit
  3.1C and Exhibit 3.2 is incorporated by reference from Exhibit 3.2B.(2)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Quarterly Report on Form 10-Q for the quarter ended September 4,
  1994.(3)
  Agreements or
  compensatory plans covering executive officers and directors of Fresh Choice,
  Inc.(6)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Annual Report on Form 10-K for the year ended December 31, 1995.(8)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Quarterly Report on Form 10-Q for the quarter ended March 24, 1996.(10)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Quarterly Report on Form 10-Q for the quarter ended September 8,
  1996.(11)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Annual Report on Form 10-K for the year ended December 29, 1996.(13)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Quarterly Report on Form 10-Q for the quarter ended June 14, 1998.(14)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Annual Report on Form 10-K/A for the year ended December 27, 1998.(15)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Annual Report on Form 10-K for the year ended December 26, 1999.(16)
  Incorporated by
  reference from the Exhibits with corresponding numbers filed with the
  Company's Annual Report on Form 10-K for the year ended December 31, 2000.