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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

|                                              |  |                                                                                         
|--------------------------------------------- |  | ----------------------------------------------------------------------------------------
|(Mark One)                                    |  |                                                                                         
|                                              |  |                                                                                         
|ü                                             |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 
|                                              |  |                                                                                         
|For the quarterly period ended April 21, 2002
|                                              |  |                                                                                         
|                                              |  | OR                                                                                      
|                                              |  |                                                                                         
|                                              |  | 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 333-57925

The Restaurant Company

---

(Exact name of registrant as specified in its charter)


|                                           |  |                    
|------------------------------------------ |  | -------------------
|Delaware                                   |  | 62-1254388         
|                                          
|(State or other jurisdiction of            |  | (I.R.S. employer   
|incorporation or organization)             |  | identification no.)
|                                           |  |                    
|6075 Poplar Avenue, Suite 800, Memphis, TN |  | 38119              
|                                          
|(Address of principal executive offices)   |  | (Zip code)         

(901) 766-6400

---

(Registrants telephone number, including area code)


Indicate by ü 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 ü No





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TABLE OF CONTENTS



|                               |                                                                                                                                              |                                            |  |  |  |  |  | 
|------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. FINANCIAL STATEMENTS                                                                                                                
|                               |                                                                                                                                              | CONSOLIDATED STATEMENTS OF INCOME         
|                               |                                                                                                                                              | CONSOLIDATED BALANCE SHEETS               
|                               |                                                                                                                                              | CONSOLIDATED BALANCE SHEETS               
|                               |                                                                                                                                              | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                               |                                                                                                                                              | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                               | ITEM  2.    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE FIRST QUARTER ENDED APRIL 21, 2002
|                               | ITEM  2A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                     
|PART II  OTHER INFORMATION   
|                               | Item 6. Exhibits and Reports on Form 8-K                                                                                                    
|Signature                     



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PART I  FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE RESTAURANT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands)

|                              |                             |   |               |        |           |   |         |        | 
|----------------------------- | --------------------------- | - | ------------- | ------ | --------- | - | ------- | ------ | 
|                              |                             |   | Quarter Ended
|                              |                             |   |              
|                              |                             |   | April 21,     |        | April 22,
|                              |                             |   | 2002          |        | 2001     
|                              |                             |   |               |        |          
|REVENUE:                      |                             |   |               |        |           |   |         |       
|                              | Food sales                  |   | $             | 98,409 |           |   | $       | 93,689 | 
|                              | Franchise and other revenue |   |               | 6,603  |           |   |         | 6,878  | 
|                              |                             |   |               |        |           |   |         |       
|Total Revenue                 |                             |   | 105,012       |        |           |   | 100,567 |       
|                              |                             |   |               |        |           |   |         |       
|COSTS AND EXPENSES:           |                             |   |               |        |           |   |         |       
|Cost of sales:                |                             |   |               |        |           |   |         |       
|                              | Food cost                   |   |               | 27,592 |           |   |         | 26,083 | 
|                              | Labor and benefits          |   |               | 35,034 |           |   |         | 32,471 | 
|                              | Operating expenses          |   |               | 20,122 |           |   |         | 19,714 | 
|General and administrative    |                             |   | 9,209         |        |           |   | 9,548   |       
|Depreciation and amortization |                             |   | 6,767         |        |           |   | 7,244   |       
|Interest, net                 |                             |   | 5,616         |        |           |   | 5,602   |       
|Loss on disposition of assets |                             |   | 28            |        |           |   | 72      |       
|Other, net                    |                             |   | (242          | )      |           |   | (393    | )     
|                              |                             |   |               |        |           |   |         |       
|Total Costs and Expenses      |                             |   | 104,126       |        |           |   | 100,341 |       
|                              |                             |   |               |        |           |   |         |       
|Income before income taxes    |                             |   | 886           |        |           |   | 226     |       
|Provision for income taxes    |                             |   | (257          | )      |           |   | (75     | )     
|                              |                             |   |               |        |           |   |         |       
|NET INCOME                    |                             | $ | 629           |        |           | $ | 151     |       
|                              |                             |   |               |        |           |   |         |       

The accompanying notes are an integral part of these consolidated statements.

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THE RESTAURANT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)

|                                                                                  |                      |        |         |             |  |              |         |        |  | 
|--------------------------------------------------------------------------------- | -------------------- | ------ | ------- | ----------- |  | ------------ | ------- | ------ |  | 
|                                                                                  |                      |        |         | April 21,   |  |              |         |       
|                                                                                  |                      |        |         | 2002        |  | December 30,
|                                                                                  |                      |        |         | (Unaudited) |  | 2001        
|                                                                                  |                      |        |         |             |  |             
|                                                                                  |                      | ASSETS |         |             |  |              |         |        |  | 
|CURRENT ASSETS:                                                                   |                      |        |         |             |  |              |         |       
|Cash and cash equivalents                                                         |                      | $      | 4,914   |             |  | $            | 4,501   |       
|Receivables, less allowance for
doubtful accounts of $949 and $907                |                      |        | 8,953   |             |  |              | 8,468   |       
|Inventories, at the lower of first-in,
first-out cost or market                   |                      |        | 5,169   |             |  |              | 5,330   |       
|Prepaid expenses and other current assets                                         |                      |        | 2,719   |             |  |              | 2,692   |       
|Deferred income taxes                                                             |                      |        | 705     |             |  |              | 705     |       
|                                                                                  |                      |        |         |             |  |              |         |       
|                                                                                  | Total current assets |        |         | 22,460      |  |              |         | 21,696 | 
|                                                                                  |                      |        |         |             |  |              |         |       
|PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation and amortization |                      |        | 134,517 |             |  |              | 136,393 |       
|ASSETS HELD FOR DISPOSITION                                                       |                      |        | 3,035   |             |  |              | 5,087   |       
|GOODWILL                                                                          |                      |        | 27,035  |             |  |              | 27,035  |       
|INTANGIBLE ASSETS, net of accumulated
amortization of $3,911 and $3,651           |                      |        | 5,380   |             |  |              | 5,667   |       
|NOTES RECEIVABLE, less allowance for doubtful
accounts of $196 and $208           |                      |        | 366     |             |  |              | 303     |       
|DEFERRED INCOME TAXES                                                             |                      |        | 6,895   |             |  |              | 6,895   |       
|OTHER ASSETS                                                                      |                      |        | 7,723   |             |  |              | 7,888   |       
|                                                                                  |                      |        |         |             |  |              |         |       
|                                                                                  |                      | $      | 207,411 |             |  | $            | 210,964 |       
|                                                                                  |                      |        |         |             |  |              |         |       

The accompanying notes are an integral part of these consolidated balance sheets.

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THE RESTAURANT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Par and Share Amounts)

|                                                                                      |                                                 |                                          |                             |        |             |        |              |        |  |        |  
|------------------------------------------------------------------------------------- | ----------------------------------------------- | ---------------------------------------- | --------------------------- | ------ | ----------- | ------ | ------------ | ------ |  | ------ | -
|                                                                                      |                                                 |                                          |                             |        | April 21,   |        |              |        | 
|                                                                                      |                                                 |                                          |                             |        | 2002        |        | December 30,
|                                                                                      |                                                 |                                          |                             |        | (Unaudited) |        | 2001        
|                                                                                      |                                                 |                                          |                             |        |             |        |             
|                                                                                      |                                                 | LIABILITIES AND STOCKHOLDERS INVESTMENT |                             |        |             |        |              |        |  |       
|CURRENT LIABILITIES:                                                                  |                                                 |                                          |                             |        |             |        |              |       
|                                                                                      | Current maturities of capital lease obligations |                                          | $                           | 985    |             |        | $            | 1,030  | 
|                                                                                      | Accounts payable                                |                                          |                             | 9,038  |             |        |              | 13,100 | 
|                                                                                      | Accrued expenses                                |                                          |                             | 24,301 |             |        |              | 18,748 | 
|                                                                                      |                                                 |                                          |                             |        |             |        |              |       
|                                                                                      |                                                 |                                          | Total current liabilities   |        |             | 34,324 |              |        |  | 32,878 |  
|                                                                                      |                                                 |                                          |                             |        |             |        |              |       
|CAPITAL LEASE OBLIGATIONS, less
current maturities                                    |                                                 |                                          | 1,596                       |        |             |        | 1,944        |       
|LONG-TERM DEBT                                                                        |                                                 |                                          | 167,338                     |        |             |        | 172,831      |       
|OTHER LIABILITIES                                                                     |                                                 |                                          | 5,972                       |        |             |        | 5,759        |       
|STOCKHOLDERS INVESTMENT:                                                             |                                                 |                                          |                             |        |             |        |              |       
|Common stock $.01 par value, 100,000 shares authorized,
10,820 issued and outstanding |                                                 |                                          | 1                           |        |             |        | 1            |       
|Accumulated deficit                                                                   |                                                 |                                          | (1,820                      | )      |             |        | (2,449       | )     
|                                                                                      |                                                 |                                          |                             |        |             |        |              |       
|                                                                                      |                                                 |                                          | Total stockholders deficit |        |             | (1,819 | )            |        |  | (2,448 | )
|                                                                                      |                                                 |                                          |                             |        |             |        |              |       
|                                                                                      |                                                 | $                                        | 207,411                     |        |             | $      | 210,964      |       
|                                                                                      |                                                 |                                          |                             |        |             |        |              |       

The accompanying notes are an integral part of these consolidated balance sheets.

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THE RESTAURANT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)

|                                                                                  |                                                       |                   |        |               |       |           |        |        |       | 
|--------------------------------------------------------------------------------- | ----------------------------------------------------- | ----------------- | ------ | ------------- | ----- | --------- | ------ | ------ | ----- | 
|                                                                                  |                                                       |                   |        | Quarter Ended
|                                                                                  |                                                       |                   |        |              
|                                                                                  |                                                       |                   |        | April 21,     |       | April 22,
|                                                                                  |                                                       |                   |        | 2002          |       | 2001     
|                                                                                  |                                                       |                   |        |               |       |          
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |                                                       |                   |        |               |       |           |        |       
|Net income                                                                        |                                                       | $                 | 629    |               |       | $         | 151    |       
|Adjustments to reconcile net income to net cash
provided by operating activities: |                                                       |                   |        |               |       |           |        |       
|                                                                                  | Depreciation and amortization                         |                   |        | 6,767         |       |           |        | 7,244  |      
|                                                                                  | Accretion of interest on Senior Discount Notes        |                   |        | 7             |       |           |        | 875    |      
|                                                                                  | Provision
for bad debt expense                        |                   |        | 112           |       |           |        | 125    |      
|                                                                                  | Loss on disposition of assets                         |                   |        | 28            |       |           |        | 72     |      
|                                                                                  | Net changes in other operating assets and liabilities |                   |        | 961           |       |           |        | (1,477 | )    
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|                                                                                  |                                                       | Total adjustments |        |               | 7,875 |           |        |        | 6,839 | 
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|Net cash provided by operating activities                                         |                                                       |                   | 8,504  |               |       |           | 6,990  |       
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |                                                       |                   |        |               |       |           |        |       
|Cash paid for property and equipment                                              |                                                       |                   | (4,520 | )             |       |           | (6,384 | )     
|Proceeds from sale of assets held for disposition                                 |                                                       |                   | 2,030  |               |       |           |       |       
|Proceeds from notes receivable                                                    |                                                       |                   | 292    |               |       |           | 78     |       
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|Net cash used in investing activities                                             |                                                       |                   | (2,198 | )             |       |           | (6,306 | )     
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |                                                       |                   |        |               |       |           |        |       
|(Payments
on) net proceeds from long-term debt                                    |                                                       |                   | (5,500 | )             |       |           | 250    |       
|Principal payments under capital lease obligations                                |                                                       |                   | (393   | )             |       |           | (300   | )     
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|Net cash used in financing activities                                             |                                                       |                   | (5,893 | )             |       |           | (50    | )     
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|Net increase in cash and cash equivalents                                         |                                                       |                   | 413    |               |       |           | 634    |       
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|CASH AND CASH EQUIVALENTS:                                                        |                                                       |                   |        |               |       |           |        |       
|Balance, beginning of period                                                      |                                                       |                   | 4,501  |               |       |           | 5,361  |       
|                                                                                  |                                                       |                   |        |               |       |           |        |       
|Balance, end of period                                                            |                                                       | $                 | 4,914  |               |       | $         | 5,995  |       
|                                                                                  |                                                       |                   |        |               |       |           |        |       

The accompanying notes are an integral part of these consolidated statements.

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THE RESTAURANT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Organization

The Restaurant Company (the Company, Perkins, or TRC) is a wholly-owned
subsidiary of The Restaurant Holding Corporation (RHC). TRC conducts business
under the name Perkins Restaurant and Bakery. TRC is also the sole stockholder
of TRC Realty LLC, The Restaurant Company of Minnesota (TRCM) and Perkins
Finance Corp. RHC is owned by Donald N. Smith (Mr. Smith), TRCs Chairman and
Chief Executive Officer, and BancBoston Ventures, Inc. Mr. Smith is also the
Chairman and Chief Executive Officer of Friendly Ice Cream Corporation (FICC),
which operates and franchises approximately 550 restaurants, located primarily
in the northeastern United States.

Basis of Presentation

The accompanying unaudited consolidated financial statements of TRC have been
prepared in accordance with the instructions to Form 10-Q and therefore do not
include all information and notes necessary for complete financial statements in
conformity with generally accepted accounting principles. The results for the
periods indicated are unaudited but reflect all adjustments (consisting only of
normal recurring adjustments) which management considers necessary for a fair
presentation of the operating results. Results of operations for the interim
periods are not necessarily indicative of a full year of operations. The notes
to the financial statements contained in the 2001 Annual Report on Form 10-K
should be read in conjunction with these statements.

Certain prior year amounts have been reclassified to conform to current year presentation.

Change in Accounting Reporting Period

Effective January 1, 2001, the Company converted its financial reporting from a calendar year basis to thirteen four-week periods ending on the last Sunday in
December. The first quarter each year will include four four-week
periods. The first quarter of 2002 ended on April 21, 2002. The remaining quarters, consisting
of three four-week periods, will end on July 14, October 6 and December 29.

Contingencies

The Company is a party to various legal proceedings in the ordinary course of business. Management does not believe it is likely that these proceedings, either
individually or in the aggregate, will have a material adverse effect on the Companys financial position or results of operations.

In the past, the Company has sponsored financing programs offered by certain lending institutions to assist its franchisees in procuring funds for the construction
of new franchised restaurants and to purchase and install in-store bakeries. The Company provided a limited guaranty of funds borrowed. The Companys obligations
under these agreements expired during the first quarter of 2002.

On June 9, 2000, the Company entered into an agreement to guarantee fifty percent of borrowings up to a total guarantee of $1,500,000 for use by a franchisee to
remodel and upgrade existing restaurants. As of April 21, 2002, there were $3,000,000 in borrowings outstanding under this agreement of which $1,500,000 were
guaranteed by the Company.

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Supplemental Cash Flow Information

The increase or decrease in cash and cash equivalents due to changes in operating assets and liabilities for the quarters ended April 21 and April 22, consists of
the following (in thousands):

|                        |                                           |   |               |        |           |   |        |        |  
|----------------------- | ----------------------------------------- | - | ------------- | ------ | --------- | - | ------ | ------ | -
|                        |                                           |   | Quarter Ended
|                        |                                           |   |              
|                        |                                           |   | April 21,     |        | April 22,
|                        |                                           |   | 2002          |        | 2001     
|                        |                                           |   |               |        |          
|(Increase) Decrease in: |                                           |   |               |        |           |   |        |       
|                        | Receivables                               |   | $             | (894   | )         |   | $      | 14     |  
|                        | Inventories                               |   |               | 161    |           |   |        | 165    |  
|                        | Prepaid expenses and
other current assets |   |               | (27    | )         |   |        | (386   | )
|                        | Other assets                              |   |               | 17     |           |   |        | 190    |  
|Increase (Decrease) in: |                                           |   |               |        |           |   |        |       
|                        | Accounts payable                          |   |               | (4,062 | )         |   |        | (2,268 | )
|                        | Accrued expenses                          |   |               | 5,270  |           |   |        | 1,217  |  
|                        | Other liabilities                         |   |               | 496    |           |   |        | (409   | )
|                        |                                           |   |               |        |           |   |        |       
|                        |                                           | $ | 961           |        |           | $ | (1,477 | )     
|                        |                                           |   |               |        |           |   |        |       

Other supplemental cash flow information is as follows (in thousands):

|                            |  |               |     |           |  |   |     | 
|--------------------------- |  | ------------- | --- | --------- |  | - | --- | 
|                            |  | Quarter Ended
|                            |  |              
|                            |  | April 21,     |     | April 22,
|                            |  | 2002          |     | 2001     
|                            |  |               |     |          
|Cash paid for interest      |  | $             | 391 |           |  | $ | 307 | 
|Income taxes paid           |  |               | 148 |           |  |   | 587 | 
|Income tax refunds received |  |               | 639 |           |  |   | 16  | 

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Segment Reporting

The following presents revenue and other financial information by business segment for the periods ended April 21 and April 22 (in thousands):

2002:

|                                |  |             |        |           |  |               |       |       |  |        |       |  |  |   |         |   |  |   |         | 
|------------------------------- |  | ----------- | ------ | --------- |  | ------------- | ----- | ----- |  | ------ | ----- |  |  | - | ------- | - |  | - | ------- | 
|                                |  | Restaurants |        | Franchise |  | Manufacturing |       | Other |  | Totals
|                                |  |             |        |           |  |               |       |       |  |       
|Revenue from
external customers |  | $           | 88,683 |           |  | $             | 6,468 |       |  | $      | 9,113 |  |  | $ | 748     |   |  | $ | 105,012 | 
|Intersegment revenue            |  |             |       |           |  |               |      |       |  |        | 2,882 |  |  |   |        |   |  |   | 2,882   | 
|Segment profit (loss)           |  |             | 8,068  |           |  |               | 5,427 |       |  |        | 2,066 |  |  |   | (14,932 | ) |  |   | 629     | 

2001:

|                                |  |             |        |           |  |               |       |       |  |        |       |  |  |   |         |   |  |   |         | 
|------------------------------- |  | ----------- | ------ | --------- |  | ------------- | ----- | ----- |  | ------ | ----- |  |  | - | ------- | - |  | - | ------- | 
|                                |  | Restaurants |        | Franchise |  | Manufacturing |       | Other |  | Totals
|                                |  |             |        |           |  |               |       |       |  |       
|Revenue from
external customers |  | $           | 84,873 |           |  | $             | 6,682 |       |  | $      | 8,754 |  |  | $ | 258     |   |  | $ | 100,567 | 
|Intersegment revenue            |  |             |       |           |  |               |      |       |  |        | 2,617 |  |  |   |        |   |  |   | 2,617   | 
|Segment profit (loss)           |  |             | 8,046  |           |  |               | 5,670 |       |  |        | 1,900 |  |  |   | (15,465 | ) |  |   | 151     | 

A reconciliation of other segment loss is as follows (in thousands):

|                                       |  |      |        |      |  |   |        |  
|-------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                       |  | 2002 |        | 2001
|                                       |  |      |        |     
|General and administrative expenses    |  | $    | 7,826  |      |  | $ | 8,167  |  
|Depreciation and amortization expenses |  |      | 1,373  |      |  |   | 1,862  |  
|Interest expense                       |  |      | 5,616  |      |  |   | 5,602  |  
|Loss on disposition of assets          |  |      | 28     |      |  |   | 72     |  
|Income tax expense                     |  |      | 257    |      |  |   | 75     |  
|Other                                  |  |      | (168   | )    |  |   | (313   | )
|                                       |  |      |        |      |  |   |        |  
|                                       |  | $    | 14,932 |      |  | $ | 15,465 |  
|                                       |  |      |        |      |  |   |        |  

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New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other
Intangible Assets. SFAS No. 142 modifies the rules for accounting for goodwill and other intangible assets including the cessation of amortization of
goodwill. It also requires an annual assessment of goodwill for impairment. The Company adopted SFAS No. 142 effective December 31, 2001 and ceased
amortization of goodwill in 2002 under the provisions of the statement. All intangibles, including goodwill, will be evaluated for impairment in accordance
with SFAS No. 142. If SFAS No. 142 had been in effect during 2001 and amortization of goodwill had not been reported, net income for the first quarter of 2001
would have been approximately $265,000 greater than the reported total of $151,000.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long Lived Assets. SFAS No. 144 modifies the rules for evaluating
the recoverability of assets (including intangibles) when events and circumstances indicate that the assets might be impaired. The Company adopted SFAS No.
144 effective December 31, 2001, with no material impact on the Companys financial position or results of operations.




ITEM  2.    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE FIRST QUARTER ENDED APRIL 21, 2002

RESULTS OF OPERATIONS

Overview:

The Company is a leading operator and franchisor of mid-scale restaurants located in 35 states and 4 Canadian provinces. As of April 21, 2002, the Company
owned and operated 152 and franchised 348 Perkins Restaurants. Both the Company-operated and franchised Perkins Restaurants operate under the names Perkins
Restaurant and Bakery, Perkins Family Restaurant, Perkins Family Restaurant and Bakery, or Perkins Restaurant and the mark Perkins. The Company also
operates two Sage Hen Cafes. The Company manufactures and distributes bakery products which are sold to Company-operated restaurants, franchisees, third-party
bakers and food distributors. The business of Perkins was founded in 1958, and since then Perkins has continued to adapt its menus, product offerings,
building designs and decor to meet changing consumer preferences. Perkins is a highly recognized brand in the geographic areas it serves.

The Companys revenues are derived primarily from the operation of Company-owned restaurants, the sale of bakery products produced by its manufacturing
division, Foxtail Foods (Foxtail), and franchise fees. In order to ensure consistency and availability of Perkins proprietary products to each unit in the
system, Foxtail offers cookie doughs, muffin batters, pancake mixes, pies and other food products to Company-operated and franchised restaurants through food
service distributors. Additionally, it produces a variety of non-proprietary products for sale in various retail markets. Sales to Company-operated
restaurants are eliminated in the accompanying statements of income. For the quarter ended April 21, 2002, revenues from Company-operated restaurants, Foxtail
and franchise and other accounted for 85.0%, 8.7% and 6.3% of total revenue, respectively.

TRC leases an executive aircraft through TRC Realty LLC. The aircraft is operated for the benefit of, and all operating costs are reimbursed by, TRC and
FICC. Revenue received from FICC is included in franchise and other revenue in the accompanying statements of income.

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A summary of the Companys results for the quarters ended April 21, 2002 and April 22, 2001 are presented in the following table. All revenues, costs and
expenses are expressed as a percentage of total revenue.

|                           |                               |                |                             |                    |   |               |       |           |   |      |      | 
|-------------------------- | ----------------------------- | -------------- | --------------------------- | ------------------ | - | ------------- | ----- | --------- | - | ---- | ---- | 
|                           |                               |                |                             |                    |   | Quarter Ended
|                           |                               |                |                             |                    |   |              
|                           |                               |                |                             |                    |   | April 21,     |       | April 22,
|                           |                               |                |                             |                    |   | 2002          |       | 2001     
|                           |                               |                |                             |                    |   |               |       |          
|Revenue:                   |                               |                |                             |                    |   |               |       |          
|                           |                               |                | Food sales                  |                    |   | 93.7          | %     |           |   | 93.2 | %   
|                           |                               |                | Franchise and other revenue |                    |   | 6.3           |       |           |   | 6.8  |     
|                           |                               |                |                             |                    |   |               |       |          
|Total Revenue              |                               |                | 100.0                       |                    |   |               | 100.0 |          
|                           |                               |                |                             |                    |   |               |       |          
|Costs and Expenses:        |                               |                |                             |                    |   |               |       |          
|                           |                               | Cost of sales: |                             |                    |   |               |       |           |   |     
|                           |                               |                |                             | Food cost          |   |               | 26.3  |           |   |      | 25.9 | 
|                           |                               |                |                             | Labor and benefits |   |               | 33.4  |           |   |      | 32.3 | 
|                           |                               |                |                             | Operating expenses |   |               | 19.2  |           |   |      | 19.6 | 
|                           | General and administrative    |                |                             | 8.8                |   |               |       | 9.5       |  
|                           | Depreciation and amortization |                |                             | 6.4                |   |               |       | 7.2       |  
|                           | Interest, net                 |                |                             | 5.3                |   |               |       | 5.6       |  
|                           | Loss on disposition of assets |                |                             |                   |   |               |       | 0.1       |  
|                           | Other, net                    |                |                             | (0.2               | ) |               |       | (0.4      | )
|                           |                               |                |                             |                    |   |               |       |          
|Total Costs and Expenses   |                               |                | 99.2                        |                    |   |               | 99.8  |          
|                           |                               |                |                             |                    |   |               |       |          
|Income before income taxes |                               |                | 0.8                         |                    |   |               | 0.2   |          
|Provision for income taxes |                               |                | (0.2                        | )                  |   |               | (0.1  | )        
|                           |                               |                |                             |                    |   |               |       |          
|Net Income                 |                               |                | 0.6                         | %                  |   |               | 0.1   | %        
|                           |                               |                |                             |                    |   |               |       |          

Net income for the first quarter of 2002 was $629,000 versus $151,000 for the first quarter of 2001.

Revenue:

Total revenues for the first quarter of 2002 increased 4.4% over the prior year first quarter primarily due to the opening of seven new Company-operated
Perkins Restaurants and the addition of nine formerly franchised Restaurants acquired from franchisees since January 1, 2001. Growth of Foxtail sales and the
sales from two new Sage Hen Cafés also contributed to the increase. These sales increases were partially offset by the continued impact of the closing of four
Company-operated Restaurants and the sale of five Company-operated restaurants to a franchisee during 2001.

Same store comparable sales in Company-operated Restaurants decreased approximately 0.9% due to a 1.4% decline in comparable guest visits. This decrease was
partially offset by an increase in the guest check average due to cumulative price increases and higher prices on promotional items.

Revenues from Foxtail increased approximately 4.1% over the prior year first quarter, and constituted approximately 8.7% of the Companys revenue. The
increase is primarily due to an increase in sales outside the Perkins system.

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Franchise and other revenue decreased 4.0% over the first quarter of 2001. Since the first quarter of 2001, the Companys franchisees have opened 14
restaurants and acquired five restaurants from the Company. Franchisees have closed 12 restaurants and the Company has purchased nine franchised restaurants.
This net decrease in the number of franchised restaurants and a drop in franchised restaurant comparable sales contributed approximately 60 percent of the
decline in franchise and other revenues. The remaining decrease was due to lower franchise opening fees and decreased aircraft income.

Costs and Expenses:

Food cost:

As a percentage of total revenue, food cost for the quarter ended April 21, 2002, increased 0.4 percentage points over the first quarter of 2001 due to
increased food cost for the restaurant division. Restaurant food cost, as a percentage of restaurant sales, increased 0.3 percentage points due primarily to
a net increase in commodity costs and differences in the mix of promotional menu items. Foxtail food cost as a percentage of Foxtail sales decreased slightly
due to stable costs and improved efficiencies.

Labor and benefits:

Labor and benefits expense, as a percentage of total revenue, increased 1.1 percentage points for the quarter ended April 21, 2002 as compared to the first
quarter of 2001. The increase is primarily due to a decrease in productivity in Company-operated restaurants and an increase in workers compensation program
costs. The company anticipates that productivity will improve in the second quarter, but expects increased workers compensation program costs to negatively
impact labor and benefits expense for the remainder of the year. The impact of workers compensation costs in the first quarter contributed approximately 10%
of the increase in labor and benefits.

The wage rates of the Companys hourly employees are impacted by Federal and state minimum wage laws. Certain states do not allow tip credits for servers
which results in higher payroll costs as well as greater exposure to increases in minimum wage rates. In the past, the Company has been able to offset
increases in labor costs through selective menu price increases and improvements in labor productivity. However, there is no assurance that future increases
can be mitigated through raising menu prices.

Operating expenses:

Operating expenses, expressed as a percentage of total revenue for the quarter decreased 0.4 percentage points. The decrease is primarily due to a drop in
natural gas costs. This positive variance was partially offset by incremental costs for supplies and repairs and maintenance as a result of a focus by the
Company on improving the image of its restaurants.

General and administrative:

General and administrative expenses, as a percentage of total revenue for the quarter, decreased 0.7 percentage points primarily due to selected staff
reductions in the third quarter of 2001. Incentive compensation costs also decreased.

Depreciation and amortization:

Depreciation and amortization expense decreased from 7.2 percent of sales to 6.4 percent of sales primarily due to the adoption of SFAS No. 142 and the
increase in total revenue. Had SFAS No. 142 been adopted as of January 1, 2001, depreciation and amortization expense in the prior year would have been
approximately $397,000 lower and 6.8 percent of sales.

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Interest, net:

Interest expense, as a percentage of total revenue, decreased 0.3 percentage points over the first quarter of 2001. The decrease is the result of reduced average
borrowings and lower variable interest rates on the Companys revolving line of credit.

Other, net:

Other income decreased due to the reduction in the number of properties leased and subleased to third parties.

CAPITAL RESOURCES AND LIQUIDITY

The Companys primary sources of funding
during the quarter were cash flows from operating activities and the
sale of three former restaurant properties. The principal uses of
cash during the quarter were capital expenditures and the reduction of outstanding borrowings on the Companys line of credit. Capital expenditures consisted primarily of
building and equipment purchases for new Company-operated restaurants, restaurant maintenance and costs related to remodeling and upgrading existing restaurants.

The following table summarizes capital expenditures for the quarters ended April 21, 2002 and April 22, 2001 (in thousands):

|                           |  |               |       |           |  |   |       | 
|-------------------------- |  | ------------- | ----- | --------- |  | - | ----- | 
|                           |  | Quarter Ended
|                           |  |              
|                           |  | April 21,     |       | April 22,
|                           |  | 2002          |       | 2001     
|                           |  |               |       |          
|New restaurants            |  | $             | 431   |           |  | $ | 3,598 | 
|Maintenance                |  |               | 1,921 |           |  |   | 1,103 | 
|Remodeling and reimaging   |  |               | 1,513 |           |  |   | 832   | 
|Manufacturing              |  |               | 106   |           |  |   | 125   | 
|Other                      |  |               | 549   |           |  |   | 726   | 
|                           |  |               |       |           |  |   |       | 
|Total Capital Expenditures |  | $             | 4,520 |           |  | $ | 6,384 | 
|                           |  |               |       |           |  |   |       | 

The Companys capital budget for 2002 is $16.0 million. The capital budget will be primarily applied to remodeling of existing restaurants, restaurant maintenance and
upgrades of the Companys technology systems. The capital spending plan also includes expenditures for the building of one new restaurant and furniture, fixtures and
equipment for three new restaurants. The Company intends to enter into one ground lease and operating leases for two build-to-suit locations. The primary source of
funding for these projects is expected to be cash flows from operating activities. Capital spending could vary significantly from planned amounts as certain of these
expenditures are discretionary in nature.

As is typical in the restaurant industry, the
Company ordinarily operates with a working capital deficit since the
majority of its sales are for cash, while credit is received from its
suppliers. Funds generated by cash sales in excess of those needed to
service short term obligations are used by the Company to reduce debt
and acquire capital assets. At April 21, 2002, this working capital
deficit was $11.9 million.

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The Company has a secured $40,000,000 revolving line of credit facility (the Credit Facility) with a sublimit for up to $5,000,000 of letters of credit. All amounts under
the Credit Facility bear interest at floating rates based on the agents base rate or Eurodollar rates as defined in the agreement. All indebtedness under the Credit
Facility is secured by a first priority lien on substantially all of the assets of the Company. As of April 21, 2002, $10,500,000 in borrowings and approximately $1,847,000
of letters of credit were outstanding under the Credit Facility.

On November 15, 2001 the Company elected to begin accruing cash interest on its 11.25% Senior Discount Notes (the Notes). Cash interest will be payable semi-annually on
May 15 and November 15. The principal balance of the Notes on April 21, 2002 was $26,838,000. On May 15, 2003 the Company will be required to redeem $8,383,000 in principal
of the Notes at a redemption price of 105.625%. The Company intends to reduce capital spending in 2002 to provide funds for the payment of cash interest on the Notes, which
is expected to be $2,969,000 in 2002.

The Company has contractual obligations and
commercial commitments including long-term debt, land lease
obligations for Company operated restaurants and the office
space for corporate operations. The table below presents, as of
April 21, 2002, the Companys future scheduled principal
repayments of long-term debt and lease obligations (in
thousands).

|                              |  |           |         |             |  |             |       |                  |  |   |        |  |  |   |         | 
|----------------------------- |  | --------- | ------- | ----------- |  | ----------- | ----- | ---------------- |  | - | ------ |  |  | - | ------- | 
|                              |  |           |         | Capital     |  | Operating   |       | Total           
|                              |  | Long-Term |         | Lease       |  | Lease       |       | Contractual     
|                              |  | Debt      |         | Obligations |  | Obligations |       | Cash Obligations
|                              |  |           |         |             |  |             |       |                 
|2002                          |  | $         |        |             |  | $           | 747   |                  |  | $ | 5,793  |  |  | $ | 6,540   | 
|2003                          |  |           | 8,829   |             |  |             | 827   |                  |  |   | 7,537  |  |  |   | 17,193  | 
|2004                          |  |           |        |             |  |             | 575   |                  |  |   | 6,797  |  |  |   | 7,372   | 
|2005                          |  |           | 10,500  |             |  |             | 398   |                  |  |   | 6,096  |  |  |   | 16,994  | 
|2006                          |  |           |        |             |  |             | 312   |                  |  |   | 5,712  |  |  |   | 6,024   | 
|Thereafter                    |  |           | 148,009 |             |  |             | 279   |                  |  |   | 30,262 |  |  |   | 178,550 | 
|                              |  |           |         |             |  |             |       |                  |  |   |        |  |  |   |         | 
|Total                         |  | $         | 167,338 |             |  |             | 3,138 |                  |  | $ | 62,197 |  |  | $ | 232,673 | 
|Less:                         |  |           |         |             |  |             |       |                  |  |   |        |  |  |   |         | 
|Amounts representing interest |  |           | (557    | )           |  |             |       |                  |  |   |        | 
|                              |  |           |         |             |  |             |       |                  |  |   |        |  |  |   |         | 
|Capital lease obligations     |  | $         | 2,581   |             |  |             |       |                  |  |   |        | 

The Companys ability to make scheduled payments of principal of, or to pay the interest or liquidated damages, if any, on, or to refinance, its indebtedness, or to fund
planned capital expenditures will depend on the Companys future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative,
regulatory and other factors that are beyond control of the Company. Based upon the current level of operations, management believes that cash flow from operating activities
and available cash, together with available borrowings under the Credit Facility, will be adequate to meet the Companys liquidity needs for the immediate future. However,
the Company may need to recapitalize or refinance all or a portion of the principal of its senior notes on or prior to maturity. There can be no assurance that the Company
will generate sufficient cash flow from operations, have access to capital markets or that future borrowings will be available in an amount sufficient to enable the Company
to service its indebtedness or to fund its other liquidity needs. In addition, there can be no assurance that the Company will be able to effect any such recapitalization or
refinancing on commercially reasonable terms or at all.

SEASONALITY

Company revenues are subject to seasonal fluctuations. Customer counts (and consequently revenues) are highest in the summer months and lowest during the winter months
because of the high proportion of restaurants located in states where inclement weather adversely affects guest visits.

FORWARD-LOOKING STATEMENTS

This discussion contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on
current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated
by the forward-looking statements. Such factors include, but are not limited to, the following: general economic conditions, competitive factors, consumer taste and
preferences and adverse weather conditions. The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes
make it clear that the projected results expressed or implied therein will not be realized.

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ITEM  2A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

The Company currently has market risk sensitive instruments related to interest rates. The Company is not subject to significant exposure for changing interest
rates on its senior notes because the interest rates are fixed. The Company has in place a $40,000,000 line of credit facility which matures on January 1, 2005.
All borrowings under the facility bear interest at floating rates based on the agents base rate or Eurodollar rates. The Company had $10,500,000 outstanding under
the line of credit facility at April 21, 2002. While changes in market interest rates would affect the cost of funds borrowed in the future, the Company believes
that the effect, if any, of reasonably possible near-term changes in interest rates on the Companys consolidated financial position, results of operations or cash
flows would not be material.

Commodity Price Risk

Many of the food products purchased by the Company are affected by commodity pricing and are, therefore, subject to price volatility caused by weather, production
problems, delivery difficulties and other factors which are outside the control of the Company. The Companys supplies and raw materials are available from several
sources and the Company is not dependent upon any single source for these items. If any existing suppliers fail, or are unable to deliver in quantities required by
the Company, the Company believes that there are sufficient other quality suppliers in the marketplace, and therefore, its sources of supply can be replaced as
necessary. At times, the Company enters into purchase contracts of one year or less or purchases bulk quantities for future use of certain items in order to
control commodity pricing risks. Certain significant items that could be subject to price fluctuations are beef, pork, coffee, eggs, wheat products and corn
products. The Company believes it will be able to pass through increased commodity costs by adjusting menu pricing in most cases. Additionally, the Companys
product offerings and marketing events are relatively diverse. Therefore, the Company has the flexibility to adjust its product mix to take advantage of or limit
exposure to commodity cost fluctuations. The Company believes that
any changes in commodity pricing, which cannot be offset by changes in menu pricing or other
product delivery strategies, would not be material to the Companys consolidated financial position, results of operations or cash flows.

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PART II  OTHER INFORMATION




Item 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits  None                                                                                                                                                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Reports on Form 8-K
 A report on Form 8-K was filed under item 4 on May 9, 2002, announcing the Companys dismissal of Arthur Andersen LLP as its
independent auditors and the Companys engagement of PricewaterhouseCoopers as its new independent auditors.




Signature

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

|                   |  |     |                                                                                                          
|------------------ |  | --- | ---------------------------------------------------------------------------------------------------------
|                   |  |     | THE RESTAURANT COMPANY                                                                                   
|                  
|DATE: June 5, 2002 |  | BY: | /s/ Steven R. McClellanSteven R.
McClellan
Executive Vice President,
Chief Financial Officer and Director
|                  
|                   |  | BY: | /s/ Louis C. JehlLouis C. Jehl
Vice President and Controller                                             

15