<Page>

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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                   FORM 10-QSB



/x/   QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
      ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001



//    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT



                        COMMISSION FILE NUMBER 000-29643


                         FOUNDERS FOOD & FIRKINS LTD.
            (Exact Name of Registrant as Specified in Its Charter)



            MINNESOTA                              41-1883639
      (State or Other Jurisdiction              (I.R.S. Employer
      of Incorporation or Organization)         Identification No.)



                              5831 CEDAR LAKE ROAD
                            ST. LOUIS PARK, MN 55416
                                 (952) 525-2070
           (Address of Principal Executive Offices and Registrant's
                    Telephone Number, including Area Code)



      Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

      Yes   X    No      .
          -----     -----

      As of October 16, 2001, the issuer had outstanding 3,807,350 shares of
common stock. This number includes all remaining units, each consisting of one
share of common stock and one redeemable Class A Warrant, sold in the issuer's
initial public offering.

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                                                 TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               PAGE
<S>                        <C>                                                                                 <C>
PART I                     FINANCIAL INFORMATION.............................................................     1

         ITEM 1            Financial Statements..............................................................     1

                           Condensed Balance Sheet as of September 30, 2001..................................     1

                           Condensed Statements of Operations for the thirteen and thirty-nine weeks ended
                           September 24, 2000 and September 30, 2001.........................................     2

                           Condensed Statements of Cash Flows for the thirty-nine weeks ended
                           September 24, 2000 and September 30, 2001.........................................     3

                           Notes to Condensed Financial Statements...........................................     4

         ITEM 2            Management's Discussion and Analysis or Plan of Operation.........................     5

PART II                    OTHER INFORMATION.................................................................    10

         ITEM 1            Legal Proceedings.................................................................    10

         ITEM 2            Changes in Securities and Use of Proceeds.........................................    10

         ITEM 3            Defaults upon Senior Securities ..................................................    11

         ITEM 4            Submission of Matters to a Vote of Security Holders...............................    11

         ITEM 5            Other Information.................................................................    11

         ITEM 6            Exhibits and Reports on Form 8-K..................................................    11

SIGNATURES...................................................................................................    12

</Table>

                                             i
<Page>



                                                      PART I

ITEM 1         Financial Statements

                                          FOUNDERS FOOD & FIRKINS LTD.

                                              CONDENSED BALANCE SHEET
                                                    (UNAUDITED)

<Table>
<Caption>
                                                                                                SEPTEMBER 30,
                                                                                                    2001
                                                                                             --------------------
<S>                                                                                                 <C>
ASSETS:
    Current assets:
        Cash                                                                                         $   310,182
        Inventory                                                                                         70,564
        Prepaids and other                                                                               124,402
                                                                                             --------------------
           Total current assets                                                                          505,148

    Property and equipment, net                                                                        7,966,599
    Liquor license and other                                                                             289,391
                                                                                             --------------------
           Total assets                                                                              $ 8,761,138
                                                                                             ====================

LIABILITIES AND SHAREHOLDERS' EQUITY:
    Current liabilities:
        Accounts payable                                                                             $   283,278
        Accrued expenses                                                                                 369,651
        Due to related parties                                                                               627
        Long-term debt, current portion                                                                   18,913
        Capital lease obligations, current portion                                                       232,813
                                                                                             --------------------
           Total current liabilities                                                                     905,282

    Long-term debt, net of current portion                                                               247,077
    Capital lease obligations, net of current portion                                                  4,024,470
                                                                                             --------------------
           Total liabilities                                                                           5,176,829

    Shareholders' equity:
        Common stock, $.01 par value, 90,000,000 shares authorized;
            3,807,350 shares issued and outstanding                                                       38,074
        Additional paid-in capital                                                                     4,416,358
        Accumulated deficit                                                                            (870,123)
                                                                                             --------------------
           Total shareholders' equity                                                                  3,584,309

           Total liabilities and shareholders' equity                                                $ 8,761,138
                                                                                             ====================

</Table>
                        See notes to condensed financial statements.


                                             1
<Page>



                                           FOUNDERS FOOD & FIRKINS LTD.

                                        CONDENSED STATEMENTS OF OPERATIONS
                                                    (UNAUDITED)

<Table>
<Caption>
                                                          THIRTEEN WEEKS ENDED                   THIRTY-NINE WEEKS ENDED
                                                          --------------------                   -----------------------
                                                    SEPTEMBER 24,       SEPTEMBER 30,         SEPTEMBER 24,       SEPTEMBER 30,
                                                         2000                2001                 2000               2001
                                                  ------------------- ----------------------------------------------------------
<S>                                                 <C>                 <C>                   <C>                 <C>
  Restaurant revenues                                   $  1,071,136        $  2,217,228        $ 2,928,465        $  6,350,143

  Restaurant costs:
    Food and beverage                                        311,405             645,667            866,336           1,882,416
    Labor                                                    347,359             732,908            947,649           2,092,168
    Direct and occupancy                                     194,553             468,424            587,851           1,326,056
    Depreciation and amortization                             60,020             118,365            179,823             348,935
                                                  ------------------- ----------------------------------------------------------
        Total restaurant costs                               913,337           1,965,364          2,581,659           5,649,575
                                                  ------------------- ----------------------------------------------------------

  Income from restaurant operations                          157,799             251,864            346,806             700,568

  Pre-opening costs                                            2,713              18,420              7,163              18,420
  General and administrative                                 129,793             207,105            268,159             540,048
                                                  ------------------- ----------------------------------------------------------

  Operating income                                            25,293              26,339             71,484             142,100
   Interest:
     Income                                                   43,242               4,472             49,718              29,845
     Expense                                                (45,214)           (101,439)          (144,148)           (271,067)
                                                  ------------------- ----------------------------------------------------------
     Net interest expense                                    (1,972)            (96,967)           (94,430)           (241,222)

Net Income (loss)                                       $     23,321         $  (70,628)        $  (22,946)        $   (99,122)
                                                  =================== ==========================================================
Earning (loss) per common share                         $       0.01         $    (0.02)        $    (0.01)        $     (0.03)
                                                  =================== ==========================================================
Earning (loss) per common share, assuming dilution      $       0.01         $    (0.02)        $    (0.01)        $     (0.03)
                                                  =================== ==========================================================
Weighted average shares outstanding                        3,807,350           3,807,350          2,694,780           3,807,350
                                                  =================== ==========================================================
Weighted average shares outstanding, assuming
dilution                                                   3,908,432           3,807,350          2,694,780           3,807,350
                                                  =================== ==========================================================
</Table>

                        See notes to condensed financial statements.


                                             2
<Page>



                                           FOUNDERS FOOD & FIRKINS LTD.

                                        CONDENSED STATEMENTS OF CASH FLOWS
                                                    (UNAUDITED)

<Table>
<Caption>
                                                                                     THIRTY-NINE WEEKS ENDED
                                                                                     -----------------------
                                                                               SEPTEMBER 24,            SEPTEMBER 30,
                                                                                    2000                    2001
                                                                           ----------------------  -----------------------
<S>                                                                            <C>                      <C>
Cash flows from operating activities:
Net loss                                                                           $    (22,946)             $   (99,122)
     Adjustments to reconcile net loss to net cash  provided by
       (used in) operating activities:
     Depreciation and amortization                                                      179,823                  348,935
     Decrease (increase) in:
         Inventory                                                                       (3,394)                  15,525
         Prepaids and other                                                               4,958                  (68,349)
     Increase (decrease) in:
         Accounts payable                                                                67,361                  (31,317)
         Accrued expenses                                                               (20,095)                 (17,159)
                                                                           ----------------------  -----------------------
      Net cash provided by operating activities                                         205,707                  148,513
                                                                           ----------------------  -----------------------
Cash flows from investing activities:
     Purchase of:
         Property and equipment                                                        (528,232)              (2,293,114)
         Liquor license & intangibles                                                  (162,665)                (107,582)
     Short-term investments/redemption of short-term investments                     (2,162,437)                 674,945
                                                                           ----------------------  -----------------------
     Net cash used in investing activities                                           (2,853,334)              (1,725,751)
                                                                           ----------------------  -----------------------
Cash flows from financing activities:
      Due to related parties                                                            (26,039)                  (6,000)
      Payments on capital lease obligations                                             (82,984)                (129,236)
      Proceeds from:
       Issuance of common stock                                                       3,313,994                        -
       Sale of warrants to underwriter                                                      100                        -
       Debt financing                                                                         -                  265,990
       Capital lease                                                                          -                  793,125
                                                                           ----------------------  -----------------------
      Net cash provided by financing activities                                       3,205,071                  923,879
                                                                           ----------------------  -----------------------
Net increase (decrease) in cash                                                         557,444                 (653,359)
Cash, beginning                                                                         107,673                  963,541
                                                                          ----------------------  -----------------------
Cash, ending                                                                       $    665,117              $   310,182
                                                                          ======================  =======================
</Table>

                        See notes to condensed financial statements.
                                             3
<Page>



                          FOUNDERS FOOD & FIRKINS LTD.

                   NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Thirteen and thirty-nine weeks ended September 24, 2000 and September 30, 2001

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION:

Nature of business:
   Founders Food & Firkins Ltd. (the Company) was formed to develop and operate
   casual dining restaurants featuring on-premise breweries. The Company is
   developing these restaurant-microbreweries, known as the Granite City Food &
   Brewery, in selected markets throughout the United States. The theme is
   casual dining with a wide variety of menu items that are prepared fresh
   daily, combined with freshly brewed hand-crafted beers made on-premise. The
   first facility, located in St. Cloud, Minnesota, opened in June 1999 and
   includes a full-service 250-seat restaurant and bar area. The second
   facility, located in Sioux Falls, South Dakota, opened on December 18, 2000
   and features a full-service 260-seat restaurant and bar area.

   A third facility located in Fargo, North Dakota, is currently under
   construction. The Company is financing this construction with (1) its own
   funds, (2) a $750,000 sale-leaseback of the Sioux Falls equipment, entered
   into in June 2001, maturing in 2008 and bearing interest at 9.0% annually,
   and (3) a $1.5 million note payable through an independent financial
   institution entered into in July 2001, maturing in 2006 and bearing interest
   at 8.75% annually. Three of the Company's directors guarantied the $1.5
   million loan referred to above, under which the Company had used $265,990 as
   of September 30, 2001. At that time, the Company had invested approximately
   $1.5 million in the construction of its Fargo facility, which is scheduled to
   open in mid November 2001.

Interim financial statements:
   The condensed financial statements of the Company for the thirteen and
   thirty-nine weeks ended September 24, 2000 and September 30, 2001 have been
   prepared by the Company without audit by the Company's independent auditors.
   In the opinion of the Company's management, all adjustments necessary to
   present fairly the financial position of the Company at September 30, 2001
   and the results of operations and cash flows for the periods ended September
   24, 2000 and September 30, 2001 have been made. Those adjustments consist
   only of normal and recurring adjustments.

   Certain information and note disclosures normally included in the Company's
   annual financial statements have been condensed or omitted. These condensed
   financial statements should be read in conjunction with the financial
   statements and notes thereto included in the Company's Form 10-KSB/A
   registration statement filed September 6, 2001 with the Securities and
   Exchange Commission.

   The results of operations for the thirteen and thirty-nine weeks ended
   September 30, 2001 are not necessarily indicative of the results to be
   expected in a full year.

Reclassifications:
   Certain reclassifications have been made to the 2000 financial statements in
   order for them to conform to the presentation of the 2001 financial
   statements. These reclassifications have no effect on the accumulated deficit
   or the net income (loss) previously reported.


                                             4
<Page>




2.  CONTINGENCY:

The Company has filed a claim under the National Association of Security
Dealers, Inc. Arbitration Code against a securities firm in connection with an
aborted underwriting of Company securities by that firm. The Company asserts
that it incurred damages of approximately $600,000. The securities firm has
asserted a claim against the Company to recover $25,000 in expenses in
connection with the aborted underwriting. An arbitration hearing has not been
held on this matter.

ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      THIS DISCUSSION AND ANALYSIS CONTAINS CERTAIN NON-HISTORICAL
FORWARD-LOOKING TERMINOLOGY SUCH AS "ANTICIPATES," "BELIEVES," "EXPECTS,"
"INTENDS," "PLANS," "ESTIMATES" AND SIMILAR EXPRESSIONS. SUCH STATEMENTS ARE
SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE ANTICIPATED. POTENTIAL PURCHASERS OF OUR SECURITIES
ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS,
WHICH ARE QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONS AND RISKS DESCRIBED
HEREIN. PLEASE REFER TO OUR ANNUAL REPORT ON FORM 10-KSB/A, FILED ON SEPTEMBER
6, 2001, FOR ADDITIONAL FACTORS KNOWN TO US THAT MAY CAUSE ACTUAL RESULTS TO
VARY.

OVERVIEW

      We operate two casual dining restaurants featuring on-premise
breweries. Our activities in 1998 and through June 1999 were related to the
development of our restaurant-microbrewery concept and the development and
financing of our first restaurant. Our initial restaurant commenced
operations in St. Cloud, Minnesota, in June 1999. Our second restaurant,
located in Sioux Falls, South Dakota, commenced operations in December 2000.
Our third restaurant is currently under construction in Fargo, North Dakota
and it is scheduled to open in mid November 2001.

      We developed our first restaurant using the net proceeds from a private
placement conducted in late 1997, together with financing in the form of
long-term building and equipment leases. We developed our second restaurant
using a portion of the net proceeds from our June 2000 initial public offering
together with long-term financing in the form of a building lease. We are
developing our third restaurant by using the remaining net proceeds from our
initial public offering, together with bank financing. We are currently
exploring methods of additional financing in order to develop additional
restaurants in selected markets throughout the United States.

      We believe that our operating results will fluctuate significantly because
of several factors, including the timing of new restaurant openings and related
expenses, profitability of new restaurants, increases or decreases in comparable
restaurant sales, general economic conditions, consumer confidence in the
economy, changes in consumer preferences, competitive factors and weather
conditions.

      We expect the timing of new restaurant openings to have a significant
impact on restaurant revenues and costs. We believe we will incur the most
significant portion of pre-opening costs associated with a new restaurant
within the quarter immediately preceding, and the month of, the opening of
such restaurant. We expect to incur net losses for the foreseeable future
primarily due to the pre-opening costs of the restaurants we propose to
develop.


                                             5
<Page>



RESULTS OF OPERATIONS

The following table compares operating results expressed as a percentage of
total revenue for the thirteen and thirty-nine weeks ended September 24, 2000
and September 30, 2001.

<Table>
<Caption>
                                                   THIRTEEN WEEKS ENDED                      THIRTY-NINE WEEKS ENDED
                                                   --------------------                      -----------------------
                                            SEPTEMBER 24,         SEPTEMBER 30,         SEPTEMBER 24,        SEPTEMBER 30,
                                                2000                  2001                  2000                  2001
                                         --------------------  --------------------  -------------------- ---------------------
<S>                                         <C>                   <C>                   <C>                  <C>
  Restaurant revenues                                 100.0%                100.0%                100.0%                100.0%

  Restaurant costs:
    Food and beverage                                  29.1%                 29.1%                 29.6%                 29.6%
    Labor                                              32.4%                 33.1%                 32.4%                 32.9%
    Direct and occupancy                               18.2%                 21.1%                 20.1%                 20.9%
    Depreciation and amortization                       5.6%                  5.3%                  6.1%                  5.5%
                                         --------------------  --------------------  -------------------- ---------------------
  Total restaurant costs:                              85.3%                 88.6%                 88.2%                 89.0%
                                         --------------------  --------------------  -------------------- ---------------------

  Income from restaurant operations                    14.7%                 11.4%                 11.8%                 11.0%
  Corporate costs:
    Pre-opening costs                                   0.3%                  0.8%                  0.2%                  0.3%
    General and administrative                         12.1%                  9.3%                  9.2%                  8.5%
                                         --------------------  --------------------  -------------------- ---------------------

  Operating income                                      2.4%                  1.2%                  2.4%                  2.2%
  Net interest expense                                 -0.2%                 -4.4%                 -3.2%                 -3.8%
                                         --------------------  --------------------  -------------------- ---------------------

  Net income (loss)                                     2.2%                 -3.2%                 -0.8%                 -1.6%
                                         ====================  ====================  ==================== =====================
</Table>


RESULTS OF OPERATIONS FOR THE THIRTEEN AND THIRTY-NINE WEEKS ENDED SEPTEMBER 24,
2000 AND SEPTEMBER 30, 2001

REVENUE

      Our first restaurant, located in St. Cloud, Minnesota, opened on June 30,
1999. Our second restaurant, located in Sioux Falls, South Dakota, opened
December 18, 2000. We generated $1,071,136 and $2,217,228 of restaurant revenues
during the third quarter of 2000 and 2001, respectively, and $2,928,465 and
$6,350,143 of restaurant revenues during the thirty-nine weeks ended September
24, 2000 and September 30, 2001, respectively. The 117% increase in revenues for
the thirty-nine weeks ended September 30, 2001 over that of the similar period
ended September 24, 2000 was attributed principally to the addition of another
operating unit.

      We anticipate that restaurant revenues will vary from quarter to quarter.
We anticipate seasonal fluctuations in restaurant revenues due in part to
increased outdoor seating and generally favorable weather conditions at both
locations during the summer months. However, patio revenues during the third
quarter of 2001 were not as favorable as anticipated due to the severe heat in
July and August and the cool weather during September.


                                             6
<Page>



RESTAURANT COSTS

FOOD AND BEVERAGE

      Our food and beverage cost remained constant at 29.1% as a percentage of
revenues during the thirteen weeks ended September 24, 2000 and September 30,
2001. Food and beverage costs also remained constant at 29.6% as a percentage of
revenues during the thirty-nine weeks ended September 24, 2000 and September 30,
2001.

      Despite these flat food and beverage costs, we expect that such costs will
vary from quarter to quarter due to numerous variables, including seasonal
changes in food costs and guest preferences. We periodically create new menu
offerings in both our craftbrewed beers and our food based upon guest
preferences. Such menu modifications typically result in increased food and
beverage cost; however, we believe that fulfilling such guest requests builds
customer loyalty and encourages repeat business. We believe that customer
preferences for craftbrewed beer, which we can produce at lower cost than beers
we purchase for resale, will help offset such increases. In addition, we believe
that our purchasing power will increase with the opening of new restaurants.

LABOR

      Between the third quarter of 2001 and the third quarter of 2000, our labor
costs expressed as a percentage of revenues increased 0.7%. During the first
three quarters of 2001 labor costs increased 0.5% as a percentage of revenues
from the similar period in 2000. Minimum wage regulations regarding tipped
employees vary from state to state. Lower minimum wage rates for such employees
in South Dakota have effectively reduced wage costs as a percentage of revenues.
However, due to the low rate of unemployment in our Sioux Falls market, turnover
has been higher than expected, thereby causing an increase in training costs at
that location. Additionally, increases in the cost of benefits that we provide
our employees have increased our labor costs, as have increases in wages paid to
retain good employees and ensure high quality customer service.

      We expect that labor costs will vary as we add new locations. Local labor
laws and practices, as well as unemployment rates, vary from state to state and
will affect our labor costs. In addition, we believe that retention of good
employees ensures high quality customer service and reduces hiring and training
costs. Our hiring and training cost savings are offset slightly by pay increases
as our staff gains more experience with us.

DIRECT AND OCCUPANCY

      Our direct and occupancy expenses increased 2.9% as a percentage of
revenues during the thirteen weeks ended September 30, 2001 compared to the
similar period in 2000. During the thirty-nine weeks ended September 30, 2001,
our direct and occupancy expenses increased 0.8% as a percentage of revenues
compared to the thirty-nine weeks ended September 24, 2000. These increases
resulted from an increase in rent expense with the addition of property tax
expense for which we were not liable in 2000 and contingent rent accrued based
on estimates of probable levels of revenues exceeding the percentage rent
threshold under our St. Cloud lease agreement. Such increases were offset in
part by our decision to eliminate our entertainment expense and reduce our
marketing expenses.

DEPRECIATION

      Depreciation expense increased by $58,345 from the thirteen weeks ended
September 24, 2000 to the similar 2001 period. The increase for the related
thirty-nine week period was $169,112. These increases were due principally to
the additional depreciation related to the new building and equipment at our
Sioux Falls location. As a percentage of revenues, during the first three
quarters of 2001, depreciation expense decreased


                                             7
<Page>



by 0.6% compared to the similar period in 2000, indicating that revenues
generated from our new location more than offset the related increase in
depreciation expense.

PRE-OPENING COSTS

      Pre-opening costs experienced during the thirteen and thirty-nine weeks
ended September 24, 2000 related to the opening of our Sioux Falls restaurant.
We incurred pre-opening costs of $18,420 during the thirteen and thirty-nine
weeks ended September 30, 2001. We expect to incur additional pre-opening costs
of approximately $182,000 for the Fargo location prior to its opening. The Fargo
restaurant is scheduled to open in mid November 2001.

GENERAL AND ADMINISTRATIVE

      General and administrative expenses include salaries and benefits
associated with our corporate staff that is responsible for overall restaurant
quality, future expansion into new locations and financial controls and
reporting. Other general and administrative expenses include professional fees,
office supplies associated with our centralized accounting system, and travel by
our corporate management to the restaurant locations. As a percentage of
revenue, our general and administrative expenses for the thirteen weeks ended
September 30, 2001 decreased 2.8% from the comparable period in 2000. During the
thirty-nine weeks ended September 30, 2001, our general and administrative
expenses decreased 0.7% compared to the thirty-nine weeks ended September 24,
2000. General and administrative expenses were $271,889 higher in the first
three quarters of 2001 compared to the similar period in 2000. As we have
continued to build our infrastructure in order to facilitate our continued
growth, we have incurred increased payroll and benefits related expenses. In
particular, in April 2001, we hired a corporate controller who is responsible
for our day-to-day financial concerns as well as our financial reporting. With
two operating locations and one under construction, additional travel and
communication costs between operating locations and the corporate office have
increased, as well as legal, accounting and investor relations expenses
associated with responsibly maintaining a public company. From the inception of
our company through September 30, 2001, our executive officers did not receive
any monetary compensation from our company. We have agreed with Messrs.
Wagenheim, Burdick and Wachman that no monetary salaries will be paid to them
through the year ending December 30, 2001, as we believe the options issued to
these officers in 1999 represent reasonable compensation for their services
through December 30, 2001. Compensation payable to them thereafter will be
determined by our board and will increase our general and administrative
expenses.

      We expect that general and administrative costs will continue to fluctuate
as a percentage of restaurant revenues in the near term as we hire certain
additional corporate staff members to adequately sustain operations across
multiple locations. The anticipated additional restaurant revenues associated
with further expansion are expected to result in greater economies of scale for
our corporate expenses in the long-term.

INTEREST EXPENSE

      Interest expense net of interest income increased $94,995 during the
thirteen weeks ended September 30, 2001, compared to the similar period in 2000.
Net interest expense increased $146,792 during the thirty-nine weeks ended
September 30, 2001 compared to the thirty-nine weeks ended September 24, 2000.
Such increased were due principally to increased debt incurred in the
construction of our Fargo location.

LIQUIDITY AND CAPITAL RESOURCES

      To date, we have required capital principally for the development,
construction and opening of new restaurants. Prior to commencement of restaurant
operations in June 1999, our capital requirements were principally funded
through private sales of equity. In 1997 and 1998, we sold, through private
placements, an aggregate of 1,969,500 shares of common stock for gross proceeds
of $1,319,500. From 1997 through the first half of 2000, we also funded our
operations through periodic advances from New Brighton Ventures, Inc., an


                                             8
<Page>


entity owned and controlled by certain members of our executive management.
In June 2000, we sold, through our initial public offering, an aggregate of
1,000,000 units for gross proceeds of $4,125,000. We have also obtained
additional financing through building and equipment lease obligations.

      Our operating activities provided $148,513 of net cash during the
thirty-nine weeks ended September 30, 2001. Using certain net proceeds from our
initial public offering, leases aggregating $793,125, and $265,990 of a note
payable entered into in July 2001, we purchased:

     o     $361,773 of equipment primarily for our Sioux Falls location,

     o     expended $1,931,341 toward the construction of our Fargo location,

     o     made payments on our capital lease obligations and debt owed to
           related parties in the amounts of $129,236 and $6,000, respectively,
           and

     o     paid $107,582 for loan fees, a portion of our Fargo liquor license
           and activity related to pending trademarks and patents.

In 2000, we invested excess cash from our initial public offering proceeds in
short-term investments with staggered maturity dates to correspond with
anticipated pre-opening costs. During the first three quarters of 2001, we
redeemed $674,945 of short-term investments.

      During the thirty-nine weeks ended September 24, 2000, our operating
activities provided $205,707 of net cash. Using net cash provided by operations
and net proceeds from our initial public offering aggregating $3,313,994, we
purchased equipment totaling $528,232, purchased a liquor license for the Sioux
Falls restaurant for $162,665, and made net payments on other debt of $109,023.
In addition, we invested excess cash of $2,162,437 in short-term investments
with staggered maturity dates designed to correspond with the construction and
opening needs of Sioux Falls restaurant.

      During 2001, we estimate that we will be required to make capital
expenditures totaling approximately $3.0 million for the development of our
third Granite City Food & Brewery restaurant, to be located in Fargo, North
Dakota. On January 18, 2001, we entered into a ground lease for property located
adjacent to the West Acres Mall in Fargo and initiated construction of a 9,720
square foot restaurant. The sources for development and construction of the
restaurant include our own funds, a $750,000 sale-leaseback of the Sioux Falls
equipment, entered into in June 2001, maturing in 2008 and bearing interest at
9.0% annually, and a $1.5 million loan from an independent financial
institution, the proceeds of which are used to pay construction costs. The loan
matures on February 19, 2007 and bears interest at the rate of 8.75% per annum.
As of September 30, 2001 we had drawn down $265,990 on this loan. The loan
agreement and related loan documentation contain other customary terms and
conditions. The loan is secured by a leasehold mortgage, a security agreement
granting to the bank a first security interest in the lease and all of our
inventory, accounts, general intangibles, equipment, furniture, fixtures, and
other personal property of our company pertaining to the project, an assignment
of leases and rents and guaranties by three of our directors. The loan agreement
with the bank includes customary covenants, including a limitation on our
ability to incur additional indebtedness, other than ordinary trade debt, make
investments in other persons or make distributions or dividends.

      Steven J. Wagenheim, our chief executive officer and a director, William
E. Burdick, our chairman and a director, and Arthur E. Pew III, a director,
guarantied the $1.5 million loan referred to above. In connection with their
guaranties of the loan, these guarantors and our company entered into an
Agreement Concerning Guaranty which provides, among other things, that our
company, Mr. Wagenheim and Mr. Burdick, jointly and severally, agree to
indemnify and hold Mr. Pew harmless from any liabilities which he may claim by
reason of his guaranty of our indebtedness, and that we will indemnify Mr.
Wagenheim and Mr. Burdick from any liabilities they may incur by reason of their
guaranties of our indebtedness. We have further


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agreed that we will not, without Mr. Pew's consent, modify the terms and
conditions of the loan, default in payment of obligations under the loan
agreement or incur additional indebtedness other than indebtedness under the
loan, ordinary trade debt or other indebtedness incurred in the ordinary
course of business, not to exceed $100,000 at any time. The agreement also
contains other customary covenants and a covenant that we will use our best
efforts to refinance the $1.5 million of indebtedness by January 1, 2006 and
to use our best efforts to obtain a release of Mr. Pew from the guaranty by
that date. If we have not released Mr. Pew from the obligation by January 1,
2006, we are obligated to pay him a monthly guaranty fee beginning in
February 2006 in the amount of $1,000, until he is released from the
obligation.

      We intend to pursue a disciplined expansion strategy in markets where we
believe our concept will have broad appeal and attractive restaurant-level
economics. However, the development of any additional Granite City locations
will require us to obtain additional financing. The amount of financing required
for new stores depends upon the definitive locations, leasehold improvement
costs, construction costs and the type of transactions pursuant to which we
establish new locations. We cannot assure you that financing needed to pursue
our expansion strategy will be available on terms acceptable or favorable to us,
or at all. We are considering various ways to obtain such financing, including
the sale of debt or equity securities, or some combination thereof, as well as
possible partnerships with investors. At present, however, we have no
commitments from any party to provide us with the financing required to achieve
additional expansion. Without such financing, our expansion strategy will be
unachievable.

SEASONALITY

      We expect that our sales and earnings will fluctuate based on seasonal
patterns. We anticipate that our highest sales and earnings will occur in the
second and third quarters due to the milder climate and availability of outdoor
seating during those quarters in our existing and proposed markets.

INFLATION

      Inflation in food, labor, real estate and construction costs can
significantly affect our operations. A large number of our restaurant personnel
are paid at rates based on the applicable minimum wage, and increases in the
minimum wage directly affect our labor costs. Although we believe we have
experienced increased building costs due to inflation, inflation has not had a
material impact on our operating results through September 30, 2001.

PART II     OTHER INFORMATION

ITEM 1      Legal Proceedings



      Other than as described in prior periodic reports, we were not a party to
any material litigation as of September 30, 2001.

ITEM 2      Changes in Securities and Use of Proceeds

            (d)   Use of Proceeds from Registered Securities

                  Our registration statement on Form SB-2 (File No. 333-93459)
                  was declared effective by the SEC on June 6, 2000. After
                  deducting the total expenses of our initial public offering,
                  our net proceeds were approximately $3,273,751.

                   From the effective date of the registration statement on Form
                   SB-2 through September 30, 2001, we had used all of the net
                   proceeds. We applied these funds in


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                   the following manner: (1) $2,282,904 for the development of
                   our Sioux Falls location, (2) $243,353 for the reimbursement
                   of expenses advanced by New Brighton Ventures, Inc. ("NBV"),
                   (3) $734,376 for the development of our Fargo location, and
                   (4) $13,118 for operating expenses. NBV is the entity through
                   which Steven J. Wagenheim, President, Chief Executive Officer
                   and Director of our company, and Mitchel I. Wachman, Chief
                   Financial Officer, Secretary and Director of our company, own
                   a Champps restaurant in New Brighton, Minnesota.

                   The Sioux Falls expenditures represent: (1) payments to the
                   development company and additional tenant improvements of
                   $1,051,514, (2) restaurant equipment of $792,052, (3)
                   pre-opening costs of $211,219, and (4) brewery equipment of
                   $228,119. The Fargo expenditures represent: (1) payments to
                   architects of $38,676, (2) site development and initial
                   construction of $305,994, (3) brewing equipment of $176,418,
                   (4) restaurant equipment of $187,910, and (5) financing costs
                   of $25,378. The amount paid to NBV has not changed since our
                   last periodic report. The amount allocated to operating
                   expenses, which has not changed since our last periodic
                   report, represents the net of previously reported uses of
                   initial public offering proceeds to fund percentage rent and
                   real estate tax expenses less subsequent repayment from
                   operating income.

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

                   None

             (b)   Reports on Form 8-K

                   We filed no Current Reports on Form 8-K during the quarter
                   ended September 30, 2001.


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                                   SIGNATURES


      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                          FOUNDERS FOOD & FIRKINS LTD.


Date:  November 2, 2001                         By /S/ MITCHEL I. WACHMAN
                                                  ---------------------------
                                                  Mitchel I. Wachman
                                                  Chief Financial Officer


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