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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 20, 2003

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

(901) 766-6400

(Registrants telephone number, including area code)


Indicate by üwhether 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 üNo

Indicate by üwhether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act). Yes   No ü

Number of shares of common stock outstanding: 10,820.

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TABLE OF CONTENTS



|                                           |                                                                                                                                          |  |  |  |  |  |  | 
|------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I - FINANCIAL INFORMATION            
|                                           | ITEM 1. FINANCIAL STATEMENTS                                                                                                            
|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 20, 2003
|                                           | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                      
|                                           | ITEM 4. CONTROLS AND PROCEDURES                                                                                                         
|PART II - OTHER INFORMATION               
|                                           | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                                                                
|Signature                                 
|CERTIFICATIONS                            



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







|                                                    |                             |   |                |        |                |   |         |        | 
|--------------------------------------------------- | --------------------------- | - | -------------- | ------ | -------------- | - | ------- | ------ | 
|                                                    |                             |   | Quarter Ended  |        | Quarter Ended 
|                                                    |                             |   | April 20, 2003 |        | April 21, 2002
|                                                    |                             |   |                |        |               
|REVENUES:                                           |                             |   |                |        |                |   |         |       
|                                                    | Food sales                  |   | $              | 93,732 |                |   | $       | 98,409 | 
|                                                    | Franchise and other revenue |   |                | 6,257  |                |   |         | 6,603  | 
|                                                    |                             |   |                |        |                |   |         |        | 
|Total Revenues                                      |                             |   | 99,989         |        |                |   | 105,012 |       
|                                                    |                             |   |                |        |                |   |         |        | 
|COSTS AND EXPENSES:                                 |                             |   |                |        |                |   |         |       
|Cost of sales (excluding depreciation
shown below): |                             |   |                |        |                |   |         |       
|                                                    | Food cost                   |   |                | 26,439 |                |   |         | 27,592 | 
|                                                    | Labor and benefits          |   |                | 33,870 |                |   |         | 35,034 | 
|                                                    | Operating expenses          |   |                | 19,964 |                |   |         | 20,122 | 
|General and
administrative                          |                             |   | 8,917          |        |                |   | 9,209   |       
|Depreciation and
amortization                       |                             |   | 5,760          |        |                |   | 6,767   |       
|Interest, net                                       |                             |   | 5,270          |        |                |   | 5,616   |       
|Provision for disposition of
assets                 |                             |   | 2              |        |                |   | 28      |       
|Other, net                                          |                             |   | (162           | )      |                |   | (242    | )     
|                                                    |                             |   |                |        |                |   |         |        | 
|Total Costs and
Expenses                            |                             |   | 100,060        |        |                |   | 104,126 |       
|                                                    |                             |   |                |        |                |   |         |        | 
|(Loss) Income before income
taxes                   |                             |   | (71            | )      |                |   | 886     |       
|Benefit from (Provision for) income
taxes           |                             |   | 14             |        |                |   | (257    | )     
|                                                    |                             |   |                |        |                |   |         |        | 
|NET (LOSS) INCOME                                   |                             | $ | (57            | )      |                | $ | 629     |       
|                                                    |                             |   |                |        |                |   |         |        | 

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 20,   |        |              |         | 
|                                                                                  |  |                      |         | 2003        |        | December 29,
|                                                                                  |  |                      |         | (Unaudited) |        | 2002        
|                                                                                  |  |                      |         |             |        |             
|ASSETS                                                                            |  |                      |         |             |        |              |         | 
|CURRENT ASSETS:                                                                   |  |                      |         |             |        |              |         | 
|Cash and cash
equivalents                                                         |  | $                    | 8,942   |             |        | $            | 5,813   | 
|Receivables, less allowance for
doubtful accounts of $920 and $1,041              |  |                      | 8,411   |             |        |              | 9,671   | 
|Inventories, at the lower of first-in, first-out cost or market                   |  |                      | 5,907   |             |        |              | 5,182   | 
|Prepaid expenses and other current
assets                                         |  |                      | 2,978   |             |        |              | 1,977   | 
|Deferred income taxes                                                             |  |                      | 721     |             |        |              | 721     | 
|                                                                                  |  |                      |         |             |        |              |         | 
|                                                                                  |  | Total current assets |         |             | 26,959 |              |         |  | 23,364 | 
|                                                                                  |  |                      |         |             |        |              |         | 
|PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation and amortization |  |                      | 123,583 |             |        |              | 126,985 | 
|GOODWILL                                                                          |  |                      | 27,035  |             |        |              | 27,035  | 
|INTANGIBLE ASSETS, net of accumulated
amortization of $4,782 and $4,581           |  |                      | 4,536   |             |        |              | 4,737   | 
|DEFERRED INCOME TAXES                                                             |  |                      | 9,209   |             |        |              | 9,209   | 
|OTHER ASSETS                                                                      |  |                      | 6,748   |             |        |              | 7,354   | 
|                                                                                  |  |                      |         |             |        |              |         | 
|                                                                                  |  | $                    | 198,070 |             |        | $            | 198,684 | 
|                                                                                  |  |                      |         |             |        |              |         | 

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 20,   |         |              |  | 
|                                                                                       |                                                                    |   |         |                             |  | 2003        |         | December 29,
|                                                                                       |                                                                    |   |         |                             |  | (Unaudited) |         | 2002        
|                                                                                       |                                                                    |   |         |                             |  |             |         |             
|LIABILITIES AND STOCKHOLDERS
INVESTMENT                                               |                                                                    |   |         |                             |  |             |         |             
|CURRENT LIABILITIES:                                                                   |                                                                    |   |         |                             |  |             |         |             
|                                                                                       | Current maturities of long-term debt and
capital lease obligations |   | $       | 9,476                       |  |             | $       | 9,489        | 
|                                                                                       | Accounts payable                                                   |   |         | 8,608                       |  |             |         | 14,132       | 
|                                                                                       | Accrued expenses                                                   |   |         | 25,100                      |  |             |         | 17,849       | 
|                                                                                       |                                                                    |   |         |                             |  |             |         |              | 
|                                                                                       |                                                                    |   |         | Total current liabilities   |  |             | 43,184  |              |  |  | 41,470 |  
|                                                                                       |                                                                    |   |         |                             |  |             |         |              | 
|CAPITAL LEASE OBLIGATIONS, less
current maturities                                     |                                                                    |   | 1,148   |                             |  |             | 1,334   |             
|LONG-TERM DEBT                                                                         |                                                                    |   | 148,022 |                             |  |             | 150,015 |             
|OTHER LIABILITIES                                                                      |                                                                    |   | 6,054   |                             |  |             | 6,146   |             
|STOCKHOLDERS
INVESTMENT:                                                              |                                                                    |   |         |                             |  |             |         |             
|Common stock, $.01 par value, 100,000
shares authorized,
10,820 issued and outstanding |                                                                    |   | 1       |                             |  |             | 1       |             
|Accumulated deficit                                                                    |                                                                    |   | (339    | )                           |  |             | (282    | )           
|                                                                                       |                                                                    |   |         |                             |  |             |         |              | 
|                                                                                       |                                                                    |   |         | Total stockholders
deficit |  |             | (338    | )            |  |  | (281   | )
|                                                                                       |                                                                    |   |         |                             |  |             |         |              | 
|                                                                                       |                                                                    | $ | 198,070 |                             |  | $           | 198,684 |             
|                                                                                       |                                                                    |   |         |                             |  |             |         |              | 

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  |       | Quarter Ended 
|                                                                                         |                                                 |                   |        | April 20, 2003 |       | April 21, 2002
|                                                                                         |                                                 |                   |        |                |       |               
|CASH FLOWS FROM OPERATING
ACTIVITIES:                                                    |                                                 |                   |        |                |       |                |        |      
|Net (loss) income                                                                        |                                                 | $                 | (57    | )              |       | $              | 629    |      
|Adjustments to reconcile net
(loss) income to net cash
provided by operating activities: |                                                 |                   |        |                |       |                |        |      
|                                                                                         | Depreciation and
amortization                   |                   |        | 5,760          |       |                |        | 6,767 |      
|                                                                                         | Accretion of Senior Discount
Notes              |                   |        | 7              |       |                |        | 7     |      
|                                                                                         | Provision for bad debt
expense                  |                   |        | 135            |       |                |        | 112   |      
|                                                                                         | Provision for disposition of
assets             |                   |        | 2              |       |                |        | 28    |      
|                                                                                         | Net changes in operating assets and
liabilities |                   |        | 1,440          |       |                |        | 961   |      
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|                                                                                         |                                                 | Total adjustments |        |                | 7,344 |                |        |       | 7,875 | 
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|Net cash provided by operating
activities                                                |                                                 |                   | 7,287  |                |       |                | 8,504  |      
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|CASH FLOWS FROM INVESTING
ACTIVITIES:                                                    |                                                 |                   |        |                |       |                |        |      
|Cash paid for property and
equipment                                                     |                                                 |                   | (2,169 | )              |       |                | (4,520 | )    
|Proceeds from sale of assets held for
disposition                                        |                                                 |                   | 10     |                |       |                | 2,030  |      
|Payments on notes
receivable                                                             |                                                 |                   | 201    |                |       |                | 292    |      
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|Net cash used in investing
activities                                                    |                                                 |                   | (1,958 | )              |       |                | (2,198 | )    
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|CASH FLOWS FROM FINANCING
ACTIVITIES:                                                    |                                                 |                   |        |                |       |                |        |      
|Payments on long-term
debt                                                               |                                                 |                   | (2,000 | )              |       |                | (5,500 | )    
|Principal payments under capital lease
obligations                                       |                                                 |                   | (200   | )              |       |                | (393   | )    
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|Net cash used in financing
activities                                                    |                                                 |                   | (2,200 | )              |       |                | (5,893 | )    
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|Net increase in cash and cash
equivalents                                                |                                                 |                   | 3,129  |                |       |                | 413    |      
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|CASH AND CASH
EQUIVALENTS:                                                               |                                                 |                   |        |                |       |                |        |      
|Balance, beginning of
period                                                             |                                                 |                   | 5,813  |                |       |                | 4,501  |      
|                                                                                         |                                                 |                   |        |                |       |                |        |      
|Balance, end of period                                                                   |                                                 | $                 | 8,942  |                |       | $              | 4,914  |      
|                                                                                         |                                                 |                   |        |                |       |                |        |      

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 and Perkins Finance Corp. RHCs principal stockholders are
Donald N. Smith (Mr. Smith), TRCs Chairman and Chief Executive Officer,
and BancBoston Ventures, Inc. (BBV). Mr. Smith is also the Chairman of
Friendly Ice Cream Corporation (FICC), which operates and franchises
approximately 543 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 2002 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.

Accounting Reporting Period

The Companys fiscal calendar year consists of 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 ended April 20, 2003.
The second, third and fourth quarters of 2003 will end on July 13, October
5 and December 28, respectively.

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.

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 20,
2003, there was $3,000,000 in borrowings outstanding under this agreement
of which the Company guaranteed $1,500,000. The Companys obligation
under the guarantee expires on July 1, 2003.

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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 20 and April 21,
consists of the following (in thousands):

|                        |                                           |   |                |        |                |   |     |        |  
|----------------------- | ----------------------------------------- | - | -------------- | ------ | -------------- | - | --- | ------ | -
|                        |                                           |   | Quarter Ended  |        | Quarter Ended 
|                        |                                           |   | April 20, 2003 |        | April 21, 2002
|                        |                                           |   |                |        |               
|(Increase) Decrease in: |                                           |   |                |        |                |   |     |       
|                        | Receivables                               |   | $              | 1,234  |                |   | $   | (894   | )
|                        | Inventories                               |   |                | (725   | )              |   |     | 161    |  
|                        | Prepaid expenses and
other current assets |   |                | (1,001 | )              |   |     | (27    | )
|                        | Other assets                              |   |                | 296    |                |   |     | 17     |  
|Increase (Decrease) in: |                                           |   |                |        |                |   |     |       
|                        | Accounts payable                          |   |                | (5,524 | )              |   |     | (4,062 | )
|                        | Accrued expenses                          |   |                | 7,251  |                |   |     | 5,270  |  
|                        | Other liabilities                         |   |                | (91    | )              |   |     | 496    |  
|                        |                                           |   |                |        |                |   |     |        |  
|                        |                                           | $ | 1,440          |        |                | $ | 961 |       
|                        |                                           |   |                |        |                |   |     |        |  

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

|                            |  |                |     |                |  |   |     | 
|--------------------------- |  | -------------- | --- | -------------- |  | - | --- | 
|                            |  | Quarter Ended  |     | Quarter Ended 
|                            |  | April 20, 2003 |     | April 21, 2002
|                            |  |                |     |               
|Cash paid for interest      |  | $              | 197 |                |  | $ | 391 | 
|Income taxes paid           |  |                | 75  |                |  |   | 148 | 
|Income tax refunds received |  |                | 36  |                |  |   | 639 | 

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Segment Reporting

The following presents revenue and other financial information by business
segment for the quarters ended April 20 and April 21 (in thousands):

|                                |  |             |        |           |  |               |       |       |  |        |       |  |  |   |         |   |  |   |         |  
|------------------------------- |  | ----------- | ------ | --------- |  | ------------- | ----- | ----- |  | ------ | ----- |  |  | - | ------- | - |  | - | ------- | -
|                                |  | Restaurants |        | Franchise |  | Manufacturing |       | Other |  | Totals
|                                |  |             |        |           |  |               |       |       |  |       
|Quarter ended April 20, 2003:   |  |             |        |           |  |               |       |       |  |        |       |  |  |   |         |   |  |   |         |  
|Revenue from
external customers |  | $           | 84,855 |           |  | $             | 6,122 |       |  | $      | 8,877 |  |  | $ | 135     |   |  | $ | 99,989  |  
|Intersegment revenue            |  |             |       |           |  |               |      |       |  |        | 3,234 |  |  |   |        |   |  |   | 3,234   |  
|Segment profit (loss)           |  |             | 5,895  |           |  |               | 5,410 |       |  |        | 1,955 |  |  |   | (13,317 | ) |  |   | (57     | )
|Quarter ended April 21, 2002:   |  |             |        |           |  |               |       |       |  |        |       |  |  |   |         |   |  |   |         |  
|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     |  

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

|                                       |  |      |        |      |  |   |        |  
|-------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                       |  | 2003 |        | 2002
|                                       |  |      |        |     
|General and administrative expenses    |  | $    | 7,378  |      |  | $ | 7,826  |  
|Depreciation and amortization
expenses |  |      | 903    |      |  |   | 1,373  |  
|Interest expense                       |  |      | 5,270  |      |  |   | 5,616  |  
|Provision for disposition of assets    |  |      | 2      |      |  |   | 28     |  
|Income tax (benefit) expense           |  |      | (14    | )    |  |   | 257    |  
|Other                                  |  |      | (222   | )    |  |   | (168   | )
|                                       |  |      |        |      |  |   |        |  
|                                       |  | $    | 13,317 |      |  | $ | 14,932 |  
|                                       |  |      |        |      |  |   |        |  

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Revolving Credit Agreement

As of April 20, 2003, the Company has a secured $40,000,000 revolving line of
credit facility (the Credit Facility) with a sub-limit 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 collateralized by
a first priority lien on substantially all of the assets of the Company. As of
April 20, 2003, there were no borrowings and approximately $3,173,000 of
letters of credit outstanding under the Credit Facility.

The Credit Facility requires the Company to comply with certain restrictive
covenants on a quarterly basis. At April 20, 2003, the Company failed to meet
the criteria of one of the restrictive covenants. On May 14, 2003, the Company
executed an amendment to the Credit Facility that waives the April 20, 2003
covenant violation, reduces the requirements of the restrictive covenants and
lowers the total amount available under the Credit Facility to $25,000,000.

New Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities
(VIEs), an interpretation of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to improve financial reporting of special
purpose and other entities. In accordance with the interpretation, business
enterprises that represent the primary beneficiary of another entity by
retaining a controlling financial interest in that entitys assets,
liabilities, and results of operating activities must consolidate the entity in
their financial statements. Prior to the issuance of FIN 46, consolidation
generally occurred when an enterprise controlled another entity through voting
interests. Certain VIEs that are qualifying special purpose entities (QSPEs)
subject to the reporting requirements of SFAS 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities, will not be
required to be consolidated under the provisions of FIN 46. The consolidation
provisions of FIN 46 apply to VIEs created or entered into after January 31,
2003, and for pre-existing VIEs in the first reporting period beginning after
June 15, 2003. If applicable, transition rules allow the restatement of
financial statements or prospective application with a cumulative effect
adjustment. In addition, FIN 46 expands the disclosure requirements for the
beneficiary of a significant or a majority of the variable interests to provide
information regarding the nature, purpose and financial characteristics of the
entities. The Company does not believe that the adoption of FIN 46 will have a
material adverse impact on the Companys financial statements.

In January 2003, the Emerging Issues Task Force (EITF) issued EITF Issue No.
02-16, Accounting by a Customer (Including a Reseller) for Certain
Consideration Received from a Vendor, which states that cash consideration
received from a vendor is presumed to be a reduction of the prices of the
vendors products or services and should, therefore, be characterized as a
reduction of cost of sales when recognized in the statement of operations. That
presumption is overcome when the consideration is either a reimbursement of
specific, incremental, identifiable costs incurred to sell the vendors
products, or a payment for assets or services delivered to the vendor. EITF
Issue No. 02-16 is effective for arrangements entered into after November 21,
2002. The Company is already accounting for vendor rebates in a manner
consistent with the EITF consensus. Therefore, applying the provisions of EITF
Issue No. 02-16 will not have a material impact on the Companys financial
position or results of operations.

In April 2003, the FASB issued Statement of Financial Accounting Standard No.
149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. This statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. This Statement is effective for contracts
entered into or modified after June 30, 2003. The Company does not believe
that the adoption of this Statement will have a material effect on the results
of operations or financial position of the Company.

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE FIRST QUARTER ENDED APRIL 20, 2003

RESULTS OF OPERATIONS

Overview:

The Company is a leading operator and franchisor of mid-scale restaurants
located in 35 states and four Canadian provinces. As of April 20, 2003, the
Company owned and operated 155 and franchised 342 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 offers cookie doughs, muffin batters, pancake mixes, pies and
other food products for sale to our Company-operated and franchised restaurants
and bakery and food service distributors through Foxtail Foods (Foxtail), our
manufacturing division. 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 Foxtail and franchise royalties. 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. Sales to Company-operated
restaurants are eliminated in the accompanying statements of operations. For
the quarter ended April 20, 2003, revenues from Company-operated restaurants,
Foxtail, and franchise and other accounted for 84.9%, 8.8% and 6.3% of total
revenue, respectively.

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A summary of the Companys results for the quarters ended April 20, 2003 and
April 21, 2002 are presented in the following table. All revenues, costs and
expenses are expressed as a percentage of total revenues.

|                                          |                                     |                             |                    |      |                |      |                |      |      |      | 
|----------------------------------------- | ----------------------------------- | --------------------------- | ------------------ | ---- | -------------- | ---- | -------------- | ---- | ---- | ---- | 
|                                          |                                     |                             |                    |      | Quarter ended  |      | Quarter ended 
|                                          |                                     |                             |                    |      | April 20, 2003 |      | April 21, 2002
|                                          |                                     |                             |                    |      |                |      |               
|Revenues:                                 |                                     |                             |                    |      |                |      |                |     
|                                          |                                     | Food sales                  |                    |      | 93.7           | %    |                |      | 93.7 | %   
|                                          |                                     | Franchise and other
revenue |                    |      | 6.3            |      |                |      | 6.3  |     
|                                          |                                     |                             |                    |      |                |      |                |      |      |     
|Total Revenues                            |                                     |                             | 100.0              |      |                |      | 100.0          |     
|                                          |                                     |                             |                    |      |                |      |                |      |      |     
|Costs and Expenses:                       |                                     |                             |                    |      |                |      |                |     
|                                          | Cost of sales:                      |                             |                    |      |                |      |                |      |     
|                                          |                                     |                             | Food cost          |      |                | 26.4 |                |      |      | 26.3 | 
|                                          |                                     |                             | Labor and benefits |      |                | 33.9 |                |      |      | 33.4 | 
|                                          |                                     |                             | Operating expenses |      |                | 20.0 |                |      |      | 19.2 | 
|                                          | General and
administrative          |                             |                    | 8.9  |                |      |                | 8.8  |     
|                                          | Depreciation and
amortization       |                             |                    | 5.8  |                |      |                | 6.4  |     
|                                          | Interest, net                       |                             |                    | 5.3  |                |      |                | 5.3  |     
|                                          | Provision for disposition of
assets |                             |                    |     |                |      |                |     |     
|                                          | Other, net                          |                             |                    | (0.2 | )              |      |                | (0.2 | )   
|                                          |                                     |                             |                    |      |                |      |                |      |      |     
|Total Costs and
Expenses                  |                                     |                             | 100.1              |      |                |      | 99.2           |     
|                                          |                                     |                             |                    |      |                |      |                |      |      |     
|(Loss) Income before income
taxes         |                                     |                             | (0.1               | )    |                |      | 0.8            |     
|(Provision for) Benefit from income
taxes |                                     |                             |                   |      |                |      | (0.2           | )   
|                                          |                                     |                             |                    |      |                |      |                |      |      |     
|Net (Loss) Income                         |                                     |                             | (0.1               | )%   |                |      | 0.6            | %   
|                                          |                                     |                             |                    |      |                |      |                |      |      |     

Net loss for the first quarter of 2003 was $57,000 versus net income of
$629,000 for the first quarter of 2002.

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Revenues:

Total revenues for the first quarter of 2003 decreased 4.8% from the prior year
first quarter. This decrease is primarily due to lower comparable restaurant
sales.

Same store comparable sales in Company-operated restaurants decreased
approximately 6.3% for the first quarter due to a decline in comparable guest
visits of 9.3%. Severe winter weather and uncertainty surrounding world events
contributed to the decrease in comparable guest visits. The decrease in
comparable guest visits was partially offset by an increase in the guest check
average due to cumulative price increases and the introduction of a new menu
with a focus on higher priced lunch and dinner items.

Revenues from Foxtail decreased approximately 2.6% over the prior year quarter,
and constituted approximately 8.8% of the Companys total revenues. The
decrease is primarily due to a decrease in sales to restaurants in the Perkins
system.

Franchise revenue, composed mainly of franchise royalties, decreased 5.3% over
the first quarter of 2002. Royalty revenues declined slightly due to a decrease
in both average franchise stores in operation and comparable sales. Since the
first quarter of 2002, the Companys franchisees have opened 11 restaurants and
have closed 17 restaurants.

Costs and Expenses:

Food cost:

In terms of total revenues, food cost increased 0.1 percentage points over the
first quarter of 2002. Restaurant food cost, as a percentage of restaurant
sales, increased 0.2 percentage points over the first quarter of 2002 due
primarily to increased commodity costs and the introduction of a new menu with
higher food cost lunch and dinner items. These increases were partially offset
by the impact of cumulative price increases. As a percentage of Foxtail sales,
Foxtail food cost increased 0.2 percentage points over the prior year.

Labor and benefits:

Labor and benefits expense, as a percentage of total revenues, increased 0.5
percentage points over the first quarter of 2002. The increase is primarily
due to a decrease in productivity in Company-operated restaurants and an
increase in workers compensation and employee insurance costs.

Federal and state minimum wage laws impact the wage rates of the Companys
hourly employees. 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:

Expressed as a percentage of total revenues, operating expenses increased 0.8
percentage points over the first quarter of 2002. The increase is primarily
due to the impact of rising natural gas costs.

General and administrative:

General and administrative expenses, as a percentage of total revenues,
increased 0.1 percentage points over the first quarter 2002. The increase was
primarily due to the decrease in revenues.

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Depreciation and amortization:

Depreciation and amortization expense decreased from 6.4 percent of sales to
5.8 percent of sales over the first quarter 2002 primarily due to the Companys
reduction in capital spending since 2001.

Interest, net:

Interest expense, as a percentage of total revenue, was flat compared to the
first quarter of 2002.

Other, net:

Other income decreased slightly compared to the first quarter of 2002.

CAPITAL RESOURCES AND LIQUIDITY

The Companys primary source of
funding during the quarter was cash flows
from operating activities. The principal uses of cash during the quarter were
payments on long-term debt and capital expenditures. Capital expenditures
consisted primarily of capital required to maintain operations and costs
related to remodeling and upgrading existing restaurants.

The following table summarizes capital expenditures for the quarters ended
April 20, 2003 and April 21, 2002 (in thousands):

|                           |  |                |       |                |  |   |       | 
|-------------------------- |  | -------------- | ----- | -------------- |  | - | ----- | 
|                           |  | Quarter Ended 
|                           |  |               
|                           |  | April 20, 2003 |       | April 21, 2002
|                           |  |                |       |               
|New restaurants            |  | $              | 14    |                |  | $ | 431   | 
|Maintenance                |  |                | 1,211 |                |  |   | 1,921 | 
|Remodeling and reimaging   |  |                | 481   |                |  |   | 1,513 | 
|Manufacturing              |  |                | 103   |                |  |   | 106   | 
|Other                      |  |                | 360   |                |  |   | 549   | 
|                           |  |                |       |                |  |   |       | 
|Total Capital Expenditures |  | $              | 2,169 |                |  | $ | 4,520 | 
|                           |  |                |       |                |  |   |       | 

The Companys capital budget for 2003 is $12.6 million and includes plans to
open no new Company-operated restaurants. Actual capital expenditures have
been primarily applied to remodeling of existing restaurants and restaurant
maintenance. The primary source of funding for these projects was cash flows
from operating activities.

The Company ordinarily operates with a working capital deficit since funds
generated by cash sales in excess of those needed to service current
liabilities are used by the Company to reduce debt and acquire capital assets.
At April 20, 2003, this working capital deficit was $16,225,000.

As of April 20, 2003, the Company has a secured $40,000,000 revolving line of
credit facility (the Credit Facility) with a sub-limit 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 collateralized by
a first priority lien on substantially all of the assets of the Company. As of
April 20, 2003, there were no borrowings and approximately $3,173,000 of
letters of credit outstanding under the Credit Facility.

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The Credit Facility requires the Company to comply with certain restrictive
covenants on a quarterly basis. At April 20, 2003, the Company failed to meet
the criteria of one of the restrictive covenants. On May 14, 2003, the Company
executed an amendment to the Credit Facility that waives the April 20, 2003
covenant violation, reduces the requirements of the restrictive covenants and
lowers the total amount available under the Credit Facility to $25,000,000.

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 20, 2003 was $26,862,000. On May 15, 2003, the Company paid $8,383,000 in
principal of the Notes at a redemption price of 105.625% of the face amount of
the notes.

The Company has contractual obligations and commercial commitments including
long-term debt, land lease obligations for Company operated restaurants and
office space for corporate operations. The table below presents, as of April
20, 2003, 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
|                      |                               |   |           |   |             |   |             |      |                 
|2003                  |                               | $ | 8,840     |   |             | $ | 545         |      |                  | $ | 6,984  |  |  | $ | 16,369  | 
|2004                  |                               |   |          |   |             |   | 575         |      |                  |   | 9,165  |  |  |   | 9,740   | 
|2005                  |                               |   |          |   |             |   | 399         |      |                  |   | 8,452  |  |  |   | 8,851   | 
|2006                  |                               |   |          |   |             |   | 312         |      |                  |   | 8,151  |  |  |   | 8,463   | 
|2007                  |                               |   | 130,000   |   |             |   | 166         |      |                  |   | 7,587  |  |  |   | 137,753 | 
|Thereafter            |                               |   | 18,022    |   |             |   | 113         |      |                  |   | 37,766 |  |  |   | 55,901  | 
|                      |                               |   |           |   |             |   |             |      |                  |   |        |  |  |   |         | 
|Total                 |                               | $ | 156,862   |   |             | $ | 2,110       |      |                  | $ | 78,105 |  |  | $ | 237,077 | 
|Less: Current Portion |                               |   | (8,840    | ) |             |   | (636        | )    |                  |   |        |  |  |   |         | 
|                      | Amounts representing interest |   |           |  |             |   |             | (326 | )                |   |        |  |  |   |         |  | 
|                      |                               |   |           |   |             |   |             |      |                  |   |        |  |  |   |         | 
|Total                 |                               | $ | 148,022   |   |             | $ | 1,148       |      |                  |   |        |  |  |   |         | 

TRC is a wholly-owned subsidiary of RHC. The common shares of RHC not owned by
Mr. Smith are subject to an option to require RHC to redeem the shares at any
time after December 22, 2004 at fair market value (the Put). As of April 20,
2003, these shares represented 30% of the outstanding common stock of RHC. As
of December 28, 2002, the estimated fair market value of the Put was
$9,220,000. RHC has a management fee agreement dated as of December 22, 1999,
with BBV whereby BBV provides certain consulting
services to RHC. In consideration for these services, a fee of $250,000
accrues annually and is payable by RHC on December 22, 2004.

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Additionally, RHC issued 50,000 shares of non-voting preferred stock on
December 22, 1999. The preferred stock is mandatorily redeemable for $1,000 per
share (the Liquidation Value) plus all accrued but unpaid dividends, if any,
on December 22, 2006. Preferred dividends of 8% per annum of the Liquidation
Value of each share are payable quarterly. As of April 20, 2003, approximately
$15,065,000 of in-kind dividends had been paid through the issuance of
additional shares of preferred stock. Assuming a continuation of in-kind
dividends, the redemption price on December 22, 2006 is estimated to be
$87,044,000. The holders of preferred stock are entitled to be paid in cash the
Liquidation Value of each share of preferred stock before any payments are made
to any holders of common stock. The preferred stock is redeemable at the option
of the Company at any time prior to the mandatory redemption date at the
Liquidation Value.

RHC has no material assets other than its investment in TRC. The ability of TRC
to pay dividends to or make distributions to RHC in order to redeem common or
preferred shares or pay the management fee to BBV is restricted under its
senior notes and the Credit Facility.

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, or to meet its or RHCs other
liquidity needs 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 in the normal course of its operations. 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 necessary 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.

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NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities
(VIEs), an interpretation of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to improve financial reporting of special
purpose and other entities. In accordance with the interpretation, business
enterprises that represent the primary beneficiary of another entity by
retaining a controlling financial interest in that entitys assets,
liabilities, and results of operating activities must consolidate the entity in
their financial statements. Prior to the issuance of FIN 46, consolidation
generally occurred when an enterprise controlled another entity through voting
interests. Certain VIEs that are qualifying special purpose entities (QSPEs)
subject to the reporting requirements of SFAS 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities, will not be
required to be consolidated under the provisions of FIN 46. The consolidation
provisions of FIN 46 apply to VIEs created or entered into after January 31,
2003, and for pre-existing VIEs in the first reporting period beginning after
June 15, 2003. If applicable, transition rules allow the restatement of
financial statements or prospective application with a cumulative effect
adjustment. In addition, FIN 46 expands the disclosure requirements for the
beneficiary of a significant or a majority of the variable interests to provide
information regarding the nature, purpose and financial characteristics of the
entities. The Company does not believe that the adoption of FIN 46 will have a
material adverse impact on the Companys financial statements.

In April 2003, the FASB issued Statement of Financial Accounting Standard No.
149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. This statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. This Statement is effective for contracts
entered into or modified after June 30, 2003. The Company does not believe
that the adoption of this Statement will have a material effect on the results
of operations or financial position of the Company.

In January 2003, the Emerging Issues Task Force (EITF) issued EITF Issue No.
02-16, Accounting by a Customer (Including a Reseller) for Certain
Consideration Received from a Vendor, which states that cash consideration
received from a vendor is presumed to be a reduction of the prices of the
vendors products or services and should, therefore, be characterized as a
reduction of cost of sales when recognized in the statement of operations. That
presumption is overcome when the consideration is either a reimbursement of
specific, incremental, identifiable costs incurred to sell the vendors
products, or a payment for assets or services delivered to the vendor. EITF
Issue No. 02-16 is effective for arrangements entered into after November 21,
2002. The Company is already accounting for vendor rebates in a manner
consistent with the EITF consensus. Therefore, applying the provisions of EITF
Issue No. 02-16 will not have a material impact on the Companys financial
position or results of operations.

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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 3. 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. As
of April 20, 2003, the Company has in place a $40,000,000 line of credit
facility that 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 no borrowings outstanding under the line of credit
facility at April 20, 2003. 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 that 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, poultry, 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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ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures and internal controls
designed to ensure that information required to be disclosed in our filings
under the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commissions rules and forms. Our principal executive and financial officers
have evaluated our disclosure controls and procedures within 90 days prior to
the filing of this Quarterly Report on Form
10-Q and have determined that such disclosure controls and procedures are
effective.

Subsequent to our evaluation, there were no significant changes in
internal controls or other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

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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 - The Company did not file any reports on Form
8-K during the quarter ended April 20, 2003.

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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 2, 2003 |  | BY:                                                                               | /s/ Michael P. Donahoe
| |  |                    |  |                                                                                   |                       
| |  |                    |  | Michael P. Donahoe
Executive Vice President,
Chief Financial Officer and Director

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CERTIFICATIONS

I, Donald N. Smith , certify that:

1.     I have reviewed this quarterly report on Form 10-Q of The
Restaurant
Company.

2.     Based on my knowledge, this quarterly report does not contain
any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other
financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are
responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have
disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have
indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                   |  |                                                                   |                     | 
|------------------ |  | ----------------------------------------------------------------- | ------------------- | 
|Date: June 2, 2003 |  |                                                                   |                     | 
|                   |  | BY:                                                               | /s/ Donald N. Smith
|                   |  |                                                                   |                    
|                   |  | Donald N. Smith
Chairman of the Board and Chief Executive Officer

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CERTIFICATIONS

I, Michael P. Donahoe, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of The
Restaurant
Company.

2.     Based on my knowledge, this quarterly report does not contain
any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other
financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are
responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have
disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have
indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                   |  |                                                                                   |                        | 
|------------------ |  | --------------------------------------------------------------------------------- | ---------------------- | 
|Date: June 2, 2003 |  | BY:                                                                               | /s/ Michael P. Donahoe
|                   |  |                                                                                   |                       
|                   |  | Michael P. Donahoe
Executive Vice President,
Chief Financial Officer and Director

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