U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                                    Form 10-KSB

[X]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 
                          OF 1934 (FEE REQUIRED)

For the fiscal year ended                     May 30, 1996                   
                                                                 OR
[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
                       ACT OF 1934 (NO FEE REQUIRED)

For the transition period from                     to                      

Commission file number                           0-1744                     

                         Ambassador Food Services Corporation              
                        (Name of small business issuer in its charter)

Delaware                                           44-0656199           
(State or other jurisdiction of     (I.R.S. Employer Identification No.)
 incorporation or organization)

3269 Roanoke Road, Kansas City, Missouri                             64111
(Address of principal executive offices)                          (Zip Code)

Issuer's telephone number:   816  561-6474       
Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock (Par Value $1)
                                (Title of Class)
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 for 
such shorter period that the Registrant was required to file such 
reports), and (2) has been subject to such filing requirements for the past 
90 days.
                 YES  X                      NO       
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be 
contained, to the best of Registrant's knowledge, in definitive proxy 
or information statements incorporated by reference in Part III of this Form
 10-KSB or any amendment to this Form 10-KSB.     [X]

Issuer's revenues for its most recent fiscal year are $20,462,465.

At October 7, 1996 there were 767,856 shares of the Registrant's common stock
outstanding.  Based on the average of the highest bid and lowest asked prices
reported on the national over-the-counter market (NASDAQ Symbol AMBF), the 
aggregate market value of the shares held by non-affiliates of the Registrant
was $959,820.

Exhibit Index is on page 34.
Transitional Small Business Disclosure Format:           YES    NO   X   



                                       PART I



Item 1.     Description of Business

     (a)     Business Development 

     The Registrant (hereinafter "Company" or "Ambassador") is a Delaware
corporation incorporated in 1963.  It is engaged, through divisions and a
subsidiary, in the food service and janitorial industries in Illinois, 
Iowa, Kansas, New York, Texas, New Jersey, Missouri, and Oklahoma.

   The principal business activity of the Company is the servicing of its 
customer accounts, primarily factories, offices, hospitals, schools, and social 
service agencies, through the use of vending machines, cafeterias, and 
prepared meals delivered from Company commissaries.
     On August 1, 1989, the name of the Company was changed from Automatique,
Incorporated to Ambassador Food Services Corporation.

     (b)     Business of Issuer

     (1)     Description of Business Done by the Registrant in its Food Segment

     (i and ii)The vending and cafeteria segment of the Company's business 
               consists of contracting to distribute beverages and food products
               to customer locations consisting of factories, offices, 
               hospitals, and schools.  The Company conducts surveys of 
               potential customer locations, determines profitability of the 
               location, and submits a proposal offering to provide the vending 
               and/or cafeteria service for the customer location.  Business 
               with local government social service agencies and not-for-profit 
               agencies is obtained through competitive bidding and is 
               serviced by producing meals in a central commissary and 
               delivering them to various designated points for consumption.

     (iii)     No new products have been developed by this segment.  The 
               Company, in general, markets the product developed by its 
               suppliers. 

     (iv)     The vending food service business, made up of a few large 
              companies and many small independently owned local and 
              regional enterprises, is highly competitive.  The practice in the 
              industry is to operate under written agreements with the 
              locations served.  In the market areas where the Company is 
              located, it has national, regional, and local competition, some of
              which have substantially greater total sales and assets.  
              Competition for locations in the food service industry 
              normally comes in the form of pricing and in quality of 
              service and product.

     (v)     Raw materials, consisting of packaged products and commodities, are
             purchased from manufacturers and purveyors and are warehoused 
             or processed by the Company in the local market. There is an 
             adequate supply of raw materials from normal sources; which 
             include Midwest Food Distributors, Inc., Kraft Food Services of 
             New York, and Loeb and Mayer.

     (vi)     During the year ended May 30, 1996, this segment had no single 
              customer whose sales were equal to 10 percent or more of the 
              Company's consolidated revenues.

          Because the Company's customers are primarily the employees and 
          students of the various schools, colleges, factories, offices, and 
          hospitals at which it has its vending and cafeteria services, the 
          Company normally experiences a seasonal decline in sales during the 
          summer months and around holidays, during which times many of these
          customers vacation and many locations close completely.

     (vii)     The distinctive logo associated with the Company has been 
               registered under the laws of the United States relating to 
               trade names and trademarks.  The Company regards such logo as 
               valuable and will maintain the registration in effect for 
               continuing use in connection with the Company's business.  In 
               addition, the segment is a party to the following labor 
               agreements:
<TABLE>
<S>                          <C>                           <C>
Bargaining Unit              Market                        Expiration Date
Teamsters Local #838         Kansas City                   1/1/00
Teamsters Local #688         St. Louis                     2/1/97
Teamsters Local #90          Des Moines                    4/30/98
United Service Employees
 Union #377                  New York                      12/31/96

</TABLE>

     (viii)     The Company does not have a material portion of its business 
                subject to renegotiation or termination at the election of 
                the Government.

     (ix)     The Company does not believe that existing or probable government 
              regulations have a material effect on its operation.

     (b)     (2)     Description of Business Done by the Registrant in its 
                     Janitorial Segment

          (i and ii)     The janitorial and maintenance service division of the 
                         Company's business consists primarily of contracting
                         various types of routine cleaning services for 
                         customers on a weekly, monthly, or as-needed basis.
                         Customers currently include grocery stores, apartment 
                         complexes, and office buildings. The Company had 
                         previously provided this kind of service to a few 
                         customers incidental to its food service.  However, 
                         with the acquisition of the assets of Squire 
                         Maintenance Service in 1988, the Company decided to 
                         establish and operate this part of its business as a 
                         separately identifiable division. 

          In fiscal 1990, four additional acquisitions were made that increased 
          the Company's market share and potential market area.  During 
          fiscal year 1995, the Company sold its operations in the Connecticut 
          market but continued its janitorial services in New York and New 
          Jersey.

     (iii)     No new products have been introduced by this segment.

     (iv)     The janitorial segment is limited to the New Jersey and New York 
              metropolitan areas. Competition for janitorial contracts comes in 
              the form of pricing and quality of service.  Competition in 
              general is from regional and local companies.

     (v)     The sources and availability of raw materials for this segment are 
             adequate.  Sources of raw materials include Graco Manufacturing, 
             Thorsen Distributors, Inc., and Malone Chemical.

     (vi)     During fiscal 1996, this segment had no single customer whose 
              sales were equal to 10 percent or more of the Company's 
              consolidated revenues.

          This segment is not subject to material fluctuations in sales volume 
          due to seasonality.

          Sales in this segment are on open accounts receivable.  Inventory 
          levels are not significant.

     (vii)     This segment is operating without registered trademarks or 
               patents.  The segment is a party to a labor agreement with 
               the United Service Employees Union #377 in New York that expires 
               December 31, 1996.

     (viii)     The Company does not have a material portion of its business 
                subject to renegotiation or termination at the election of the 
                Government. 

     (ix)     The Company does not believe that existing or probable government 
              regulations have a material effect on its operations.


     (b)     (x) Through (xii) with Respect to the Registrant's Business in 
                General

          (x)     The Company has not incurred any expense for research and 
                  development activities during any of its last two (2) 
                  fiscal years.

          (xi)     Compliance with federal, state, and local laws and 
                   regulations involving the protection of the environment 
                   will not have a material effect.

          (xii)     As of May 30, 1996, the Company and its subsidiary employed 
                    approximately 350 persons.

Item 2.     Description of Properties

     The Company leased all real estate for office, warehouse, garage, repair 
     shops, and commissaries in each of its market areas throughout fiscal 1996,
     except for the property located at 3269 Roanoke Road, which was 
     purchased in July 1990.  The property was encumbered by a mortgage in the 
     amount of $282,937 at May 30, 1996.  Annual rentals were approximately 
     $244,272 less $6,630 of sublease income.  The suitability of the leased 
     properties is adequate; such properties are described below:
<TABLE>
<S>                                    <C>                  <C>       <C>
                                                            Size      Expiration
Location                               Type of Property     (Sq. Ft.) Date
3269 Roanoke Rd., Kansas City, MO        Office/Whse          13,600  Owned
208 E. Aurora, Des Moines, IA            Office/Whse           9,200  6/96
10745 Midwest Indust Dr., St.Louis, MO   Office/Whse          15,800  9/95
5-30 54th Ave., Long Island City, NY     Office/Whse           8,000  Mo/Mo
41-43 24th St., Long Island City, NY     Office/Whse           2,500  3/01
9100 Santa Fe Dr., Overland Park, KS     Restaurant-
                                          Discontinued         1,800  2005
162 Closter Dock Rd., Closter, NJ        Office/Whse           1,200  Mo/Mo
900 West 8th St., Kansas City, MO        Warehouse               300  Mo/Mo
36 Clark St., Des Moines, IA             Office/Whse          10,600  3/01

</TABLE>
     The major portion of the physical properties used by the Company is made up
     of automatic vending equipment and food service and production equipment.  
     Equipment is primarily owned by the Company. In several instances, the 
     cafeteria and vending equipment is owned by the account to which food 
     services are rendered by the Company.  The Company operates 
     approximately 100 vehicles in the conduct of its business, approximately
     25% of which are leased and the balance owned.  The annual rentals on 
     all such leased real estate properties, equipment, and vehicles are 
     approximately $750,000.

Item 3.     Legal Proceedings

     In December 1991, a suit was filed on behalf of the United States 
     Department of Agriculture under the False Claims Act Title 31 U.S.C. 3730 
     and 28 U.S.C. 1345.  The suit was based on alleged overcharges for food 
     services provided for certain government-sponsored projects in New York.  
     Based upon extensive investigation, the Company concluded that it had not 
     overcharged for food services provided for these projects and that the 
     Company had no liability with respect to the government's claim.  
     The Company therefore contested the government's claim.

     The government initiated settlement negotiations, which the Company joined 
     with a view to effecting a disposition of the case and avoiding further 
     litigation expense.  These negotiations led to a settlement agreement 
     during fiscal year 1995, pursuant to which the government's case was 
     dismissed with prejudice.  Terms of the agreement included payment by the 
     Company to the government of $164,000, of which $89,000 was paid in 1995 
     and $75,000 was paid in 1996. 

Item 4.     Submission of Matters to a Vote of Security Holders

     No matters were submitted to a vote of security holders during the fourth 
     quarter of the fiscal year of the Company.




                                PART II

Item 5.     Market for Common Equity and Related Stockholder Matters

     (a)     Price Range of Common Stock

     The principal market in which the common stock of the Company is traded is 
     the national over-the-counter market (NASDAQ symbol AMBF).  
     The bid quotation for the Company's common stock for each quarter during
     fiscal years ended May 30, 1996 and June 1, 1995 are shown below: 

<TABLE>
 
                                   1996                 1995     
                                Bid Quotation       Bid Quotation
<S>                            <C>       <C>        <C>      <C>     
                                High     Low        High     Low
First Quarter                   3/4       3/4       5/8       5/8
Second Quarter                  3/4       3/4       3/4       5/8
Third Quarter                   1         3/4       3/4       3/4
Fourth Quarter                  1 3/8     15/16     3/4       3/4
</TABLE>
     The quotations above reflect inter-dealer prices without retail mark-up, 
     mark-down, or commission and may not represent actual transactions.

     (b)     Number of Equity Security Holders

     As of May 30, 1996, there were 612 record holders of the Company's common 
     stock.

     (c)     Dividends

     The Company has never paid cash dividends on its common stock.  Payment of 
     dividends will be within the discretion of the Company's Board of 
     Directors and will depend, among other factors, on earnings, debt 
     agreements, capital requirements, and the operating and financial 
     condition of the Company.  

Item 6.     Management's Discussion and Analysis of Financial Condition and 
            Results of Operations

     Results of Continuing Operations

     Income from continuing operations declined from the 1995 level despite 
     increased sales of $836,773 during the year ended May 30, 1996.  These 
     earnings were $50,224 in fiscal 1996, down from $180,052 in 1995.  A 
     change in the reserve relating to the Company's discontinued restaurant 
     operations brought the net result to a loss of $42,076.  
     This disappointing result reflects continued deterioration in margins in
     the Company's vending and cafeteria operations.  While management 
     implemented price increases throughout the year, food costs continued to
     rise at a substantial rate resulting in a decline in margins during the 
     year.  Price increases and improved controls and purchasing are being 
     implemented to address this problem.  It is imperative that margins 
     improve for the Company to return to profitability.

     All other cost areas combined remained near 1995 levels in relation to 
     sales.  Operating costs were lower as a percentage of sales due to lower
     operating payroll; however, increased administrative payroll and 
     interest costs offset these decreases.

     Liquidity and Capital Resources

     Working Capital improved from a deficit of $561,543 to a deficit of 
     $238,371.  This improvement was due entirely to the negotiation of a 
     committed line of credit facility.  This agreement expires in August 
     1997, therefore the full amount of the agreement will again be classified 
     as current at the end of the first quarter of fiscal 1997, resulting in 
     a significant change in working capital.  Total liabilities increased 
     to $6,254,130 from $4,925,282, while stockholders' equity remained nearly 
     the same as in 1995.

     While sales increased substantially during the later part of the fiscal 
     year, so did the Company's obligations.  This makes it extremely 
     important for the Company to improve its food cost and return to 
     profitability so that it can provide adequate capital for continued growth.
     Financing continues to be available for the purchase of necessary 
     capital equipment.

Item 7.     Consolidated Financial Statements

     Index to Consolidated Financial Statements


                                                                         Page
     Report of Independent Certified Public Accountants                      9


     Consolidated Balance Sheets as of May 30, 1996 and June 1, 1995      10-11


     Consolidated Statements of Operations for the Years Ended 
      May 30, 1996 and June 1, 1995                                        12


     Consolidated Statement of Changes in Stockholders' Equity for the 
     Years Ended May 30, 1996 and June 1, 1995                             13


     Consolidated Statements of Cash Flows for the Years Ended May 30, 1996 
     and June 1, 1995                                                      14-15


     Notes to Consolidated Financial Statements                            16





          REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors 
Ambassador Food Services Corporation and Subsidiary


We have audited the accompanying consolidated balance sheets of Ambassador Food 
Services Corporation and Subsidiary as of May 30, 1996 and June 1, 1995 and the 
related consolidated statements of operations, changes in stockholders' equity, 
and cash flows for the years then ended. These financial statements are the 
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits. 

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Ambassador Food
Services Corporation and Subsidiary as of May 30, 1996 and June 1, 1995 and 
the consolidated results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.





Kansas City, Missouri
August 2, 1996




                        Ambassador Food Services Corporation and Subsidiary
                                CONSOLIDATED BALANCE SHEETS
                                May 30, 1996 and June 1, 1995
<TABLE>
<S>                                                    <C>         <C>

               ASSETS                                     1996           1995
CURRENT ASSETS   
 Cash (including change funds of $291,505 in 1996
        and $226,680 in 1995) (note C)                 $   402,768  $   321,471
     Trade accounts receivable (notes A11, B, D, and E)  1,768,211   1,703,152
     Income taxes receivable                                17,042      21,562
     Inventories (note A4)                                 593,820      483,283
     Prepaid expenses                                      248,916      100,596
     Current portion of note receivable (note O)           114,182       -      
     Deferred income taxes (note J)                         30,033      62,793
               Total current assets                      3,174,972   2,692,857
PROPERTY AND EQUIPMENT - at cost (notes A5 and E)          
     Vending equipment                                   5,044,062   4,601,459
     Cafeteria, commissary, and restaurant equipment     1,171,549   1,133,489
     Building and leasehold improvements                   649,877      563,395
     Other                                               1,056,859     918,009
                                                         7,922,347   7,216,352
     Less accumulated depreciation and amortization      5,792,683   5,199,388
               Total property and equipment              2,129,664    2,016,964
OTHER ASSETS                                       
     Location contracts (note A6)                        1,242,656     1,088,049
     Note receivable, less current portion (note O)        481,961       -      
     Unrecognized prior service costs (notes A7 and H)     222,932       258,500
     Excess of purchase price over net assets acquired
        (note A6)                                           93,771        94,790
     Deferred expenses                                      58,012        11,404
     Miscellaneous                                         273,398       163,431
               Total other assets                        2,372,730     1,616,174
                                                        $7,677,366    $6,325,995

</TABLE>



            Ambassador Food Services Corporation and Subsidiary
                 CONSOLIDATED BALANCE SHEETS - CONTINUED 
                    May 30, 1996 and June 1, 1995

<TABLE>
<S>                                              <C>          <C>
      LIABILITIES AND STOCKHOLDERS' EQUITY           1996           1995
CURRENT LIABILITIES          
     Trade accounts payable (note C)              $2,131,857   $1,760,915
     Accrued expenses (note C)                       679,549      627,591
     Current maturities of long-term debt (note E)   601,937      372,515
     Line of credit (note D)                            -         493,379
               Total current liabilities           3,413,343    3,254,400
LONG-TERM LIABILITIES          
     Line of credit (note D)                         618,798         -    
     Deferred income taxes (note J)                  297,102      329,862
     Projected benefit obligation (note H)           337,342      391,748
     Other long-term liabilities                      68,522       32,070
     Subordinated note payable to stockholder 
      (note F)                                       250,000         -    
     Long-term debt, less current maturities 
      (note E)                                     1,124,817      779,657
     Reserve for disposal of restaurant operations 
      (note K)                                        97,612       52,447
     Reserve for litigation and sales tax obligations 
      (note L)                                        46,594       85,098
               Total long-term liabilities         2,840,787    1,670,882
COMMITMENTS AND CONTINGENCIES
  (notes G, I, K, L, and O)                           -                -
STOCKHOLDERS' EQUITY (notes F and I)     
     Common stock, par value $1.00 per share;
      authorized, 2,000,000 shares; issued, 
      1,009,230 shares                             1,009,230    1,009,230
     Additional paid-in capital                      718,291      718,291
     Retained earnings (accumulated deficit)         (20,380)      21,696
                                                   1,707,141    1,749,217
     Less treasury stock - 241,374 shares in 1996
      and 305,973 shares in 1995 - at cost          (283,905)    (348,504)
               Total stockholders' equity          1,423,236    1,400,713
                                                  $7,677,366   $6,325,995
</TABLE>









               Ambassador Food Services Corporation and Subsidiary
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                  Years ended May 30, 1996 and June 1, 1995
<TABLE>
<S>                                            <C>               <C>

                                                 1996                 1995
Net sales 
      Food                                      $18,807,080       $17,672,028
      Janitorial                                  1,655,385         1,953,664
                                                 20,462,465        19,625,692
Cost and expenses          
     Cost of food products sold                   8,300,394         7,810,858
     Operating (note M)                           8,300,729         8,036,539
     Selling and administrative                   2,930,109         2,774,169
     Depreciation and amortization                  636,343           627,430
     Interest                                       244,666           196,644
          Total cost and expenses                20,412,241        19,445,640
Earnings from continuing operations
   before income taxes                               50,224           180,052
     Income tax benefit (note J)                        -              30,000
          Net earnings from continuing
               operations                            50,224           210,052
Discontinued operations          
     Change in estimate of loss on 
         disposal of restaurants (note K)           (92,300)             -   
          Net earnings (loss)                     $ (42,076)     $    210,052
          
Earnings (loss) per common share:          
     Earnings from continuing 
         operations                               $     .07      $        .30
     Loss on disposal of restaurants                   (.13)              -   
          Net earnings (loss) per
              common share                        $    (.06)      $       .30

Weighted average common shares
     outstanding (note A9)                           719,207          700,781


</TABLE>


                 Ambassador Food Services Corporation and Subsidiary
                          CONSOLIDATED STATEMENT OF 
                     CHANGES IN STOCKHOLDERS' EQUITY
                     Years ended May 30, 1996 and June 1, 1995
<TABLE>
                                                          Retained
                                             Additional   Earnings    Total
                                              Paid-In (Accumulated Stockholders'
                     Common Stock              Capital    Deficit)    Equity    
                Issued         Treasury Stock                        
           Shares     Amount   Shares    Cost                   
<S>       <C>       <C>        <C>     <C>      <C>      <C>        <C>
Balance at 
June 2, 
1994      1,009,230 $1,009,230 315,873 $355,317 $717,665 $(188,356) $1,183,222  
   
Net 
earnings      -         -         -        -        -      210,052     210,052  
   
Sale of 
treasury 
stock         -         -      (10,000)  (6,875)     626      -          7,501  
    
Purchase of 
treasury 
stock         -         -          100       62     -         -           (62)

Balance at 
June 1, 
1995      1,009,230  1,009,230 305,973  348,504  718,291       696   1,400,713  
    
Net loss      -         -         -        -        -      (42,076)   (42,076)
  
Sale of 
treasury 
stock         -         -      (77,267) (77,267)    -         -         77,267  
  
Purchase of 
treasury 
stock         -         -       12,668   12,668     -         -       (12,668)

Balance at 
May 30, 
996       1,009,230 $1,009,230 241,374 $283,905 $718,291  $(20,380) $1,423,236 


</TABLE>




             Ambassador Food Services Corporation and Subsidiary
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                 Years ended May 30, 1996 and June 1, 1995
<TABLE>
<S>                                               <C>            <C>


                                                      1996             1995
Cash Flows From Operating Activities          
     Net earnings (loss)                             $(42,076)      $210,052 
     Adjustments to reconcile net earnings (loss)
       to net cash provided by (used in) 
       operations
          Depreciation and amortization                636,343        627,430 
          Gain on sale of property and equipment        (1,342)       (25,304)
          Provision for bad debts                        9,589          9,600 
          Change in net pension obligation             (24,061)       (13,502)
          Change in reserves for disposal of 
             restaurant operations and for 
             litigation and sales tax
             obligations                               (63,033)      (116,986)
          Changes in operating assets and 
          liabilities:          
                    Trade accounts receivable          (74,648)           590 
                    Income taxes receivable              4,520           (982)
                    Miscellaneous - other assets      (180,374)       (36,119)
                    Inventories                       (110,537)       (38,337)
                    Prepaid expenses                  (148,320)        35,461 
                    Trade accounts payable and 
                         accrued expenses              433,667       (633,260)
                    Deferred income taxes                 -           (30,000)
                         Net cash provided by
                         (used in) operating 
                         activities                    439,728        (11,357)


5
Cash Flows From Investing Activities          
     Purchase of property and equipment              (638,663)       (881,597)
     Proceeds from sale of property and
        equipment                                      12,174          48,410
     Issuance of note receivable                     (600,000)            -
     Collections on note receivable                     3,857             -
          Net cash used in investing activities    (1,222,632)       (833,187)
Cash Flows From Financing Activities          
     Proceeds from issuance of long-term debt       1,179,648         811,829
     Principal payments on long-term obligations     (606,068)       (572,250)
     Treasury stock transactions                       64,599             (62)
     Net increase in checks outstanding in excess
       of bank      balances                           58,927          36,814
     Other financing activities                        41,675         (11,897)
     Net borrowings under line of credit              125,420         493,379
          Net cash provided by financing 
          activities                                  864,201         757,813
Net Increase (Decrease) in Cash                        81,297         (86,731)
Cash, Beginning of Year                               321,471         408,202
Cash, End of Year                                $    402,768      $  321,471

Supplementary Schedule of Cash Flow Information:          
     Cash paid during year for:          
          Income taxes                           $        6,553   $     6,688
          Interest                               $      250,436   $   208,260
          
     Noncash investing and financing activities:          
          Purchase of Bassman Vending, Inc.
               assets with long-term debt         $    251,000    $        -

</TABLE>



                    Ambassador Food Services Corporation and Subsidiary
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       Years ended May 30, 1996 and June 1, 1995


A.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     1.     Principles of Consolidation

The financial statements include the accounts of Ambassador Food Services 
Corporation and its wholly-owned subsidiary, Ambassador Fast Services, Inc.  
All material intercompany balances and transactions have been eliminated.

     2.     Nature of Business

The Company and its subsidiary are engaged in two segments:  food service 
(vending, cafeteria and catering) and janitorial service.  The Company's 
customers are principally located in the Midwest and Northeast United States.

     3.     Reporting Periods

The Company has a fiscal year (52 or 53 weeks) ending on the Thursday nearest 
May 31.  Both fiscal years 1996 and 1995 contained 52 weeks.

     4.     Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or 
market.

     5.     Property and Equipment

Property and equipment are stated at cost.  Depreciation and amortization are 
provided in amounts sufficient to relate the cost of depreciable assets to 
operations over their estimated useful lives on the straight-line method.

     6.     Location Contracts and Excess of Purchase Price Over Net Assets 
            Acquired 
Location contracts and excess of purchase price over net assets acquired arise 
from the purchase of various companies and are carried at cost.  Location 
contracts represent the amount paid for customer vending relationships in 
existence at the time of acquisition which were generally cancelable by either 
party with limited notice.  Amounts resulting from acquisitions prior to 
November 1, 1970 ($1,064,787) are not being amortized and relate mainly to St. 
Louis operations.  Acquisitions of $568,173 expended subsequent to November 
1, 1970 are being amortized on a straight-line basis over 5 to 40 years.  



     6.     Location Contracts and Excess of Purchase Price Over Net Assets 
            Acquired - Continued

          The Company's management continually evaluates the carrying value of 
their intangible assets based upon local market and economic conditions, and, in
their opinion, there has been no diminution in the value of these assets.

     7.     Unrecognized Prior Service Costs

Unrecognized prior service costs, related to the defined benefit pension plan 
discussed in Note H, are being amortized straight-line over the average 
remaining service period of the participants included in the plan.

     8.     Costs and Expenses

Preopening costs associated with new vending and cafeteria accounts are expensed
as incurred.

     9.     Earnings (Loss) Per Common Share

Earnings (loss) per share has been computed using the weighted average common 
shares outstanding during the period.  In addition to these shares, certain 
common stock equivalents exist that were outstanding during the reporting 
periods.  These common stock equivalents were not considered in the net 
earnings (loss) per share calculation for fiscal year 1996 and 1995 as they 
did not effect the calculation. 
          
In addition, during fiscal year 1996, the Company issued convertible debt.  The 
possible conversion of such debt was not considered in the net earnings (loss) 
per share calculation for 1996 as its effect is antidilutive (See Note F).

     10.     Statements of Cash Flows

For purposes of reporting cash flows, cash includes cash on hand, in banks, and 
in change funds.

     11.     Concentration of Credit Risk

The majority of the Company's accounts receivable, approximately $1,500,000 in 
1996 and 1995, respectively, are with customers located in the Northeast 
United States.  The Company grants credit to customers; which includes 
businesses, schools, and governmental agencies.  Collateral is generally not 
required.


     12.     Use of Estimates

In preparing financial statements in conformity with generally accepted 
accounting principles, management is required to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period.  Actual results could differ 
from those estimates.

     13.     Reclassifications

Certain items in the 1995 consolidated financial statements have been 
reclassified to conform to the 1996 presentation.

     14.     Financial Instruments

The carrying value of the Company's financial instruments, including cash, 
accounts and notes receivable, accounts payable, line of credit, and 
long-term debt, approximate fair value.

B.     ACCOUNTS RECEIVABLE

     Accounts receivable includes the following:
<TABLE>
<S>                                                <C>            <C>

                                                      1996             1995
Trade accounts receivable                           $1,790,385     $1,734,914
Less allowance for doubtful accounts                    22,174         31,762
                                                    $1,768,211     $1,703,152
</TABLE>

C.     CURRENT LIABILITIES

     Trade accounts payable includes checks outstanding in excess of bank 
balances of $567,769 and $508,842 for 1996 and 1995, respectively.

     Accrued expenses include the following:
<TABLE>
<S>                                                 <C>          <C>
                                                      1996             1995
Legal fees                                           $108,874      $  77,314
Vacation pay                                           97,376        137,841
Commissions                                            61,674         12,799
Taxes                                                  47,622         90,000
Salaries                                              245,070        112,151
Current portion of pension benefit
     obligation (Note H)                               60,638         60,638
Reserve for discontinued operations (Note K)           16,388         11,082
Reserve for litigation and sales tax obligations
     (Note L)                                          29,000        104,000
Other                                                  12,907         21,766
                                                     $679,549       $627,591
</TABLE>

D.     LINE OF CREDIT AGREEMENT

     During fiscal year 1995, the Company entered into a line of credit 
     agreement with a financing company that carries interest at the publicly 
     announced prime rate (8.25% at May 30, 1996) plus 3.5%. The amount drawn 
     cannot exceed 80% of eligible accounts receivable and is collateralized by 
     the Company's accounts receivable.  At May 30, 1996 and June 1, 1995, 
     amounts outstanding were $618,798 and $493,379, respectively. Interest 
     is payable monthly and amounts outstanding were due upon demand.  
     Subsequent to May 30, 1996, terms of the agreement were revised whereby the
     maturity date is August 1997.

E.     LONG-TERM DEBT
<TABLE>
<S>                                                    <C>          <C>
                                                         1996           1995
Note payable - bank, payable in monthly installments
     of $2,848, including interest at prime rate 
     (8.25% at May 30, 1996) plus 2.0%, due July 1998,
     collateralized by building                          $282,937    $286,776
Notes payable - equipment, payable in monthly 
     installments of $51,746, including interest at 
     rates ranging from 10% to 19.25%, due through 
     December 2000, collateralized by equipment           817,467     758,703
Note payable to Bassman Vending, Inc. payable in
     monthly installments of $5,150, including interest 
     at 8.5%, due through March 2001, collateralized by
     certain location contracts and equipment 
     (See Note O).                                        244,232         -
Note payable - equipment, payable in monthly
     installments of $9,723 plus interest at the
     publicly announced prime rate (8.25% at
     May 30, 1996) plus 3.5%, due August 1997,
     collateralized by equipment.                         330,554        -
Note payable - bank, payable in monthly
     installments of $2,000 plus interest at 9.0%,
      due December 1995, collateralized by
      accounts receivable                                   -          14,000
Notes payable - other                                      51,564      92,693
                                                        1,726,754   1,152,172
     Less current maturities                              601,937     372,515
                                                       $1,124,817  $  779,657
</TABLE>

     Aggregate annual principal payments applicable to long-term debt due 
subsequent to May 30, 1996 are as follows:
<TABLE>
                       <S>            <C>
                        Fiscal Year
                        Ending             Amount  
                        1997           $   601,937
                        1998               519,465
                        1999               423,496
                        2000               114,351
                        2001                67,505
                                        $1,726,754
</TABLE>

F.     SUBORDINATED NOTE PAYABLE TO STOCKHOLDER

During fiscal year 1996, the Company borrowed $250,000 from a stockholder and 
officer. The note calls for interest at 10%, payable quarterly with quarterly 
principal payments of $12,500 beginning June 30, 2001, with a final payment 
June 30, 2006.

     The note is subordinate to all other indebtedness of the Company.

From April 30, 1998 to May 1, 2006, the note is convertible to shares of the 
Company's stock at a price of $1.25 per share.  In the event any payments 
are made on the note, the Company will issue warrants to the stockholder 
which will entitle the stockholder to purchase an equivalent number of shares 
during the same period.  The conversion terms may be adjusted upon certain 
events to prevent dilution of the stockholder conversion rights.
                     


G.     LEASES

     Future minimum lease payments under all noncancellable operating leases as 
     of May 30, 1996 are as follows
<TABLE>
<S>            <C>             <C>              <C>

Fiscal year
 ending          Real estate     Equipment          Total     
1997             $  278,005     $   470,375      $   748,380
1998                284,392         436,352          720,744
1999                220,921         370,494          591,415
2000                156,606         314,231          470,837
2001                135,580          39,678          175,258
                 $1,075,504      $1,631,130       $2,706,634

</TABLE>
     Rental expense charged to operations was as follows:

<TABLE>
<S>                                              <C>             <C>
                                                   1996            1995    
     Minimum rentals                              $499,703        $380,263
     Less sublease rentals                          (6,630)        (34,065)
                                                  $493,073        $346,198
</TABLE>

H.     EMPLOYEE BENEFIT PLANS

The Company has a nonqualified defined benefit pension plan covering two key 
employees and three former officers of the Company.  Under the terms of the 
plan, each individual will receive a fixed monthly payment for ten years 
after retirement.  The benefit does not vest until the employee reaches age 
65.  If the individual dies, either during employment or after retirement, the 
beneficiary is entitled to receive benefits as specified in the agreement. 
The plan is unfunded.

The following table sets forth the status and amounts recognized in the 
Company's consolidated financial statements for 1996 and 1995:

<TABLE>
<S>                                                 <C>            <C>         
                                                       1996         1995
Actuarial present value of benefit obligations:
        Accumulated benefit obligation, including
          vested benefits of $302,806 in 1996 and
          $368,777 in 1995                           $ 397,980      $ 452,386 
     Projected benefit obligation for service
          rendered to date                           $ 397,980      $ 452,386 
Plan assets at fair value                               -              -  
Projected benefit obligation in excess of 
    plan assets                                       397,980          452,386 
Additional minimum liability recorded                 222,932          258,500 
Prior service cost not yet recognized in net
     periodic pension cost                           (222,932)        (258,500)
Net accrued pension cost                             $ 397,980      $ 452,386 
          
Net accrued pension cost is included in the accompanying consolidated financial 
statements as follows:
                                                     1996            1995
Current portion included in accrued
  expenses                                       $   60,638        $   60,638
Long-term portion of obligation                     337,342           391,748
                                                  $ 397,980         $ 452,386
</TABLE>

     The weighted-average discount rate used in determining the actuarial 
present value of the projected benefit obligation was 8.0% in 1996 and 1995.

     Net pension cost for 1996 and 1995 includes the following components:
<TABLE>
<S>                                                   <C>         <C>

                                                        1996         1995
Service cost - benefits earned
     during the period                                 $  5,085     $  5,347
Interest cost on projected benefit
     obligation                                          35,363       39,950
Amortization of prior service cost                       37,745       37,745
Net periodic pension cost                               $78,193      $83,042


     The Company contributed approximately $83,000 and $85,000 in fiscal years 
1996 and 1995, respectively, to several multi-employer pension plans for 
employees covered by collective bargaining agreements. These plans are not 
administered by the Company, and contributions are determined in accordance 
with provisions of negotiated labor contracts.  

     The Company has a defined contribution plan that covers all permanent 
nonunion employees.  Under the terms of the plan, employees can contribute 
up to a maximum of 15% of their gross annual salary.  Company contributions 
to the Plan are at the discretion of the Board of Directors.  The Company made 
no contributions to this plan during fiscal year 1996 or 1995. 

I.     STOCK OPTIONS

On November 18, 1992, the Board of Directors approved the granting of 
nonstatutory options for 40,000 shares to an officer and certain key 
employees.  The exercise price of the options is $.688 per share, which 
approximated the fair market value of the shares on the date of grant of the 
option.  The option can be exercised at any time within five years of the 
date of grant.  As of May 30, 1996, none of these options had been exercised.  

On November 9, 1994, the Board of Directors approved the granting of 
nonstatutory options for 10,000 shares to an officer.  The exercise price of 
the options was $.75 per share, which approximated the fair market value of 
the shares on the date of grant of the option. The options were exercised during
fiscal year 1995.

On February 23, 1996, the Board of Directors approved the granting of 
nonstatutory options for 65,000 shares to certain key employees.  The 
exercise price of the options was $1 per share, which approximated the fair 
market value of the shares on the date of grant of the option.  The options were
 exercised during fiscal year 1996.

Stock option transactions for the two years are summarized below:


</TABLE>
<TABLE>
<S>                                                    <C>          <C>
                                                       Option Shares
                                                          1996         1995
Outstanding, beginning of year                            40,000      40,000 
Granted                                                   65,000      10,000 
Exercised                                                (65,000)    (10,000)
Expired                                                     -              -    
Outstanding, end of year                                   40,000      40,000 

</TABLE>
        

J.          INCOME TAXES

The net deferred tax liability in the accompanying consolidated balance sheets 
includes the following amounts of deferred tax assets and liabilities:

<TABLE>
<S>                                               <C>              <C>
                                                   1996                1995
Deferred tax liability                             $ 528,337        $ 526,723   
Deferred tax asset                                  (693,295)        (680,922)
      Less:  Valuation allowance                     432,027          421,268   
Net deferred tax liability                         $ 267,069        $ 267,069   
</TABLE>

The net deferred tax liability is included in the accompanying consolidated 
financial statements as follows:

<TABLE>
<S>                                               <C>           <C>
                                                    1996               1995
Deferred income taxes - long-term
     liability                                     $297,102      $329,862 
Deferred income taxes - short-term
     asset                                          (30,033)      (62,793)
                                                   $267,069      $267,069 
</TABLE>

The approximate tax effect of each temporary difference giving rise to the 
deferred tax liability and asset was as follows at May 30, 1996 and June 1, 
1995:

<TABLE>
<S>                                       <C>             <C>            
                                               1996              1995
Amortization of location contracts         $  297,069      $  297,069 
Accelerated depreciation                      231,268         229,654 
                                           $  528,337      $  526,723 

Reserve for contingencies                  $  (60,681)     $   (98,524)
Amortization of pension costs                 (69,118)          (75,616)
Vacation accrual                              (37,977)          (53,758)
Other                                          (8,648)          (11,612)
Net operating loss carryforward               (243,834)        (176,448)
AMT credit carryforward                       (108,716)          (99,868)
Investment tax credit carryforward            (164,321)        (165,096)
                                              $(693,295)      $(680,922)

</TABLE>

The valuation allowance was established to reduce the deferred tax asset to the 
amount that will more likely than not be realized.  The reduction is necessary 
due to prior operating losses and uncertainty as to the Company's ability to 
utilize tax credit and net operating loss carryforwards before they expire.  
The valuation allowance was increased (decreased) $10,759 and ($127,517) in 
fiscal years 1996 and 1995, respectively.

The income tax benefit reflected in the consolidated statements of operations 
differs from the amounts computed at federal statutory income tax rates.  The 
principal differences are as follows:

<TABLE>
<S>                                               <C>           <C>
                                                    1996           1995
Federal income tax expense (benefit)
     computed at statutory rate                    $(14,000)     $ 60,000 
State income tax expense (benefit)                   (2,000)        9,000 
Tax effect of nondeductible expenses                 12,000        15,000 
Increase (decrease) in valuation allowance           11,000      (127,000)
Other, net                                           (7,000)       13,000 
                                                  $    -        $ (30,000)
</TABLE>

The Company had available for income tax purposes the following investment 
credit carryforwards at May 30, 1996:

<TABLE>
<S>                          <C>
        Year of Expiration      Amount
          1997                $    4,217
          1998                    59,630
          1999                    25,168
          2000                    49,551
          2001                    25,755
                                $164,321
</TABLE>

In addition, the Company had the following net operating loss carryforwards 
available at May 30, 1996:

<TABLE>
<S>                      <C>
Year of Expiration        Amount 
         2008             $362,643
         2009               76,572
         2010               15,626
         2011              152,319
                          $607,160
</TABLE>

K.          RESERVE FOR DISPOSAL OF RESTAURANT OPERATIONS

          During fiscal year 1988, management decided to cease operations of its
 final restaurant due to operating losses.  The Company reduced the carrying 
value of assets relative to the restaurant to zero and provided a reserve for
estimated losses from disposal.  The remaining reserve represents estimated 
losses, net of anticipated sublease rentals, to terminate the Company's 
obligation under the property lease.

During fiscal year 1996, management revised its estimate to reflect a 
decrease in potential sublease rentals.  This change increased the reserve 
$92,300.  If anticipated sublease rentals significantly change in the future,
 the estimate may again need to be revised. 

          An analysis of the reserve for discontinued operations is presented 
below:

<TABLE>
<S>                                        <C>             <C>
                                               1996             1995
Balance, beginning of year                  $  63,529       $ 89,691 
   Additions to reserves                       92,300            -
   Expenses paid during the year              (41,829)        (26,162)
Balance, end of year                         $114,000        $ 63,529   
</TABLE>

          The reserve is included in the accompanying consolidated financial 
statements as follows:

<TABLE>
<S>                                              <C>             <C>           
                                                    1996             1995
Current portion included in accrued
    expenses                                      $  16,388       $11,082
Reserve included in long-term
    liabilities                                      97,612        52,447
                                                   $114,000       $63,529
</TABLE>


L.          RESERVE FOR LITIGATION AND SALES TAX OBLIGATIONS

          At May 30, 1996, the Company has $75,594 reserved relating to a New 
York state sales tax audit performed in 1988.  The amount is a total of the 
sales tax assessed plus interest and penalties, less total payments.

          In addition, during fiscal year 1994, the Company established a 
reserve relating to a lawsuit filed by the federal government on behalf of 
the United States Department of Agriculture (USDA).  The suit was based on 
alleged overcharges for food services provided for certain 
government-sponsored projects in New York.  The Company contested the 
government's claim on the basis of extensive investigation and a resulting 
conclusion that the Company had not overcharged for food services provided for 
such projects, and that the Company had no liability with respect to the 
government's claim.  During fiscal year 1995, the government initiated 
settlement negotiations.  The Company joined with a view to effect a 
disposition of the case and avoid further litigation expenses.  Following these 
negotiations, an agreement for settlement was reached.  Terms of the 
agreement included payment by the Company to the government of $164,000, of 
which $89,000 was paid in 1995 and $75,000 was paid in 1996.

An analysis of the reserve for these obligations is as follows:

<TABLE>
<S>                                               <C>            <C>
                                                     1996              1995
Balance, beginning of year                         $ 189,098      $279,922 
   Additions to reserves                              -              5,246 
   Payments                                         (113,504)      (96,070)
Balance, end of year                              $   75,594      $189,098 
</TABLE>

The reserves are included in the accompanying consolidated financial statements 
as follows:

<TABLE>
<S>                                              <C>         <C>
                                                   1996          1995
Current portion included in accrued expenses      $29,000     $104,000
Reserve included in long-term liabilities          46,594       85,098
                                                  $75,594     $189,098
</TABLE>


M.     OPERATING EXPENSES

Operating expenses in the accompanying consolidated statements of operations are
 composed of the following:

<TABLE>
<S>                                  <C>                     <C>
                                         1996                     1995          
Payroll and related costs             $6,198,208              $6,178,781     
Equipment rental                         255,431                 192,528     
Other                                  1,847,090               1,665,230     
                                      $8,300,729              $8,036,539
</TABLE>

N.          BUSINESS SEGMENT INFORMATION

The Company is engaged in two different business segments:  food and janitorial.
Segment information is as follows:

<TABLE>
<S>                           <C>             <C>             <C>
                                                                Consolidated
                               Food             Janitorial           Total
Year ended May 30, 1996
     Sales                     $18,807,080     $1,655,385      $20,462,465
     Earnings from continuing
          operations before 
          income taxes              47,066          3,158           50,224
     Depreciation and 
          amortization             601,833         34,510          636,343
     Capital expenditures          724,337          4,326          728,663
     Identifiable assets         7,332,248        345,118        7,677,366

Year ended June 1, 1995
     Sales                     $17,672,028     $1,953,664      $19,625,692
     Earnings (loss) from
         continuing 
         operations 
         before income taxes       190,290        (10,238)         180,052
     Depreciation and 
         amortization              570,628         56,802          627,430
     Capital expenditures          841,531         40,066          881,597
     Identifiable assets         5,944,005        381,990        6,325,995

</TABLE>


O.          ACQUISITION

During fiscal year 1996, the Company acquired certain location contracts, parts 
inventory and equipment from Bassman Vending, Inc. (BVI) for $251,000 allocated 
as follows:

<TABLE>
<S>                                                          <C>
Location contracts (in and around Des Moines, Iowa)           $161,000
Parts inventory                                                 30,000
Equipment                                                       60,000
                                                              $251,000
</TABLE>

The purchase price was financed with a $251,000 note payable to BVI, which is 
described in Note E. 

In addition, the Company has entered into noncancellable operating leases with 
BVI whereby the Company will lease certain equipment and real estate for $6,000 
and $24,500 per month, respectively, from March 1996 through March 2001.

Additionally, the Company lent BVI $600,000 which is payable in monthly 
installments of $12,300, including interest at 8.5% through April 2001.  The 
note is collateralized by the real estate and equipment being leased above.

P.          ADJUSTMENTS TO QUARTERLY RESULTS (UNAUDITED)

          As discussed in Note K, the Company revised its estimated loss on the 
disposal of restaurant operations.  The effect of this restatement for the 
first quarter of fiscal 1996 is as follows:

<TABLE>
<S>                                        <C>
                                           Three Months Ended
                                             August 31, 1995
Net earnings (loss):
     As originally reported                      $ 14,717
     Effect of restatement                        (92,300)
As restated                                      $(77,583)

</TABLE>
Item 8.     Changes in and Disagreements with Accountants on Accounting and
             Financial Disclosure

     There were no disagreements of the type described in paragraph (a) or any 
reportable event as described in paragraph (b) of Item 304 of Regulation SB 
during the two most recent fiscal years.


                                     Part III


Item 9.     Directors and Executive Officers of the Registrant; Compliance with 
16 (a) of the Exchange Act.

     (a), (b) The Executive Officers and Directors of the Company are:

<TABLE>
<S>                      <C>      <C>                                 <C>
            Name         Age      Principal Occupation                Director
                                                                        Since
George F. Crawford (1)     71     Partner in the law firm of Morrison
                                  & Hecker Attorneys at Law,General 
                                  Counsel for Ambassador, Secretary of
                                  Ambassador (2)                        1974 (3)
Arthur D. Stevens (1)      71     Chairman of the Board of Directors,
                                  Executive Officer, and Treasurer of
                                  Ambassador (4)                        1963
George T. Terris           74     Investor (5)                          1966
Robert A. Laudicina        55     Executive Vice-President and 
                                  General Manager of Ambassador's
                                  New York Operations (6)               1986
Richard A. Mitchell        32     Assistant Secretary, Vice President 
                                  ofOperations (7)                      N/A
Ann W. Stevens             55                                           1996
</TABLE>

     (1)     Member of Executive Committee of Board of Directors

     (2)     Mr. Crawford has been Secretary of Ambassador since June 28, 1979; 
             he served as Assistant Secretary prior to that time beginning in
             January 1972.  He was also the first Secretary of Ambassador, 
             serving from April 1963 to October 1968, inclusive.  Throughout the
             entire period he has been a partner in Morrison & Hecker 
             Attorneys at Law, the firm which serves as general counsel to 
             Ambassador.  Mr. Crawford resigned from the Board effective 
             August 22, 1996.

     (3)     Member of Board of Directors 1963-67.

     (4)     Mr. Stevens has been Chairman of the Board of Directors of 
             Ambassador since February 15, 1963, Chief Executive Officer 
             since April 11, 1963, and Treasurer since January 26, 1972.  He was
             also the first President and Treasurer of Ambassador beginning 
             on April 19, 1963, relinquishing those positions in April 1978 
             and October 1969, respectively.  He again assumed the position of 
             President on January 1, 1987 upon the retirement of Mr. George 
             Terris from that position. 

     (5)     Mr. Terris, until his retirement January 1, 1987, was President and
             Chief Operations Officer of Ambassador.

     (6)     Mr. Laudicina was elected Executive Vice President February 22,
             1989.  He served as Vice President prior to that time, beginning
             in January 1982.  He was New York Sales and Marketing Director 
             from December 1977 to January 1979 and has been divisional 
             President of Ambassador's New York operations since January 1979.

     (7)     Mr. Mitchell served as Manager of Operating Systems from August 
             1991 through November 1994 and has served as Assistant Secretary 
             since November 1991.  In November 1994, he was appointed to the 
             position of Vice President of Operations.

     (c)     No family relationship exists between any of the Executive Officers
             listed above. 

     Each Officer holds his office at the pleasure of the Board of Directors 
     until the next annual meeting of the Directors and until his successor 
     is duly elected and qualified.

     (d)     The Executive Officers and Directors listed above were not involved
              or a part of any legal proceedings as described in Item 401(d).

Item 10.     Executive Compensation

     (a), (b) The following table sets forth information as to the remuneration 
              accrued by Ambassador Food Services Corporation and its 
              subsidiary during the fiscal year ended May 30, 1996, for each 
              Director and Officer whose aggregate remuneration for the year 
              exceeded $100,000. 

<TABLE>
<S>                                                 <C>        <C>
Names of Individuals,
Number of Persons in Group                           Fiscal      Base
and Capacities in which Served                        Year      Salary  
Arthur D. Stevens,                                      1996    $188,428
Chairman of the Board, President, Chief Executive       1995     161,100
Officer and Treasurer of Ambassador and Officer         1994     141,000
and Director of its Subsidiary

Robert A. Laudicina,                                    1996    $169,597
Executive Vice President and                            1995     140,446
General Manager of New York Operations                  1994     110,631
</TABLE>

          Executive Retirement Program

     An executive retirement program was adopted during the 1990 fiscal year to 
provide a target annual retirement benefit at age 65 or upon retirement, if 
later, in an amount equal to approximately 40-45% of annual salary, payable 
for 10 years, for certain salaried employees, including the following officer:  
Robert A. Laudicina.  This target retirement benefit will be provided through 
the combination of (1) discretionary annual cash retirement  bonus payments in 
the amount of $2,000, which must be invested in an individual retirement 
account or a universal life insurance policy, and (2) a nonqualified (for tax 
purposes) supplemental retirement agreement from the Company.  The nonqualified 
retirement agreements will pay the estimated portion of the target retirement 
benefit which cannot be funded by the executive through the annual cash 
retirement bonus payments.  The nonqualified retirement arrangements will 
also provide a pre-retirement death benefit in the event of the executive's 
death prior to age 65.

     These annual retirement benefits of the above named Officer, are estimated 
     to be as follows:
<TABLE>
<S>                <C>   <C>                    <C>              <C>
Name of Executive  Age   Estimated Benefit      Supplemental     Target
                         From Cash               Retirement      Retirement
                         Retirement                 Benefit      Benefit

Robert A. Laudicina  55    $9,123                    $46,227          $55,350

</TABLE>
     *based upon contributions of $2,000 per year until age 65 and interest at 
      8% annum.

     The Company maintains insurance policies on the lives of the executives in 
amounts estimated to be sufficient to reimburse it for most of the supplemental 
retirement and/or death benefit payments.

     (d)     Stock Options

     There were no stock options held by any Officer or Director whose 
remunerations exceeded $100,000 as of May 30, 1996.

Item 11.     Security Ownership of Certain Beneficial Owners and Management

     (a)      Security Ownership of Certain Beneficial Owners

     The following table sets forth, as of May 30, 1996, the information with 
respect to common stock ownership of each person known by the Company to own 
beneficially more than 5% of the shares of the Company's common stock, and of
 all Officers and Directors as a group.

<TABLE>
<S>                                           <C>               <C>
                                              Amount            Percent of
                                              Beneficially      Outstanding
Name and Address of Beneficial Owner(s)       Owned             Shares

Arthur D. Stevens
1901 W. 69th Street
Mission Hills, KS  66205                       181,444      (1)        23.3%

Thomas G. Berlin 
800 Superior Avenue, Suite 2100 
Cleveland, Ohio 44114                          124,218      (3)         16.0%

George T. Terris
936 West Shaker Circle
Nequon, WI  53092                               50,000      (2)           6.4%

George F. Crawford
10110 Fontana Lane
Overland Park, KS  66207                         52,597                   6.8%

</TABLE>

     (1)     Does not include 60,000 shares beneficially owned by Mr. Stevens' 
             adult children, in which shares he disclaims any beneficial 
             interest.  Additionally, does not include 200,000 shares which may 
             be issued in the event of conversion of certain debt under its 
             conversion provisions which are effective from April 30, 1998 to
             May 1, 2006.

     (2)     Does not include 4,000 shares owned by Mr. Terris' immediate 
             family, in which shares he disclaims any beneficial interest.

     (3)     Includes 12,800 shares owned by Mr. Berlin's wife. 

     (b)     Security Ownership of Management

<TABLE>
<S>                                           <C>               <C>
                                                      Shares of Stock
                                                    Beneficially Owned
                                                     May 30, 1996              
Name                                             Number           Percent
                                              of Shares          of Stock
George F. Crawford
10110 Fontana Lane
Overland Park, KS  66207                        52,597              6.8%

Arthur D. Stevens
1901 W. 69th Street
Mission Hills, KS  66205                        181,444   (1)      23.3%

George T. Terris
936 West Shaker Circle
Nequon, WI  53092                                 50,000   (2)      6.4%

Robert A. Laudicina
303 Cedar Court
Norwood, NJ  07648                                24,375            3.1%

Ann W. Stevens
1901 W. 69th Street
Mission Hills, KS 66205                            1,000             0.1%

All Directors and Officers
   as a Group (5 persons)                        337,416   (3)      43.4%

</TABLE>

     (1)     Does not include 60,000 shares beneficially owned by Mr. Stevens' 
             adult children, in which shares he disclaims any beneficial 
             interest.  Additionally, does not include 200,000 shares which may 
             be issued in the event of conversion of certain debt under its 
             conversion provisions which are effective from April 30, 1998 
             to May 1, 2006.

     (2)     Does not include 4,000 shares owned by Mr. Terris' immediate 
             family, in which shares he disclaims any beneficial interest.

     (3)     Includes 10,000 shares which could be purchased by certain Officers
             and Directors under stock options.

     (c)     Changes in Control

     The Company knows of no contractual arrangements which may, at a subsequent
     date, result in a change in control of the Company.


Item 12.     Certain Relationships and Related Transactions

     (a)     Certain Business Relationships

     George F. Crawford, a Director and Officer of Ambassador, is a partner of 
     Morrison & Hecker Attorneys at Law, which firm serves as general counsel
     to the Company.  Mr. Crawford resigned from the Board effective August 
     22, 1996.

     There were no other transactions with any member of management during 
     fiscal 1996 which exceeded $60,000.

Item 13.     Exhibits and Reports on Form 8-K 

     (a)     Exhibit No.:

          3A     Articles of Incorporation of the Registrant             (1)

          3B     By-Laws of the Registrant                               (1)

           6      1984 Incentive Stock Option Plan Dated January 31, 1984(2)

          10     Material Contracts Agreement with Paul F. Leathers      (1)

          17     Letter on Director Resignation                          (3)

          22     Subsidiary of the Registrant                            (3)

     (1)     This exhibit was filed with the Ambassador's 10-K for the fiscal 
             year ended May 28, 1981.  A copy of the Certificate of Amendment 
             of Certificate of Incorporation changing the Company's name was 
             filed as a supplement to said exhibit for the fiscal year ended 
             June 1, 1989.

     (2)     This exhibit was filed with the Company's 10-K for the fiscal year 
             ended May 31, 1984.

     (3)     Exhibit attached as part of filing.


Exhibit No. 22

Subsidiary of the Registrant

Ambassador Food Services Corporation (a Delaware Corporation), the parent 
Company, has the following subsidiary, which is included in the consolidated 
financial statements.

Name of Subsidiary      State of Incorporation             % of Voting
                                                         Securities Owned
Ambassador Fast 
Services, Inc.
d/b/a Squire Maintenance
 Services                   New York                              100%


Note:     The Company will provide, on the written request of any stockholder, a
           copy of any exhibit to this Form 10-KSB at a rate of $.15 per page.  
           The minimum fee is $5.00.  Requests should be directed to Arthur 
           D. Stevens, President, Ambassador Food Services Corporation, P.O. Box
           419586, Kansas City, Missouri 64141-6586.





                       Signatures


Pursuant to the requirements of Section 13 or 15(d) 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.


                                  AMBASSADOR FOOD SERVICES CORPORATION
                                         (Registrant)


             /s/ Athrur D. Stevens                 Date October 17, 1996       
             Arthur D. Stevens
             Chairman of the Board




              /s/ Richard Mitchell                 Date October 17, 1996        
              Richard Mitchell
              Assistant Secretary


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


                                  Chairman of the Board 
                                  President, Treasurer and 
/s/ Arthur D. Stevens             Chief Executive Officer    October 17, 1996   
Arthur D. Stevens                 Title                      Date


/s/ Robert A. Laudicina           Vice-President/Director    October 17, 1996  
Robert A. Laudicina               Title                      Date


/s/ Ann W. Stevens                Director                   October 17, 1996  
Ann W. Stevens                    Title                      Date


/s/ George T. Terris              Director                   October 17, 1996  
George T. Terris                  Title                      Date

 EXHIBIT 17


October 16, 1996


Mr. Arthur D. Stevens
President
Ambassador Food Services Corporation
3269 Roanoke Road
Kansas City, MO  64111

Dear Arthur:

I have been advised by management of our firm that, because of our firm's 
general policy against having its members serve as directors or officers of 
publicly held corporations for which the firm serves as legal counsel, and 
in light of recent developments in the position of the American Bar Association 
and other bar associations in this regard, which have been well publicized and 
of which you are probably aware, I should terminate my status as a director 
and officer of Ambassador Food Services Corporation.  Accordingly, I hereby 
resign as a director and as an officer of the corporation, as well as any 
subsidiary or subsidiaries of which I may be listed as a director or officer, 
effective immediately.

Very truly yours,


/s/ George F. Crawford
George F. Crawford