<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

  [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

For the fiscal year ended SEPTEMBER 28, 1997

                                       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 1-9573
                       ------


                           UNO RESTAURANT CORPORATION
                           --------------------------
             (Exact name of registrant as specified in its charter)


               DELAWARE                                          04-2953702
----------------------------------------                     -------------------
   (State or other jurisdiction of                            (I.R.S. Employer
    incorporation or organization)                           Identification No.)

100 CHARLES PARK ROAD, WEST ROXBURY, MA                             02132
----------------------------------------                     -------------------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code (617) 323-9200
                                                   --------------

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class                Name of each exchange on which registered

COMMON STOCK, $.01 PAR VALUE                    NEW YORK STOCK EXCHANGE
----------------------------           -----------------------------------------

           Securities registered pursuant to Section 12(g) of the Act:

                                      NONE
              ----------------------------------------------------
                                (Title of Class)

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X      No
                                             -----      -----










<PAGE>   2



        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not 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-K or any
amendment to this Form 10-K.  [ ]

        The aggregate market value of the registrant's Common Stock, $.01 par
value, held by non-affiliates of the registrant as of November 28, 1997, was
$30,592,618 based on the closing price of $6.25 on that date on the New York
Stock Exchange. As of November 28, 1997, 10,965,455 shares of the registrant's
Common Stock, $.01 par value, were outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE


         Portions of the registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on February 26, 1998 which will be filed within 120 days
after the end of the registrant's fiscal year, are incorporated by reference in
Part III of this report. Portions of the registrant's Registration Statement on
Form S-1 (Registration No. 33-13100) (the "1987 Registration Statement"), the
registrant's Annual Report on Form 10-K for the fiscal year ended September 30,
1990, the registrant's Annual Report on Form 10-K for the fiscal year ended
September 29, 1991, the registrant's Annual Report on Form 10-K for the fiscal
year ended October 2, 1994, the registrant's Annual Report on Form 10-K for the
fiscal year ended October 1, 1995, the registrant's Annual Report on Form 10-K
for the fiscal year ended September 29, 1996, the registrant's Quarterly Report
on Form 10-Q for the fiscal quarter ended April 2, 1995, the registrant's Proxy
Statement for the Annual Meeting of Stockholders held on February 22, 1994, the
registrant's Proxy Statement for the Annual Meeting of Stockholders held on
February 8, 1995, and the registrant's Proxy Statement for the Annual Meeting of
Stockholders held on February 26, 1997, are incorporated by reference in Part IV
of this Report.




                                       -2-

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                                     PART I


ITEM 1.  BUSINESS

GENERAL AND DEVELOPMENTS DURING FISCAL YEAR 1997

        The Company owns and operates or franchises a total of 166 restaurants,
including 92 owned and 66 franchised casual dining, full-service restaurants
under the name "Pizzeria Uno...Chicago Bar & Grill." The Pizzeria Uno
restaurants offer a diverse, high-quality menu at moderate prices in a casual,
friendly atmosphere. The restaurants feature the Company's signature
Chicago-style deep-dish pizza and a selection of entrees, including thin crust
pizza, pasta, fajitas, ribs, steak and chicken, as well as a variety of
appetizers, salads, sandwiches and desserts. The Company's restaurants average
approximately 6,200 square feet with seating for an average of approximately 180
guests. For the fiscal year ended September 28, 1997, Company-owned restaurants
averaged $1,818,000 in sales. Company-owned restaurants are located primarily in
major markets from New England to Virginia, as well as Florida, Chicago and
Denver, and franchised restaurants are located throughout the United States as
well as one franchised restaurant in Seoul, Korea.

        The Company acquired the rights to the name "Pizzeria Uno" from the late
Ike Sewell, who opened the original Pizzeria Uno restaurant in Chicago, Illinois
in 1943 and is considered the originator of Chicago-style deep-dish pizza. The
Company opened its first Pizzeria Uno restaurant in 1979.

        During the fiscal year ended September 28, 1997, the Company opened
seven full-service restaurants and closed one full-service restaurant. Six
full-service franchised restaurants opened during the fiscal year and three
full-service franchise restaurants closed. The Company also took over operations
of one limited-service unit that previously operated as a franchised unit.
During the fiscal year ending September 27, 1998, the Company anticipates
opening up to six Company-owned full-service restaurants and up to ten
franchised restaurants, including several international restaurants. The timing
of these planned openings is subject to various factors, including locating
satisfactory sites and negotiating leases and franchise agreements.

        The Company has implemented several strategic initiatives intended to
strengthen its position in casual dining and to distinguish its restaurants from
quick service pizza, pizza and pasta, and full-service Italian restaurants over
the past several years. As part of this strategy, the Company enhanced its
kitchen capabilities, to include saute stations, grills and fryers, enabling the
Company to improve the quality, breadth and appeal of its non-pizza menu items.
This has allowed the Company to be very aggressive in its approach to product
development through seasonal menus and targeted specialty offerings. The Company
also re-designed its prototype restaurant to replicate the look of an old
Chicago warehouse. This prototype was designed as a less serious, more fun
experience for our guests and was intended to make the restaurants more
consistent with its casual dining theme. In addition, the Company refined the
name of its restaurants to "Pizzeria Uno...Chicago Bar & Grill" to communicate
its concept and broadened menu to consumers. The Company believes that by
keeping its menu offerings current and providing a relaxed, yet fun atmosphere
for its patrons, guest satisfaction and frequency will be enhanced.

        The Company continues to expand its channels of distribution to
capitalize on the Pizzeria Uno brand name and the appeal of its signature
Chicago-style deep-dish pizza. Currently, the Company is distributing
refrigerated and frozen Chicago-style deep-dish pizza to approximately 1,000
supermarkets and wholesale price club stores, primarily in New England, for sale
in their fresh deli counters and frozen food sections. In August 1997, the
Company began shipping proprietary products and recipes to Sainsbury's
Supermarket PLC, a British supermarket chain with over 375 locations.

                                       -3-

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For the past several years, the Company has also been supplying frozen Pizzeria
Uno brand, Chicago-style deep-dish pizza to American Airlines for service on its
flights and has rolled out a similar pizza product at Pizzeria Uno kiosks in 43
General Cinema theaters. The Company has also entered into a two year agreement
with Doubletree Hotels Corporation which will offer Pizzeria Uno brand pizzas
and calzones to its guests through the various food venues of the hotels, and is
currently in 85 Doubletree units. Several other branded and private label tests
are underway with supermarket chains and major foodservice providers.

        In December 1996, the Company entered into a 15 year mortgage loan
agreement with MetLife Capital Financial Corporation in the original aggregate
principal amount of $5.1 million. The loan agreement is secured by mortgages on
five Company owned full-service properties in Orlando, FL, Amherst, NY, Paoli,
PA, Williamsburg, VA and Columbus, OH. The loan has a fixed annual interest rate
of 8.75% and requires monthly payments of principal and interest.

        In June 1997, the Board of Directors of the Company authorized the
repurchase of shares of the Company's Common Stock in a "Dutch Auction" tender
offer. The terms of the tender offer provided that the Company would purchase up
to 1,000,000 shares of its Common Stock and reserved the right to purchase more
than 1,000,000 shares under certain circumstances, at prices, not in excess of
$7.50 nor less than $6.00 per share, specified by tendering stockholders. The
Company would then select the lowest purchase price that would allow it to
purchase the 1,000,000 shares. On July 30, 1997, the Company announced that it
had repurchased 1,207,624 shares at a price of $7.00 per share. The total number
of shares purchased represented approximately 10% of the shares outstanding at
the time.

        During the third quarter of fiscal 1997, the Company recorded special
charges in the amount of $4.0 million, consisting of an asset impairment charge
of $3.3 million and store closing costs of $700,000. The $3.3 million asset
impairment charge was recorded to reduce the carrying value of equipment and
leaseholds at two full-service Pizzeria Uno restaurants to their fair market
value and resulted from weak operating results and continuing negative cash
flow. The store closure costs represent remaining minimum lease payments of one
full-service Pizzeria Uno restaurant which was closed during fiscal 1997.

        In September 1997, the Company announced the signing of three
international agreements for the development of Pizzeria Uno restaurants in
Indonesia, Pakistan and the Middle East. PT. Nadya Vincent Indotama ("Navindo"),
the Company's area developer for Indonesia, entered into a development agreement
requiring the opening of a minimum of ten Pizzeria Uno restaurants within ten
years. A development agreement with Jason Foods, LLC, the Company's area
developer for Pakistan, requires the opening of a minimum of 12 units within
five years. The Company also signed a letter of intent with Al Bannai
Enterprises for its first international master franchise agreement providing for
the development of 22 Pizzeria Uno restaurants over seven years in United Arab
Emirates, Saudi Arabia, Egypt, Kuwait, Jordan, Oman, Qatar, Bahrain and Lebanon.

        On November 4, 1997, the Company entered into a $55 million revolving
credit and term loan facility with Fleet National Bank and BankBoston,N.A. which
replaced the Company's $50 million revolving credit facility. The loan agreement
includes a seven year $20 million mortgage loan, a five year term loan for $8.4
million and a $26.6 million revolving loan due in October, 2002. The agreement
contains certain financial covenants including, a cash flow coverage ratio and
consolidated leverage ratio.






                                       -4-

<PAGE>   5



RESTAURANT CONCEPT AND MENU

        "Pizzeria Uno...Chicago Bar & Grill" restaurants are full-service,
casual dining restaurants, featuring the Company's signature Chicago-style
deep-dish pizza and a diverse menu of high quality, moderately-priced menu
items. The Company's target market is middle to upper-middle income individuals
in the 17 to 49 year-old age group. The restaurants are generally open from
11:00 a.m. to midnight, seven days per week.

        The restaurants feature the Company's signature Chicago-style deep-dish
pizzas and a selection of entrees, including thin crust pizza, pasta, fajitas,
ribs, steak and chicken, as well as a variety of appetizers, salads, sandwiches
and desserts. The Company's signature product, its Chicago-style, deep-dish
pizza, filled with ingredients such as fresh meats, spices, vegetables and real
cheeses, is baked according to proprietary recipes. The Company believes that
its proprietary recipes produce a superior pizza that is difficult to duplicate.
At the end of fiscal 1997, the Company's average check per guest for full
service Company-owned restaurants was approximately $10.10. For fiscal 1997,
sales of alcoholic beverages accounted for approximately 18% of total restaurant
sales.

RESTAURANT DESIGN AND SITE SELECTION

        The Company has continually upgraded the design and decor of its
restaurants to be consistent with its theme as "Pizzeria Uno...Chicago Bar &
Grill." Pizzeria Uno restaurants are designed and decorated to provide a
friendly and comfortable atmosphere expected of full-service, casual dining
restaurants and distinguished from typical pizza restaurants. The decor elements
of most restaurants include different variations of wood, brick and brass.

        During fiscal 1996, the Company re-designed its prototype restaurant to
replicate the look of an old Chicago warehouse. This prototype was designed as a
less serious, more fun experience for our guests. The Company now has 15 of
these prototypes open, including all seven new restaurant openings during fiscal
1997, and is evaluating existing units for possible conversion to the new
prototype. During fiscal 1996 and fiscal 1997, the Company developed several
variations of this prototype which allows it to readily adapt to specific new
site locations by choosing from this "family" of prototype buildings. Initial
sales volumes from the Company-owned prototype units have been very encouraging
and will continue to be monitored as they begin to mature.

        To ensure quality and compliance with Company standards, preliminary
exterior design, interior and kitchen design for all Company-owned and
franchised restaurants are reviewed by the Company. The Company's current
prototypes for free-standing restaurants occupy a range of approximately 5,200
to 6,400 square feet, with a seating capacity ranging from 180 to 210 customers.

        The Company considers the specific location of a restaurant to be
critical to its long-term success and devotes significant effort to the
investigation and evaluation of potential sites. One or more of the Company's
executive officers inspect and approve the site for each Company-owned and
franchised restaurant. Within each target market area, the Company evaluates
population density and demographics, major retail and office concentration and
traffic patterns. In addition, the Company evaluates visibility, accessibility,
proximity to direct competition and various other site specific factors.
Pizzeria Uno restaurants are located in both urban and suburban markets, in
free-standing buildings, strip centers and malls. Restaurant development is
currently targeted at high profile, free-standing locations.

        Historically, the Company has leased most of its restaurants to minimize
investment costs. Since fiscal 1992, however, the Company began selectively
purchasing real estate to develop new restaurants where available and when the
expected long-term cost of owning the real estate is less than the cost of
leasing. Of the 100 Company-owned restaurants open as of November 28, 1997, 82
are located in leased facilities and 18 are fee owned properties. See "Item 2.
Properties."

                                       -5-

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RESTAURANT LOCATIONS

        The following tables provide the locations for Company-owned and
franchised restaurants as of November 28, 1997.

                         COMPANY-OWNED RESTAURANTS (100)

COLORADO (4)                MASSACHUSETTS (27)          Latham               
Aurora                      Boston(5)                   Lynbrook             
Denver                      Bellingham                  Massapequa           
Greenwood(a)                Braintree                   New York City        
Westminster                 Brockton                       Bayside           
                            Burlington                     Bay Ridge         
CONNECTICUT (6)             Cambridge(2)                   Forest Hills      
Danbury                     Danvers                        Manhattan(5)      
Fairfield                   Dedham                      Syracuse             
Manchester                  Framingham                  Victor               
Milford                     Hanover                     Vestal               
Newington                   Hyannis(a)                  Yonkers              
West Hartford               Kingston                                         
                            Lynnfield(a)                OHIO (2)             
FLORIDA (6)                 Newton(2)(c)                Columbus(2)(a)       
Altamonte                   Revere                                           
Daytona Beach               Shrewsbury(d)               PENNSYLVANIA (3)     
Kissimmee                   Springfield                 Philadelphia (2)(a)  
Lake Mary(a)                Waltham (2)(c)              Pittsburgh           
Orlando (2)(a)              Westborough                                      
                            Woburn                      RHODE ISLAND (1)     
ILLINOIS (8)                                            Warwick              
Aurora                      MISSOURI (1)                                     
Chicago (4)(a)(b)           St. Louis                   VERMONT (1)          
Gurnee Mills (a)                                        Burlington (a)       
Lombard                     NEW HAMPSHIRE(3)                                 
Schaumburg                  Concord                     VIRGINIA (9)         
                            Manchester                  Ballston             
MAINE (1)                   Nashua                      Fairfax              
Portland(a)                                             Falls Church         
                            NEW JERSEY (1)              Merrifield           
MARYLAND (6)                Paramus                     Newport News         
Baltimore                                               Norfolk              
Bel Air                     NEW YORK (19)               Potomac Mills(a)     
Bethesda                    Albany                      Reston               
Ellicott City (a)           Amherst(a)                  Williamsburg(a)      
Towson                      Buffalo                                          
Waldorf                     Henrietta                   WASHINGTON, DC(2)    
                                                        Cleveland Park       
                                                        Union Station        



-----------------------
See footnotes on next page





                                       -6-

<PAGE>   7






                           FRANCHISED RESTAURANTS (69)

                                  DOMESTIC (68)

ARIZONA (2)                 MASSACHUSETTS (4)           OKLAHOMA (1)       
Phoenix                     Holyoke                     Tulsa              
Tempe                       Marlborough (d)                                
                            Springfield(2)(c)           PENNSYLVANIA (9)   
CALIFORNIA (11)                                         Doylestown         
Cupertino                   MICHIGAN (3)                King of Prussia    
Fremont                     Ann Arbor                   Langhorne          
Los Angeles                 Birch Run                   Media              
Oakland                     Bloomfield                  Philadelphia(3)    
San Diego(2)                                            Plymouth Meeting   
San Francisco(2)            MINNESOTA (2)               Willow Grove       
Santa Clara                 Minnetonka                                     
Visalia                     Edina                       PUERTO RICO (3)    
West Hollywood                                          San Juan(2)(c)     
                            NEVADA (1)                  San Patricio       
FLORIDA (3)                 Las Vegas                                      
Miami                                                   TENNESSEE (1)      
Orlando(2)                  NEW JERSEY (4)              Bristol            
                            Cherry Hill                                    
INDIANA (2)                 Secaucus                    TEXAS (4)          
Indianapolis                South Plainfield            Addison            
Merrillville                Wayne                       Arlington          
                                                        Ft. Worth          
KENTUCKY (3)                NEW YORK (2)                Houston            
Lexington                   Poughkeepsie                                   
Louisville (2)              White Plains                WASHINGTON, DC(1)  
                                                        Georgetown         
                            OHIO (7)                                       
MARYLAND (1)                Cincinnati (2)              WISCONSIN (4)      
Deep Creek                  Cleveland (3)               Janesville         
                            Dayton                      Milwaukee          
                            Mentor                      Madison(2)         


                                INTERNATIONAL (1)
KOREA (1)
Seoul


---------------------
(a) Owned property - Pizzeria Uno.
(b) Includes one Mexican restaurant and one limited seating take-out kiosk.
(c) Includes one limited seating, take-out restaurant.
(d) Limited seating, take-out restaurant.


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UNIT ECONOMICS

        For the fiscal year ended September 28, 1997, the 85 Company-owned
restaurants open for the entire fiscal year generated average restaurant sales
of approximately $1,807,000, average restaurant operating income of
approximately $195,000 (or 10.8% of sales) and average restaurant operating cash
flow of approximately $323,000 (or 17.9% of sales). The 14 Company-owned
restaurants opened in fiscal 1996 and fiscal 1997 had an average cash investment
of approximately $1,710,000 for building, leasehold improvements, furniture,
fixtures and equipment, but excludes land costs and pre-opening expenses. The
Company expects that the average cash investment required to open a full-service
Pizzeria Uno restaurant will be approximately $1.6 million, excluding land and
pre-opening expenses. In the future, the Company anticipates that it will
continue to purchase a portion of its new restaurant locations and expects that
its total investment for each fee owned unit will range between $2.1 and $2.6
million.

RESTAURANT EXPANSION

        The Company intends to continue opening Company-owned restaurants in
three of its primary metropolitan markets, Boston, New York and
Baltimore/Washington, D.C. The Company is also engaged in site development
efforts in Chicago and Orlando. In fiscal 1997, the Company opened seven
restaurants in existing markets. In fiscal 1998, the Company intends to open
approximately six restaurants and does not plan to enter any new markets.

        The Company will continue to grant franchisees the right to expand the
Pizzeria Uno restaurant business throughout the United States and will
aggressively pursue international expansion opportunities.

        In September 1997, the Company announced the signing of three
international agreements for the development of Pizzeria Uno restaurants in
Indonesia, Pakistan and the Middle East. PT. Nadya Vincent Indotama ("Navindo"),
the Company's area developer for Indonesia, entered into a development agreement
requiring the opening of a minimum of ten Pizzeria Uno restaurants within ten
years. A development agreement with Jason Foods, LLC, the Company's area
developer for Pakistan, requires the opening of a minimum of 12 units within
five years. The Company also signed a letter of intent with Al Bannai
Enterprises for its first international master franchise agreement providing for
the development of 22 Pizzeria Uno restaurants over seven years in United Arab
Emirates, Saudi Arabia, Egypt, Kuwait, Jordan, Oman, Qatar, Bahrain and Lebanon.

        In fiscal 1997, six full-service franchised restaurants were opened,
including the first unit in Seoul, Korea, and three full-service restaurants
were closed. During fiscal 1998, the Company expects franchisees to open
approximately ten restaurants. See "Item 1. Franchise Program."

OTHER BUSINESS DEVELOPMENTS

        The Company continues to expand its consumer product business
principally through distribution of its deep-dish pizza in the fresh deli
counters and frozen food sections of approximately 1,000 supermarkets and
wholesale price club stores primarily in New England. Currently, the Company
believes that Pizzeria Uno deep-dish pizza is the leading brand of fresh,
refrigerated pizza sold in New England supermarkets. The Company continues to
supply private-label thin-crust pizza to selected New England supermarket
chains. The Company is also supplying proprietary products and recipes to
Sainsbury's Supermarket PLC, a British supermarket chain with over 375
locations. The Company continues to supply frozen Pizzeria Uno brand,
Chicago-style deep-dish pizza to American Airlines for service on its flights
and has rolled out a similar pizza product at Pizzeria Uno kiosks in 43 General
Cinema theaters. The Company has also entered into a two year agreement with
Doubletree Hotels Corporation


                                       -8-

<PAGE>   9



which will offer Pizzeria Uno brand pizzas and calzones to its guests through
the various food venues of the hotels, and is currently in 85 Doubletree units.
Several other branded and private label tests are underway with supermarket
chains and major foodservice providers.

RESTAURANT MANAGEMENT

        The staff for a typical Pizzeria Uno restaurant consists of one general
manager, an assistant general manager, one manager and approximately 50 to 70
hourly employees, many of whom are part-time personnel. Managers of
Company-owned restaurants are compensated with a salary plus a performance bonus
based on several factors, including restaurant sales and profits.

        The Company conducts an initial ten-week training program for all
managers and franchisees focusing on restaurant operations. There is continuing
training of Company-owned restaurant managers through specialized training
programs and regular meetings that emphasize the areas of leadership, quality of
food preparation and service. The Company requires its food handling personnel
and alcohol serving employees to participate in a training program to ensure the
sanitary and responsible service of food and alcohol. The training program is
conducted on an ongoing basis. The Company also holds quarterly regional
meetings and an annual national meeting of franchisees and Company managers
which focus on continuing training in marketing, new products, site selection
and aspects of business management.

        Each Company-owned restaurant manager and franchisee is required to
comply with an extensive operations manual which contains detailed standards and
specifications for all elements of operations. The Company monitors system wide
compliance by regular visits from Company personnel. The Company employs three
operations vice presidents and 13 regional operations directors. The regional
directors provide field supervision to both Company-owned and franchised
restaurants. Their duties include regular visits and detailed inspections of
quality, service and sanitation. As additional restaurants are opened, the
Company intends to add qualified regional directors in order to maintain quality
control.

PURCHASING

        The Company negotiates directly with suppliers for all primary food
ingredients and beverage products to ensure adequate supplies and to obtain
competitive prices. The Company seeks competitive bids from suppliers on many of
its primary food ingredients on a periodic basis and no less than annually for
each supplier. The Company approves suppliers of these ingredients and products
and requires its suppliers to adhere to product specifications established by
the Company. Several key ingredients are proprietary. They are manufactured for
the Company under private label and sold to authorized distributors for resale
to Company-owned restaurants and franchisees. The Company and its franchisees
purchase substantially all food and beverage products from authorized local or
national distributors. In some cases, franchisees find it more economical to
purchase most of these products from the same distributors servicing the
Company-owned restaurants in order to take advantage of volume discounts. The
Company does not derive any income from suppliers or distributors on sales to
franchisees. All essential food and beverage products are available, or upon
short notice can be made available, from alternative qualified suppliers.


ADVERTISING AND MARKETING

        For fiscal 1997, the Company spent 2.8% of restaurant and consumer
product sales on advertising and marketing. The Company relies primarily on
television, radio, direct mail and print advertising. Through an advertising
cooperative fund, the Company prepares regional and local advertising materials
and also produces menus and

                                       -9-

<PAGE>   10



promotional programs for both franchised and Company-owned restaurants.

        Franchisees are required to contribute a fee of up to 1.0% of franchised
restaurant sales to the advertising cooperative fund, and the Company
contributes an equal percentage of Company-owned restaurant sales. Except for
the materials prepared and distributed by the Company through the advertising
cooperative fund, franchisees are responsible for the implementation of
advertising and marketing for their respective restaurants, subject to adherence
to Company established guidelines. In addition, the Company's franchise
agreement requires franchisees to spend at least 2% of franchised restaurant
sales each year on local advertising and public relations.

FRANCHISE PROGRAM

        As of September 28, 1997, the Company had 66 franchised Pizzeria Uno
restaurants operated by 42 franchisees located in 18 states, the District of
Columbia, Puerto Rico and Seoul, Korea. Historically, franchises were granted on
a unit-by-unit basis, rather than by territory. The Company is currently
pursuing territorial development with franchisees for construction of more than
one restaurant over a certain period of time and within a certain geographic
area. In fiscal 1996, the Company signed its first international franchise
agreement with the Kolon Group, headquartered in Seoul, Korea. This agreement
calls for the opening of a minimum of ten full-service restaurants in Korea
within ten years. The Kolon Group's first restaurant opened on September 1,
1997. The Company has also signed a Letter of Intent with Al Bannai Enterprises
for a master franchise agreement for the development of 22 Pizzeria Uno
restaurants in the Middle East over the next seven years. The Company also
entered into international agreements for the development of Pizzeria Uno
restaurants in Indonesia and Pakistan. See "-- General and Developments During
Fiscal Year 1997" and "--Restaurant Expansion." The Company intends to
aggressively pursue international expansion opportunities and is in continual
discussions with existing and prospective franchisees for the development of
certain geographic areas and expects to grant additional franchises to qualified
applicants with restaurant related operating experience and requisite financial
resources, both domestically and internationally.

        New domestic franchisees are required to pay at the time the development
agreement is signed a non-refundable fee of $25,000 per restaurant committed to
be developed. The Company's current franchise agreement also requires
franchisees to pay a unit franchise fee of $25,000 per restaurant before signing
a franchise agreement for a specific location and a continuing monthly royalty
of 5% of restaurant sales. Royalties and franchise fees for international
franchises are negotiated on an individual basis. Royalties received by the
Company averaged 4.2% of franchised restaurant sales for the fiscal year ended
September 28, 1997. The Company has a variable royalty plan that allows royalty
rate reductions from contractual rates for those franchised restaurants meeting
certain criteria. It is available only to those franchised restaurants that do
not achieve minimum sales levels during their first five years of operation in
relation to their overall capital investment, including capitalized lease
obligations. The minimum royalty rate under the variable royalty plan is 3% and
ranges up to 5%. Six franchised restaurants currently qualify for some degree of
royalty rate reduction under the variable royalty plan.

        The Company receives weekly and monthly sales reports from its
franchisees and, in addition, conducts random test sales audits of all
franchisees on an annual basis. Based upon these reports, the Company believes
that the average annualized sales for its franchised restaurants in fiscal 1997
was approximately $1.6 million.


        The franchise agreements generally prohibit the Company from granting
competing franchises or opening competing restaurants within three miles of a
franchised restaurant. The franchise agreements have an initial term of 20 years
with three successive ten year renewal periods at the option of the franchisee,
provided that the agreement has not previously been terminated by either party.
Upon each renewal,

                                      -10-

<PAGE>   11



the Company may require a franchisee to sign a revised franchise agreement and
to make capital expenditures to renovate the restaurant, but may not increase
the continuing monthly royalty or charge a renewal fee. The Company retains the
right to terminate a franchise agreement for a variety of reasons, including
significant and willful understatement of gross receipts, failure to pay fees,
material misrepresentation on an application for a franchise, or material breach
or default under the franchise agreement, including failure to maintain Company
operating standards. Many state franchise laws limit the ability of a franchisor
to terminate or refuse to renew a franchise. The Company has the right to audit
and receive certain monthly and annual financial and other information from
franchisees.

        The Company's initial training program for franchisees is similar to its
training program for management trainees and employees in Company-owned
restaurants. See "-- Restaurant Management." In order to ensure uniform quality
standards, the Company requires franchisees to comply with Company
specifications as to space, design and decor, menu items, principal food
ingredients and day-to-day operations, as set forth in the Company's operations
manual. The Company's executives or field-service personnel on average visit
each franchise location at least four times per year.

        The Company guarantees certain limited equipment and leasehold
improvement financing to qualified franchisees through an agreement with an
unaffiliated finance company. Under this agreement, the Company guarantees
financing provided by the finance company to qualified franchisees in the
maximum aggregate amount of $1.0 million for all franchisees combined. The
Company has also guaranteed up to a maximum of $400,000 of future lease payments
in the event of default by a specific franchisee.

COMPETITION

        The restaurant business is highly competitive with respect to price,
service and food quality, and is often affected by changes in consumer tastes,
economic conditions and population and traffic patterns. There is also intense
competition for real estate sites, personnel and qualified franchisees. The
Company competes within each market with locally-owned restaurants as well as
with national and regional restaurant chains, some of which operate more
restaurants and have greater financial resources and longer operating histories
than the Company.

EMPLOYEES

        As of September 28, 1997, the Company employed approximately 6,389
persons, 126 of whom were corporate personnel and 353 of whom were field service
or restaurant managers and trainees. The remaining employees were restaurant
personnel, many of whom were part-time. Of the 126 corporate employees, 87 were
in management positions and 39 were general office employees.

        The Company considers its employee relations to be good. None of the
Company's employees is covered by collective bargaining agreements except for
employees of its three restaurants in urban Chicago who are members of the Hotel
Employees and Restaurant Employees International Union of the AFL-CIO, and who
are subject to a collective bargaining agreement with the Company through
November 30, 1999.


TRADEMARKS

        The Company regards its many trademarks and service marks as having
significant value and as being an important factor in the marketing of its
products. Its most significant marks include "Uno," "Pizzeria Uno," and
"Pizzeria Due." The Company's registrations of its significant marks are subject
to renewal at various times from 1998 to 2005. However, the Company intends to
renew its registration of such marks prior to expiration. The Company has
applied for federal registration of the trademark "Pizzeria Uno... Chicago Bar &
Grill." The Company's policy is to pursue registration

                                      -11-

<PAGE>   12



of its marks whenever possible and to oppose strenuously any infringement of its
marks. The Company has also initiated efforts toward international trademark
registration in support of the Company's plan to expand products and services
into international markets. The Company has received one trademark registration
in Korea, where the Company has a development agreement with an existing area
licensee, and has applied for several other trademark registrations which are
still pending. See -- "General and Developments During Fiscal Year 1997" and
"Restaurant Expansion." In Korea, Pakistan, Indonesia and other countries, the
Company has sought registration of a variety of marks, including "Pizzeria Uno"
and "Pizzeria Uno...Chicago Bar & Grill."


GOVERNMENT REGULATION

        The Company is subject to various federal, state and local laws
affecting its business. Each of the Company's restaurants is subject to
licensing and regulation by a number of governmental authorities, which may
include alcoholic beverage control, health and safety and fire agencies in the
state or municipality in which the restaurant is located. Difficulties or
failures in obtaining the required licenses or approvals could delay or prevent
the development of a new restaurant in a particular area.

        Alcoholic beverage control regulations require each of the Company's
restaurants to apply to a state authority and, in certain locations, county and
municipal authorities for a license or permit to sell alcoholic beverages on the
premises. Typically, licenses must be renewed annually and may be revoked or
suspended for cause at any time. Alcoholic beverage control regulations relate
to numerous aspects of the daily operations of the Company's restaurants,
including minimum age of patrons and employees, hours of operation, advertising,
wholesale purchasing, inventory control, and handling, storage and dispensing of
alcoholic beverages.

        The Company may be subject in certain states to "dram-shop" statutes,
which generally provide a person injured by an intoxicated person the right to
recover damages from an establishment which wrongfully served alcoholic
beverages to such person. The Company carries liquor liability coverage as part
of its existing comprehensive general liability insurance.

        The Company is also subject to federal and a substantial number of state
laws regulating the offer and sale of franchises. Such laws impose registration
and disclosure requirements on franchisors in the offer and sale of franchises.
These laws often also apply substantive standards to the relationship between
franchisor and franchisee and limit the ability of a franchisor to terminate or
refuse to renew a franchise.

        The Company is subject to the rules and regulations of various federal,
state and local health agencies, including the United States Food and Drug
Administration (the "FDA") and the United States Department of Agriculture. The
FDA specifies standards for nutrition content claims and health claims made in
connection with food items offered in the Company's restaurants. The FDA also
prescribes the format and content of nutrition information required to appear on
labels of certain products, including the Company's line of fresh and frozen
items sold through supermarkets and wholesale price clubs.











                                      -12-

<PAGE>   13




EXECUTIVE OFFICERS OF THE REGISTRANT

      The executive officers of the Company and their ages are as follows:

                                                                        DIRECTOR
       NAME             AGE               TITLE                          SINCE
       ----             ---               -----                          -----

Aaron D. Spencer ...... 66      Chairman and Director                    1979

Craig S. Miller ....... 48      President, Chief Executive               1985
                                Officer, Chief Operating
                                Officer and Director

Robert M. Brown ....... 50      Senior Vice President-                   1987
                                Administration

Alan M. Fox ........... 50      Senior Vice President-                    --
                                Purchasing, President-Uno
                                Foods Inc.

Thomas W. Gathers ..... 41      Senior Vice President-                    --
                                Human Resources and Training

Damon M. Liever ....... 43      Senior Vice President-                    --
                                Marketing

Paul W. MacPhail....... 34      Senior Vice President-                    --
                                Operations

Robert M. Vincent ..... 45      Senior Vice President-                    --
                                Finance, Chief Financial Officer
                                and Treasurer

       The following is certain additional information concerning each executive
officer of the Company. When used below, unless otherwise noted, positions held
with the Company include positions held with the Company's predecessors.

       Mr. Spencer, the founder of the Company, has been Chairman since 1986 and
previously served as the Company's Chief Executive Officer until September 29,
1996 and as the Company's President until 1986. Mr. Spencer has 32 years of
experience in the restaurant industry and was the founder and owner of the
predecessor of the Company which operated a chain of 24 Kentucky Fried Chicken
franchised restaurants at the time the restaurants were sold.

       Mr. Miller has been President and Chief Operating Officer since 1986. He
was appointed Chief Executive Officer on September 30, 1996. From 1984 to 1986,
he served as a Vice President and then Executive Vice President of the Company.
Prior to joining the Company, Mr. Miller spent 11 years with the General Mills,
Inc. restaurant subsidiary, including four years in various executive capacities
with Casa Gallardo Mexican restaurants and six years with the Red Lobster
restaurant chain. Mr. Miller has a total of 30 years of experience in the
restaurant industry.

       Mr. Brown has been Senior Vice President-Administration since July 1997
and as Senior Vice President-Finance from 1988 to June 1997. Mr. Brown also
served as Chief Financial Officer and Treasurer from 1987 to June 1997. From
1987 to 1988, he served as Vice President-Finance of the Company. From 1984 to
1987, Mr. Brown served as vice president, treasurer and chief financial officer
of the waste management subsidiary of Genstar Corporation, and was employed by
SCA Services, Inc. from 1980 to 1984, most recently as assistant controller. Mr.
Brown is a certified public accountant and has worked in accounting and finance
since 1969.



                                      -13-

<PAGE>   14



       Mr. Fox has been Senior Vice President-Purchasing since October 1990.
Also, since 1990, Mr. Fox has been President of Uno Foods Inc., the Company's
subsidiary responsible for retail pizza distribution. Mr. Fox served as Senior
Vice President- Purchasing and Development from 1989 to 1990, and served as Vice
President of Purchasing from 1988 to 1989. Prior to joining the Company, from
1971 to 1988, Mr. Fox served as Vice President-Purchasing at Worcester Quality
Foods, Inc. a wholesale food service distributor. Mr. Fox has a total of 26
years of experience in the restaurant and food service industries.

       Mr. Gathers has been Senior Vice President-Human Resources and Training
since November 1992. Mr. Gathers served as Vice President-Human Resources and
Training from August 1990 to November 1992. Prior to joining the Company, Mr.
Gathers served in several senior training and development functions with the
General Mills, Inc. restaurant subsidiary from 1981 to 1990. Mr. Gathers has a
total of 21 years of experience in the restaurant industry.

       Mr. Liever has been Senior Vice President-Marketing since January 1994.
From 1993 to 1994, he served as Vice President-Marketing of the Company. Prior
to joining the Company, Mr. Liever served as Vice President-Marketing for the
Black-Eyed Pea restaurant division of Unigate PLC from 1991 to 1993. From 1981
to 1991, Mr. Liever held several senior marketing positions with Pepsico
subsidiaries, including Frito-Lay and Taco Bell. Mr.Liever has a total of 16
years of experience in the restaurant industry.

       Mr. MacPhail has been Senior Vice President-Operations since January
1997. From October 1994 to January 1997, he served as Divisional Vice President
- Operations, and from November 1992 to October 1994, he served as a Regional
Director of Operations. Prior to that, Mr. MacPhail served with the Company as a
General Manager and Senior Operations Manager from 1990 to 1992. Prior to
joining the Company, Mr. MacPhail served for 8 years as a General Manager with
Ground Round, Inc. Mr. MacPhail has a total of 14 years of experience in the
restaurant industry.

       Mr. Vincent has been Senior Vice President-Finance, Chief Financial
Officer and Treasurer since July 1997. Prior to that, he served as Vice
President-Finance and Controller from November 1992 to June 1997. From April
1992 to October 1992, he served as Controller of the Company. Prior to joining
the Company, Mr. Vincent served as Chief Financial Officer and Vice
President-Finance at Omega Corporation from 1988 to 1992, and Vice
President-Finance at Boston Restaurant Associates from 1985 to 1988. From 1976
to 1985 Mr. Vincent worked at Ogden Corporation in a variety of finance
positions. Mr. Vincent has 21 years experience in accounting and finance.

       Officers are elected by, and serve at the pleasure of, the Board of
Directors.

       See also "ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT,"
"ITEM 11. EXECUTIVE COMPENSATION," "ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT," and "ITEM 13. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS."

                                      -14-

<PAGE>   15



ITEM 2.  PROPERTIES

       The Company owns a 30,000 square foot production plant in Brockton,
Massachusetts. The production plant produces frozen product for service aboard
American Airlines flights, at Pizzeria Uno kiosks in General Cinema theaters,
Doubletree Hotels and Sainsbury's Supermarkets, as well as fresh, refrigerated
pizzas that are sold at deli counters in approximately 1,000 supermarkets and
wholesale price club stores throughout New England. This facility provides
sufficient capacity to support double the level of sales achieved in fiscal
1997. See "ITEM 1. Other Business Development."

       As of September 28, 1997, the Company leased 80 and owned 17 of the
locations for its restaurants. Since fiscal 1992, the Company began selectively
purchasing real estate to develop new restaurants where available and when the
expected long-term cost of owning the real estate is less than the cost of
leasing. A list of Company-owned properties is presented in "ITEM 1. Restaurants
Locations." During fiscal 1997, the Company purchased a property in Ellicott
City, MD for which restaurant operations commenced on November 17, 1997. The
Company intends to purchase approximately two additional restaurant properties
in fiscal 1998.

       The leases for Company-owned restaurants typically have initial terms of
20 years with certain renewal options and provide for a base rent plus real
estate taxes, insurance and other expenses, plus additional percentage rents
based on revenues of the restaurant. All of the Company's franchised restaurants
are in space leased from parties unaffiliated with the Company, with the
exception of one franchised restaurant which is subleased from the Company.
Franchised restaurant leases typically have lease terms through the initial term
of the franchise agreements.

       One of the Company-owned restaurants in Boston, Massachusetts is located
on the first floor of a six-story office building owned by Aaron D. Spencer,
Chairman of the Company. Mr. Spencer has leased the entire building to the
Company pursuant to a five-year lease, which ended on March 29, 1997, at a rent
of $162,000 per year. The Company is currently negotiating a renewal of this
lease and continues to pay $162,000 of rent per year on a tenancy at will basis
in the interim. The lease requires that the rent will be increased by 12% of the
cost of any improvements to the building made by Mr. Spencer. The Company is
responsible for all taxes, utilities, insurance, maintenance and repairs. The
lease provided that if Mr. Spencer or the Company terminates the lease, a new
lease between the Company and Mr. Spencer relating only to the restaurant space
of the building would become effective immediately. The new lease would have a
five-year term with two five-year renewal options. Rent under the new lease
would be 6.5% of total restaurant revenues but with a minimum rent, determined
by independent appraisal, equal to the fair market rent at the time the new
lease becomes effective. The Company currently sublets all but the restaurant
space at rents which approximate the $162,000 annual rent that it is obligated
to pay Mr. Spencer. Management believes that the terms of both the existing
lease and the new lease which will become effective upon termination of the
existing lease are comparable to those otherwise available in the real estate
market.

       The Company's executive offices are located in two adjacent buildings in
West Roxbury, Massachusetts. The first, a three-story building owned by Mr.
Spencer, is leased to the Company pursuant to a five-year lease, commencing on
March 30, 1987, with options to renew for two additional five-year periods. Rent
during the initial term of the lease was $30,000 per year. Currently, the second
of the two five-year options has been exercised at a rate of $43,200 per year.
The Company is responsible for all taxes, utilities, insurance, maintenance and
repairs. The adjacent facility, a two-story building owned by Mr. Spencer's
children, is also leased to the Company pursuant to a 15 year term commencing on
February 1, 1990, with options to renew for three additional five-year periods.
Rent during the first five years of the initial term of the lease was $106,800
per year, increasing to $128,160 per year for the next five years, and to
$153,792 for the final five years of the initial term of the lease. The Company
is responsible for all taxes, utilities, insurance, maintenance and repairs.
Rent during any option period will be 120% of the rent for the prior term of the
lease. Management believes that the terms of the leases for the two offices

                                      -15-

<PAGE>   16



are as favorable as otherwise available in the real estate market. With the two
buildings, the executive offices currently consist of approximately 25,000
square feet and house the Company's executive, administrative and clerical
offices.

       The Company also owns a 12,000 square foot warehouse/training facility in
Norwood, Massachusetts. A portion of this facility contains classrooms and is
currently being used for the training and instruction of restaurant management
trainees. The remainder of the building is warehouse space and is currently
being used to store Company records and artifacts used in its restaurant
properties.


ITEM 3.  LEGAL PROCEEDINGS

       The Company agreed to a proposed consent order (the "Agreement") with the
Federal Trade Commission (the "FTC") on October 23, 1996. The Agreement was
announced by the FTC on January 22, 1997 for public comment and became final on
March 22, 1997. The Agreement was based on a complaint by the FTC involving a
print advertisement which ran once and a television commercial which ran for two
weeks. Although the FTC did not allege that the Company intended any deception,
it contended that portions of these advertisements misrepresented that all of
the Company's thin crust pizzas were low fat. The Company disputed the FTC's
interpretation of the commercial, and believed that it had a reasonable basis
for the advertising claims in question. However, rather than contest this matter
further, the Company chose to accept the proposed Agreement, which, among other
things, imposes no fine, orders the Company not to misrepresent the existence or
amount of total fat or any other nutrient or substance in any food product
containing a baked crust, and requires the Company to maintain substantiation
for nutrition claims for its pizza products for five years.

       On January 23, 1997, a class action complaint (the "Complaint") was filed
by Rhonda D'Ambrosio against the Company and certain of its subsidiaries in the
Suffolk Superior Court of the Commonwealth of Massachusetts. The Complaint
alleges that the Company, through its advertisements, made false and misleading
representations about the fat content of the Company's thin crust pizzas. The
plaintiff seeks to have the action maintained as a class action and seeks to
recover unspecified damages allegedly sustained by the plaintiff and the other
members of the class. The class is alleged to include all purchasers of the
Company's "Thinzettas"(R) thin crust pizzas who relied upon, and sustained
damage as a result of, the alleged misrepresentations. The Company intends to
defend vigorously against the Complaint.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

       None.

                                      -16-

<PAGE>   17



                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

       The Company's Common Stock, $.01 par value, is listed on the New York
Stock Exchange under the symbol "UNO." The table below sets forth the range of
high and low sales prices on the New York Stock Exchange for the period from
October 2, 1995 to September 28, 1997:


                                                         COMMON STOCK
                                                            PRICE
                                                      ------------------
                                                       HIGH        LOW
FISCAL YEAR ENDED SEPTEMBER 29, 1996
------------------------------------

First Quarter                                         $8.75      $6.375
Second Quarter                                        $8.125     $5.625
Third Quarter                                         $7.50      $6.50
Fourth Quarter                                        $7.75      $5.625

FISCAL YEAR ENDED SEPTEMBER 28, 1997
------------------------------------

First Quarter                                         $7.875     $6.375
Second Quarter                                        $7.375     $6.375
Third Quarter                                         $7.25      $5.875
Fourth Quarter                                        $7.25      $5.8125

NUMBER OF STOCKHOLDERS

       As of September 28, 1997, there were approximately 2,500 beneficial
owners of the Company's Common Stock.

DIVIDENDS

       The Company has never paid any cash dividends on its Common Stock and for
the foreseeable future intends to continue its policy of retaining earnings to
finance the development and growth of the Company. The Board of Directors may
reconsider this policy from time to time in light of conditions then existing,
including the Company's earnings performance, financial condition and capital
requirements. Pursuant to the Company's $55 million revolving credit and term
loan agreement entered into in November 1997, the Company is subject to various
financial and operating covenants, including limitations on the payment of cash
dividends. The most restrictive limitations, in general, preclude the Company
from paying cash dividends, if such payment, when aggregated with certain other
payments, would exceed 35% of net income for the then most recent four quarter
period or would cause certain net tangible asset and debt ratios to be exceeded.



                                      -17-

<PAGE>   18



ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                              Fiscal Year Ended
                                                                (Amounts in thousands, except per share data)
                                                        --------------------------------------------------------------
                                                        Sept. 28      Sept. 29       Oct. 1      Oct. 2        Oct. 3
                                                          1997          1996          1995        1994          1993
                                                        --------      --------      --------    --------       -------
                                                                                                              (53 wks)

<S>                                                     <C>           <C>           <C>         <C>            <C>    
INCOME STATEMENT DATA:

REVENUES
 Restaurant sales....................................   $164,389      $159,581      $146,100    $112,674       $98,234
 Consumer product sales..............................      9,115         8,351         8,477       7,418         7,073
 Franchise income....................................      4,516         4,209         4,129       3,973         3,638
                                                        --------      --------      --------    --------       -------
                                                         178,020       172,141       158,706     124,065       108,945
                                                        --------      --------      --------    --------       -------

COSTS AND EXPENSES
 Cost of food and beverages..........................     43,994        44,064        39,420      30,177        26,024
 Labor and benefits..................................     54,183        51,868        47,377      36,935        32,990
 Occupancy costs.....................................     27,045        26,339        22,925      18,979        17,295
 Other operating costs...............................     16,067        15,890        13,583      10,751         9,166
 General and administrative..........................     13,384        12,155        11,229       9,277         8,233
 Depreciation and amortization.......................     12,469        12,964        10,795       7,655         7,152
 Special charges.....................................      4,000         3,937
                                                        --------      --------      --------    --------       -------
                                                         171,142       167,217       145,329     113,774       100,860
                                                        --------      --------      --------    --------       -------

OPERATING INCOME.....................................      6,878         4,924        13,377      10,291         8,085

INTEREST AND OTHER EXPENSE...........................      2,827         2,481         1,944         845         1,085
                                                        --------      --------      --------    --------       -------

INCOME BEFORE INCOME TAXES...........................      4,051         2,443        11,433       9,446         7,000
 Provision for income taxes..........................      1,378           757         4,230       3,690         2,837
                                                        --------      --------      --------    --------       -------

NET INCOME...........................................   $  2,673      $  1,686     $   7,203    $  5,756      $  4,163
                                                        ========      ========      ========    ========       =======

EARNINGS PER COMMON SHARE............................   $   0.22      $   0.13     $    0.58   $    0.51      $   0.37
                                                        ========      ========      ========    ========       =======

WEIGHTED-AVERAGE SHARES OUTSTANDING                       12,008        12,756        12,364      11,360        11,291
                                                        ========      ========      ========    ========       =======

BALANCE SHEET DATA:

Total assets.........................................   $143,732      $135,065      $125,260     $92,153       $74,735
Long-term debt, net of current portion...............     42,516        37,085        21,750      17,703         8,167
Capital lease obligations, net of current portion....        867         1,056           749         820           472
Treasury stock.......................................     19,877        10,653         2,900
Total shareholders' equity...........................     70,880        77,136        83,127      55,958        49,375



OPERATING DATA:

SYSTEM-WIDE SALES(a)
 Company-owned.......................................   $160,045      $151,178      $136,659    $110,272       $96,540
 Franchised..........................................    101,512        94,718        91,670      87,646        82,590
                                                        --------      --------      --------    --------       -------

TOTAL................................................   $261,557      $245,896      $228,329    $197,918      $179,130
                                                        ========      ========      ========    ========       =======
</TABLE>


                                      -18-

<PAGE>   19



<TABLE>
<CAPTION>
                                                                              Fiscal Year Ended
                                                                (Amounts in thousands, except per share data)
                                                        --------------------------------------------------------------
                                                        Sept. 28      Sept. 29       Oct. 1      Oct. 2        Oct. 3
                                                          1997          1996          1995        1994          1993
                                                        --------      --------      --------    --------       -------
                                                                                                              (53 wks)

<S>                                                      <C>           <C>           <C>         <C>           <C>    
AVERAGE RESTAURANT SALES(b)
 Company-owned.......................................    $1,818        $1,846        $1,925      $1,886        $1,807
 Franchised..........................................     1,579         1,549         1,552       1,488         1,387


NUMBER OF RESTAURANTS
Company-owned(c).....................................        97            92            87          66            57
Franchised(d)........................................        69            67            61          61            58
                                                         ------        ------        ------      ------        ------

TOTAL AT YEAR END....................................       166           159           148         127           115
                                                         ======        ======        ======      ======        ======
</TABLE>


--------------------
(a) Pizzeria Uno full-service restaurants.
(b) Pizzeria Uno full-service restaurants, annualized.
(c) Includes one Mexican restaurant four quick-service Uno units in 1997 ; one
    Mexican restaurant, two Bay Street Grill restaurants and three quick-service
    Uno units in 1996; one Mexican restaurant, three Bay Street Grill 
    restaurants and four quick-service Uno units in 1995; one Mexican restaurant
    and two quick-service Uno units in 1994; one Mexican restaurant and one 
    quick-service Uno unit in 1993.
(d) Includes three quick-service Uno units in 1997; four quick-service Uno units
    in 1996; two quick-service units in 1995 and 1994.


                                      -19-

<PAGE>   20



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The following table sets forth the percentage relationship to total
revenues, unless otherwise indicated, of certain items included in the Company's
income statements and operating data for the periods indicated:

<TABLE>
<CAPTION>
                                                         52 Weeks            52 Weeks            52 Weeks
                                                          Ended               Ended               Ended
                                                         9/28/97             9/29/96             10/1/95
                                                         --------            --------            --------
<S>                                                       <C>                 <C>                 <C>  
REVENUES:
 Restaurant sales.................................         92.4%               92.7%               92.1%
 Consumer product sales...........................          5.1                 4.9                 5.3
 Franchise income ................................          2.5                 2.4                 2.6
                                                          -----               -----               -----
  Total ..........................................        100.0               100.0               100.0


COSTS AND EXPENSES:
 Cost of food and beverages (1) ..................         25.4                26.2                25.5
 Labor and benefits (1) ..........................         31.2                30.9                30.6
 Occupancy costs (1) .............................         15.6                15.7                14.8
 Other operating costs (1) .......................          9.3                 9.5                 8.8
 General and administrative ......................          7.5                 7.1                 7.1
 Depreciation and amortization(1).................          7.2                 7.7                 7.0
 Special charges (1) .............................          2.3                 2.3

OPERATING INCOME..................................          3.9                 2.9                 8.4

INTEREST AND OTHER EXPENSE .......................         (1.6)               (1.5)               (1.2)
                                                          -----               -----               -----

INCOME BEFORE INCOME TAXES........................          2.3                 1.4                 7.2
Provision for income taxes .......................           .8                  .4                 2.7
                                                          -----               -----               -----
NET INCOME .......................................          1.5%                1.0%                4.5%
                                                          =====               =====               =====
</TABLE>

(1) Percentage of restaurant and consumer product sales


FISCAL YEAR 1997 COMPARED TO FISCAL YEAR 1996

         Total revenues increased 3.4% to $178.0 million in fiscal 1997 from
$172.1 million in the prior year. Company-owned restaurant sales increased 3.0%
to $164.4 million from $159.6 million in the prior year, due primarily to a 7.5%
increase in operating weeks of full-service Pizzeria Uno restaurants resulting
from the addition of seven restaurants during the past four quarters. Comparable
store sales for the 52 weeks ended September 28, 1997 declined by 1.7%, while
average weekly sales, which includes sales at comparable stores as well as new
units, were 1.5% below last year. Sales levels for the Company's new prototype
units were 5% above the Company system average for the year.

         Consumer product sales increased 9.2% to $9.1 million from $8.4 million
in fiscal 1996. Sales in the foodservice category have increased significantly
as sales to American Airlines increased approximately 37% during fiscal 1997.
Also the addition of new business due to the expansion of the Doubletree Hotels
and General Cinema programs has contributed to the growth in the foodservice
category. There was a decline in sales volumes for existing customers in the
fresh refrigerated and wholesale club categories of the business. During the
fourth quarter the Company began shipments to an international supermarket
chain, Sainsbury's Supermarket PLC, and continues to test several branded and
private label products with other

                                      -20-

<PAGE>   21



supermarket and foodservice providers.  See "Item 1 Business - General and
Developments During Fiscal Year 1997" and "- Other Business Developments."

         Franchise income increased 7.3% to $4.5 million in fiscal 1997 from
$4.2 million the prior year. Royalty income increased 7.1% in fiscal 1997, as
average weekly sales increased by 2.3%. Operating weeks increased by 5.6%, as
six new full-service restaurants opened and three full-service units closed in
fiscal 1997. Sales volumes for the six new franchised restaurants opened in
fiscal 1997 annualized at approximately $2.1 million. Initial franchise fees
totaled $182,500 for fiscal 1997 compared to $162,500 in fiscal 1996.

         During the third quarter of fiscal 1997, the Company recorded special
charges in the amount of $4.0 million, consisting of an asset impairment charge
of $3.3 million and store closing costs of $0.7 million. The $3.3 million asset
impairment charge was recorded to reduce the carrying value of equipment and
leaseholds at two full-service Pizzeria Uno restaurants to their fair market
value and resulted from weak operating results and continuing negative cash
flow. The store closure costs represent remaining minimum lease payments of one
full-service Pizzeria Uno restaurant which was closed during fiscal 1997. In
fiscal 1996, the Company recorded an asset impairment charge of $3.9 million to
adjust the carrying value of those assets identified as impaired. The charge
consisted of $1.0 million for three Uno Pizza Takery's, $1.6 million for one
full-service Uno restaurant and $1.3 million for certain assets of three Bay
Street Grill restaurants. The assets written down include the Bay Street
trademark and leasehold improvements and equipment of the aforementioned stores.

         Operating income, was $6.9 million which represents an operating margin
of 3.9% for fiscal year 1997. For fiscal year 1996, operating income was $4.9
million which represents an operating margin of 2.9%. Operating income,
exclusive of the special charges, was $10.9 million which represents an
operating margin of 6.1% for fiscal year 1997. Fiscal year 1996 operating
income, exclusive of the $3.9 million asset impairment charge, was $8.9 million,
which represents an operating margin of 5.1%. The improvement in operating
income and operating margin in fiscal 1997 was due to lower cost of sales, a
reduction in advertising spending and lower pre-opening amortization.

         Cost of food and beverages as a percentage of restaurant and consumer
product sales decreased to 25.4% for fiscal 1997 from 26.2% the prior year. This
decline primarily reflects lower cheese costs and overall lower commodity prices
on key product ingredients. Partially offsetting these decreases were changes in
menu products, promotions and pricing intended to enhance customers' value
perception.

         Labor and benefits as a percentage of restaurant and consumer product
sales increased slightly to 31.2% for fiscal 1997 from 30.9% the prior year,
principally due to an increase in the average hourly wage rate and increasing
salaries for entry level managers. The increase in the average hourly wage rate,
due primarily to the increase in the federal minimum wage increase, was
partially offset by productivity gains in restaurant operations.

         Occupancy costs as a percentage of restaurant and consumer product
sales decreased to 15.6% for fiscal 1997 from 15.7% the prior year due to
slightly lower real estate taxes and a reduction in repair & maintenance
expense.

         Other operating costs decreased as a percentage of restaurant and
consumer product sales to 9.3% for fiscal 1997 from 9.5% the prior year,
primarily due to lower advertising expenditures.

         General and administrative expenses as a percentage of total revenues
for fiscal year 1997 increased to 7.5% from 7.1% in fiscal 1996. This increase
was due to higher

                                      -21-

<PAGE>   22



legal expense related to the resolution of several legal matters (none of which
were material), and higher salary and benefit expense relating to increased
staffing in the franchise and operations areas.

         Depreciation and amortization expense as a percentage of restaurant and
consumer product sales decreased to 7.2% for fiscal 1997 from 7.7% the prior
year, due to lower pre-opening amortization.

         Other expense increased to $2.8 million or 1.6% as a percentage of
total revenues in fiscal 1997 from $2.5 million or 1.5% of total revenues in the
prior year. This increase was principally due to higher interest expense
associated with the increased level of debt due to the Company's ownership of an
increasing number of restaurant properties and the repurchase of 1.2 million
shares under the "Dutch Auction" tender offer.

         The effective income tax rate increased to 34% for fiscal 1997 from 31%
in fiscal 1996, primarily due to the impact of tax credits, which remained
consistent from fiscal 1996, being applied against a higher pre-tax income.

FISCAL YEAR 1996 COMPARED TO FISCAL YEAR 1995

         Total revenues increased 8% to $172.1 million in fiscal 1996 from
$158.7 million in the prior year. Company-owned restaurant sales increased 9.2%
to $159.6 million due primarily to a 15.4% increase in operating weeks of
full-service Pizzeria Uno restaurants resulting from the addition of seven
restaurants during fiscal 1995. Comparable store sales for the 52 weeks ended
September 29, 1996, declined by 1.3%, while average weekly sales, which includes
sales at comparable stores as well as new units, were 4.1% below last year.

         Consumer product sales declined slightly to $8.4 million in fiscal 1996
from $8.5 million in fiscal 1995. Sales to American Airlines declined by
approximately 25% during fiscal 1996, which the company believes was due to a
reduction of the number of flights on which food service was offered. This sales
decline was mostly offset by new business within the frozen products and
contract food service categories, and modest growth in sales volumes for
existing customers in the fresh refrigerated segment.

         Franchise income increased 1.9% to $4.2 million in fiscal 1996 from
$4.1 million the prior year. Royalty income increased 1% in fiscal 1996, as
average weekly sales increased by .2% and operating weeks increased by 3.4%,
resulting from five new full-service restaurants opened during fiscal 1995.
Initial franchise fees totaled $162,500 for fiscal 1996 compared to $125,000 in
fiscal 1995.

         The Company's operating income of $4.9 million includes special charges
for asset impairment of $3.9 million in connection with the adoption of SFAS 121
during the second fiscal quarter in 1996. The Company recorded this write-down
for three Uno Pizza Takery's, one full-service Pizzeria Uno unit and a partial
write-down of its investment in three Bay Street Grill units, the Company's
seafood test concept. The write-down represents non-cash adjustments made to
reduce assets to net realizable value for each of these restaurants.

         Operating income, exclusive of the asset impairment charge, was $8.9
million which represents an operating margin of 5.3% for fiscal year 1996.
Fiscal year 1995 operating income was $13.4 million, which represents an
operating margin of 8.4%. The decline in operating income and operating margin
in fiscal 1996, is due to lower sales levels at comparable stores and new units,
as well as the cost factors mentioned below.


                                      -22-

<PAGE>   23



         Cost of food and beverages as a percentage of restaurant and consumer
product sales increased to 26.2% for fiscal 1996 from 25.5% the prior year. This
percentage cost increase primarily reflects substantially higher cheese costs,
but also reflects changes in menu products and menu pricing intended to enhance
customers' value perception.

         Labor and benefits as a percentage of restaurant and consumer product
sales increased slightly to 30.9% for fiscal 1996 from 30.6% the prior year,
principally due to additional training costs associated with the introduction of
a revised menu during the first half of fiscal 1996. Labor costs as a percentage
of restaurant and consumer product sales for the last six months of fiscal 1996
were virtually flat compared to the last half of fiscal 1995.

         Occupancy costs as a percentage of restaurant and consumer product
sales increased to 15.7% for fiscal 1996 from 14.8% the prior year, primarily
due to lower sales levels at comparable stores and new units.

         Other operating costs increased as a percentage of restaurant and
consumer product sales to 9.5% for fiscal 1996 from 8.8% the prior year, due to
higher advertising expenditures and the effect of lower sales levels at
comparable stores and new units.

         General and administrative expenses as a percentage of total revenues
for fiscal 1996 remained unchanged from fiscal 1995 at 7.1%.

         Depreciation and amortization expense as a percentage of restaurant and
consumer product sales increased to 7.7% for fiscal 1996 from 7% the prior year,
due to increased capital expenditures for facility renovations and the effect of
lower sales levels at comparable stores and new units.

         Other expense increased to $2.5 million or 1.5% as a percentage of
total revenues in fiscal 1996 from $1.9 million or 1.2% of total revenues in the
prior year. This increase was principally due to higher interest expense
associated with the increased level of debt used to repurchase approximately 1.1
million shares of the Company's common stock, and its ownership of an increasing
number of restaurant properties.

         The effective income tax rate declined to 31% for fiscal 1996 from 37%
in fiscal 1995, primarily due to the impact of tax credits, which remained
consistent from fiscal 1995, being applied against a lower pre-tax income.




                                      -23-

<PAGE>   24



LIQUIDITY AND SOURCES OF CAPITAL

         The following table (000's omitted) presents a summary of the Company's
cash flows for fiscal 1997.


Net cash provided by operating activities.......       $ 20,073
Net cash used in investing activities...........        (19,682)
Net cash provided by financing activities.......           (733)
                                                       --------
Decrease in cash ...............................       $   (342)
                                                       ========

         Historically, the Company has leased most of its restaurant locations
and pursued a strategy of controlled growth, financing its expansion principally
from operating cash flow, equity offerings and from the issuance of senior,
unsecured notes and short-term borrowing under revolving lines of credit. During
fiscal 1997, the Company's investment in property, equipment and leasehold
improvements was $20.0 million.

         The Company opened seven restaurants during fiscal 1997 and currently
plans to open up to six restaurants in fiscal 1998. The Company expects that the
average cash investment required to open a full-service Pizzeria Uno restaurant,
excluding land and pre-opening costs, will be approximately $1.6 million.

         As of September 28, 1997, the Company had outstanding indebtedness of
$40.5 million under its $50 million unsecured revolving credit facility (the
"$50 million revolver"), $5.1 million under its MetLife Capital mortgage
program, and $1.1 million in capital lease obligations. The Company recently
entered into a $55 million credit facility ( the "$55 million facility") to
replace the $50 million revolver. The $55 million facility consists of three
components, a $26.6 million unsecured revolver, a $20 million secured mortgage
facility and a $8.4 million loan. The $26.6 million unsecured revolver is due in
October 2002. The $20 million secured mortgage facility is due in 27 quarterly
installments of $500,0000 plus interest commencing on January 31, 1998 with a
final installment of the outstanding principal plus interest due in October
2004. The $8.4 million term loan is due in 20 quarterly installments of $420,000
plus interest commencing on January 31, 1998. Amounts borrowed under the $55
million facility accrue interest at variable rates based on, at the election of
the Company, either the LIBOR plus 100-175 basis points or prime plus 0-50 basis
points. The Company anticipates using the unsecured revolver of the $55 million
facility for the development of additional restaurants and for working capital
needs. The Company used the proceeds of the $20 million secured mortgage
facility component to refinance certain owned properties and used the $8.4
million term loan component to finance the "Dutch Auction" tender offer
completed in the fourth quarter of fiscal 1997.

         In December 1996, the Company entered into a 15 year mortgage loan
agreement with MetLife Capital Financial Corporation in the original aggregate
principal amount of $5.1 million. The loan agreement is secured by mortgages on
five Company owned full-service properties in Orlando, FL, Amherst, NY, Paoli,
PA, Williamsburg, VA and Columbus, OH. The loan has a fixed annual interest rate
of 8.75% and requires monthly payments of principal and interest.

         In October 1995, the Company entered into a five year interest rate
swap agreement involving the exchange of floating rate interest payment
obligations for fixed rate interest payment obligations. The notional amount of
this interest rate swap agreement was $20 million. The Company entered into this
agreement in order to manage interest costs and risks associated with
fluctuating interest rates.

                                      -24-

<PAGE>   25




         In June 1997, the Board of Directors of the Company authorized the
repurchase of 1.0 million shares of the Company's Common Stock though a "Dutch
Auction" tender offer. The terms of the tender offer provided that the Company
would purchase up to 1,000,000 shares (subject to increase under certain
circumstances) of its Common Stock at prices, not in excess of $7.50 nor less
then $6.00 per share, specified by tendering stockholders. The Company would
than select the lowest purchase price that would allow it to purchase the
1,000,000 shares. On July 31, 1997 the Company announced that it had repurchased
1,207,624 shares at a price of $7.00 per share. The total number of shares
purchased represented approximately 10% of the shares outstanding at the time.

         The Company believes that existing cash balances, cash generated from
operations and borrowing under its $55 million facility will be sufficient to
satisfy the Company's working capital and capital expenditure requirements for
the foreseeable future.

IMPACT OF INFLATION

         Inflation has not been a major factor in the Company's business for the
last several years. The Company believes it has historically been able to pass
on increased costs through menu price increases, but there can be no assurance
that it will be able to do so in the future. Future increases in local area
construction costs could adversely affect the Company's ability to expand.

SEASONALITY

         The Company's business is seasonal in nature, with revenues and, to a
greater degree, operating income being lower in its first and second quarters
than its other quarters due to reduced winter volumes.

FORWARD-LOOKING INFORMATION

         Certain information in this Annual Report on Form 10-K including, but
not limited to, statements found in this "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations," may be
forward-looking statements. Actual results might differ materially from those
projected in such forward-looking statements. Among the factors that could cause
actual results to differ materially are: the Company's ability to open new
restaurants and operate new and existing restaurants profitably, which will
depend upon a number of factors including the availability of suitable sites,
the negotiation of acceptable lease or purchase terms, the securing of required
governmental permits and approvals, the hiring, training and retaining of
skilled management, and the availability of adequate financing; changes in
local, regional and national economic conditions, especially economic conditions
in the areas in which the Company's restaurants are concentrated; increasingly
intense competition in the restaurant industry; changes in consumer tastes and
eating habits; increases in food, labor, employee benefits and similar costs;
and other risks detailed from time to time in the Company's periodic earnings
releases and reports filed with the Securities and Exchange Commission and the
more detailed factors discussed in the Company's Registration Statement on Form
S-2 (Reg. No. 33-59193).



                                      -25-

<PAGE>   26



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

         Not Applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The financial statements and supplementary data are listed under Part
IV, Item 14 in this Report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL DISCLOSURE

         None.



                                      -26-

<PAGE>   27



                                    PART III



ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The information required by this Item 10 is hereby incorporated by
reference to the text appearing under Part I, Item 1 - Business, under the
caption "Executive Officers of the Registrant" at page 13 of this Report, and by
reference to the Company's definitive Proxy Statement which is expected to be
filed by the Company within 120 days after the close of its fiscal year.


ITEM 11.  EXECUTIVE COMPENSATION

         The information required by this Item 11 is hereby incorporated by
reference to the Company's definitive Proxy Statement which is expected to be
filed by the Company within 120 days after the close of its fiscal year.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by this Item 12 is hereby incorporated by
reference to the Company's definitive Proxy Statement which is expected to be
filed by the Company within 120 days after the close of its fiscal year.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by this Item 13 is hereby incorporated by
reference to the Company's definitive Proxy Statement which is expected to be
filed by the Company within 120 days after the close of its fiscal year.






                                      -27-

<PAGE>   28



                                     PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1.  INDEX TO FINANCIAL STATEMENTS
                                                                   Page
                                                                   ----

       Report of Independent Auditors ...........................   33
       Consolidated Balance Sheets -- September 28, 1997 and
        September 29, 1996 ......................................   34
       Consolidated Statements of Income -- Years ended
        September 28, 1997, September 29, 1996, and
        October 1, 1995 .........................................   35
       Consolidated Statements of Shareholders' Equity --
        Years ended September 28, 1997, September 29, 1996, and
        October 1, 1995 .........................................   36
       Consolidated Statements of Cash Flows -- Years ended
        September 28, 1997, September 29, 1996, and
        October 1, 1995 .........................................   37
       Notes to Consolidated Financial Statements ...............   38

    2.  FINANCIAL STATEMENT SCHEDULES

        All schedules for which provision is made in the applicable accounting
      regulations of the Securities and Exchange Commission are not required
      under the related instructions or are inapplicable and, therefore, have
      been omitted.

    3.  EXHIBITS

      (3)      ARTICLES OF INCORPORATION AND BY-LAWS.

      (a)      Restated Certificate of Incorporation, as amended, filed as
               Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for
               the fiscal quarter ended April 2, 1995 (the "April 2, 1995 Form
               10-Q").*

      (b)      By-laws filed as Exhibit 3.2 to the April 2, 1995 Form 10-Q.*

      (4)      INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
               INDENTURES.

      (a)      Specimen Certificate of Common Stock filed as Exhibit 4(a) to the
               Company's Annual Report on Form 10-K for the fiscal year ended
               September 29, 1991 (the "1991 Annual Report on Form 10-K").*

      (10)     MATERIAL CONTRACTS.

      (a)      Lease between the Company and Aaron D. Spencer dated March 30,
               1987 for premises in West Roxbury, Massachusetts, filed as
               Exhibit 10.2 to the Registration Statement on Form S-1
               (Registration No.33-13100)(the "1987 Registration Statement").*

      (b)      Lease between the Company and Aaron D. Spencer dated March 30,
               1987 for premises in Boston, Massachusetts, filed as Exhibit 10.3
               to the 1987 Registration Statement.*



                                      -28-

<PAGE>   29



      (c)      Lease between Uno Restaurants, Inc. and Lisa S. Cohen and Mark N.
               Spencer dated February 1, 1990 for premises in West Roxbury,
               Massachusetts, filed as Exhibit 10(d) to the Company's Annual
               Report on Form 10-K for the fiscal year ended September 30, 1990
               (the "1990 Annual Report on Form 10- K").*

      (d)      Form of Franchise Agreement and Area Franchise Agreement, filed
               as Exhibit 10(d) to the Company's Annual Report on Form 10-K for
               the fiscal year ended September 29, 1996 (the "1996 Annual Report
               on Form 10-K").*

      (e)      Uno Restaurant Corporation 1987 Employee Stock Option Plan, as
               amended, filed as Exhibit A to the Company's Proxy Statement for
               the Annual Meeting of Stockholders held on February 22, 1994.* **

      (f)      Uno Restaurant Corporation 1989 Non-Qualified Stock Option Plan
               for Non- Employee Directors, filed as Exhibit A to the Company's
               Proxy Statement for the Annual Meeting of Stockholders held on
               February 8, 1995.* **

      (g)      Uno Restaurant Corporation 1993 Non-Qualified Stock Option Plan
               for Non- Employee Directors, as amended. **

      (h)      Uno Restaurant Corporation 1997 Employee Stock Option Plan, filed
               as Exhibit A to the Company's Proxy Statement for the Annual
               Meeting of Stockholders held on February 26, 1997.* **

      (i)      Form of Indemnification Agreement between the Company and its
               Directors filed as Exhibit 10.6 to the 1987 Registration
               Statement.* **

      (j)      Variable Royalty Plan for Franchises, filed as Exhibit 10(l) to
               the 1991 Annual Report on Form 10-K.*

      (k)      Interest Rate Swap Agreement between Fleet Bank of Massachusetts,
               N.A. and Uno Restaurants, Inc. Dated October 25, 1995, filed as
               Exhibit 10(k) to the 1995 Annual Report on Form 10-K.*

      (l)      Note between the Company and Craig S. Miller dated January 23,
               1996, filed as Exhibit 10(l) to the 1996 Annual Report on Form
               10-K * **

      (m)      Form of Change in Control Protection Agreements between Uno
               Restaurant Corporation and Mr. Spencer and Mr. Miller. **

      (n)      Form of Change in Control Protection Agreements between Uno
               Restaurant Corporation and its Senior Vice Presidents. **

      (o)      Form of Change in Control Protection Agreements between Uno
               Restaurant Corporation and its other officers. **

      (p)      Master Lease-Purchase Agreement between ORIX Credit Alliance,
               Inc., as Lessor, and Massachusetts Industrial Finance Agency, as
               Lessee, dated April 19, 1994, and Master Sublease-Purchase
               Agreement between Massachusetts Industrial Finance Agency, as
               Sublessor, and Uno Foods Inc. as Sublessee, dated April 19, 1994
               filed as Exhibit 10(s) to the 1994 Annual Report on Form 10-K.*







                                      -29-

<PAGE>   30



      (q)      MetLife Capital Financial Corporation Mortgage Notes: $1,875,000
               8.75% Note dated December 23, 1996 of 8250 International Drive
               Corporation, $825,000 8.75% Note dated December 23, 1996 of Saxet
               Corporation, $900,000 8.75% Note dated December 23, 1996 of Saxet
               Corporation, $675,000 8.75% Note dated January 30, 1997 of Saxet
               Corporation, $825,000 8.75% Note dated February 27, 1997 of Saxet
               Corporation, each payable to the order of MetLife Capital
               Financial Corporation.

      (r)      Note between the Company and Craig S. Miller dated April 1, 1997.
               **

      (s)      $55,000,000 Revolving Credit and Term Loan Agreement dated as of
               November 4, 1997 by and among Uno Restaurants, Inc. and Saxet
               Corp., as Borrower, Uno Foods Inc., Pizzeria Uno Corporation, URC
               Holding Company, Inc. and Uno Restaurant Corporation, as
               Guarantors, and Fleet National Bank, as Agent and BankBoston,
               N.A. as Co-Agent (without exhibits).

      (11)     Statement Re: Computation of Per Share Earnings.

      (21)     Subsidiaries of the Registrant.

      (23)     Consent of Ernst & Young LLP, Independent Auditors.

      (27)     Financial Data Schedule.

------------------------
*  In accordance with Rule 12b-23 and Rule 12b-32 under the Securities Exchange
   Act of 1934, as amended, reference is made to the documents previously filed
   with the Securities and Exchange Commission, which documents are hereby
   incorporated by reference.
** Management Contract

                                      -30-

<PAGE>   31



(b)  REPORTS ON FORM 8-K

        During the fiscal year ended September 28, 1997, the Company filed a
        Current Report on Form 8-K dated July 3, 1997 reporting under "Item 5.
        Other Events" a $4.0 million pre-tax charge for the fiscal quarter ended
        June 29, 1997.


                                      -31-

<PAGE>   32



                                   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.

(Registrant)      Uno Restaurant Corporation
             -------------------------------------

By (Signature and Title)             /s/ Robert M. Vincent
                                     -------------------------------------------
                                     Robert M. Vincent, Senior Vice President
Date  December 19, 1997
      -----------------

         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 date indicated.

By (Signature and Title)             /s/ Aaron D. Spencer
                                     -------------------------------------------
                                     Aaron D. Spencer,
                                     Chairman and Director
Date  December 19, 1997
      -----------------

By (Signature and Title)             /s/ Craig S. Miller
                                     -------------------------------------------
                                     Craig S. Miller,
                                     President, Chief Executive Officer, Chief
                                     Operating Officer and Director
                                     (Principal Executive Officer)
Date  December 19, 1997
      -----------------

By (Signature and Title)             /s/ Robert M. Vincent
                                     -------------------------------------------
                                     Robert M. Vincent,
                                     Senior Vice President-Finance, Chief
                                     Financial Officer and Treasurer
                                     (Principal Financial Officer)
Date  December 19, 1997
      -----------------

By (Signature and Title)             /s/ Robert M. Brown
                                     -------------------------------------------
                                     Robert M. Brown,
                                     Senior Vice President-Administration
                                     and Director
Date  December 19, 1997
      -----------------

By (Signature and Title)             /s/ John T. Gerlach
                                     -------------------------------------------
                                     John T. Gerlach, Director
Date  December 19, 1997
      -----------------

By (Signature and Title)             /s/ S. James Coppersmith
                                     -------------------------------------------
                                     S. James Coppersmith, Director
Date  December 19, 1997
      -----------------

By (Signature and Title)             /s/ Stephen J. Sweeney
                                     -------------------------------------------
                                     Stephen J. Sweeney, Director
Date  December 19, 1997
      -----------------

By (Signature and Title)             /s/ James F. Carlin
                                     -------------------------------------------
                                     James F. Carlin, Director
Date  December 19, 1997
      -----------------


                                      -32-

<PAGE>   33



                         Report of Independent Auditors


The Board of Directors
Uno Restaurant Corporation


We have audited the accompanying consolidated balance sheets of Uno Restaurant
Corporation and subsidiaries (the Company) as of September 28, 1997 and
September 29, 1996, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended September 28, 1997. 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 audit 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 Uno Restaurant
Corporation and subsidiaries at September 28, 1997 and September 29, 1996, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended September 28, 1997, in conformity with
generally accepted accounting principles.

As discussed in Note 2 to the consolidated financial statements, in fiscal year
1996, the Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of."
                                                              Ernst & Young LLP


Boston, Massachusetts
November 4, 1997



                                       33

<PAGE>   34


                   Uno Restaurant Corporation and Subsidiaries

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                      SEPTEMBER 28 1997        SEPTEMBER 29 1996
                                                                      ------------------------------------------
                                                                                    (In thousands)
<S>                                                                   <C>                      <C>
ASSETS
Current assets:
   Cash                                                                    $  1,486                 $  1,828
   Royalties receivable                                                         728                      710
   Consumer products receivable                                                 844                      322
   Inventory                                                                  2,326                    2,333
   Deferred pre-opening costs                                                   949                      470
   Prepaid expenses and other assets                                          1,959                    2,387
                                                                      ------------------------------------------

Total current assets                                                          8,292                    8,050

Property, equipment and leasehold improvements, net                         125,357                  120,510

Deferred income taxes                                                         6,599                    3,613


Liquor licenses and other assets                                              3,484                    2,892
                                                                      ------------------------------------------

                                                                           $143,732                 $135,065
                                                                      ==========================================


                                                                      SEPTEMBER 28 1997        SEPTEMBER 29 1996
                                                                      ------------------------------------------
                                                                      (Dollar amounts in thousands, except share
                                                                                         data)
LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities:
   Accounts payable                                                        $  6,966                 $  6,009
   Accrued expenses                                                           7,563                    5,033
   Accrued compensation and taxes                                             2,641                    2,187
   Income taxes payable                                                       2,076                    1,581
   Current portions of long-term debt and capital lease
     obligations                                                              3,132                      178
                                                                      ------------------------------------------
Total current liabilities                                                    22,378                   14,988

Long-term debt, net of current portion                                       42,516                   37,085
Capital lease obligations, net of current portion                               867                    1,056
Other liabilities                                                             7,091                    4,800

Commitments and contingencies


Shareholders' equity:
   Preferred Stock, $1.00 par value, 1,000,000 shares authorized,
     no shares issued or outstanding
   Common Stock, $.01 par value, 25,000,000 shares authorized,
     13,754,480 shares in 1997 and 13,697,526 shares in 1996 issued             138                      137

   Additional paid-in capital                                                53,803                   53,509
   Retained earnings                                                         36,816                   34,143
                                                                      ------------------------------------------
                                                                             90,757                   87,789
   Treasury Stock (2,790,597 shares in 1997 and
     1,500,000 shares in 1996, at cost)                                     (19,877)                 (10,653)
                                                                      ------------------------------------------
Total shareholders' equity                                                   70,880                   77,136
                                                                      ------------------------------------------

                                                                           $143,732                 $135,065
                                                                      ==========================================
</TABLE>

See accompanying notes.




                                       34

<PAGE>   35


                   Uno Restaurant Corporation and Subsidiaries

                        Consolidated Statements of Income



<TABLE>
<CAPTION>
                                                                            YEAR ENDED
                                                         ----------------------------------------------
                                                         SEPTEMBER 28      SEPTEMBER 29      OCTOBER 1
                                                             1997              1996             1995
                                                         ----------------------------------------------
                                                                  (Amounts in thousands, except
                                                                         per share data)
<S>                                                      <C>               <C>               <C>
Revenues:
   Restaurant sales                                        $164,389          $159,581          $146,100
   Consumer product sales                                     9,115             8,351             8,477
   Franchise income                                           4,516             4,209             4,129
                                                         ----------------------------------------------
                                                            178,020           172,141           158,706

Costs and expenses:
   Cost of food and beverages                                43,994            44,064            39,420
   Labor and benefits                                        54,183            51,868            47,377
   Occupancy costs                                           27,045            26,339            22,925
   Other operating costs                                     16,067            15,890            13,583
   General and administrative                                13,384            12,155            11,229
   Depreciation and amortization                             12,469            12,964            10,795
   Special charges                                            4,000             3,937
                                                         ----------------------------------------------
                                                            171,142           167,217           145,329
                                                         ----------------------------------------------
Operating income                                              6,878             4,924            13,377

Other expense:
   Interest expense                                           2,695             2,358             1,924
   Other expense                                                132               123                20
                                                         ----------------------------------------------
                                                              2,827             2,481             1,944
                                                         ----------------------------------------------
Income before income taxes                                    4,051             2,443            11,433

Provision for income taxes                                    1,378               757             4,230
                                                         ----------------------------------------------

Net income                                                 $  2,673          $  1,686          $  7,203
                                                         ==============================================

Earnings per common share                                  $    .22          $    .13          $    .58
                                                         ==============================================

Weighted-average number of common shares                     12,008            12,756            12,364
                                                         ==============================================
</TABLE>

See accompanying notes.



                                       35

<PAGE>   36


                   Uno Restaurant Corporation and Subsidiaries

                 Consolidated Statements of Shareholders' Equity


<TABLE>
<CAPTION>
                                                    COMMON STOCK         ADDITIONAL
                                                ------------------        PAID-IN       RETAINED      TREASURY
                                                SHARES      AMOUNT        CAPITAL       EARNINGS        STOCK         TOTAL
                                                ----------------------------------------------------------------------------
                                                                           (Amounts in thousands)
<S>                                             <C>         <C>          <C>            <C>           <C>            <C>    

Balance at October 2, 1994                       9,072       $ 91         $30,613        $25,254                     $55,958
   Net income                                                                              7,203                       7,203
   Five-for-four stock split                     2,275         23             (23)
   Sale of Common Stock,  net of  
     offering costs                              2,300         23          22,541                                     22,564
   Exercise of stock options                        35                        226                                        226
   Purchase of Treasury Stock                                                                         $ (2,900)       (2,900)
   Tax benefit from exercise of
      nonqualified stock options                                               76                                         76
                                                -----------------------------------------------------------------------------
Balance at October 1, 1995                      13,682        137          53,433         32,457        (2,900)       83,127
   Net income                                                                              1,686                       1,686
   Exercise of stock options                        16                         63                                         63
   Purchase of Treasury Stock                                                                           (7,753)       (7,753)
   Tax benefit from exercise of
     nonqualified stock options                                                13                                         13
                                                -----------------------------------------------------------------------------
Balance at September 29, 1996                   13,698        137          53,509         34,143       (10,653)       77,136
   Net income                                                                              2,673                       2,673
   Exercise of stock options                        57          1             257                                        258
   Purchase of Treasury Stock                                                                           (9,224)       (9,224)
   Tax benefit from exercise of
     nonqualified stock options                                                37                                         37
                                                -----------------------------------------------------------------------------

Balance at September 28, 1997                   13,755       $138         $53,803        $36,816      $(19,877)      $70,880
                                                =============================================================================
</TABLE>

See accompanying notes.



                                       36

<PAGE>   37


                   Uno Restaurant Corporation and Subsidiaries

                      Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                                      YEAR ENDED
                                                                  ------------------------------------------------
                                                                  SEPTEMBER 28       SEPTEMBER 29        OCTOBER 1
                                                                      1997               1996              1995
                                                                  ------------------------------------------------
                                                                                    (In thousands)
<S>                                                               <C>                <C>                 <C>      

OPERATING ACTIVITIES
Net income                                                          $  2,673           $  1,686          $  7,203
Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation and amortization                                    12,573             13,064            10,896
     Deferred income taxes                                            (2,986)            (2,462)              291
     Provision for deferred rent                                         612                688               637
     Loss (gain) on disposal of equipment                                (15)                19               (28)
     Special charges                                                   4,000              3,937
     Changes in operating assets and liabilities, net of
       effects from business acquisitions:
         Royalties receivable                                            (18)                15              (172)
         Inventory                                                         7               (107)             (482)
         Prepaid expenses and other assets                            (1,888)              (903)           (3,736)
         Accounts payable and other liabilities                        4,620              1,157             2,055
         Income taxes payable                                            495              1,455              (528)
                                                                  ------------------------------------------------
Net cash provided by operating activities                             20,073             18,549            16,136

INVESTING ACTIVITIES
Additions to property, equipment and leasehold 
   improvements
                                                                     (19,982)           (22,909)          (39,864)
Proceeds from sale of fixed assets                                       300                144                42
Purchase of business, net of cash acquired                                                                   (316)
                                                                  ------------------------------------------------
Net cash used in investing activities                                (19,682)           (22,765)          (40,138)

FINANCING ACTIVITIES
Proceeds from revolving line of credit                                71,193             53,103            60,950
Principal payments on debt and capital lease 
   obligations
                                                                     (62,997)           (40,687)          (56,570)
Issuance of Common Stock                                                                                   22,564
Purchase of Treasury Stock                                            (9,224)            (7,753)           (2,900)
Exercise of stock options                                                295                 76               302
                                                                  ------------------------------------------------
Net cash (used) provided by financing activities                        (733)             4,739            24,346
                                                                  ------------------------------------------------
Increase (decrease) in cash                                             (342)               523               344
Cash at beginning of year                                              1,828              1,305               961
                                                                  ------------------------------------------------

Cash at end of year                                                 $  1,486           $  1,828          $  1,305
                                                                  ================================================
</TABLE>


See accompanying notes.



                                       37

<PAGE>   38



                   Uno Restaurant Corporation and Subsidiaries

                   Notes to Consolidated Financial Statements

                               September 28, 1997



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

The Company owns and operates 92 "Pizzeria Uno...Chicago Bar & Grill" casual
dining, full-service restaurants primarily from New England to Virginia, as well
as Florida, Chicago and Denver, and franchises 66 units in 18 states, the
District of Columbia, Puerto Rico and Seoul, Korea. The Company also operates a
Mexican restaurant in Chicago, several take-out and quick-serve Uno units in
test, and a refrigerated and frozen consumer foods division. The consumer foods
business supplies American Airlines, movie theaters, hotels, supermarket and
wholesale club chains with both frozen and refrigerated Pizzeria Uno brand
products, as well as certain private label products.

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Uno Restaurant
Corporation and its wholly-owned subsidiaries (the Company). All intercompany
accounts and transactions have been eliminated in consolidation.

FISCAL YEAR

The Company's fiscal year ends on the close of business on the Sunday closest to
September 30 in each year.

INVENTORY

Inventory, which consists of food, beverages and store supplies, is stated at
the lower of cost (first-in, first-out method) or market.

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements are recorded at cost. The Company
provides for depreciation of buildings and equipment using the straight-line
method over 25 and 7 years, respectively. Leasehold improvements are amortized
over the shorter of their estimated useful lives or the term of the lease
(generally 20 years) using the straight-line method.



                                      -38-
<PAGE>   39

                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION-FRANCHISE FEES

The Company defers franchise fees until the franchisee opens the restaurant and
all services have been substantially performed; at that time, the fee is
recorded as income. Royalty income is recorded as earned based on rates provided
by the respective franchise agreements. Expenses related to franchise activities
amounted to approximately $3,441,000, $3,409,000 and $1,889,000 in fiscal years
1997, 1996 and 1995, respectively.

A summary of full-service franchise unit activity is as follows:

                                                          YEAR ENDED
                                          -------------------------------------
                                          SEPTEMBER 28  SEPTEMBER 29  OCTOBER 1
                                              1997          1996         1995
                                          -------------------------------------

Units operating at beginning of year           63            59           59
Units opened                                    6             5            5
Units closed                                   (3)           (1)          (5)
                                          -------------------------------------
Units operating at end of year                 66            63           59
                                          =====================================

PRE-OPENING COSTS

Pre-opening costs consist principally of labor costs associated with the hiring
and training of operating personnel as well as initial food and beverage
purchases. These costs are deferred until the restaurants open and are amortized
over 12 months from that point using the straight-line method.

INCOME TAXES

Deferred income taxes are determined utilizing the liability method. Under this
method, deferred tax assets and liabilities are determined based on differences
between financial reporting and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.


<PAGE>   40
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EARNINGS PER COMMON SHARE

Earnings per common share amounts are calculated based upon the weighted-average
number of shares outstanding, giving effect to the dilutive effect of stock
options.

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management 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
consolidated financial statements and the reported amounts of revenues and costs
and expenses during the reporting period. Actual results could differ from those
estimates.

IMPAIRMENT OF LONG-LIVED ASSETS

In the second quarter of fiscal 1996, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which
establishes criteria for the recognition and measurement of impairment losses
associated with long-lived assets (see Note 2).

STOCK-BASED COMPENSATION

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB No. 25) in accounting for its
stock-based compensation plans, rather than the alternative fair value
accounting method provided for under SFAS No. 123, "Accounting for Stock-Based
Compensation," as this alternative requires the use of option valuation models
that were not developed for use in valuing employee stock options. Under APB No.
25, since the exercise price of options granted under these plans equals the
market price of the underlying stock on the date of grant, no compensation
expense is required.




<PAGE>   41
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTING PRONOUNCEMENTS

In February 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 128, "Earnings Per Share" which simplifies the calculation of earnings per
share and creates a standard of comparability to the recently issued
International Accounting Standard No. 33, "Earnings Per Share." Since early
application is not permitted, the Company will adopt this standard in the first
quarter of fiscal 1998. The Company believes the adoption of this standard will
not have a material impact on the Company's consolidated results of operations.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income" and
SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information." Both SFAS No. 130 and SFAS No. 131 are effective for fiscal years
beginning after December 15, 1997. The Company believes that the adoption of
these new accounting standards will not have a material impact on the Company's
consolidated financial statements.

RECLASSIFICATIONS

Certain amounts in the accompanying financial statements have been reclassified
to conform with the 1997 presentation.

2.  SPECIAL CHARGES

During the third quarter of fiscal 1997, the Company recorded a special charge
in the amount of $4.0 million, consisting of an asset impairment charge of $3.3
million and store closing costs of $0.7 million. The $3.3 million asset
impairment charge was recorded to reduce the carrying value of equipment and
leaseholds at two full-service Uno restaurants to their fair market value and
resulted from weak operating results and continuing negative cash flow. The
store closure costs represent remaining minimum lease payments of one
full-service Uno restaurant which was closed during 1997.

As discussed in Note 1, the Company adopted SFAS No. 121 in the second quarter
of fiscal 1996, and recorded a pre-tax charge of $3.9 million to adjust the
carrying value of those assets identified as impaired. The charge consisted of
$1.0 million for three Uno


<PAGE>   42
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2.  SPECIAL CHARGES (CONTINUED)

Pizza Bakery's, $1.6 million for one full-service Uno restaurant and $1.3
million for certain assets of three Bay Street restaurants. The assets written
down include the Bay Street trademark and leasehold improvements and equipment
of the aforementioned stores. Based upon operating and cash flow results,
management believed that these units would likely continue to generate cash flow
losses and therefore reduced the carrying value of the impaired assets to fair
market value.

3.  PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements consist of the following:

<TABLE>
<CAPTION>
                                                         SEPTEMBER 28  SEPTEMBER 29
                                                             1997          1996
                                                         --------------------------
                                                         (In thousands)

<S>                                                        <C>            <C>      
Land                                                       $ 15,883       $ 14,796
Buildings                                                    25,265         22,037
Equipment                                                    49,802         45,690
Leasehold improvements                                       87,047         82,013
Construction in progress                                      4,201          2,120
                                                         --------------------------
                                                            182,198        166,656
Less allowances for depreciation and amortization            56,841         46,146
                                                         --------------------------
                                                           $125,357       $120,510
                                                         ==========================
</TABLE>

4.  RELATED-PARTY TRANSACTIONS

The Company leases three buildings from its principal shareholder for a
restaurant and corporate office space. Rent expense in the amount of
approximately $455,000 was charged to operations in each of the fiscal years
presented. The Company believes that the terms of these leases approximate fair
rental value.

The Company's President and his brother own and operate four franchised
restaurants and one of the directors of the Company has a partnership interest
in a franchised restaurant. These franchisees pay royalties to the Company under
standard franchise agreements.


<PAGE>   43
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



5.  LEASES

The Company conducts the majority of its operations in leased facilities, which
are accounted for as capital or operating leases. The leases typically provide
for a base rent plus real estate taxes, insurance and other expenses, plus
additional contingent rent based upon revenues of the restaurant. Assets held
under capital leases were $2,881,000 at September 28, 1997 and September 29,
1996. Accumulated amortization amounted to $613,000 at September 28, 1997 and
$480,000 at September 29, 1996. Capital lease asset amortization is included in
depreciation and amortization. At September 28, 1997, the minimum rental
commitments under all noncancelable capital and operating leases with initial or
remaining terms of more than one year are as follows:


                                                         CAPITAL     OPERATING
FISCAL YEAR                                              LEASES        LEASES
                                                         ---------------------
                                                             (In thousands)

1998                                                     $  260      $  9,420
1999                                                        260         9,321
2000                                                        223         9,236
2001                                                         75         9,311
2002                                                         42         9,365
Thereafter                                                1,209        78,331
                                                         --------------------
                                                          2,069      $124,984
Less amount representing interest                         1,013      ========
                                                         ------
Present value of net minimum lease payments               1,056
Less current portion of obligation under capital leases     189
                                                         ======

Long-term obligation under capital leases                $  867
                                                         ======

Total expenses for all operating leases were as follows:


                                          MINIMUM       CONTINGENT
FISCAL YEAR                            LEASE RENTALS     RENTALS        TOTAL
                                       ---------------------------------------
                                                      (In thousands)

1997                                      $12,641         $  811       $13,452
1996                                       12,105            956        13,061
1995                                       10,492          1,017        11,509
<PAGE>   44
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


5.  LEASES (CONTINUED)

Certain operating lease agreements contain free rent inducements and scheduled
rent increases which are being amortized over the terms of the agreements,
ranging from 15 to 20 years, using the straight-line method. The deferred rent
liability, included in other liabilities, amounted to $4,596,000 at September
28, 1997 and $3,984,000 at September 29, 1996.

6.  FINANCING ARRANGEMENTS

Long-term debt consists of the following:

                                                    SEPTEMBER 28  SEPTEMBER 29
                                                        1997          1996
                                                    --------------------------
                                                          (In thousands)

Revolving credit and note agreement                   $40,480        $37,085
                                                     
8.75%, 15-year secured mortgage notes payable           4,979
                                                    --------------------------
                                                       45,459         37,085
Less current portion                                    2,943
                                                    --------------------------
                                                     
                                                      $42,516        $37,085
                                                    ==========================

On November 4, 1997, the Company entered into a new $55,000,000 credit facility,
which includes a $26.6 million unsecured revolver due in October, 2002, a $8.4
million term loan due in 20 quarterly installments of $420,000 plus interest
commencing on January 31, 1998 and a $20.0 million secured mortgage facility due
in 27 quarterly installments of $500,000 plus interest also commencing on
January 31, 1998 with a final payment due in October, 2004. The Company is
entitled to borrow, at its discretion, amounts which accrue interest at variable
rates based on either the LIBOR or prime rate. At September 28, 1997, interest
on outstanding borrowings under the previous revolving line of credit ranged
from 6.875% to 8.50%. A commitment fee of approximately .375% is accrued on
unused borrowings under the new credit agreement. The note agreements contain
certain financial and operating covenants, including maintenance of certain
levels of net worth and income. At September 28, 1997, the carrying value of the
Company's long-term debt approximated fair market value.

<PAGE>   45

                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



6.  FINANCING ARRANGEMENTS (CONTINUED)

Annual principal payments of debt are as follows (in thousands):

                                    Year
                                    ----

                                    1998            $ 2,943
                                    1999              3,880
                                    2000              3,898
                                    2001              3,918
                                    2002              3,940
                                    Thereafter       26,880
                                                    -------

                                                    $45,459
                                                    =======


In October 1995, the Company entered into a five-year interest rate swap
agreement to convert a portion of its floating rate debt to a fixed-rate basis,
thereby reducing the potential impact of interest rate increases on future
income. The notional amount of this interest rate swap agreement was $20 million
and the fixed swap rate was 6.04%. The differential to be paid or received is
accrued as interest rates change and recognized as an adjustment to interest
expense related to the debt.

The Company made cash payments of interest of $3,044,000, $2,845,000 and
$2,445,000 during fiscal years 1997, 1996 and 1995, respectively. The Company
capitalized interest during the construction period of new restaurants which
amounted to $313,000 in fiscal year 1997, $290,000 in fiscal year 1996 and
$509,000 in fiscal year 1995 and included those amounts in leasehold
improvements.

The Company provides certain limited lease financing to qualified franchisees
through an agreement with an unaffiliated finance company. The Company's maximum
guarantee under the agreement was $1,000,000 at September 28, 1997. The Company
has also guaranteed up to a maximum of $400,000 of future lease payments in the
event of default by a specific franchisee.


<PAGE>   46
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



7.  COMMON STOCK TRANSACTIONS

In June 1997, the Company initiated a Dutch Auction self-tender offer for up to
1,000,000 shares of the Company's common stock and in certain circumstances,
reserved the right to purchase in excess of 1,000,000 shares. Under the terms of
the offer, the Company invited stockholders to tender their shares at prices
ranging from $6.00 to $7.50 per share. In July 1997, the Company completed the
tender offer for 1,207,624 shares of its common stock at $7.00 per share.

In July 1995, the Board of Directors authorized the purchase of up to 500,000
shares of the Company's common stock, of which 358,100 shares were purchased in
fiscal 1995. In October 1995, the Board of Directors increased its authorization
to purchase up to 1.5 million shares of the Company's stock, of which the
balance of 1,141,900 shares were purchased in fiscal 1996. In January 1997, the
Board of Directors authorized the purchase of up to 500,000 additional shares of
the Company's common stock, of which 82,973 shares were purchased in fiscal
1997, prior to the Dutch Auction.

8.  PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other current assets consist of the following:

                                                 SEPTEMBER 28  SEPTEMBER 29
                                                     1997          1996
                                                 --------------------------
                                                 (In thousands)

Prepaid insurance                                 $  430          $  422
Product rebates receivable                           402             342
Prepaid rent                                         220             328
Prepaid operating costs                               58             213
Other accounts receivable                            849           1,082
                                                 --------------------------

                                                  $1,959          $2,387
                                                 ==========================


<PAGE>   47
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


9.  ACCRUED EXPENSES

Accrued expenses consist of the following:
                                                  SEPTEMBER 28    SEPTEMBER 29
                                                      1997            1996
                                                  ----------------------------
                                                  (In thousands)

Accrued store closure                                $1,618           $  413
Accrued rent                                          1,334            1,379
Accrued insurance                                     1,103              962
Accrued utilities                                       760              768
Accrued vacation                                        632              489
Accrued advertising                                     561              308
Accrued professional fees                               413              172
Franchise fee deposit                                   348              117
Other                                                   794              425
                                                  ----------------------------

                                                     $7,563           $5,033
                                                  ============================

10.  EMPLOYEE BENEFIT PLANS

The Company maintains a 401(k) Savings and Employee Stock Ownership Retirement
Plan (the Plan) for all of its eligible employees. The Plan is maintained in
accordance with the provisions of Section 401(k) of the Internal Revenue Code
and allows all employees with at least one year of service to make annual
tax-deferred voluntary contributions up to 15% of their salary. Under the Plan,
the Company matches a specified percentage of the employees contributions,
subject to certain limitations. Total contributions made to the plan were
$229,000, $161,000 and $153,000 in fiscal years 1997, 1996 and 1995,
respectively.

The Company sponsors a Deferred Compensation Plan which allows officers to defer
up to 20% of their annual compensation. These assets are placed in a "rabbi
trust" and are presented as assets of the Company in the accompanying balance
sheet as they are available to the general creditors of the Company in the event
of the Company's insolvency. The related liability of $727,000 at September 28,
1997 and $566,000 at September 29, 1996 is included in other liabilities in the
accompanying balance sheet. Deferred compensation expense in the amounts of
$161,000, $140,000 and $173,000 were recorded in fiscal years 1997, 1996 and
1995 respectively.


<PAGE>   48
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

11.  INCOME TAXES

Deferred taxes are attributable to the following temporary differences:

                                                 SEPTEMBER 28    SEPTEMBER 29
                                                     1997            1996
                                                 ----------------------------
                                                 (In thousands)
Deferred tax assets:
  Deferred rent                                     $1,842          $1,604
  Accrued expenses                                   1,738             715
  Asset impairment charge                            1,630           1,123
  Depreciation                                       1,113             123
  Franchise fees                                       291             148
  Other                                                309             261
                                                -----------------------------
Total deferred tax assets                            6,923           3,974

Deferred tax liabilities:
  Deferred pre-opening costs                           217             243
  Other                                                107             118
                                                -----------------------------
Total deferred tax liabilities                         324             361
                                                -----------------------------

Net deferred tax assets                             $6,599          $3,613
                                                =============================



<PAGE>   49
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

11.  INCOME TAXES (CONTINUED)

The provision (credit) for income taxes consisted of the following:

<TABLE>
<CAPTION>
                                                               YEAR ENDED
                                              ------------------------------------------
                                              SEPTEMBER 28    SEPTEMBER 29     OCTOBER 1
                                                  1997            1996           1995
                                              ------------------------------------------
                                                            (In thousands)

<S>                                             <C>             <C>              <C>   
Current:
  Federal                                       $ 3,448         $ 2,532          $3,098
  State                                             916             687             841
                                              ------------------------------------------
                                                  4,364           3,219           3,939
Deferred:
  Federal                                        (2,435)         (1,995)            228
  State                                            (551)           (467)             63
                                              ------------------------------------------
                                                 (2,986)         (2,462)            291
                                              ------------------------------------------

Income tax expense                              $ 1,378         $   757          $4,230
                                              ==========================================
</TABLE>

A reconciliation of the effective tax rates with the federal statutory rates is
as follows:

<TABLE>
<CAPTION>
                                                               YEAR ENDED
                                              ------------------------------------------
                                              SEPTEMBER 28    SEPTEMBER 29     OCTOBER 1
                                                  1997            1996           1995
                                              ------------------------------------------

<S>                                               <C>             <C>             <C>  
Federal statutory rate                            34.0%           34.0%           34.1%
State income taxes, net of federal
  income tax benefit                               4.6             5.0             4.9
Tax credits                                       (7.1)           (9.8)           (2.6)
Other                                              2.5             1.8              .6
                                              ------------------------------------------

Effective income tax rate                         34.0%           31.0%           37.0%
                                              ==========================================
</TABLE>

The Company made income tax payments of $3,936,000, $2,416,000 and $3,667,000
during fiscal years 1997, 1996 and 1995, respectively.



<PAGE>   50
                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



12.  STOCK-BASED COMPENSATION 

During 1997, the Company established the 1997 Employee Stock Option Plan (the
Plan) which provides for the granting of options to purchase up to 1.0 million
shares of common stock. Options may be granted at an exercise price not less
than fair market value on the date of grant. All options vest at a rate of 20%
per year beginning one year after the date of grant. All options terminate ten
years after the date of grant.

The Company's 1987 Employee Stock Option Plan which contains similar provisions
to the 1997 Plan was terminated during fiscal 1997. The 1.3 million options
granted under that plan will continue to vest at a rate of 20% per year
beginning one year after the date of grant, with the exception of 93,750 options
granted to the President of the Company, which vest immediately at the date of
grant. All options terminate ten years after the date of grant, with the
exception of the 112,500 options granted to the Chairman, which terminate five
years after the date of grant.

The 1989 and 1993 Non-Qualified Stock Option Plans for Non-Employee Directors
(the Directors' Plans) provide for up to 101,563 shares of Common Stock issuable
upon exercise of options granted under the Directors' Plans. The 1989 and 1993
Directors' Plans terminate on November 10, 1999 and August 17, 2002, but such
termination shall not affect the validity of options granted prior to the dates
of termination. Options are to be granted at an exercise price equal to the fair
market value of the shares of Common Stock at the date of grant. Options granted
under the Directors' Plans may be exercised commencing one year after the date
of grant and ending ten years from the date of grant.

In August 1997, the Company's Board of Directors authorized an executive stock
option program which allows for the granting of options to purchase up to 1.2
million shares of common stock. Options will vest upon the achievement of
certain financial targets. The plan is subject to stockholder approval.

Pro forma information regarding net income and earnings per share is required by
SFAS No. 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that statement. The
Company determined that the pro forma information for fiscal 1996 and fiscal
1997 was not material to the Company's consolidated results of operations,
however, the effects of expensing the estimated fair value of stock options are
not necessarily indicative of the effects on reporting results of operations for
future years as the pro forma calculations only include one and two years,
respectively, of option grants under the Company's plans.


<PAGE>   51

                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



12.  STOCK-BASED COMPENSATION (CONTINUED)

The fair value for these options was estimated at the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions for fiscal 1997 and fiscal 1996: risk-free interest rates of 6.6%
and 7.0%, respectively, no dividend yield, the volatility factor of the expected
market price of the Company's common stock was 38.2% and a weighted-average
expected life of the options of five years.

Information regarding the Company's stock option plans is summarized below:

<TABLE>
<CAPTION>
                                                        YEAR ENDED
                          ----------------------------------------------------------------------
                              SEPTEMBER 28            SEPTEMBER 29               OCTOBER 1
                                   1997                    1996                     1995
                          ----------------------------------------------------------------------
                                     WEIGHTED-                WEIGHTED-                WEIGHTED-
                                      AVERAGE                  AVERAGE                  AVERAGE
                                      EXERCISE                 EXERCISE                 EXERCISE
                           OPTIONS     PRICE       OPTIONS      PRICE      OPTIONS       PRICE
                          ----------------------------------------------------------------------
<S>                       <C>          <C>        <C>           <C>       <C>            <C>  
Outstanding at           
  beginning of period     1,289,248    $7.28      1,200,287     $7.61     1,043,735      $7.33
Granted                     211,609     6.59        295,508      6.42       277,489       8.46
Exercised                   (55,667)    4.44        (15,256)     4.74       (41,400)      5.43
Canceled                   (207,783)    7.06       (191,291)     8.21       (79,537)      8.08
                          ----------------------------------------------------------------------
Outstanding at end       
  of period               1,237,407    $7.33      1,289,248     $7.28     1,200,287      $7.61
                          ======================================================================

Options exercisable      
 at end of period           691,491                 612,526                 538,932
                          =========               =========               =========
Options available for    
  grant at end of period    854,248                 377,279                 481,496
                          =========               =========               =========
</TABLE>

Exercise prices for options outstanding ranged from $4.74 to $14.50. Between
$4.74 and $7.41, 753,556 and 365,482 options were outstanding and exercisable,
respectively, and between $7.42 and $14.50, 483,851 and 326,009 were outstanding
and exercisable, respectively. The weighted-average contractual life of the
options is 7.1 years. The Company has 2.1 million shares of common stock
reserved for issuance at September 28, 1997.


<PAGE>   52

                   Uno Restaurant Corporation and Subsidiaries

             Notes to Consolidated Financial Statements (continued)




13.  QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                   QUARTER ENDED
                              ---------------------------------------------------------
                              DECEMBER 29     MARCH 30        JUNE 29     SEPTEMBER 28
                                 1996           1997           1997           1997
                              ---------------------------------------------------------
                              (Amounts in thousands, except per share information.)

<S>                             <C>            <C>            <C>            <C>    
Revenues                        $42,164        $42,711        $45,387        $47,758
Gross profit (1)                  8,345          8,618          9,604         10,545
Operating income (loss)           2,265          1,899           (908)         3,622
Income (loss) before
  income taxes                    1,655          1,233         (1,619)         2,782
Net income (loss)                 1,092            815         (1,070)         1,836
Earnings per common share           .09            .07           (.09)           .16

<CAPTION>
                                                   QUARTER ENDED
                              ---------------------------------------------------------
                              DECEMBER 31     MARCH 31        JUNE 30       SEPTEMBER
                                 1995           1996           1996          29 1996
                              ---------------------------------------------------------
                              (Amounts in thousands, except per share information.)

<S>                             <C>            <C>            <C>            <C>    
Revenues                        $40,560        $40,287        $44,694        $46,600
Gross profit (1)                  7,754          7,268          9,417         10,574
Operating income (loss)           1,472         (3,525)         2,963          4,014
Income (loss) before
  income taxes                      852         (4,129)         2,308          3,412
Net income (loss)                   545         (2,642)         1,477          2,306
Earnings per common share           .04           (.21)           .12            .19
</TABLE>

(1)   Restaurant and consumer product sales, less cost of food and beverages,
      labor and benefits, occupancy and other operating expenses, excluding
      advertising expenses.


<PAGE>   53



                                  EXHIBIT INDEX
                                  -------------

<TABLE>
<CAPTION>
EXHIBIT NUMBER                                                                         PAGE
--------------                                                                         ----

<S>        <C>                                                                            <C>
(3)(a)     Restated Certificate of Incorporation                                          *

(3)(b)     By-laws                                                                        *

(4)(a)     Specimen Certificate of Common Stock                                           *

(10)(a)    Lease between the Company and Aaron D. Spencer dated March 30, 1987
           for premises in West Roxbury, Massachusetts                                    *

(10)(b)    Lease between the Company and Aaron D. Spencer dated March 30, 1987
           for premises in Boston, Massachusetts                                          *

(10)(c)    Lease between Uno Restaurants, Inc. and Lisa S. Cohen and Mark N.
           Spencer dated February 1, 1990 for premises in West Roxbury,
           Massachusetts                                                                  *

(10)(d)    Form of Franchise Agreement and Area Franchise Agreement                       *

(10)(e)    Uno Restaurant Corporation 1987 Employee Stock Plan, and As Amended
                                                                                          *
(10)(f)    Uno Restaurant Corporation 1989 Non-Qualified Stock Option Plan for
           Non-Employee Directors                                                         *

(10)(g)    Uno Restaurant Corporation 1993 Non-Qualified Stock Option Plan for
           Non-Employee Directors as amended

(10)(h)    Uno Restaurant Corporation 1997 Employee Stock Option Plan                     *

(10)(I)    Form of Indemnification Agreement between the Company and its
           Directors                                                                      *

(10)(j)    Variable Royalty Plan for Franchises.                                          *

(10)(k)    Interest Rate Swap Agreement between Fleet Bank of Massachusetts,
           N.A. and Uno Restaurants, Inc. Dated October 25, 1995.                         *

(10)(l)    Note between the Company and Craig S. Miller dated January 23, 1996.           *

(10)(m)    Form of Change in Control Protection Agreements between Uno
           Restaurant Corporation and Mr. Spencer and Mr. Miller.                        

(10)(n)    Form of Change in Control Protection Agreements between Uno
           Restaurant Corporation and its Senior Vice Presidents.                         

(10)(o)    Form of Change in Control Protection Agreements between Uno
           Restaurant Corporation and its other officers.                                  

(10)(p)    Master Lease-Purchase Agreement between ORIX Credit Alliance, Inc.,
           as Lessor, and Massachusetts Industrial Finance Agency, as Lessee,
           dated April 19, 1994, and Master Sublease-Purchase Agreement between
           Massachusetts Industrial Finance Agency, as Sublessor, and Uno
           Foods, Inc. as Sublessee, dated April 19, 1994.                                *

(10)(q)    MetLife Capital Financial Corporation Mortgage Notes: $1,875,000
           8.75% Note dated December 23, 1996 of 8250 International Drive
           Corporation, $825,000 8.75% Note dated December 23, 1996 of
           Saxet Corporation, $900,000 8.75% Note dated December 23, 1996
           of Saxet Corporation, $675,000 8.75% Note dated January 30, 1997
           of Saxet Corporation, $825,000 8.75% Note dated February 27,
           1997 of Saxet Corporation, each payable to the order of MetLife
           Capital Financial Corporation.

(10)(r)    Note between the Company and Craig S. Miller dated April 1, 1997.
</TABLE>




                                      -53-

<PAGE>   54



(10)(s)    $55,000,000 Revolving Credit and Term Loan Agreement dated as of
           November 4, 1997 by and among Uno Restaurants, Inc. and Saxet Corp.,
           as Borrower, Uno Foods Inc., Pizzeria Uno Corporation, URC Holding
           Company, Inc. and Uno Restaurant Corporation, as Guarantors, and
           Fleet National Bank, as Agent and BankBoston, N.A. as Co-Agent
           (without exhibits).

(11)       Statement Re: Computation of Per Share Earnings.

(21)       Subsidiaries of the Registrant.

(23)       Consent of Ernst & Young LLP, Independent Auditors.

(27)       Financial Data Schedule.

*In accordance with Rule 12b-23 and Rule 12b-32 under the Securities Exchange
Act of 1934, as amended, reference is made to the documents previously filed
with the Securities and Exchange Commission, which documents are hereby
incorporated by reference.

                                      -54-