UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION~~

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
For the quarterly period ended July 3, 2004
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
For the quarterly period ended April 2, 2005
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
For the transition period from to
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 333-115046
	For the transition period from to

MRS. FIELDS FAMOUS BRANDS, LLC
(Exact Name of Registrant Specified in Its Charter)
Delaware		80-0096938
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)
2855 East Cottonwood Parkway, Suite 400
Salt Lake City, Utah		84121-1050
(Address of Principal Executive Offices)		(Zip Code)
Registrant’s telephone number, including area code: (801) 736-5600

Commission file number: 333-115046

~~Indicate~~MRS. byFIELDS ~~check mark whether the registrant (1) has filed all reports~~FAMOUS ~~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)~~BRANDS, ~~and (2) has been subject to such filing requirements for the past 90 days.~~LLC

~~Yes~~(Exact oName Noof ýRegistrant Specified in Its Charter)

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act).

Delaware		80-0096938
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)


2855 East Cottonwood Parkway, Suite 400 Salt Lake City, Utah		84121-1050
(Address of principal executive offices)		(Zip code)

~~Yes~~Registrant's otelephone Nonumber, ýincluding area code: (801) 736-5600

On Indicate ~~August 17,~~by ~~2004,~~check ~~100~~mark ~~common~~whether ~~interests~~the of registrant ~~were outstanding,~~(1) has filed all ofreports ~~which~~required ~~are~~to ~~held~~be filed by anSection ~~affiliate. There~~13 isor no15(d) ~~established~~of ~~trading~~the ~~market~~Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period ~~registrant’s~~that ~~common~~the ~~interests~~Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý NO o

~~MRS.~~ Indicate ~~FIELDS~~by ~~FAMOUS~~check ~~BRANDS,~~mark whether ~~LLC~~the ~~AND~~registrant is an accelerated filer (as defined by Rule 12b-2 of the ~~SUBSIDIARIES~~Exchange Act). YES o NO ý

~~TABLE~~ On May OF13, ~~CONTENTS~~2005, 100 common interests of registrant were outstanding, all of which are held by an affiliate. There is no established trading market for registrant's common interests.

PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of July 3, 2004 and January 3, 2004
		Condensed Consolidated Statements of Income and Comprehensive Income for the 13 Weeks Ended July 3, 2004 and June 28, 2003
		Condensed Consolidated Statements of Income and Comprehensive Income for the 26 Weeks Ended July 3, 2004 and June 28, 2003
		Condensed Consolidated Statements of Cash Flows for the 26 Weeks Ended July 3, 2004 and June 28, 2003
		Notes to Condensed Consolidated Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Item 4. Controls and Procedures
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
Signatures

MRS. FIELDS FAMOUS BRANDS, LLC

2TABLE OF CONTENTS

PART 1 – FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

	Condensed Consolidated Balance Sheets as of April 2, 2005 and January 1, 2005

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the
		13 weeks Ended April 2, 2005 and April 3, 2004

	Condensed Consolidated Statements of Cash Flows for the 13 Weeks Ended April 2, 2005
		and April 3, 2004

	Notes to condensed consolidated financial statements

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Item 5. Other Information

Item 6. Exhibits

SIGNATURES

~~ITEM 1. Financial Statements~~2

~~MRS.~~PART ~~FIELDS~~I ~~FAMOUS~~– ~~BRANDS,~~FINANCIAL ~~LLC AND SUBSIDIARIES~~INFORMATION

CONDENSEDItem CONSOLIDATED1. BALANCEFinancial SHEETSStatements

~~(Unaudited)~~MRS. FIELDS FAMOUS BRANDS, LLC

~~(Dollars~~Condensed inConsolidated ~~thousands)~~Balance Sheets

	July 3, 2004			January 3, 2004
ASSETS:
Cash and cash equivalents	$	16,783		$	1,300
Receivables, net of allowance for doubtful accounts of $1,508 and $1,948, respectively	6,983			9,070
Amounts due from affiliates	182			—
Inventories	2,095			1,962
Prepaid rent and other	940			1,122
Deferred tax asset	1,605			1,535
Total current assets	28,588			14,989
Property and equipment, net	3,280			3,174
Goodwill, net	113,456			113,456
Trademarks and other intangible assets, net	24,784			26,149
Deferred loan costs, net of accumulated amortization of $8,405 and $20,470	8,337			4,222
Other assets	631			612
	$	179,076		$	162,602
LIABILITIES AND MEMBER’S DEFICIT:
Accounts payable	$	1,895		$	6,789
Accrued liabilities	17,797			13,210
Current liabilities of discontinued operations	96			405
Amounts due to affiliates	1,901			3,135
Current portion of capital lease obligations	37			—
Current portion of deferred revenues	2,372			2,289
Total current liabilities	24,098			25,828
Long-term debt	195,747			185,762
Capital lease obligations, net of current portion	456			—
Deferred revenues, net of current portion	1,369			2,019
Deferred tax liability	3,148			4,814
Total liabilities	224,818			218,423
Member’s deficit	(45,565		)	(55,601		)
Deferred stock compensation	(48		)	(75		)
Accumulated other comprehensive loss	(129		)	(145		)
Total member’s deficit	(45,742		)	(55,821		)
COMMITMENTS AND CONTINGENCIES
	$	179,076		$	162,602

(Unaudited)

~~See~~(Dollars ~~accompanying~~in ~~notes to condensed consolidated financial statements.~~thousands)

	April 2,					January 1,
	2005					2005
ASSETS:
Cash and cash equivalents	$			13,483		$	19,859
Receivables, net of allowance for doubtful accounts of $592 and $1,295, respectively	6,576					8,039
Amounts due from affiliates	—					23
Inventories	2,518					2,626
Prepaid expenses and other	1,437					1,200
Deferred tax asset	984					1,120

Total current assets	24,998					32,867

Property and equipment, net	3,383					3,486
Goodwill	113,456					113,456
Trademarks and other intangible assets, net	22,739					23,419
Deferred loan costs, net of accumulated amortization of $9,358 and $9,043, respectively	7,569					7,885
Other assets	686					668
	$	172,831				$		181,781

LIABILITIES AND MEMBER'S DEFICIT:
Accounts payable	$		1,884			$	4,334
Accrued liabilities	8,944					14,646
Amounts due to affiliates	2,419					2,780
Current portion of capital lease obligations	37					36
Current portion of deferred revenues	1,984					2,049

Total current liabilities	15,268					23,845

Long-term debt	195,747					195,747
Capital lease obligations, net of current portion	418					427
Deferred revenues, net of current portion	1,158					1,387
Deferred tax liability	3,981					3,876

Total liabilities	216,572					225,282

Member's deficit	(43,600				)	(43,365			)
Accumulated other comprehensive loss	(141				)	(136			)

Total member's deficit	(43,741				)	(43,501			)

COMMITMENTS AND CONTINGENCIES
	$	172,831				$		181,781

~~MRS.~~See ~~FIELDS~~accompanying notes ~~FAMOUS~~to ~~BRANDS,~~condensed ~~LLC~~consolidated ~~AND SUBSIDIARIES~~financial statements

~~CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME~~3

~~(Unaudited)~~MRS. FIELDS FAMOUS BRANDS, LLC

~~(Dollars~~Condensed inConsolidated ~~thousands)~~Statements of Operations and Comprehensive Loss

	13 Weeks Ended
	July 3, 2004			June 28, 2003
REVENUES:
Franchising	$	15,228		$	14,928
Gifts	4,758			3,200
Licensing	1,191			1,325
Other	58			114
Total revenues	21,235			19,567
OPERATING COSTS AND EXPENSES:
Franchising	6,345			4,812
Gifts	4,230			2,781
Licensing	200			448
General and administrative	3,052			2,702
Stock compensation expense	13			31
Depreciation	324			442
Amortization	701			492
Other operating expenses (income), net	(40		)	208
Total operating costs and expenses	14,825			11,916
Income from operations	6,410			7,651
Interest expense, net	(5,502		)	(6,142		)
Income from continuing operations before provision for income taxes	908			1,509
Provision for income taxes	415			534
Income from continuing operations	493			975
Income from discontinued operations (net of income taxes of $10 and $1, respectively	11			30
Net income	$	504		$	1,005
COMPREHENSIVE INCOME:
Net income	$	504		$	1,005
Foreign currency translation adjustment	19			(3		)
Comprehensive income	$	523		$	1,002

(Unaudited)

~~See~~(Dollars ~~accompanying~~in ~~notes to condensed consolidated financial statements.~~ thousands)

	13 Weeks Ended
	April 2,				April 3,
	2005				2004
REVENUES:
Franchising	$	12,354			$	13,005
Gifts	4,960				4,540
Licensing	1,138				1,257
Other	52				83

Total revenues	18,504				18,885

OPERATING COSTS AND EXPENSES:
Franchising	5,088				4,175
Gifts	5,248				3,666
Licensing	142				129
General and administrative	2,005				2,313
Stock compensation expense	—				13
Costs associated with debt refinancing, net	—				87
Depreciation	279				316
Amortization	705				715
Other operating expenses, net	37				18

Total operating costs and expenses	13,504				11,432

Income from operations	5,000				7,453

Interest expense, net	(5,355			)	(8,885		)
Other income	—				1,054

Loss from continuing operations before provision for income taxes	(355			)	(378		)

Benefit for income taxes	(120			)	(185		)

Loss from continuing operations	(235			)	(193		)

Income from discontinued operations (net of income taxes of $0 and $29, respectively)	—				47

Net loss	$		(235	)	$	(146	)

COMPREHENSIVE INCOME (LOSS):
Net loss	$		(235	)	$	(146	)
Foreign currency translation adjustment	(5			)	(2		)

Comprehensive loss	$		(240	)	$	(148	)

~~MRS.~~See ~~FIELDS~~accompanying notes ~~FAMOUS~~to ~~BRANDS,~~condensed ~~LLC~~consolidated ~~AND SUBSIDIARIES~~financial statements

~~CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME~~4

~~(Unaudited)~~MRS. FIELDS FAMOUS BRANDS, LLC

~~(Dollars~~Condensed inConsolidated ~~thousands)~~Statements of Cash Flows

	26 Weeks Ended
	July 3, 2004			June 28, 2003
REVENUES:
Franchising	$	28,233		$	27,772
Gifts	9,298			6,010
Licensing	2,448			2,944
Other	141			240
Total revenues	40,120			36,966
OPERATING COSTS AND EXPENSES:
Franchising	10,520			8,910
Gifts	7,896			4,859
Licensing	329			694
General and administrative	5,365			5,050
Stock compensation expense	26			62
Costs associated with debt refinancing	87			—
Depreciation	640			902
Amortization	1,416			879
Other operating expenses (income), net	(22		)	250
Total operating costs and expenses	26,257			21,606
Income from operations	13,863			15,360
Interest expense, net	(14,387		)	(12,236		)
Other income	1,054			—
Income from continuing operations before provision for income taxes	530			3,124
Provision for income taxes	230			1,289
Income from continuing operations	300			1,835
Income from discontinued operations (net of income taxes of $39 and $19, respectively	58			31
Net income	$	358		$	1,866
COMPREHENSIVE INCOME:
Net income	$	358		$	1,866
Foreign currency translation adjustment	17			1
Comprehensive income	$	375		$	1,867

(Unaudited)

~~See~~(Dollars ~~accompanying~~in ~~notes to condensed consolidated financial statements.~~thousands)

	13 Weeks Ended
	April 2,			April 3,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations	$	(235	)	$	(193	)
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:
Gain on sale of equity warrants	—			(1,054		)
Depreciation and amortization	984			1,031
Amortization of deferred loan costs	316			2,818
Stock compensation expense	—			13
Amortization of discount on notes	—			1,245
Deferred income taxes	241			(1,881		)
Changes in assets and liabilities
Receivables, net	1,463			1,648
Amounts due to/from affiliates, net	(338		)	(1,847		)
Inventories, net	108			(296		)
Prepaid rent and other	(237		)	(274		)
Other assets	(43		)	63
Accounts payable	(2,450		)	(4,179		)
Accrued liabilities	(5,702		)	(412		)
Deferred revenues	(294		)	(252		)

Net cash used in continuing operating activities	(6,187		)	(3,570		)
Net cash used in discontinued operating activities	—			(235		)

Net cash used in operating activities	(6,187		)	(3,805		)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equity warrants	—			1,054
Purchases of property and equipment	(176		)	(45		)

Net cash (used in) provided by investing activities	(176		)	1,009

CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments under line of credit	—			(3,452		)
Principal payments on long-term debt	—			(98,014		)
Payment of debt financing costs	—			(11,990		)
Proceeds from issuance of Senior Secured Notes	—			115,000
Principal payments on capital lease	(8		)	—
Contribution by parent	—			17,500
Other activity with parent	—			(7,996		)

Net cash (used in) provided by financing activities	(8		)	11,048

Effect of foreign exchange rate changes on cash	(5		)	(2		)

Net (decrease) increase in cash and cash equivalents	(6,376		)	8,250
Cash and cash equivalents at beginning of period	19,859			1,300

Cash and cash equivalents at end of period	$	13,483		$	9,550

Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	10,273		$	6,259
Cash paid for income taxes	—			50
Cash paid to parent for income taxes	—			1,450

~~MRS.~~See ~~FIELDS~~accompanying notes ~~FAMOUS~~to ~~BRANDS,~~condensed ~~LLC~~consolidated ~~AND~~financial ~~SUBSIDIARIES~~statements

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~5

~~(Unaudited)~~MRS. FIELDS FAMOUS BRANDS, LLC

~~(Dollars~~Notes into ~~thousands)~~the Condensed Consolidated Financial Statements

	26 Weeks Ended
	July 3, 2004			June 28, 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from continuing operations	$	300		$	1,835
Gain on sale of equity warrants	(1,054		)	—
Depreciation and amortization	2,056			1,781
Amortization of deferred loan costs	3,124			2,259
Stock compensation expense	26			62
Amortization of discount on notes	1,245			286
Non-cash debt increases associated with PIK interest	—			280
Deferred income taxes	(1,736		)	(245		)
Changes in assets and liabilities:
Receivables, net	2,087			2,057
Amounts due to/from affiliates	(1,416		)	(3,968		)
Inventories	(133		)	(399		)
Prepaid rent and other	182			(211		)
Other assets	(69		)	(164		)
Accounts payable	(4,894		)	(1,327		)
Accrued liabilities	4,603			3,745
Deferred revenues	(567		)	(448		)
Net cash provided by continuing operating activities	3,754			5,543
Net cash (used in) provided by discontinued operating activities	(251		)	374
Net cash provided by operating activities	3,503			5,917
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equity warrants	1,054			—
Purchase of property and equipment	(72		)	(172		)
Net cash provided by (used in) investing activities	982			(172		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) under line of credit	(3,452		)	7,019
Principal payments on long-term debt	(98,014		)	(2,900		)
Payment of debt financing costs	(12,034		)	(1,136		)
Proceeds from issuance of Senior Notes	115,000			—
Principal payments on capital lease	(23		)	—
Contribution by parent	17,500			—
Other activity with parent	(7,996		)	(9,515		)
Net cash provided by (used in) financing activities	10,981			(6,532		)
Effect of foreign exchange rate changes on cash	17			1
Net increase (decrease) in cash and cash equivalents	15,483			(786		)
Cash and cash equivalents at beginning of period	1,300			2,900
Cash and cash equivalents at end of period	$	16,783		$	2,114
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	6,295		$	9,449
Cash paid for income taxes	50			251
Cash paid to parent for income taxes	1,450			5,000
Supplemental Disclosure of Noncash Investing and Financing Activities:
Distributions payable to parent under tax sharing agreement	$	—		$	1,520
Assets acquired under capital lease	500			—

(Unaudited)

See accompanying notes to condensed consolidated financial statements.

1. Basis of

Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Mrs. Fields Famous Brands, LLC and subsidiaries (the "Company" or "Mrs. Fields") in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q and, accordingly, do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("United States") for a complete presentation of the financial statements. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, which consist only of normal recurring adjustments, necessary to present fairly the financial position of Mrs. Fields as of April 2, 2005 and January 1, 2005, and the results of their operations and their cash flows for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended January 1, 2005 contained in Mrs. Fields' Form 10-K, filed with the Securities and Exchange Commission on March 22, 2005.

The Company is a wholly-owned subsidiary of Mrs. Fields' Original Cookies, Inc., ("MFOC"). MFOC is a wholly-owned subsidiary of Mrs. Fields' Holding Company, Inc. ("MFH"), and MFH is a wholly-owned subsidiary of Mrs. Fields' Companies, Inc. ("MFC").

The results of operations for the 13 weeks ended April 2, 2005 are not necessarily indicative of the results that may be expected for the remainder of the fiscal year ending December 31, 2005. Income per common interest information is not presented because Mrs. Fields is wholly-owned by MFOC and, therefore, its common interests are not publicly traded.

2. Recent

Accounting

Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 123 (revised 2004) ("SFAS 123R"), "Share-Based Payment," which is a revision of SFAS No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation." SFAS 123R supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" and amends SFAS No. 95, "Statement of Cash Flows." Generally, the approach in SFAS 123R is similar to the approach described in SFAS 123. However, SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The new standard will be effective for the Company beginning January 1, 2006. The adoption of SFAS 123R is not expected to have a material effect on the Company's consolidated financial statements.

In November 2004, the FASB issued SFAS No. 151, ("SFAS 151"), "Inventory Costs, an amendment of ARB No. 43, Chapter 4" which clarifies the types of costs that should be expensed rather than capitalized as inventory. This statement also clarifies the circumstances under which fixed overhead costs associated with operating facilities involved in inventory processing should be capitalized. The new standard will be effective for the Company beginning January 1, 2006. The adoption of SFAS 151 is not expected to have a material impact on the Company's consolidated financial position or results of operations.

MRS. FIELDS FAMOUS BRANDS, LLC AND SUBSIDIARIES

	3. Receivables		The Company's receivables are primarily due from domestic and international franchisees, distributors, licensees and corporate customers in our gifts segment and consist of normal trade accounts receivable and longer-term notes receivable. Service charges may be assessed on past due invoices but any revenues associated with these charges is only recognized when collected. The Company maintains an allowance for doubtful accounts to cover potential losses. This allowance is the Company's best estimate of the amount of probable collection losses in the Company's existing trade accounts receivable. The Company determines the allowance based upon historical write-off experience and individual facts and circumstances associated with individual debtors. If the assumptions that are used to determine the allowance for doubtful accounts change, the Company may have to provide for a greater level of expense in future periods or reverse amounts provided in prior periods.
			Prior to fiscal 2001, TCBY Systems, LLC ("TCBY"), a wholly-owned subsidiary of the Company, extended credit from time to time in the form of notes receivable to franchisees and certain of these notes receivable remain outstanding. Notes receivable from franchisees are primarily collateralized by equipment located at the franchisees' stores. The notes bear interest at market rates and mature at various dates through April 2009. TCBY regularly reviews the notes for non-performance. Notes that are considered non-performing are placed on a non-accrual status when the collectability of principal or interest becomes uncertain.
			Notes receivable at April 2, 2005 and January 1, 2005 consist of the following (in thousands):

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	April 2,			January 1,
	2005			2005
Non-performing notes	$	—		$	521
Allowance for doubtful accounts	—			(521		)
Non-performing notes, net	—			—

Performing notes	229			225
Allowance for doubtful accounts	(88		)	(76		)
Performing notes, net	141			149
	$	141		$	149

The activity in the allowance for notes receivable for the 13 weeks ended April 2, 2005 and April 3, 2004 is as follows (~~Unaudited~~in thousands):

1. BASIS OF PRESENTATION

	13 Weeks Ended
	April 2,			April 3,
	2005			2004
Beginning balance	$	597		$	713
Additions (reversals)	4			(8		)
Write-offs	(513		)	(2		)
	$	88		$	703

The accompanying unaudited condensed consolidated financial statements have been prepared by Mrs. Fields Famous Brands, LLC and subsidiaries (“Mrs. Fields” or the “Company”) in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q and, accordingly, do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for a complete presentation of the financial statements. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, which consist only of normal recurring adjustments, necessary to present fairly the financial position of Mrs. Fields as of July 3, 2004 and January 3, 2004, and the results of their operations and their cash flows for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the combined financial statements and notes thereto for the fiscal year ended January 3, 2004 contained in Mrs. Fields’ Registration Statement on Form S-4 (File No. 333-115046), as amended, filed with the Securities and Exchange Commission on April 30, 2004.7

~~The~~4. ~~Company~~Property isand anEquipment ~~entity~~Equipment ~~that~~and ~~was~~fixtures ~~formed~~are instated ~~March 2004~~at ~~in connection~~cost ~~with~~less ~~the~~accumulated ~~reorganization~~depreciation ~~of certain entities~~ and ~~segments that~~ are ~~under~~ ~~the~~depreciated ~~common~~over ~~control~~three ofto ~~Mrs. Fields’~~seven ~~Companies, Inc.~~years ~~(“MFC”), formerly~~using ~~known~~the asstraight-line ~~Mrs~~method. ~~Fields’~~ ~~Famous~~Leasehold ~~Brands, Inc.~~improvements ~~The~~are ~~Company~~stated isat ~~a wholly-owned~~cost ~~subsidiary~~less ofaccumulated ~~Mrs. Fields’~~depreciation ~~Original~~and ~~Cookies, Inc.~~are ~~(“MFOC”). MFOC~~depreciated isover athe ~~wholly-owned~~term ~~subsidiary~~ of ~~Mrs. Fields’~~the ~~Holding Company, Inc.~~lease ~~(“MFH”)~~using ~~and~~the ~~MFH is a wholly~~straight-~~owned~~line ~~subsidiary of MFC~~method. ~~Prior to~~Property ~~the~~and ~~reorganization,~~equipment ~~TCBY~~at ~~Systems~~April 2, ~~LLC~~2005 ~~(“TCBY”)~~and ~~was~~January a1, ~~wholly-owned~~2005 ~~subsidiary~~ consist of ~~TCBY~~the ~~Enterprises,~~following ~~LLC~~ (~~“TCBY~~in ~~Enterprises”~~thousands)~~, whose parent is also MFC.~~:

The accompanying unaudited condensed consolidated financial statements include the accounts of TCBY and the franchising, licensing and gifts segments of MFOC through March 2004. In March 2004, MFC completed a reorganization whereby TCBY and the franchising, licensing and gifts segments of MFOC were contributed to the Company. These financial statements have been prepared to reflect this reorganization as if it had occurred on December 31, 2000 (the beginning of fiscal 2001).

	April 2,			January 1,
	2005			2005
Leasehold improvements	$	3,881		$	3,879
Equipment and fixtures	9,977			9,801
Land	240			240
	14,098			13,920
Less accumulated depreciation	(10,715		)	(10,434		)
	$	3,383		$	3,486

~~The~~Property ~~unaudited~~and ~~condensed~~equipment ~~consolidated~~includes ~~financial~~gross ~~statements~~assets ~~assume~~acquired ~~that Mrs. Fields,~~under ~~for all periods presented, had existed as~~ a ~~separate~~capital ~~legal entity~~lease ~~with~~of ~~the~~$500,000 ~~following~~at ~~three~~April ~~business segments: franchising~~2, ~~gifts~~2005 and ~~licensing.~~ ~~The~~January ~~unaudited condensed consolidated financial statements~~1, ~~which through~~2005. ~~March 2004,~~The ~~have~~related ~~been~~accumulated ~~carved~~deprecation ~~out~~on ~~from~~these ~~the~~capital ~~consolidated~~lease ~~financial statements of MFOC and TCBY using the historical results of operations and~~ assets ~~and~~was ~~liabilities~~$66,000 ~~of these businesses~~ and ~~activities~~$53,000 ~~and~~at ~~which~~April ~~exclude the company-owned stores segment of MFOC~~2, ~~reflect~~2005 ~~the accounting policies adopted by MFOC~~ and ~~TCBY~~January in1, ~~the~~2005, ~~preparation of their consolidated financial statements and thus do not necessarily reflect the accounting policies which Mrs~~respectively. ~~Fields~~ ~~might have adopted had it been an independent company~~5. ~~The historical~~Accrued ~~consolidated~~Liabilities ~~financial~~Accrued ~~statements~~liabilities ofconsist ~~Mrs. Fields include those accounts specifically attributable to Mrs. Fields, substantially all~~ of the ~~indebtedness~~following ofat ~~MFOC~~April ~~and TCBY~~2, ~~and~~2005 ~~allocations of expenses relating to shared services~~ and ~~administrative~~January ~~functions~~1, ~~incurred~~2005 at(in ~~MFOC.~~thousands):

Historically, MFOC has not allocated its various corporate overhead expenses, and common general and administrative expenses to its operating business units. However, an allocation of such expenses has been included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of income and comprehensive income. The Company’s general and administrative expenses represent portions of MFOC’s corporate functions such as human resources, legal, accounting and finance, treasury and information technology systems, that have been allocated to Mrs. Fields based on percentage of labor hours devoted by the functional department. These allocated costs are not necessarily indicative of the costs that Mrs. Fields would have incurred had it operated as an independent, stand-alone entity for all periods presented.

	April 2,		January 1,
	2005		2005
Accrued liabilities	$	4,260	$	4,701
Accrued compensation and benefits	3,830		3,968
Accrued interest payable	854		5,977
	$	8,944	$	14,646

~~The~~On June 24, 2004, the Company’s ~~cash~~announced ~~balances~~a atreorganization ~~January 3~~of its executive management team effective June 28, 2004. ~~include~~As ~~cash accounts~~a ~~specifically~~result ~~attributable~~of this reorganization, the Company terminated the employment of two Senior Vice Presidents effective June 28, 2004 and accrued approximately $600,000 related to ~~Mrs~~severance expenses. ~~Fields~~ ~~plus~~As anof ~~allocated portion~~April 2, 2005, remaining severance payments of ~~cash~~$411,000 were included in ~~MFOC’s~~accrued ~~centralized~~compensation ~~cash~~and ~~management~~benefits. ~~systems~~6. ~~Accordingly,~~ ~~the~~Related-Party ~~Company’s~~Transactions ~~cash~~The ~~balance~~amounts atdue ~~January 3,~~to/from ~~2004~~affiliates ~~may~~are ~~not~~comprised ~~be representative~~ of ~~what~~amounts itdue ~~would~~to/from ~~have~~MFOC, ~~been~~MFH ifand ~~Mrs. Fields~~MFC ~~were~~at ~~an independent~~April ~~company.~~2, 2005 and January 1, 2005 (in thousands):

	April 2,		January 1,
	2005		2005
Amounts due from affiliates:
MFC	$	—	$	23

Amounts due to affiliates:
MFC – tax sharing	$	2,014	$	2,382
MFH	273		273
MFOC	132		125
	$	2,419	$	2,780

The results of operations for the 13 weeks and 26 weeks ended July 3, 2004 are not necessarily indicative of the results that may be expected for the remainder of the fiscal year ending January 1, 2005. Income per common interest information is not presented as Mrs. Fields is wholly-owned by MFOC and, therefore, its common interests are not publicly traded.8

2. DEBT REFINANCING

		The Company has entered into a tax allocation agreement with MFC pursuant to which the Company has agreed to make payments to MFC, after taking into account payments the Company makes directly to tax authorities, based on the Company's stand-alone consolidated federal income tax liability, determined as if the Company and its subsidiaries constituted their own consolidated group for federal income tax purposes. The Company will not be permitted to make these payments to MFC, unless the MFC federal tax liability exceeds the Company's stand-alone federal tax liability, until it meets certain financial ratios and is otherwise in compliance with the terms of the indenture governing its senior secured notes.
7. Reportable Segments		Operating segments are components of the Company for which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and in assessing performance. This information is reported on the basis that it is used internally for evaluating segment performance. The Company has three reportable operating segments: franchising, gifts and licensing. The franchising segment consists of revenues received either directly or indirectly from cookie, yogurt and pretzel stores, which are owned and operated by third parties. These revenues include initial franchise or license fees, monthly royalties based on a percentage of a franchisee's gross sales, sales of cookie dough that the Company produces at its Great American Cookie batter facility, and certain product formulation fees and supplier allowances which are based upon sales to franchisees. The gifts segment includes sales generated from the Company's mail order gift catalog and website. The licensing segment consists of other licensing activities with third parties for the sale of products bearing the Company's brand names. Sales and transfers between segments are eliminated in consolidation.
		The Company evaluates performance of each segment based on contribution margin. Contribution margin is computed as the difference between the revenues generated by a reportable segment and the selling and occupancy expenses, cost of sales and direct general and administrative expenses related to that reportable segment. Contribution margin is used as a measure of the operating performance of an operating segment. The Company does not allocate any indirect general and administrative expenses, other operating expenses, interest expense, depreciation and amortization or assets to its reportable operating segments.
		Segment revenues and contribution margin are presented in the following table (in thousands):

On March 16, 2004, the Company issued $80.7 million of 9 percent senior secured notes (the “9 percent Senior Secured Notes”) in exchange for $80.7 million of 10 1/8 percent Senior Notes and issued $115.0 million of 11 1/2 percent senior secured notes (the “11 1/2 percent Senior Secured Notes” together with the 9 percent Senior Secured Notes, the “Senior Secured Notes”). The proceeds from the 11 1/2 percent Senior Secured Notes were used to retire the Company’s remaining long-term debt subsequent to year-end.

	13 Weeks Ended
	April 2,			April 3,
	2005			2004
Revenues:
Franchisings	$	12,354		$	13,005
Gifts	4,960			4,540
Licensing	1,138			1,257
	$	18,452		$	18,802
Contribution Margin:
Franchisings	$	7,266		$	8,830
Gifts	(288		)	874
Licensing	996			1,128
	$	7,974		$	10,832

The Senior Secured Notes will mature March 15, 2011, with interest payable semi-annually. The Senior Secured Notes rank senior in right of payment to all subordinated indebtedness of the Company and rank equal in right of payment with all existing and future senior indebtedness of the Company. The Senior Secured Notes are secured by all of the tangible and intangible assets of the Company and its subsidiaries.9

The ~~Senior~~reconciliation ~~Secured Notes are redeemable at the option~~ of ~~the~~contribution ~~Company anytime~~margin ~~on or after March 15, 2008. Prior~~ to ~~March 15, 2007, the Company may redeem up to 35 percent of the aggregate principal amount of the notes with the~~ net ~~proceeds~~loss ofis certain equity offerings, provided at least 65 percent of the aggregate principal amount of the Senior Secured Notes originally issued remain outstanding. The Senior Secured Notes require the Company to repurchase a portion of the notes at 100 percent of the principal amount, plus accrued and unpaid interest thereon to the date of purchase, with 50 percent of the Company’s “excess cash flow”, as ~~defined in~~follows ~~the indenture agreement entered into by the Company in respect of the Senior Secured Notes~~ (~~the "Indenture"), when the ratio of the Company’s Net indebtedness to Consolidated EBITDA is above 3.75 to 1.0. In the event of a change~~ in control, as defined in the Indenture, the holders of the Senior Secured Notes will have the right to put the notes to the Company at 101 percent of their principal amount, plus accrued and unpaid interest.thousands):

The Senior Secured Notes contain certain covenants that limit among other things, the ability of the Company and its subsidiaries to: (i) incur additional indebtedness; (ii) make certain investments or enter into sale and leaseback transactions; (iii) pay dividends, redeem subordinated debt, repurchase the Company’s or its subsidiaries stock or make any other restricted payments as defined in the indenture; (iv) enter into certain transactions with affiliates; (v) create or incur liens; (vi) transfer or sell assets; (vii) make dividends, distributions or other payments from the Company’s subsidiaries; (viii) consummate a merger, consolidation or sale of all or substantially all of our assets; and (ix) engage in unrelated business.

	13 Weeks Ended
	April 2,			April 3,
	2005			2004
Contribution margin	$	7,974		$	10,832
Other operating revenues	52			83
General and administrative expenses	(2,005		)	(2,313		)
Stock compensation expense	—			(13		)
Costs associated with debt refinancing, net	—			(87		)
Depreciation and amortization	(984		)	(1,031		)
Other operating expenses, net	(37		)	(18		)
Interest expense, net	(5,355		)	(8,885		)
Other income	—			1,054
Benefit for income taxes	120			185
Loss from current operations	(235		)	(193		)
Income from discontinued operations (net of income taxes of $0 and $29, respectively)	—			47
Net loss	$	(235	)	$	(146	)

3. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS


		The fixed assets and inventory of the Company primarily relate to the Company's Great American Cookie batter facility and gifts business segment and related activities. Assets relating to franchising and licensing activity are primarily amounts due from franchisees and licensees and goodwill relating to franchising concepts.
		The Company has one licensee that accounted for $767,000 and $709,000, or 67.4 percent and 56.4 percent of the revenues of the licensing segment for the 13 weeks ended April 2, 2005 and April 3, 2004, respectively. The Company has one customer in its gifts business segment that accounted for $665,000 and $1.3 million, or 13.4 percent and 28.1 percent of revenues of the gifts business segment for the 13 weeks ended April 2, 2005 and April 3, 2004, respectively. There were no other customers or licensees that accounted for more than 10.0 percent of Mrs. Fields' total revenues or any individual segment's revenues.
8. Commitments And Contingencies		In the ordinary course of business, the Company is involved in routine litigation. The Company is not a party to any legal proceedings which, in the opinion of management, after consultation with legal counsel, is material to its business, financial condition or results of operations.
		The Company and its products are subject to regulation by numerous governmental authorities, including, without limitation, federal, state and local laws and regulations governing franchising, health, sanitation, environmental protection, safety and hiring and employment practices.
9. Supplemental Condensed Consolidating Financial Information		Long-term debt includes the 9 percent senior secured notes and the 11 ½ percent senior secured notes (the "Senior Secured Notes") that were issued by the Company and Mrs. Fields Financing Company, Inc., as co-issuers. Mrs. Fields Financing Company, Inc. is a wholly-owned finance subsidiary of the Company. The Senior Secured Notes are fully and unconditionally guaranteed on a joint and several basis by all of the Company's domestic subsidiaries other than minor subsidiaries. Mrs. Fields Famous Brands has no independent assets or operations. Therefore, supplemental financial information on a condensed consolidating basis of the guarantor subsidiaries is not required. There are no restrictions on the Company's ability to obtain cash dividends or other distributions of funds from the guarantor subsidiaries, except those imposed by applicable law.

In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities—an Interpretation of Accounting Research Bulletin No. 51” (“FIN 46”). In December 2003, the FASB issued FIN No. 46 (Revised 2003) (“FIN 46R”) to address certain FIN 46 implementation issues, including the delay of the effective date for certain types of Variable Interest Entities (“VIE”). This interpretation clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” for companies that have interests in entities that are defined as a VIE under FIN 46. According to this interpretation, if a company has an interest in a VIE and is at risk for a majority of the expected losses of the VIE or receives a majority of the expected gains of the VIE, it shall consolidate the VIE. FIN 46R also requires additional disclosures by primary beneficiaries and other significant variable interest holders. For entities acquired or created before December 31, 2003, FIN 46R is effective as of the beginning of fiscal 2005 while it is effective immediately for all VIEs created after December 31, 2003. The Company completed adoption of FIN 46R during the first quarter of fiscal 2004. The adoption of FIN 46R had no effect on the Company’s consolidated financial statements.10

8Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

4 Unless the context otherwise requires, references in this report to the terms "Company," "we," "us," or "our" generally refer to the Registrant, Mrs. ~~PROPERTY~~ ~~AND~~Fields ~~EQUIPMENT~~Famous Brands, LLC, a Delaware limited liability company, and its subsidiaries.

~~Property and equipment are~~DISCLOSURE ~~stated~~REGARDING ~~at cost less accumulated depreciation and amortization. Equipment, fixtures and leasehold improvements are depreciated or amortized over three to seven years or the lease term, using the straight~~FORWARD-~~line~~LOOKING ~~method. Property and equipment at July 3, 2004 and January 3, 2004 were comprised of the following (in thousands):~~STATEMENTS

	July 3, 2004			January 3, 2004
Leasehold improvements	$	3,715		$	3,204
Equipment and fixtures	9,222			9,695
Land	240			240
	13,177			13,139
Less accumulated depreciation and amortization	(9,897		)	(9,965		)
Net property and equipment	$	3,280		$	3,174

This report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. They may contain words such as "believe," "anticipate," "expect," "estimate," "intend," "project," "plan," "continue," "will," "may" or words or phrases of similar meaning. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive and governmental factors outside of our control, that may cause actual results to differ materially from trends, plans or expectations set forth in the forward looking statements. Factors you should consider that could cause these differences include:

~~Property~~· the availability and ~~equipment included~~adequacy ~~gross~~of ~~assets~~our ~~acquired under a capital lease and related accumulated~~cash ~~depreciation~~flow ~~and~~to ~~amortization~~satisfy ofour ~~$500~~obligations,~~000~~ ~~and~~including ~~$27,000,~~debt ~~respectively,~~service ~~at July 3,~~on ~~2004. There~~our ~~were~~long-term ~~no assets~~debt ~~acquired~~and ~~under~~additional afunds ~~capital~~required ~~lease~~for asworking ~~of January 3, 2004.~~capital;

~~5. ACCRUED~~· the impact of our current negative ~~LIABILITIES~~member's deficit on our franchising activities;

~~Accrued~~· our ~~liabilities~~ability ~~were~~to ~~comprised~~solicit ofnew ~~the following at July 3, 2004 and January 3, 2004 (in thousands):~~franchisees;

	July 3, 2004		January 3, 2004
Accrued liabilities	$	7,627	$	7,628
Accrued compensation and benefits	3,965		3,555
Accrued interest payable	6,205		2,027
	$	17,797	$	13,210

· economic, competitive, demographic, business and other pressures, trends and conditions in various markets;

~~On June 24, 2004,~~ · the ~~Company~~seasonal ~~announced a~~nature ~~reorganization~~ of ~~its~~our executive management team effective June 28, 2004. As a result of this reorganization, the Company terminated the employment of two Senior Vice Presidents effective June 28, 2004 and accrued approximately $600,000 related to severance expenses.operations;

On· actions ~~May~~taken 7,or ~~2003,~~failed the Board of Directors of MFC accepted the resignation of Larry A. Hodges as its President, Chief Executive Officer and Director of MFC and its subsidiaries, which resignation was effective on May 14, 2003. Pursuant to ~~the~~be ~~terms~~taken ~~of a~~by ~~separation~~third ~~agreement~~parties, ~~dated~~including ~~August 6,~~by ~~2003,~~our ~~and a Severance Assumption Agreement dated March 16~~customers, ~~2004~~suppliers, ~~among MFC~~distributors, ~~MFOC, the Company~~ competitors and ~~Mr. Hodges (the “Separation Agreements”)~~shareholders, ~~Mr.~~as ~~Hodges~~well ~~is receiving 28 months of salary~~ as ~~severance~~legislative, ~~which is being paid semi-monthly through the end of 2004~~regulatory, ~~and~~ ~~the~~judicial ~~balance will be paid in a lump sum in January 2005. This severance obligation was assumed by the Company concurrently with the completion of the reorganization~~ and ~~refinancing (see Notes 1 and 2). As of July 3, 2004,~~other ~~severance~~governmental ~~payments of $520,000 were due to Mr. Hodges and included in accrued compensation and benefits.~~authorities;

~~Under~~· changes the terms of a stockholders’ agreement among MFC and its stockholders, there are put and call rights with respect to the common shares of MFC, including common shares received upon exercise of options. Pursuant to the Separation Agreements, Mr. Hodges and MFC agreed that all of the shares of MFC’s common stock held by Mr. Hodges, would be purchased by MFC for an aggregate purchase price of $449,479. The purchase price is payable in ~~five~~our ~~installments~~business ofstrategy ~~$74,913 and a sixth~~or ~~installment~~development of $74,914 (in each case, without interest). The installments are payable every 30 days, beginning on April 15, 2004, which was 30 days following the closing date of the reorganization and refinancing (see Notes 1 and 2). This payment obligation to Mr. Hodges was assumed by the Company concurrently with the completion of the reorganization and refinancing (see Notes 1 and 2). As of July 3, 2004, the remaining obligation payable to Mr. Hodges for the purchase of the shares of MFC’s common stock was $224,740 and was included in accrued liabilities.plans;

9· performance by our franchisees and licensees or changes in relationships with our franchisees and licensees;

~~6. RELATED~~· difficulties or delays in our developing ~~PARTY~~and ~~TRANSACTIONS~~introducing anticipated new products or failure of our customers to accept new product offerings;

~~Amounts~~· adoption ~~due to/from affiliates were comprised~~ of ~~the~~new ~~following at July 3, 2004 and~~accounting ~~January 3, 2004 (in thousands):~~pronouncements;

	July 3, 2004		January 3, 2004
Amounts due from affiliates:
MFOC	$	159	$	—
MFC	23		—
	$	182	$	—
Amounts due to affiliates:
Mrs. Fields’ Holding	$	273	$	273
TCBY Enterprises	—		550
MFC – tax sharing	1,628		2,312
	$	1,901	$	3,135

· changes in consumer preferences and our ability to adequately anticipate such changes;

~~7. REPORTABLE SEGMENTS~~· changes in prices of our raw materials;

~~Operating~~· changes ~~segments are components of the Company for which separate financial information is available that is evaluated regularly by management~~ in ~~deciding~~personnel how to allocate resources and in assessing performance. This information is reported on the basis that it is used internally for evaluating segment performance. Mrs. Fields has three reportable operating segments: franchising, gifts, and licensing. The franchising segment consists of revenues received either directly or ~~indirectly~~increased ~~from cookie, yogurt and~~labor pretzel stores, which are owned and operated by third parties. These revenues include initial franchise or license fees, royalties based on a percentage of a franchisee’s gross sales, sales of cookie dough that the Company produces, and certain product formulation fees and supplier allowances which are based upon sales to franchisees. The gifts segment includes sales generated from the Company’s mail order gift catalog and web site. The licensing segment consists of other licensing activity from third parties for the sale of products bearing the Company’s brand names. Sales and transfers between segments are eliminated in consolidation.costs;

~~The Company evaluates performance of each segment based on contribution margin. Contribution margin is computed as~~ · the ~~difference between~~termination ~~the revenues generated by a reportable segment and the selling and occupancy expenses~~of, ~~cost~~or ofinability ~~sales and direct general and administrative expenses related~~ to ~~that reportable segment. Contribution margin is used as a~~renew ~~measure~~on offavorable ~~the operating performance of an operating segment. The Company does not allocate any indirect general and administrative expenses~~terms, ~~other~~our ~~operating income~~material ~~(expense), interest expense, depreciation and amortization or assets to its reportable operating segments.~~agreements;

~~Segment~~· changes ~~revenue and contribution margin are presented~~ in ~~the~~customer ~~following table (in thousands):~~traffic;

	Franchising		Gifts		Licensing		Total
13 weeks ended July 3, 2004
Revenue	$	15,228	$	4,758	$	1,191	$	21,177
Contribution margin	8,883		528		991		10,402
13 weeks ended June 28, 2003
Revenue	$	14,928	$	3,200	$	1,325	$	19,453
Contribution margin	10,116		419		877		11,412
26 weeks ended July 3, 2004
Revenue	$	28,233	$	9,298	$	2,448	$	39,979
Contribution margin	17,713		1,402		2,119		21,234
26 weeks ended June 28, 2003
Revenue	$	27,772	$	6,010	$	2,944	$	36,726
Contribution margin	18,862		1,151		2,250		22,263

· legal proceedings and regulatory matters;

10· acts of war or terrorist incidents; and

~~The~~· all ~~reconciliation~~other offactors ~~contribution~~described ~~margin~~under to"Risk ~~net~~Factors" ~~loss~~in isour Registration asStatement ~~follows~~on Form S-4 (~~in thousands~~File No. 333-115046):, as amended.

	13 Weeks Ended						26 Weeks Ended
	July 3, 2004			June 28, 2003			July 3, 2004			June 28, 2003
Contribution margin	$	10,402		$	11,412		$	21,234		$	22,263
Other operating revenues	58			114			141			240
General and administrative expenses	(3,052		)	(2,702		)	(5,365		)	(5,050		)
Stock compensation expense	(13		)	(31		)	(26		)	(62		)
Other operating income (expense), net	40			(208		)	(65		)	(250		)
Interest expense, net	(5,502		)	(6,142		)	(14,387		)	(12,236		)
Other income	—			—			1,054			—
Depreciation and amortization	(1,025		)	(934		)	(2,056		)	(1,781		)
Provision for income taxes	(415		)	(534		)	(230		)	(1,289		)
Income from current operations	493			975			300			1,835
Income from discontinued operations (net of income taxes of $10, $1, $39 and$19,respectively)	11			30			58			31
Net income	$	504		$	1,005		$	358		$	1,866

You are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report may not occur.

The fixed assets and inventory of the Company primarily relate to the Company’s Great American Cookie batter facility and the gifts business segment and related activities. Assets relating to franchising and licensing activity are primarily amounts due from franchisees and licensees and goodwill relating to franchising concepts.11

The Company has one customer that accounted for $879,000 and $2.2 million, or 18.5 percent and 23.7 percent of the revenue of the gifts segment for the 13 weeks and 26 weeks ended July 3, 2004, respectively, and $363,000 and $938,000, or 11.3 percent and 15.6 percent of the revenue of the gifts segment for the 13 weeks and 26 weeks ended June 28, 2003, respectively. The Company has one licensee that accounted for $778,000 and $1.5 million, or 65.3 percent and 61.3 percent of the revenue of the licensing segment for the 13 weeks and 26 weeks ended July 3, 2004, respectively, and $841,000 and $1.8 million, or 63.5 percent and 61.1 percent of the revenue of the licensing segment for the 13 weeks and 26 weeks ended June 28, 2003, respectively. There were no other customers or licensees that accounted for more than 10.0 percent of Mrs. Fields’ total revenue or any individual segment’s revenue.Overview

8We are one of the largest franchisors in the premium snack food industry, featuring Mrs. ~~COMMITMENTS~~ Fieldsâ, ~~AND~~Great ~~CONTINGENCIES~~American Cookie Companyâ, TCBYâ, Pretzel Timeâ and PretzelmakerÔ as our core brands. Through our franchisees' retail stores, we are the largest retailer of freshly baked, on-premises specialty cookies and brownies in the United States; the largest retailer of soft serve frozen yogurt in the United States; and the second largest retailer of baked on-premises pretzels in the United States. In addition, we operate a gifts business and have entered into licensing arrangements that attempt to leverage awareness of our core brands among our retail customer base. We operate through a network of franchised stores, which are located throughout the United States and in approximately 30 foreign countries. As of April 2, 2005, our franchise network consisted of 2,612 retail concept locations.

~~Legal~~Our ~~Matters~~business is divided into three primary business segments for financial reporting purposes: franchising, gifts and licensing, which represented 66.8 percent, 26.8 percent and 6.2 percent of total revenues, respectively, for the 13 weeks ended April 2, 2005. The franchising segment consists of revenues received either directly or indirectly from cookie, yogurt and pretzel stores, which are owned and operated by third parties. These revenues include franchise or license fees, monthly royalties based on a percentage of a franchisee's gross sales, sales of cookie dough that we produce at our Great American Cookie batter facility and certain product formulation fees and supplier allowances which are based upon sales to franchisees. The gifts segment includes sales generated from our mail order gift catalog and website. The licensing segment consists of other licensing activities with third parties for the sale of products bearing our brand names. For further disclosure of reportable segments, see Note 7 to our unaudited condensed consolidated financial statements contained elsewhere in this report.

~~The~~As ~~Company~~of ~~and~~April 2, ~~its~~2005, ~~products~~our ~~are~~store ~~subject~~portfolio toconsisted ~~regulation~~of ~~by numerous governmental authorities~~2,090 domestic franchised ~~including~~locations, ~~without~~324 ~~limitation,~~international ~~federal,~~franchised ~~state~~locations and ~~local~~198 licensed locations, ~~laws~~which ~~and~~are ~~regulations governing~~described ~~health,~~in ~~sanitation,~~more ~~environmental~~detail ~~protection~~below. By brand, ~~safety~~our franchisees' and ~~hiring~~licensees' ~~and employment~~concept ~~practices.~~locations are distributed as follows:

In the ordinary course of business, the Company is involved in routine litigation, including franchise disputes and trademark disputes. The Company is not a party to any legal proceedings (including the matter described below) which, in the opinion of management, after consultation with legal counsel, is material to its business, financial condition or results of operations.

	Domestic	Internationa	Licensed
	Franchised	l Franchised	Locations	Total
Mrs. Fields	372	83	54	509
Great American	280	1	1	282
Original Cookie	—	—	4	4
Cookie subtotal	652	84	59	795

Pretzel Time	210	8	5	223
Pretzelmaker	153	40	3	196
Hot Sam	—	—	8	8
Pretzel subtotal	363	48	16	427
Bakery brands subtotal	1,015	132	75	1,222

TCBY – traditional stores	468	—	—	468
TCBY – non-traditional stores	607	192	123	922
TCBY brands subtotal	1,075	192	123	1,390

Total	2,090	324	198	2,612

AsThe ~~discussed~~above intable ~~the~~counts ~~Company’s~~each ~~Registration~~concept ~~Statement~~location ~~on Form S-4 (File No~~individually. ~~333-115046),~~For ~~as amended~~example, ~~the~~if ~~Company’s~~a ~~indirect~~physical ~~subsidiary,~~location had ~~TCBY~~a ~~of Ireland, Inc~~Mrs., Fields ~~was~~store ~~the defendant~~and in a ~~recently~~Pretzel ~~concluded~~Time ~~case~~store ~~captioned Advanced Food Concepts~~together, ~~Ltd.~~ etthis ~~al.~~would v.be counted ~~William~~as P.two ~~Creasman,~~concept etlocations ~~al., Case No. 401-CV-00-117JMM, filed~~ in the ~~U.S.~~table ~~District Court for the Eastern District of Arkansas (the “Court”)~~above. ~~This~~If ~~complaint~~actual ~~was~~physical ~~filed in 2001 by two~~stores ~~former~~were ~~franchisees against TCBY of Ireland and other corporate and individual defendants~~counted, ~~but~~rather ~~all~~than ~~defendants~~concept ~~have been dismissed with the exception of TCBY of Ireland~~locations, ~~Inc.,~~ ~~the~~total ~~franchisor~~store ~~party~~counts ~~under~~would ~~a Transnational Master~~be ~~License~~reduced ~~Agreement~~by ~~entered into with certain of the plaintiffs and others. The plaintiffs sought damages in excess of $70~~287 ~~million~~locations into ~~connection with TCBY of Ireland’s performance under and termination of the Transnational Master~~2,325.

11MFOC and certain of its subsidiaries own approximately 61 franchised and licensed retail concept locations as of April 2, 2005, representing 2.3 percent of the total retail concept locations. During the 13 weeks ended April 2, 2005, we recognized $327,000 of franchise royalties and $366,000 of product sales relating to retail concept locations owned by MFOC. MFOC expects that most of these retail concept locations will be sold to new and current franchisees or will be closed during fiscal 2005.

License Agreement. On August 4, 2004, the Court granted TCBY of Ireland’s Motion for Summary Judgment on all remaining counts of the complaint. The plaintiffs may still file motions for reconsideration and/or appeal the Court’s ruling. The Company does not have insurance coverage for this lawsuit because the claims arose prior to the Company’s acquisition of TCBY; however, TCBY has reserved anticipated defense costs. Notwithstanding the excessive claim for damages, the lack of insurance coverage and the risk that TCBY of Ireland’s parent entities might ultimately bear or share in the cost of any significant judgment obtained against it, after consultation with legal counsel, and in light of the favorable summary judgment ruling, management believes it is unlikely that plaintiffs will obtain any judgment against TCBY of Ireland that would be material to our business, financial condition or operations.12

~~9. DISCONTINUED~~ During the period from January 1, 2005 ~~OPERATIONS~~to April 2, 2005, our store portfolio declined from 2,688 concept locations to 2,612 concept locations, as follows:

TCBY transitioned its equipment sales segment (“Riverport”) to a third party equipment and smallwares distributor during the quarter ended March 29, 2003. The distributor purchased certain of Riverport’s inventory at cost, subject to certain slow moving inventory purchase price adjustments. The Company has reserved for anticipated purchase price adjustments and believes that future periods will not be negatively impacted as a result of this transition. The segment’s assets that were subject to depreciation and amortization were being periodically expensed over the remaining estimated useful life. The results of operations and financial position of Riverport are classified as discontinued operations in the accompanying unaudited condensed consolidated financial statements.

	Domestic		International		Licensed
	Franchised		Franchised		Locations		Total
Balance, January 1, 2005	2,145		338		205		2,688
New development openings	12		6		2		20
Permanent closings	(72	)	(20	)	(9	)	(101	)
Other openings, net	5		—		—		5
Balance, April 2, 2005	2,090		324		198		2,612

10 Of the 101 permanent closings between January 1, 2005 and April 2, 2005, 49. ~~SUPPLEMENTAL~~5 percent related to TCBY brand ~~CONDENSED~~non-traditional ~~CONSOLIDATING~~locations, ~~FINANCIAL~~8.9 ~~INFORMATION~~percent related to TCBY brand traditional locations, 29.7 percent related to bakery concept locations owned by franchisees other than MFOC and 11.9 percent related to retail concept locations owned by MFOC.

~~The~~Results ~~Senior Secured Notes are fully and unconditionally guaranteed on a joint and several basis by all~~ of the Company’s domestic subsidiaries other than minor, immaterial subsidiaries. Mrs. Fields Famous Brands, LLC has no independent assets or operations; therefore, supplemental financial information on a condensed consolidating basis of the guarantor subsidiaries is not required. There are no restrictions on the Company’s ability to obtain cash dividends, loans or other distributions of funds from the guarantor subsidiaries, except those imposed by applicable law.Operations

12 The following table sets forth, for the periods indicated, certain information relating to our operations and percentage changes from period to period.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	13 Weeks Ended
	April 2, 2005				April 3, 2004					% Change
Statement of Operations Data:	(Dollars in thousands)
REVENUES:
Franchising	$	12,354			$			13,005		(5.0	)
Gifts	4,960				4,540					9.3
Licensing	1,138				1,257					(9.5	)
Other	52				83					(37.3	)
Total revenues	18,504				18,885					(2.0	)
OPERATING COSTS AND EXPENSES:
Franchising	5,088				4,175					21.9
Gifts	5,248				3,666					43.2
Licensing	142				129					10.1
General and administrative	2,005				2,313					(13.3	)
Stock compensation expense	—				13					(100.0	)
Costs associated with debt refinancing, net	—				87					(100.0	)
Depreciation	279				316					(11.7	)
Amortization	705				715					(1.4	)
Other operating expenses, net	37				18					105.6
Total operating costs and expenses	13,504				11,432					18.1
Income from operations	5,000				7,453					(32.9	)
Interest expense, net	(5,355			)	(8,885				)	(39.7	)
Other income	—				1,054					(100.0	)
Loss from continuing operations before provision for income taxes	(355			)	(378				)	(6.1	)
Benefit for income taxes	(120			)	(185				)	(35.1	)
Loss from continuing operations	(235			)	(193				)	21.8
Income from discontinued operations (net of income taxes of $0 and $29, respectively)	—				47					(100.0	)
Net loss	$	(235		)	$			(146	)	61.0

Cash flows from operating activities	$	(6,187		)	$		(3,805		)	(62.6	)
Cash flows from investing activities	$		(176	)	$		1,009			NM
Cash flows from financing activities	$		(8	)	$	11,048				NM

~~Forward-looking Information~~13

~~This~~13 ~~report~~Weeks ~~includes “forward-looking statements” within the meaning of~~Ended ~~the~~April ~~Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that do not relate solely to historical fact. They include~~2, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. They may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “continue,” “will,” “may” or words or phrases of similar meaning. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive and governmental factors outside of our control, that may cause actual results to differ materially from trends, plans or expectations set forth in the forward looking statements. Factors you should consider that could cause these differences include:2005

~~• the~~Compared ~~availability~~to ~~and~~the ~~adequacy~~13 ofWeeks ~~cash~~Ended ~~flow~~April ~~to satisfy our obligations~~3, ~~including debt service on our long-term debt and additional funds required for working capital;~~2004

• Income From Operations—Overview. Income from operations was $5.0 million for the ~~impact~~13 weeks ended April 2, 2005, a decrease of $2.5 ~~our~~million ~~current~~or ~~negative~~32.9 ~~member’s~~percent, ~~deficit~~from on$7.5 million ~~our~~for the 13 weeks ended April 3, 2004. This decrease was primarily attributable to decreases in contribution margin from franchising activities; of $1.6 million, gifts of $1.2 million and licensing of $100,000 offset by decreases in general and administrative expenses of $300,000 and costs associated with debt refinancing of $100,000.

• Segment Contribution. The following table sets forth the contribution from each of our ~~ability~~reporting tosegments. Franchising contribution is comprised of sales ~~solicit~~of new ~~franchisees;~~franchises and royalties from existing franchises less direct operating expenses. Gifts contribution is comprised of sales of our products through our catalog and Internet business less direct operating expenses. Licensing contribution is comprised of licensing fees received from third parties for the sale of products bearing our brand names less direct operating expenses.

• economic, competitive, demographic, business and other pressures, trends and conditions in various markets;

	13 Weeks Ended
Reporting Segment	April 2, 2005			April 3, 2004			% Change
	(Dollars in thousands)

Franchising	$	7,266		$		8,830	(17.7	)
Gifts	(288		)	874			(133.0	)
Licensing	996			1,128			(11.7	)
Total segment contribution	$	7,974		$	10,832		(26.4	)

~~• the seasonal nature of our operations;~~Franchising

~~• actions~~ Franchising Revenues. ~~taken~~Franchising ~~or failed~~revenues towere be$12.4 ~~taken~~million byfor ~~third~~the ~~parties~~13 weeks ended April 2, ~~including~~2005, bya ~~our~~decrease ~~customers~~of $600,000 ~~suppliers~~or 5.0 percent, from $13.0 ~~distributors,~~million ~~competitors~~for ~~and~~the ~~shareholders,~~13 asweeks ~~well~~ended asApril ~~legislative~~3, ~~regulatory~~2004. This decrease was principally due to a decrease in revenues from our TCBY franchise system of $900,000 offset by ~~judicial~~an ~~and~~increase ~~other~~in ~~governmental~~revenues ~~authorities;~~from our bakery franchise system of $300,000.

~~• changes~~ The decrease in our TCBY franchise system ~~business~~revenues ~~strategy~~was principally comprised of a decrease in product formulation revenues generated by purchases of TCBY products by franchisees of $700,000 or 25.7 ~~development~~percent ~~plans;~~as a result of approximately 1,200 fewer traditional equivalent unit weeks and a decrease in gallons shipped due to the introduction of "low carb" yogurt in the prior year which required initial shipments to franchisees. In addition, initial franchise fees recognized upon new store openings decreased $200,000 or 58.0 percent as a result of fewer new store openings.

~~• performance~~ The increase in our bakery franchise system revenues was principally comprised of increases in sales of products by our Great American Cookie batter facility to our franchisees ~~and~~of ~~licensees~~$200,000 or ~~changes~~6.5 percent, inproduct ~~relationships~~formulation ~~with~~revenues ~~our~~generated ~~franchisees~~by purchases of certain bakery products by franchisees of $100,000 or 9.9 percent and ~~licensees;~~initial franchise fees of $100,000 or 39.8 percent, partially offset by a decrease in other bakery franchising revenues of $100,000.

~~• difficulties~~ Franchising orExpenses. Franchising expenses were $5.1 million ~~delays~~for inthe ~~our~~13 ~~developing~~weeks ~~and~~ended ~~introducing~~April ~~anticipated~~2, ~~new~~2005, ~~products~~an increase of $900,000 or ~~failure~~21.9 percent, from $4.2 million for the 13 weeks ended April 3, 2004. This increase was principally due to increases in expenses for brand investment initiatives of $400,000, product costs of $300,000 relating to our ~~customers~~Great American Cookie batter facility, administrative costs of $200,000 relating to ~~accept~~documentation audits ~~new~~of ~~product~~franchisees, ~~offerings;~~and franchise development costs of $100,000, partially offset by reduced bad debt expense from our franchisees of $100,000.

~~• adoption~~ Franchising Contribution. The decrease in franchising contribution of ~~new~~$1.6 million or 17.7 percent was principally due to decreases ~~accounting~~in ~~pronouncements;~~product formulation revenues and initial franchise fees earned from our TCBY franchise system of $700,000 and $200,000, respectively, a net reduction in operating contribution relating to our Great American Cookie batter facility of $100,000, and increases in franchising expenses associated with our brand investment initiatives of $400,000 and in other franchising development and operations costs of $200,000.

~~• changes in consumer preferences and our ability to adequately anticipate such changes;~~14

~~• changes in prices of our raw materials;~~Gifts

~~• changes~~ Gifts inRevenues. Gifts revenues were $5.0 million for the 13 ~~personnel~~weeks ended April 2, 2005, an increase of $500,000 or 9.3 percent, from $4.5 million for the 13 weeks ended April 3, 2004. Gifts revenues consist of sales through our catalog and website as well as affiliations with other websites and sales to large corporate accounts for gifting purposes and to commercial airlines. The increase in gifts revenues in the 13 weeks ended April 2, 2005 was due to increases in sales through our catalogs and website of $1.1 million due to increased ~~labor~~catalog ~~costs~~circulation and the timing of the Easter holiday in the first quarter of 2005 compared to the second quarter of 2004, offset by a decrease in sales to our large corporate accounts of $600,000 due to a decrease in products sold. During the first quarter of 2004, a large corporate customer purchased higher price point products in addition to their normal purchases; however, they did not purchase the higher price point products in the first quarter of 2005.

• Gifts Expenses. Gifts expenses were $5.2 million for the ~~termination~~13 ofweeks ended April 2, 2005, an increase of $1.5 million or ~~inability~~43.2 percent, from $3.7 million for the 13 weeks ended April 3, 2004. This increase in expenses was due to ~~renew~~increases onin ~~favorable~~advertising ~~terms~~and marketing expenses of $700,000 associated ~~our~~with ~~material~~increased ~~agreements;~~circulation of catalogs, professional fees of $400,000 primarily due to consulting fees to assist us in preparing a five year strategic plan, labor and related expenses of $200,000, cost of sales of $100,000 and other operating expenses of $100,000.

~~• changes~~ Gifts Contribution. The decrease in gifts contribution was ~~customer~~primarily ~~traffic;~~attributable to the increase in gifts operating expenses of $1.5 million or 43.2 percent, partially offset by an increase in gifts revenues of $500,000 or 9.3 percent.

~~• prevailing interest rates;~~Licensing

~~• legal~~ Licensing Revenues. Licensing revenues were $1.1 million for ~~proceedings~~the ~~and~~13 ~~regulatory~~weeks ~~matters;~~ended April 2, 2005, a decrease of $100,000 or 9.5 percent, from $1.2 million for the 13 weeks ended April 3, 2004. This decrease was due to a decrease in licensing royalties earned under our licensing agreement for the sale of TCBY frozen food specialty products through retail channels of $100,000.

~~• acts~~ Licensing ofExpenses. ~~war~~Licensing orexpenses were $100,000 for the ~~terrorist~~13 ~~incidents;~~weeks ended April 2, 2005 and for the 13 weeks ended April 3, 2004.

~~• all~~ Licensing ~~other~~Contribution. The decrease in licensing ~~factors~~contribution ~~described~~of ~~under~~$100,000 ~~“Risk~~or ~~Factors”~~11.7 percent was primarily due to a decrease in licensing royalties earned under our ~~Registration~~licensing ~~Statement~~agreement onfor ~~Form~~the sale of TCBY ~~S-4~~frozen ~~(File~~food ~~No.~~specialty ~~333-115046),~~products asthrough ~~amended~~retail channels of $100,000.

13Other

We General ~~undertake~~and noAdministrative Expense. General and ~~obligation~~administrative toexpenses ~~publicly~~were ~~update~~$2.0 ormillion ~~revise~~for ~~any~~the ~~forward-looking~~13 ~~statements~~weeks ended April 2, ~~whether~~2005, as a ~~result~~decrease of ~~new information~~$300,000 ~~future~~or ~~events~~13.3 orpercent ~~otherwise~~from $2. In3 ~~light~~million offor ~~these~~the ~~risks~~13 weeks ended April 3, ~~uncertainties~~2004. This decrease was principally due to reductions in compensation and related payroll costs of $200,000, a change in estimate of a previously ~~assumptions~~recorded incentive compensation accrual of $200,000 ~~the~~and ~~forward-looking~~health ~~events~~insurance ~~discussed~~costs of in$100,000, ~~this~~partially ~~report~~offset ~~may~~by ~~not~~an ~~occur~~increase in professional fees of $200,000.

~~Overview~~ Depreciation and Amortization Expense. Total depreciation and amortization expense was $1.0 million for the 13 weeks ended April 2, 2005 and for the 13 weeks ended April 3, 2004. Depreciation expense was $300,000 for the 13 weeks ended April 2, 2005 and for the 13 weeks ended April 3, 2004. Amortization expense was $700,000 for the 13 weeks ended April 2, 2005 and for the 13 weeks ended April 3, 2004.

We Interest ~~are~~Expense, ~~one~~Net. ofInterest ~~the largest~~expense, ~~franchisors~~net inwas ~~the~~$5.4 million ~~premium~~for ~~snack-food~~the ~~industry,~~13 ~~featuring~~weeks ~~Mrs.~~ended ~~Fields, Great~~April ~~American Cookie Company~~2, ~~TCBY~~2005, ~~Pretzel~~a ~~Time~~decrease ~~and~~of ~~Pretzelmaker~~$3.5 asmillion ~~our core~~or ~~brands~~39.7 ~~Through~~percent, ~~our~~from ~~franchisees’~~$8.9 ~~retail~~million ~~stores,~~for ~~we are~~ the ~~largest~~13 ~~retailer~~weeks ofended ~~freshly baked~~April ~~on-premises~~3, ~~specialty~~2004. ~~cookies~~This decrease ~~and~~was ~~brownies~~primarily indue ~~the~~to ~~United States;~~ the ~~largest~~ ~~retailer~~write-off of ~~soft~~deferred ~~serve~~loan ~~frozen~~costs ~~yogurt~~of $2.8 million in the ~~United~~first ~~States;~~quarter ~~and~~of ~~the second~~2004 ~~largest~~associated ~~retailer~~with certain of ~~baked~~our onlong-~~premises~~term debt ~~pretzels~~and ina ~~the~~reduction ~~United~~in ~~States.~~amortization ~~In addition,~~of wedeferred ~~operate~~loan acosts ~~profitable~~of ~~gifts~~$600,000 ~~business~~as ~~and~~a result ~~have~~of ~~entered~~the ~~into~~lower ~~key licensing~~deferred ~~arrangements~~loan ~~that~~costs ~~leverage~~associated ~~awareness~~with ofthe ~~our~~new ~~core~~borrowings. ~~brands among our~~The ~~retail~~deferred ~~customer~~loan ~~base.~~costs Weassociated ~~operate~~with ~~through~~certain aof ~~network~~our oflong-term ~~2,885~~debt ~~retail~~were ~~concept~~written ~~locations,~~off ~~which~~due ~~are~~to ~~located~~the ~~throughout~~completion ~~the~~of ~~United~~our ~~States~~debt ~~and~~refinancing inon ~~approximately 40~~March ~~foreign~~16, ~~countries~~2004.

Our business is divided into three primary business segments for financial reporting purposes: franchising, gifts and licensing representing 70.4 percent, 23.2 percent and 6.1 percent of total revenues, respectively, for the 26 weeks ended July 3, 2004. 15

As Other ofIncome. ~~July~~Other income was $1.1 million for the 13 weeks ended April 3, 2004,. ~~our~~Other ~~store~~income ~~portfolio~~represents gain on the sale of certain equity ~~consisted~~warrants of 2Nonni's Food Company,~~296~~ ~~domestic~~a ~~franchised~~predecessor-in-interest ~~locations~~to Shadewell Grove Foods, ~~353~~Inc., ~~international~~a ~~franchised locations~~manufacturer and ~~236~~distributor ~~licensed~~of ~~locations~~Mrs. ByFields ~~brand,~~branded ~~our~~soft ~~franchisees’~~baked cookies ~~and~~under ~~licensees’ concept~~certain ~~locations~~license ~~are~~agreements ~~distributed~~with asus ~~follows:~~and our affiliates.

	Domestic Franchised	International Franchised	Licensed Locations	Total
Mrs. Fields	392	83	58	533
Great American	284	1	1	286
Original Cookie	—	—	11	11
Cookie Subtotal	676	84	70	830
Pretzel Time	213	3	6	222
Pretzelmaker	164	39	3	206
Hot Sam	—	—	15	15
Pretzel Subtotal	377	42	24	443
Bakery Brands Subtotal	1,053	126	94	1,273
TCBY—Traditional Stores	512	227	—	739
TCBY—Non-traditional Stores	731	—	142	873
Dairy Brands Subtotal	1,243	227	142	1,612
Totals	2,296	353	236	2,885

Consolidated Financial Condition

~~The~~ Total ~~above~~assets ~~table counts~~at ~~each~~April ~~concept~~2, 2005 ~~location~~were ~~individually~~$172.8 ~~For example~~million, if a ~~physical~~decrease ~~location had~~of ~~a Mrs~~$9.0 ~~Fields~~million ~~store~~or ~~and~~4.9 apercent, ~~Pretzel~~from $181.8 ~~Time~~million ~~store~~at ~~together~~January 1, ~~this~~2005. ~~would~~This ~~be counted~~decrease aswas ~~two~~primarily ~~concept~~attributable ~~locations~~to decreases in ~~the~~cash ~~table~~and ~~above~~cash equivalents of $6.4 Ifmillion, ~~actual~~a ~~physical~~decrease ~~stores~~in receivables ~~were~~of ~~counted,~~$1.5 ~~rather~~million ~~than~~and ~~concept~~a ~~locations,~~net ~~total~~decrease ~~store~~in ~~counts~~other ~~would~~current ~~be reduced~~and bylong-term ~~254~~assets ~~locations~~of $1.0 ~~to 2,631~~million.

~~Mrs.~~ Total ~~Fields Original~~liabilities ~~Cookies,~~at ~~Inc. (“MFOC”)~~April 2, ~~our~~2005 ~~parent~~were ~~company, and certain of its subsidiaries own approximately~~ $216.6 ~~franchised and licensed retail concept locations~~million, ~~representing~~a ~~7.5~~decrease ~~percent~~ of ~~the total retail concept locations~~$8. ~~During~~7 ~~the~~million 26or ~~weeks ended July~~ 3,.9 ~~2004~~percent, ~~we recognized~~ from $1225.63 million ~~of franchise~~at ~~royalties~~January ~~and $~~1, 2005.5 ~~million~~This ofdecrease ~~product~~was ~~sales~~primarily ~~relating~~due to ~~these retail~~decreases ~~concept~~in ~~locations.~~accounts ~~MFOC~~payable ~~expects~~of ~~that~~$2.5 ~~certain~~million ofand ~~these~~accrued ~~retail~~liabilities, ~~concept~~primarily ~~locations~~accrued ~~may~~interest bepayable, ~~sold~~of ~~over~~$5.7 ~~time to new and current franchisees or will be closed~~million.

14Consolidated Cash Flows

~~During~~ Net ~~the~~cash ~~period~~flows used in ~~from~~operating ~~January 3,~~activities ~~2004~~were to$6.2 ~~July 3~~million for the 13 weeks ended April 2, ~~2004~~2005, ~~our~~an increase ~~store~~of ~~portfolio~~$2.4 ~~has declined~~million, from net cash flows used in operating activities of $3.8 million for the 13 weeks ended April 3,~~027~~ ~~concept~~2004. ~~locations~~This increase was principally due to ~~2,885~~cash ~~concept~~used ~~locations,~~for aschanges ~~follows:~~in working capital.

	Domestic Franchised		International Franchised		Licensed Locations		Total
Balance, January 3, 2004	2,380		378		269		3,027
New development openings	78		8		1		87
Permanent closings	(183	)	(33	)	(32	)	(248	)
Other openings, net	21		—		(2	)	19
Balance July 3, 2004	2,296		353		236		2,885

Net cash flows used in investing activities were $176,000 for the 13 weeks ended April 2, 2005 compared to net cash flows provided by investing activities of $1.0 million for the 13 weeks ended April 3, 2004. This change was principally due to proceeds from the sale of equity warrants of Nonni's Food Company of $1.1 million received in the first quarter of 2004 and an increase in purchases of property and equipment of $131,000.

Of Net ~~the~~cash ~~248~~flows used in ~~permanent~~financing ~~closings~~activities ~~between~~were ~~January 3~~$8,000 ~~2004~~for ~~and~~the ~~July 3,~~13 ~~2004~~weeks ended April 2, 502005 compared to net cash flows provided by financing activities of $11.0 million for the 13 ~~percent~~weeks ~~related~~ended April 3, 2004. This change was principally due to ~~TCBY~~the ~~brand~~completion ~~non-traditional~~of our ~~locations~~debt refinancing on March 16, 192004 which resulted in $115.0 ~~percent~~million ~~related~~in toproceeds ~~TCBY~~from ~~brand~~the ~~traditional~~issuance ~~locations,~~of ~~15.7~~our ~~percent~~senior ~~related~~secured tonotes ~~bakery~~and ~~concept~~a capital ~~locations~~contribution ~~owned~~from our parent of $17.5 million offset by ~~franchisees~~payments ~~other~~of ~~than~~our long-term ~~MFOC~~debt and 15our line of credit of $101.35 ~~percent~~million, ~~related~~payments toof debt ~~retail~~issuance ~~concept~~costs ~~locations~~of ~~owned~~$12.0 bymillion ~~MFOC~~and other activity with parent of $8.0 million.

RecentLiquidity Developmentsand Capital Resources

~~Reorganization~~ Our ~~and~~principal sources ~~Refinancing. We~~of ~~were~~liquidity ~~formed~~are incash ~~March 2004~~flows from operating activities and cash on hand. At inApril ~~connection~~2, ~~with~~2005, ~~the~~we ~~reorganization~~had $13.5 million of ~~certain~~cash ~~entities~~on ~~and~~hand. ~~segments~~During ~~that~~fiscal ~~are~~2005, we ~~under~~expect ~~the~~that ~~common~~our ~~control~~principal uses of ~~Mrs~~cash ~~Fields’~~will ~~Companies,~~be ~~Inc.~~for ~~(“MFC”)~~working capital, ~~formerly known~~capital asexpenditures ~~Mrs~~of approximately $3.0 ~~Fields’~~million ~~Famous~~and ~~Brands,~~interest ~~Inc. We are~~payments aon ~~wholly~~our long-~~owned~~term ~~subsidiary~~debt of ~~MFOC~~$20. ~~MFOC~~5 ismillion, aof ~~wholly-owned~~which ~~subsidiary~~$10.3 ofmillion ~~Mrs~~was paid on March 16, 2005. ~~Fields’~~During ~~Holding~~fiscal ~~Company~~2005, ~~Inc. (“MFH”)~~we ~~and~~will ~~MFH~~not isbe arequired ~~wholly-owned~~but ~~subsidiary~~we may offer to repurchase a portion of ~~MFC~~the senior secured notes as described below. ~~Prior~~ In addition, to the ~~reorganization,~~extent ~~TCBY~~we ~~Systems~~have cash available and it is permitted by the indenture governing our outstanding senior secured notes, we may pay dividends ~~LLC~~to ~~(“TCBY”)~~our ~~was~~parent acompanies ~~wholly-owned~~for ~~subsidiary~~uses ofsuch ~~TCBY~~as ~~Enterprises~~acquisitions, ~~LLC~~debt ~~(“TCBY~~repayments and ~~Enterprises”),~~dividends. ~~whose~~We ~~parent~~believe isthat ~~also~~cash ~~MFC~~provided by operating activities and cash on hand will be adequate to meet our cash requirements for the next 12 months.

As We ~~part~~are ofhighly ~~the~~leveraged. ~~reorganization~~At ~~described above~~April 2, 2005, we ~~refinanced~~had ~~substantially~~$195.7 million ~~all~~ of ~~our~~long-term ~~indebtedness. We~~debt ~~issued~~consisting ~~$80.7 million~~ of 9 percent senior secured notes ~~(the~~and “911 ½ percent senior secured notes (the "Senior Secured Notes”"). inThe ~~exchange~~Senior Secured ~~for~~Notes ~~$80.7 million~~mature ofon 10March 15, ~~1/8~~2011, ~~percent~~with ~~senior~~interest ~~notes~~payable semi-annually ~~and~~on ~~issued~~March ~~$115~~15 and September 15.0 ~~million~~Due ofto 11borrowing ~~1/2~~restrictions ~~percent~~under ~~senior~~the ~~secured~~indenture ~~notes~~governing (the ~~“11~~Senior ~~1/2~~Secured ~~percent~~Notes, our ability to obtain additional debt financing is significantly limited. The Senior Secured Notes” ~~together~~require ~~with~~us to offer to repurchase a portion of the 9notes at 100 percent ~~Senior~~of the ~~Secured~~principal ~~Notes~~amount, plus accrued and unpaid interest thereon to the ~~“Senior~~date ~~Secured~~of ~~Notes”). The~~purchase, ~~proceeds~~with ~~from~~50 percent of our "excess cash flow," as defined in the 11indenture agreement, when the ratio of our net indebtedness to consolidated EBITDA is above 3.75 to 1/2.0 and the cumulative unpaid excess cash ~~percent~~flow offer amount exceeds $10.0 million. For a more detailed description of the material terms of the Senior Secured Notes, ~~were~~see ~~used~~Note 3 to ~~retire~~our ~~the~~consolidated financial ~~Company’s~~statements ~~remaining long-term~~included ~~debt~~in ~~subsequent~~our toannual ~~year~~report on Form 10-~~end~~K, filed with the Securities and Exchange Commission on March 22, 2005.

Increase Investment in Brands. As discussed in our Registration Statement on Form S-4 (File No. 333-115049), as amended, in 2004, we intend to invest $3.0 million in advertising, promotion and brand building ideas. While we believe this investment in our brands will support the initiatives aimed at increasing sales at all franchised locations, we have identified TCBY as the brand that offers our greatest opportunity for building profitable sales in the short term. Against the background of a product aligned with current health trends and not limited by mall based locations, we intend to reposition the TCBY concept consistent with our consumer and franchisee based strategic framework, building on today’s health conscious consumer and a desire for a low fat, healthy, yet satisfying treat, which we believe will increase positive consumer perception of our brand.16

During the 13 weeks and 26 weeks ended July 3, 2004, we incurred expenses of $1.3 million related to brand investment initiatives. There were no such expenses in 2003. These expenses for brand investment initiatives included increased advertising and promotion of the TCBY brand and its products, including the introduction during the second quarter of several flavors of “low carb” yogurt at most of our TCBY traditional franchised retail stores of approximately $1.0 million and initial expenses relating to the reconcepting of TCBY of approximately $300,000. We currently anticipate expending an additional $1.7 million in 2004 for brand investment initiatives.Inflation

~~Management~~ The ~~Reorganization. On~~impact ~~June 24,~~of ~~2004,~~inflation ~~we announced~~on aour ~~management~~business ~~reorganization~~has ~~effective~~not ~~June 28,~~been ~~2004. We~~significant ~~believe~~in ~~this~~recent ~~new~~years. ~~structure is aligned with~~Some of our ~~strategic~~employees ~~vision. In~~are ~~addition~~paid ~~to creating~~hourly awages ~~new~~at ~~executive~~the ~~committee~~Federal ~~comprised~~minimum ofwage ~~our~~level. ~~Chief~~Minimum wage ~~Executive~~increases ~~Officer~~will ~~and four~~negatively ~~Executive~~impact ~~Vice~~our ~~Presidents,~~payroll wecosts ~~created~~in ~~two~~the ~~cross-functional~~short ~~teams~~term, ~~which~~but ~~will~~management ~~have~~believes ~~representation~~such ~~from~~impact ~~all~~can ~~functions~~be ofoffset ~~our~~in ~~company~~the ~~and~~long ~~will~~term ~~share~~through lower ~~accountability~~staffing ~~for~~of ~~building~~operations ~~the bakery~~ and, ~~TCBY~~if ~~brands. Under the cross-functional teams~~necessary, wethrough ~~will move~~product ~~decision-making~~price ~~closer to our customers~~increases.

AsCritical aAccounting result of this reorganization, we terminated the employment of two Senior Vice Presidents effective June 28, 2004 and accrued approximately $600,000 related to severance expenses for the 13 weeks ended July 3, 2004.Policies

15 The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in our unaudited condensed consolidated financial statements. Management has reviewed with our Audit Committee the accounting policies that it uses to prepare our unaudited condensed consolidated financial statements and believes that the following policies are the most important to the portrayal of our financial condition and the results of our operations while requiring the use of judgments and estimates about the effects of matters that are inherently uncertain.

In Impairment of ~~comparison~~Goodwill. Goodwill is not amortized, ~~during~~but ~~the~~is 13subject ~~weeks~~to ~~ended~~an ~~June 28~~annual assessment for impairment, ~~2003~~or more frequently if circumstances indicate potential impairment, through a comparison of fair value to its carrying amount. The two-step approach to assess our goodwill impairment requires that we first compare the estimated fair value of each reporting unit with goodwill ~~expensed~~to the carrying amount of the reporting unit's assets and ~~accrued~~liabilities, including ~~approximately~~its ~~$800~~goodwill. If the fair value of the reporting unit is below its carrying amount,~~000~~ ~~for~~then ~~severance~~the ~~costs~~second ~~relating~~step toof the impairment test is performed, in ~~resignation~~which the current fair value of ~~our~~the ~~previous~~reporting ~~Chief~~unit's ~~Executive~~assets ~~Officer~~and liabilities will determine the current implied fair value of the reporting unit's goodwill.

In On ~~addition~~an annual basis, aswe ~~part~~complete an evaluation of goodwill associated with our various reporting units. To the extent ~~new~~that the fair value associated with goodwill is determined to be less ~~organizational~~than ~~alignment~~the recorded value, we ~~expect~~write todown ~~hire~~the ~~additional~~value ~~personnel~~of ~~including~~the related goodwill. The ~~three~~estimated ~~new~~fair ~~Vice~~value ~~Presidents~~of ~~and~~goodwill ~~several~~is ~~Director~~affected ~~level~~by, ~~staff. As~~among aother ~~result~~things, weour business ~~expect~~plan ~~additional~~for ~~expenses~~the future, estimated results of future operations and the ~~approximately~~comparable ~~$500,000~~companies inthat are used to estimate the ~~second~~fair ~~half~~value of ~~2004~~our ~~relating~~goodwill. Changes toin the ~~recruitment,~~business plan or operating results that are different than the ~~relocation~~projections ~~and~~used ~~compensation~~to ofdevelop ~~these~~the ~~individuals. However,~~valuation ~~this~~of ~~may~~goodwill ~~fluctuate~~have ~~depending~~an ~~upon~~impact on the ~~timing~~valuation of ~~these~~the ~~new hires~~goodwill.

~~Results~~ In conducting our impairment analyses, we perform analyses and tests of ~~Operations~~our goodwill with respect to our reporting units. The test methods employed involve assumptions concerning useful lives of intangible assets, interest and discount rates, projections and other assumptions of future business conditions. The assumptions employed are based on management's judgment using internal and external data.

~~The~~ Impairment of ~~following~~Long-Lived and Certain Identifiable Intangible Assets. We review ~~table~~our ~~sets~~long-lived ~~forth,~~assets for impairment when circumstances indicate that the ~~periods~~book value ~~indicated,~~of ~~certain~~an ~~information~~asset ~~relating~~may not be fully recovered by the undiscounted net cash flow generated over the remaining life of the related asset or group of assets. If the cash flows generated by the asset are not sufficient to recover the remaining book value of the ~~operations~~asset, we are required to write down the value of the ~~Mrs~~asset to its estimated fair value. ~~Fields~~ In evaluating whether the asset will generate sufficient cash flow to recover its book value, we estimate the amount of cash flow that will be generated by the asset and ~~percentage~~the ~~changes~~remaining ~~from~~life ~~period~~of the asset. In making our estimate, we consider the performance trends related to the ~~period~~asset, the likelihood that the trends will continue or change, both at the asset level as well as at the national economic level, and the length of time that we expect to retain the asset.

16 Allowance for Doubtful Accounts. We sell products to and receive royalties from our franchisees and sell products to other customers. Sometimes these franchisees and customers are unable or unwilling to pay for the products that they receive or royalties that they owe. Factors that affect our ability to collect amounts that are due to us include the financial strength of a franchisee or customer and its operations, the economic strength of the mall where the franchisee is located and the overall strength of the retail economy. We are required to establish an estimated allowance for the amounts included in accounts receivable that we will not be able to collect in the future. To establish this allowance, we evaluate the customer's or franchisee's financial strength, payment history, reported sales and the availability of collateral to offset potential losses. If the assumptions that are used to determine the allowance for doubtful accounts change, we may have to provide for a greater level of expense in future periods or to reverse amounts provided in prior periods.

~~Statement of Operations Data:~~17

	13 Weeks Ended								26 Weeks Ended
	July 3, 2004			June 28, 2003			% Change		July 3, 2004			June 28, 2003			% Change
	(Dollars in Thousands)
REVENUES:
Franchising	$	15,228		$	14,928		2.0		$	28,233		$	27,772		1.7
Gifts	4,758			3,200			48.7		9,298			6,010			54.7
Licensing	1,191			1,325			(10.1	)	2,448			2,944			(16.8	)
Other	58			114			(49.1	)	141			240			(41.3	)
Total revenues	21,235			19,567			8.5		40,120			36,966			8.5
OPERATING COSTS AND EXPENSES:
Franchising	6,345			4,812			31.9		10,520			8,910			18.1
Gifts	4,230			2,781			52.1		7,896			4,859			62.5
Licensing	200			448			(55.4	)	329			694			(52.6	)
General and administrative	3,052			2,702			13.0		5,365			5,050			6.2
Stock compensation expense	13			31			(58.1	)	26			62			(58.1	)
Costs associated with debt refinancing	—			—			NM		87			—			NM
Depreciation	324			442			(26.7	)	640			902			(29.0	)
Amortization	701			492			42.5		1,416			879			61.1
Other operating expenses (income), net	(40		)	208			NM		(22		)	250			NM
Total operating costs and expenses	14,825			11,916			24.4		26,257			21,606			21.5
Income from operations	6,410			7,651			(16.2	)	13,863			15,360			(9.7	)
Interest expense, net	(5,502		)	(6,142		)	(10.4	)	(14,387		)	(12,236		)	17.6
Other income	—			—			NM		1,054			—			NM
Income from continuing operations before provision for income	908			1,509			(39.8	)	530			3,124			(83.0	)
Provision for income taxes	415			534			(22.3	)	230			1,289			(82.2	)
Income from continuing operations	493			975			(49.4	)	300			1,835			(83.7	)
Income from discontinued operations (net of income taxes of $10, $1, $39 and $19,respectively)	11			30			(63.3	)	58			31			87.1
Net income	$	504		$	1,005		(49.9	)	$	358		$	1,866		(80.8	)
Cash flows from operating activities	$	7,308		$	1,342				$	3,503		$	5,917
Cash flows from investing activities	$	(27	)	$	(4	)			$	982		$	(172	)
Cash flows from financing activities	$	(67	)	$	(2,582	)			$	10,981		$	(6,532	)

Revenue Recognition. We recognize revenues from our initial franchising fees and licensing and other fees when all material services or conditions relating to the revenues have been substantially performed or satisfied, which is generally upon the opening of a store. We recognize franchise and license royalties, which are based on a percentage of gross sales, as earned, which is generally upon sale of product by our franchisee or licensee. Minimum royalty payments under our licensing agreements are deferred and recognized on a straight-line basis over the term of the agreement. We recognize revenues from the sale of cookie dough that we produce and sell to franchisees at the time of shipment and classify them as franchising revenues. We recognize revenues from gift sales at the time of shipment. We receive product formulation fees and allowances from suppliers based on product sales to franchisees. We recognize these fees and allowances upon shipment of product to our distributors or franchisees.

17Recent Accounting Pronouncements

13 In ~~Weeks~~December ~~Ended July 3~~2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 123 (revised 2004) ("SFAS 123R"), "Share-Based Payment," which is a revision of SFAS No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation." SFAS 123R supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" and amends SFAS No. 95, "Statement of Cash Flows." Generally, the approach in SFAS 123R is similar to the approach described in SFAS 123. However, SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The new standard will be effective for the Company beginning January 1, 2006. The adoption of SFAS 123R is not expected to have a material effect on the Company's consolidated financial statements.

~~Compared~~ In toNovember 2004, the 13FASB ~~Weeks~~issued SFAS No. 151, ~~Ended~~("SFAS ~~June~~151"), "Inventory Costs, an amendment of ARB No. 2843, Chapter 4" which clarifies the types of ~~2003~~costs that should be expensed rather than capitalized as inventory. This statement also clarifies the circumstances under which fixed overhead costs associated with operating facilities involved in inventory processing should be capitalized. The new standard will be effective for the Company beginning January 1, 2006. The adoption of SFAS 151 is not expected to have a material impact on the Company's consolidated financial position or results of operations.

IncomeItem From Operations—Overview. Income from operations was $6.4 million for the 13 weeks ended July 3, 2004, a decrease of $1.3 millionQuantitative or 16.2 percent, from $7.7 million for the 13 weeks ended June 28, 2003. This decrease was primarily attributable to a decrease in contribution from our franchising segment of $1.2 million which was primarily attributable to $1.3 million expended for brand investment initiatives previously discussed. These brand investment initiatives included increased advertising and promotionQualitative ofDisclosures theabout TCBYMarket brand and its products, including the introduction during the second quarter of 2004 of several flavors of “low carb” yogurt at most of our TCBY traditional franchised retail stores, and initial expenses relating to the repositioning of the TCBY concept consistent with our consumer and franchisee based strategic framework.Risk

~~Segment~~ There ~~Contribution. The~~have ~~following~~been no ~~table~~significant ~~sets~~changes ~~forth~~in ~~the contribution~~market ~~from~~risks ~~each~~since ofthe ~~our~~end ~~reporting~~of ~~segments.~~the ~~Franchising~~Company’s ~~contribution is~~fiscal ~~comprised~~year ofended ~~sales~~January of1, ~~new~~2005. ~~franchises~~For ~~and~~more ~~royalties~~information, ~~from~~please ~~existing~~read ~~franchises less~~Item ~~direct operating expenses~~7A. ~~Gifts~~and ~~contribution~~the consolidated isfinancial ~~comprised~~statements ofand ~~sales~~notes ofthereto ~~our products~~included ~~through~~in our ~~catalog~~annual ~~and Internet business less direct operating~~report ~~expenses.~~on ~~Licensing~~Form ~~contribution~~10-K, isfiled ~~comprised~~with ~~of licensing fees received from third parties for~~ the ~~sale~~Securities ofand ~~products~~Exchange ~~bearing~~Commission ~~our~~on ~~brand~~March ~~names less direct~~22, ~~operating expenses~~2005.

	13 Weeks Ended
Reporting Segment	July 3, 2004 Contribution		June 28, 2003 Contribution		Percent Change
	(dollars in thousands)
Franchising	$	8,883	$	10,116	(12.2	)%
Gifts	528		419		26.0	%
Licensing	991		877		13.0	%
Total Segment Contribution	$	10,402	$	11,412	(8.9	)%

Item 4. Controls and Procedures

~~Franchising~~ The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures, as of the end of the period covered by this report, are functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

~~Franchising Revenues. Franchising revenues were $15.2 million~~ There ~~for~~has ~~the~~been 13no ~~weeks~~change ~~ended~~in ~~July 3,~~our ~~2004,~~internal ancontrol ~~increase~~over offinancial ~~$300,000~~reporting ~~or 2.0 percent,~~(as ~~from $14.9 million for the 13 weeks ended June 28,~~defined ~~2003. This increase was principally due to a $500,000 or 8.7 percent increase~~ in ~~revenues~~Rules ~~from~~13a-15(f) ~~our~~and ~~TCBY~~15d-15(f) ~~franchise~~under ~~system~~the asSecurities aExchange ~~result~~Act of ~~increased royalties. This increase in our TCBY franchisee system~~1934) ~~revenues~~that ~~was~~occurred ~~partially~~during ~~offset by a $200,000 or 2.1 percent decrease in revenues from~~ our ~~bakery~~fiscal ~~franchisee~~quarter ~~system~~ended asApril ~~a result of lower initial franchise fees of $300~~2,~~000~~ ~~and lower product formulation revenues of $100~~2005,~~000~~ ~~partially~~that ~~offset~~has bymaterially ~~an increase in revenues of $200~~affected,~~000~~ asor ais ~~result~~reasonably oflikely ato ~~0.6~~materially ~~percent~~affect, ~~increase~~our ininternal ~~year~~control over ~~year~~financial ~~sales at our bakery franchisee system and sales from our Great American Cookie batter facility to franchisees~~reporting.

Franchising Expenses. Franchising expenses were $6.3 million for the 13 weeks ended July 3, 2004, an increase of $1.5 million or 31.9 percent, from $4.8 million for the 13 weeks ended June 29, 2003. This increase was principally due to increases in expenses for brand investment initiatives as previously discussed of $1.3 million, operating costs associated with our Great American Cookie batter facility of $300,000 and other marketing and advertising expenses of $200,000 partially offset by a reduction in franchise development and selling expenses of $300,000.18

~~Franchising~~PART ~~Contribution. The~~II ~~decrease~~– inOTHER ~~franchising contribution of $1.2 million or 12.2 percent was principally due to costs incurred for brand investment initiatives of $1.3 million.~~INFORMATION

GiftsItem 1. Legal Proceedings

~~Gifts~~ We ~~Revenues. Gifts~~and ~~revenues~~our ~~were~~products ~~$4.8 million~~are ~~for~~subject ~~the~~to 13regulation ~~weeks~~by ~~ended~~numerous ~~July 3,~~governmental ~~2004~~authorities, anincluding ~~increase~~without ~~of $1.6 million or~~limitation, ~~48.7 percent~~federal, ~~from~~state ~~$3.2 million~~and ~~for~~local ~~the~~laws 13and ~~weeks~~regulations ~~ended~~governing ~~June 28~~franchising, ~~2003.~~ ~~Gifts revenues consist of sales through our catalog and e-tailing Web~~health, ~~site. The increase in revenues in the 13 weeks ended July 3~~sanitation, ~~2004~~environmental ~~was due to increases in corporate gift sales of $900~~protection,~~000~~ orsafety ~~59.8~~and ~~percent~~hiring and ~~catalog~~employment ~~and Internet sales of $900,000 or 74~~practices.~~1 percent partially offset by a reduction in our sales to commercial airlines of $200,000.~~

18 In the ordinary course of business, we are involved in routine litigation. We are not a party to any legal proceedings, which in the opinion of management, after consultation with legal counsel, is material to our business, financial condition or operations.

~~Gifts~~Item ~~Expenses~~5. ~~Gifts~~ ~~expenses~~Other were $4.2 million for the 13 weeks ended July 3, 2004, an increase of $1.4 million or 52.1 percent, from $2.8 million for the 13 weeks ended June 28, 2003. This increase in expenses was due to increases in cost of sales of $900,000 associated with the increased sales volume and increased cost of product, advertising and marketing expenses of $400,000 due to increased circulation of catalogs, and labor and related expenses of $100,000 due to increased sales volume.Information

~~Gifts~~ On ~~Contribution~~May 13, 2005, the Company accepted the resignation of Sandra M. ~~The~~ ~~increase~~Buffa inas ~~gifts~~Chief ~~contribution~~Financial Officer, Executive Vice President and Treasurer of the Company, effective as of ~~$100~~May 31,~~000~~ or2005. 26Ms.0 ~~percent~~Buffa ~~was~~also ~~primarily~~resigned ~~attributable~~from toall anoffices ~~increase~~and indirectorships ~~gifts~~that ~~sales~~she holds on behalf of ~~$1.6 million~~the orCompany's ~~48.7 percent~~parent ~~partially~~entities ~~offset~~and bysubsidiaries. anAs ~~increase~~a inresult ~~gifts~~of ~~operating~~this ~~expenses~~resignation, effective as of $1May 31, 2005, the parties will terminate the Amended and Restated Employment Agreement, dated March 16, 2004, by and between Ms. Buffa and the Company, filed as Exhibit 10.57 to the Company's Registration Statement on Form S-4 ~~million~~ or(File 52No.~~1 percent~~ 333-115046), as amended.

Licensing

Item 6.		Exhibits

31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .

Licensing Revenues. Licensing revenues were $1.2 million for the 13 weeks ended July 3, 2004, a decrease of $100,000 or 10.1 percent, from $1.3 million for the 13 weeks ended June 28, 2003. This decrease was due to decreases in licensing royalties earned under our licensing agreement for the sale of TCBY frozen food specialty products through retail channels of $200,000 partially offset by an increase in licensing royalties from premium candies and other various Mrs. Fields branded products of $100,000.19

Licensing Expenses. Licensing expenses were $200,000 for the 13 weeks ended July 3, 2004, a decrease of $200,000 or 55.4 percent, from $400,000 for the 13 weeks ended June 28, 2003. This decrease was due to reduced licensing expenses incurred under our licensing agreement for TCBY frozen food specialty products.SIGNATURES

~~Licensing~~Pursuant ~~Contribution. The~~to ~~increase~~the inrequirements ~~licensing~~of ~~contribution~~Section ~~of $100,000~~13 or ~~13.0%~~15(d) ~~was~~of the ~~primarily~~Securities ~~due~~Exchange toAct of 1934, the ~~decrease~~registrant inhas ~~licensing~~duly ~~expenses~~caused this report ~~previously~~to ~~discussed,~~be ~~which~~signed ~~was~~on ~~partially~~its ~~offset~~behalf by the ~~decrease~~undersigned inthereunto ~~licensing revenues~~duly authorized.

Other

MRS. FIELDS FAMOUS BRANDS, LLC



/s/ Stephen Russo		May 13, 2005
Stephen Russo, President and		Date
Chief Executive Officer
(Principal Executive Officer)

/s/ Sandra M. Buffa		May 13, 2005
Sandra M. Buffa, Executive Vice President		Date
and Chief Financial Officer
(Principal Financial and Accounting Officer)

General and Administrative Expense. General and administrative expenses were $3.1 million for the 13 weeks ended July 3, 2004, an increase of $400,000 or 13.0 percent, from $2.7 million for the 13 weeks ended June 28, 2003. This increase was primarily due to increases in salaries and wages of $100,000, health insurance costs of $100,000, property and casualty insurance of $100,000, occupancy costs of $100,000 and other administrative expenses of $200,000 partially offset by a decrease in severance costs of $200,000 associated with certain terminations of our executive management team as previously discussed.20

Depreciation and Amortization Expense. Total depreciation and amortization expense was $1.0 million for the 13 weeks ended July 3, 2004, an increase of $100,000 or 11.1 percent, from $900,000 for the 13 weeks ended June 28, 2003. Depreciation expense was $300,000 for the 13 weeks ended July 3, 2004, a decrease of $100,000 or 26.7 percent, from $400,000 for the 13 weeks ended June 28, 2003. This decrease was principally due to the write off of equipment relating to distribution of TCBY yogurt product in convenience stores in the third quarter of 2003. Amortization expense was $700,000 for the 13 weeks ended July 3, 2004, an increase of $200,000 or 42.5 percent from $500,000 for the 13 weeks ended June 28, 2003. This increase was due to the amortization associated with the TCBY trade names and recipes, which were previously considered to be indefinite, lived assets and are now amortized over a 15 year life.

Interest Expense, Net. Interest expense, net was $5.5 million for the 13 weeks ended July 3, 2004, a decrease of $600,000 or 10.4 percent, from $6.1 million for the 13 weeks ended June 28, 2003. This decrease was primarily due to the refinancing of our debt in March 2004 resulting in lower effective interest rates on our outstanding debt for the 13 weeks ended July 3, 2004 compared to the effective interest rate on our outstanding debt for the 13 weeks ended June 28, 2003.

26 Weeks Ended July 3, 2004

Compared to the 26 Weeks Ended June 28, 2003

Income From Operations—Overview. Income from operations was $13.9 million for the 26 weeks ended July 3, 2004, a decrease of $1.5 million or 9.7 percent, from $15.4 million for the 26 weeks ended June 28, 2003. This decrease was primarily attributable to decreases in contribution from our franchising segment of $1.1 million which was primarily attributable to $1.3 million of expenses incurred for brand investment initiatives previously discussed, our licensing segment of $100,000, and other revenues of $100,000, and increases in general and administrative expenses of $300,000, expenses incurred for the refinancing of our debt of $100,000 and depreciation and amortization expense of $300,000 offset by an increase in contribution from our gifting segment of $300,000 and a decrease in other operating expenses of $200,000.

Segment Contribution. The following table sets forth the contribution from each of our reporting segments. Franchising contribution is comprised of sales of new franchises and royalties from existing franchises less direct operating expenses. Gifts contribution is comprised of sales of our products through our catalog and Internet business less direct operating expenses. Licensing contribution is comprised of licensing fees received from third parties for the sale of products bearing our brand names less direct operating expenses.

	26 Weeks Ended
Reporting Segment	July 3, 2004 Contribution		June 28, 2003 Contribution		Percent Change
	(dollars in thousands)
Franchising	$	17,713	$	18,862	(6.1	)%
Gifts	1,402		1,151		21.8	%
Licensing	2,119		2,250		(5.8	)%
Total Segment Contribution	$	21,234	$	22,263	(4.6	)%

Franchising

Franchising Revenues. Franchising revenues were $28.2 million for the 26 weeks ended July 3, 2004, an increase of $400,000 or 1.7 percent, from $27.8 million for the 26 weeks ended June 28, 2003. This increase was principally due to an increase in revenues from our TCBY franchise system of $500,000 as a result of increased royalties of $400,000 and increased product formulation revenues on TCBY products sold through the TCBY franchisee system of $100,000. Our bakery franchise system experienced an increase in royalties of $200,000 as a result of year over year sales increase of 2.2% and an increase in revenues from sales by our Great American Cookie batter facility to franchisees of $300,000. These increases in revenues were partially offset by a decrease in initial franchisees fees recognized upon new store openings of $400,000 and lower royalties as a result of fewer franchised locations of $200,000.

Franchising Expenses. Franchising expenses were $10.5 million for the 26 weeks ended July 3, 2004, an increase of $1.6 million or 18.1 percent, from $8.9 million for the 26 weeks ended June 28, 2003. This increase was principally due to increases to expenses for brand investment initiatives of $1.3 million, operating costs associated with our Great American Cookie batter facility of $500,000, other marketing and advertising expenses of $100,000 and product development of $100,000 partially offset by a reduction in franchise development and selling expenses of $400,000.

Franchising Contribution. The decrease in franchising contribution of $1.1 million or 6.1 percent was principally due to increases in expenses incurred for brand investment initiatives of $1.3 million, operating expenses associated with our Great American Cookie batter facility of $500,000, product development and marketing expenses of $200,000 offset by increased royalty revenues associated to our TCBY franchisee system of $500,000 and reduced franchise development and selling expenses of $400,000.

Gifts

Gifts Revenues. Gifts revenues were $9.3 million for the 26 weeks ended July 3, 2004, an increase of $3.3 million or 54.7 percent, from $6.0 million for the 26 weeks ended June 28, 2003. Gifts revenues consist of sales through our catalog and e-tailing Web site. The increase in revenues in the 26 weeks ended July 3, 2004 was due to

increases in corporate gift sales of $2.1 million or 74.1 percent and catalog and Internet sales of $1.3 million or 50.7 percent partially offset by a reduction in our sales to commercial airlines of $100,000.

Gifts Expenses. Gifts expenses were $7.9 million for the 26 weeks ended July 3, 2004, an increase of $3.0 million or 62.5 percent, from $4.9 million for the 26 weeks ended June 28, 2003. This increase in expenses was due to increases in cost of sales of $1.8 million associated with the increased sales volume and increased cost of product, advertising and marketing expenses of $900,000 due to increased circulation of catalogs, labor and related expenses of $200,000 due to increased sales volume and other operating expenses of $100,000.

Gifts Contribution. The increase in gifts contribution of $300,000 or 21.8 percent was primarily attributable to an increase in gifts sales of $3.3 million or 54.7 percent partially offset by an increase in gifts operating expenses of $3.0 million or 62.5 percent.

Licensing

Licensing Revenues. Licensing revenues were $2.4 million for the 26 weeks ended July 3, 2004, a decrease of $500,000 or 16.8 percent, from $2.9 million for the 26 weeks ended June 28, 2003. This decrease was due to decreases in licensing royalties earned under our licensing agreement for the sale of TCBY frozen food specialty products through retail channels of $400,000 and in licensing royalties for Mrs. Fields branded cookies distributed through retail channels by a national manufacturer of cookies of $300,000 offset by an increase in licensing royalties from premium candies and other various Mrs. Fields branded products of $200,000.

Licensing Expenses. Licensing expenses were $300,000 for the 26 weeks ended July 3, 2004, a decrease of $400,000 or 52.6 percent, from $700,000 for the 26 weeks ended June 28, 2003. This decrease was due to reduced licensing expenses incurred under our licensing agreement for TCBY frozen food specialty products.

Licensing Contribution. The decrease in licensing contribution of $100,000 or 5.8% was primarily due to net decreases in royalties earned under our licensing agreements as previously discussed, which were partially offset by the decrease in licensing expenses.

Other

General and Administrative Expense. General and administrative expenses were $5.4 million for the 26 weeks ended July 3, 2004, an increase of $300,000 or 6.2 percent, from $5.1 million for the 26 weeks ended June 28, 2003. This increase was primarily due to increases in salaries and wages of $300,000, health insurance costs of $100,000, and property and casualty insurance of $100,000 offset by a decrease in severance costs of $200,000 associated with certain terminations of our executive management team as previously discussed.

Costs Associated with Debt Refinancing. During the 26 weeks ended July 3, 2004, we incurred $12.0 million of costs that were directly related to our debt refinancing which was completed March 16, 2004. Generally, these costs would be deferred and amortized into interest expense over the term of the borrowings. However, approximately $4.9 million of these costs related to the exchange of $80.7 million of the existing senior notes for $80.7 million of the newly issued 9 percent Senior Secured Notes. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” these costs were expensed net of the gain recognized on retirement of the senior notes of $4.8 million.

Depreciation and Amortization Expense. Total depreciation and amortization expense was $2.1 million for the 26 weeks ended July 3, 2004, an increase of $300,000 or 16.6 percent, from $1.8 million for the 26 weeks ended June 28, 2003. Depreciation expense was $600,000 for the 26 weeks ended July 3, 2004, a decrease of $300,000 or 29.0 percent, from $900,000 for the 26 weeks ended June 28, 2003. This decrease was principally due to the write off of equipment relating to distribution of TCBY yogurt product in convenience stores in the third quarter of 2003. Amortization expense was $1.4 million for the 26 weeks ended July 3, 2004, an increase of $500,000 or 61.1 percent from $900,000 for the 26 weeks ended June 28, 2003. This increase was due to the amortization associated with the TCBY trade names and recipes, which were previously considered to be indefinite, lived assets and are now amortized over a 15 year life.

Interest Expense, Net. Interest expense, net was $14.4 million for the 26 weeks ended July 3, 2004, an increase of $2.2 million or 17.6 percent, from $12.2 million for the 26 weeks ended June 28, 2003. This increase was primarily due to the write-off of deferred loan costs of $2.8 million associated with our previous debt. These deferred loan costs were written off due to the completion of our debt refinancing on March 16, 2004. This increase was partially offset by lower interest expense incurred as a result of the refinancing of our debt in March 2004 resulting in lower effective interest rates on our outstanding debt for the 13 weeks ended July 3, 2004 compared to the effective interest rate on our outstanding debt for the 13 weeks ended June 28, 2003.

Other Income. Other income was $1.1 million for the 26 weeks ended July 3, 2004. Other income represents gain on the sale of certain equity warrants of Nonni’s Food Company, a predecessor-in-interest to Shadewell Grove Foods, Inc., a manufacturer and distributor of Mrs. Fields branded soft baked cookies under certain license agreements with us and our affiliates.

Consolidated Financial Condition

Total assets at July 3, 2004 were $179.1 million, an increase of $16.5 million or 10.1 percent, from $162.6 million at January 3, 2004. This increase was primarily attributable to increases in cash and cash equivalents of $15.5 million, net deferred loan costs of $4.1 million, amounts due from affiliates of $200,000 and inventories of $100,000 offset by decreases in accounts receivable of $2.1 million and net trademarks and other intangible assets of $1.3 million.

Total liabilities at July 3, 2004 were $224.8 million, an increase of $6.4 million or 2.9 percent, from $218.4 million at January 3, 2004. This increase was primarily due to an increase in long-term debt of $10.0 million, accrued liabilities of $4.6 million and capital lease obligations of $500,000 offset by decreases in accounts payable of $4.9 million, deferred tax liability of $1.7 million, amounts due to affiliates of $1.2 million, deferred revenue of $600,000 and liabilities of discontinued operations of $300,000.

Consolidated Cash Flows

Net cash flows provided by operating activities were $3.5 million for the 26 weeks ended July 3, 2004, a decrease of $2.4 million, from net cash flows provided by operating activities of $5.9 million for the 26 weeks ended June 28, 2003. This decrease was principally due to decreased contribution by our operating segments of $1.0 million primarily as a result of brand investment expenses previously discussed, increased general and administrative expenses of $300,000 and cash used from changes in working capital.

Net cash flows provided by investing activities were $1.0 million for the 26 weeks ended July 3, 2004, an increase of $1.2 million, from cash used in investing activities of $200,000 for the 26 weeks ended June 28, 2003. This increase was attributable to proceeds from the sale of equity warrants in Nonni’s Food Company of $1.1 million during the 26 weeks ended July 3, 2004.

Net cash flows provided by financing activities were $11.0 million for the 26 weeks ended July 3, 2004, an increase of $17.5 million from cash used in financing activities of $6.5 million for the 26 weeks ended June 28, 2003. This increase was principally due to the completion of our debt refinancing on March 16, 2004 which resulted in $115.0 million in proceeds from the issuance of our senior secured notes, a capital contribution by our parent of $17.5 million and a decrease in other activity with parent of $1.5 million partially offset by increases in payments to retire our previous debt of $105.6 million and payment of debt issuance costs of $10.9 million.

Liquidity and Capital Resources

During 2004, we expect that our principal uses of cash will be for working capital, capital expenditures of approximately $1.4 million, debt service requirements and other general corporate purposes. We expect that our principal sources of cash will be provided by operating activities and the cash reserve retained from the net proceeds of the offering of the original notes. At July 3, 2004, we had $16.8 million of cash on hand.

Our working capital at July 3, 2004 was $4.5 million, an improvement of $15.3 million, from a working capital deficit of $10.8 million at January 3, 2004. This improvement was the result of cash and working capital generated through our operating activities, cash generated from our debt refinancing and capital contribution by our parent.

We are highly leveraged. At July 3, 2004, we had $195.7 million of long-term debt due in 2011. Due to borrowing restrictions under the indenture governing the notes, our ability to obtain additional debt financing is significantly limited. We believe that our sources of cash will be adequate to meet our cash requirements anticipated for the next 12 months.

Inflation

The impact of inflation on our business has not been significant in recent years. Some of our employees are paid hourly wages at the Federal minimum wage level. Minimum wage increases will negatively impact our payroll costs in the short term, but management believes such impact can be offset in the long term through lower staffing of operations and, if necessary, through product price increases.

Critical Accounting Policies

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in our consolidated financial statements. Management has reviewed with our Audit Committee the accounting policies that it uses to prepare our consolidated financial statements and believes that the following policies are the most important to the portrayal of our financial condition and the results of our operations while requiring the use of judgments and estimates about the effects of matters that are inherently uncertain.

Impairment of Goodwill. Goodwill is not amortized, but is subject to an annual assessment for impairment, or more frequently if circumstances indicate potential impairment, through a comparison of fair value to its carrying amount. The two-step approach to assess our goodwill impairment requires that we first compare the estimated fair value of each reporting segment with goodwill to the carrying amount of the segment’s assets and liabilities, including its goodwill. If the fair value of the reporting segment is below its carrying amount, then the second step of the impairment test is performed, in which the current fair value of the segment’s assets and liabilities will determine the current implied fair value of the segment’s goodwill.

On an annual basis, we complete an evaluation of goodwill associated with our various reporting segments. To the extent that the fair value associated with goodwill is determined to be less than the recorded value, we write down the value of the related goodwill. The estimated fair value of goodwill is affected by, among other things, our business plan for the future, estimated results of future operations and the comparable companies that are used to estimate the fair value of our goodwill. Changes in the business plan or operating results that are different than the projections used to develop the valuation of goodwill have an impact on the valuation of the goodwill.

In conducting our impairment analyses, we perform analyses and tests of our goodwill with respect to our reporting segments. The test methods employed involve assumptions concerning useful lives of intangible assets, interest and discount rates, projections and other assumptions of future business conditions. The assumptions employed are based on management’s judgment using internal and external data.

Impairment of Long-lived and Certain Identifiable Intangible Assets. We review our long-lived assets for impairment when circumstances indicate that the book value of an asset may not be fully recovered by the undiscounted net cash flow generated over the remaining life of the related asset or group of assets. If the cash flows generated by the asset are not sufficient to recover the remaining book value of the asset, we are required to write down the value of the asset to its estimated fair value. In evaluating whether the asset will generate sufficient cash flow to recover its book value, we estimate the amount of cash flow that will be generated by the asset and the remaining life of the asset. In making our estimate, we consider the performance trends related to the asset, the likelihood that the trends will continue or change, both at the asset level as well as at the national economic level, and the length of time that we expect to retain the asset.

Allowance for Doubtful Accounts. We sell products to and receive royalties from our franchisees and sell products to other customers. Sometimes these franchisees and customers are unable or unwilling to pay for the products that they receive or royalties that they owe. Factors that affect our ability to collect amounts that are due to us include the financial strength of a franchisee or customer and its operations, the economic strength of the mall where the franchisee is located and the overall strength of the retail economy. We are required to establish an estimated allowance for the amounts included in accounts receivable that we will not be able to collect in the future. To establish this allowance, we evaluate the customer’s or franchisee’s financial strength, payment history, reported sales and the availability of collateral to offset potential losses. If the assumptions that are used to determine the allowance for doubtful accounts change, we may have to provide for a greater level of expense in future periods or to reverse amounts provided in prior periods.

Revenue Recognition. We recognize revenues from our initial franchising fees and licensing and other fees when all material services or conditions relating to the revenues have been substantially performed or satisfied, which is generally upon the opening of a store. We recognize franchise and license royalties, which are based on a percentage of gross sales, as earned, which is generally upon sale of product by our franchisee or licensee. Minimum royalty payments under our licensing agreements are deferred and recognized on a straight-line basis over the term of the agreement. We recognize revenues from the sale of cookie dough that we produce and sell to franchisees at the time of shipment and classify them as franchising revenues. We recognize revenues from gift sales at the time of shipment. We receive product formulation fees and allowances from suppliers based on product sales to franchisees. We recognize these fees and allowances upon shipment of product to our distributors or franchisees.

Recent Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities—an Interpretation of Accounting Research Bulletin No. 51” (“FIN 46”). In December 2003, the FASB issued FIN No. 46 (Revised 2003) (“FIN 46R”) to address certain FIN 46 implementation issues, including the delay of the effective date for certain types of Variable Interest Entities (“VIE”). This interpretation clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” for companies that have interests in entities that are defined as a VIE under FIN 46. According to this interpretation, if a company has an interest in a VIE and is at risk for a majority of the expected losses of the VIE or receives a majority of the expected gains of the VIE, it shall consolidate the VIE. FIN 46R also requires additional disclosures by primary beneficiaries and other significant variable interest holders. For entities acquired or created before December 31, 2003, FIN 46R is effective as of the beginning of fiscal 2005 while it is effective immediately for all VIEs created after December 31, 2003. We completed adoption of FIN 46R during the first quarter of fiscal 2004. The adoption of FIN 46R had no effect on our consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

There have been no significant changes in market risks since the end of the Company’s fiscal year ended January 3, 2004. For more information, please read the combined financial statements and notes thereto included in our Registration Statement on Form S-4 (File No. 333-115046), as amended.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, these officers have concluded that as of July 3, 2004, our disclosure controls and procedures were effective in alerting them on a timely basis to material information relating to the Company (including its consolidated subsidiaries) required to be included in our reports filed or submitted under the Securities Exchange Act of 1934. There were no significant changes with respect to our internal controls over financial reporting or in other factors that could significantly affect internal controls over financial reporting during the quarter ended July 3, 2004.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We and our products are subject to regulation by numerous governmental authorities, including without limitation, federal, state and local laws and regulations governing health, sanitation, environmental protection, safety and hiring and employment practices.

In the ordinary course of business, we are involved in routine litigation, including franchise disputes and trademark disputes. We are not a party to any legal proceedings (including the matter described below) which, in the opinion of management, after consultation with legal counsel, is material to our business, financial condition or operations.

As discussed in our Registration Statement on Form S-4 (File No. 333-115046), as amended, our indirect subsidiary, TCBY of Ireland, Inc., was the defendant in a recently concluded case captioned Advanced Food Concepts, Ltd. et al. v. William P. Creasman, et al., Case No. 401-CV-00-117JMM, filed in the U.S. District Court for the Eastern District of Arkansas (the “Court”). This complaint was filed in 2001 by two former franchisees against TCBY of Ireland and other corporate and individual defendants, but all defendants have been dismissed with the exception of TCBY of Ireland, Inc., the franchisor party under a Transnational Master License Agreement entered into with certain of the plaintiffs and others. The plaintiffs sought damages in excess of $70 million in connection with TCBY of Ireland’s performance under and termination of the Transnational Master License Agreement. On August 4, 2004, the Court granted TCBY of Ireland’s Motion for Summary Judgment on all remaining counts of the complaint. The plaintiffs may still file motions for reconsideration and/or appeal the Court’s ruling. The Company does not have insurance coverage for this lawsuit because the claims arose prior to our acquisition of TCBY; however, TCBY has reserved anticipated defense costs. Notwithstanding the excessive claim for damages, the lack of insurance coverage and the risk that TCBY of Ireland’s parent entities might ultimately bear or share in the cost of any significant judgment obtained against it, after consultation with legal counsel, and in light of the favorable summary judgment ruling, management believes it is unlikely that plaintiffs will obtain any judgment against TCBY of Ireland that would be material to our business, financial condition or operations.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports Filed On Form 8-K

We filed a Form 8-K on July 27, 2004, attaching a press release announcing that we have commenced an offer to exchange an aggregate principal amount of up to $115.0 million of our 11 1/2% Senior Secured Notes due 2011, which have been registered under the Securities Act of 1933, as amended, for a like principal amount of our issued and outstanding 11 1/2% Senior Secured Notes due 2011 from the registered holders thereof, and an aggregate principal amount of up to $80.7 million of our 9% Senior Secured Notes due 2011, which have been registered under the Securities Act of 1933, as amended, for a like principal amount of our issued and outstanding 9% Senior Secured Notes due 2011 from the registered holders thereof.

SIGNATURES

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

MRS. FIELDS FAMOUS BRANDS, LLC
/s/ Stephen Russo				August 17, 2004
Stephen Russo, President and Chief Executive Officer				Date
/s/ Sandra M. Buffa				August 17, 2004
Sandra M. Buffa, Executive Vice President and Chief Financial Officer (Chief Financial and Principal Accounting Officer)				Date

Washington, D.C. 20549

MRS. FIELDS FAMOUS BRANDS, LLC

CONDENSEDItem CONSOLIDATED1. BALANCEFinancial SHEETSStatements

MRS. FIELDS FAMOUS BRANDS, LLC AND SUBSIDIARIES

8Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

14Consolidated Cash Flows

RecentLiquidity Developmentsand Capital Resources

Item 4. Controls and Procedures

GiftsItem 1. Legal Proceedings

Item 6.

Exhibits

Stephen Russo, President and

Date

Chief Executive Officer

Sandra M. Buffa, Executive Vice President

Date

and Chief Financial Officer

(Principal Financial and Accounting Officer)

Consolidated Financial Condition

Consolidated Cash Flows

Liquidity and Capital Resources

Filing Compare · MRS FIELDS FAMOUS BRANDS LLC