SAFE HARBOR STATEMENT under the PRIVATE SECURITIES LITIGATION REFORM ACT of 1995

Forward-looking statements are included in this Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A). Such statements generally express management's expectations with respect to its plans, or its assumptions and beliefs concerning future developments and their potential effect on the Company. There can be no assurances that such expectations will be met or that future developments will not conflict with management's current beliefs and assumptions, which are inherently subject to risks and uncertainties. Factors that could cause actual results and performance to differ materially from anticipated results that may be expressed or implied in forward-looking statements are included in, but are not limited to, the discussion in this Form 10-Q under Part II, Item 1A. "Risk Factors."

Forward-looking statements can generally be identified in sentences that contain words such as "should," "would," "could," "may," "plan(s)," "anticipate(s)," "project(s)," "believe(s)," "will," "expect(s)," "estimate(s)," "intend(s)," "continue," "assumption(s)," "goal(s)," "target" and similar words (or derivatives thereof) that are used to distinguish forward-looking statements from historical or present facts.

All forward-looking information in this MD&A is provided by the Company pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of all risk factors. Except as may be required by law, the Company disclaims any obligation to update any forward-looking statements that may be contained in this MD&A.

CORPORATE OVERVIEW

The operations of Frisch's Restaurants, Inc. and Subsidiaries (the Company) consist of two reportable segments within the restaurant industry: full service family-style "Big Boy" restaurants and grill buffet style "Golden Corral" restaurants. As of March 10, 2009, 89 Big Boy restaurants and 35 Golden Corral restaurants were owned and operated by the Company, located in various regions of Ohio, Kentucky and Indiana, plus smaller areas in Pennsylvania and West Virginia.

The Company's Third Quarter of Fiscal 2009 consists of the twelve weeks ended March 10, 2009, and compares with the twelve weeks ended March 4, 2008, which constituted the Third Quarter of Fiscal 2008. The First Three Quarters of Fiscal 2009 consists of the 40 weeks ended March 10, 2009, and compares with the 40 weeks ended March 4, 2008, which constituted the First Three Quarters of Fiscal 2008. The twelve-week third quarter is usually a disproportionately smaller share of annual revenue and earnings because it spans most of the winter season from mid December through early March. References to Fiscal 2009 refer to the 52 week year that will end on June 2, 2009. References to Fiscal 2008 refer to the 53 week year that ended June 3, 2008.

Sales reached a record $67,685,000 during the Third Quarter of Fiscal 2009, rising $1,066,000 or 1.6 percent higher than the Third Quarter of Fiscal 2008. Net earnings for the Third Quarter of Fiscal 2009 were a record $3,410,000, or diluted earnings per share (EPS) of $.66, which compares with $2,065,000, or diluted EPS of $.40, in the Third Quarter of Fiscal 2008. The improvement in net earnings is partly due to a lower tax rate: 29 percent in the Third Quarter of Fiscal 2009 versus 32 percent in the Second Quarter of Fiscal 2008. Factors having a noteworthy effect on pretax earnings when comparing the Third Quarter of Fiscal 2009 with the Third Quarter of Fiscal 2008:

• Big Boy same store sales increased .7 percent

• Golden Corral same store sales increased 2.3 percent

• As a percentage of sales, food costs decreased to 35.1 percent from 35.9 percent

• Golden Corral's pretax earnings exceeded $1,000,000 in the Third Quarter of Fiscal 2009

• $890,000 was credited to pretax earnings, the conclusion of long-standing litigation

Sales reached a record $226,659,000 during the First Three Quarters of Fiscal 2009, rising .6 percent or $1,301,000 higher than the First Three Quarters of Fiscal 2008, which had set the previous record. Net earnings for the First Three Quarters of Fiscal 2009 were $7,801,000, or diluted EPS of $1.51, which compares with $6,684,000, or diluted EPS of $1.28, in the First Three Quarters of Fiscal 2008. The effective tax rate was 29 percent throughout the First Three Quarters of Fiscal 2009. It was 32 percent throughout the First Three Quarters of Fiscal 2008.

Factors having a noteworthy effect on pretax earnings when comparing the First Three Quarters of Fiscal 2009 with the First Three Quarters of Fiscal 2008:

• Big Boy same store sales increased .5 percent

• Golden Corral same store sales increased .6 percent

• As a percentage of sales, food costs increased to 35.9 percent from 35.5 percent

• As a percentage of sales, payroll and related costs decreased to 32.8 percent from 33.0 percent

• Golden Corral's pretax earnings improved by over $1,200,000

• Gains on sale of real estate were $1,116,000, up from $524,000 last year

• Long-standing litigation was concluded, resulting in $890,000 being credited to pretax earnings.

Another significant factor affecting the Company's margins has been the annual increase in the minimum wage as mandated by Ohio voters in the November 2006 election:

• The minimum wage for non-tipped employees increased 33 percent from $5.15 per hour to $6.85 per hour beginning January 1, 2007. It was increased to $7.00 per hour effective January 1, 2008 and to $7.30 per hour on January 1, 2009 in accordance with the mandate's annual provision to adjust automatically for the rate for inflation.

• The minimum wage for tipped employees increased 61 percent from $2.13 per hour to $3.43 per hour beginning January 1, 2007. It was increased to $3.50 per hour on January 1, 2008 and $3.65 per hour on January 1, 2009 in accordance with the inflation provision in the mandate.

More than two-thirds of the Company's payroll costs are incurred in Ohio. The effects of paying the required higher hourly rates of pay have effectively been countered with the combination of higher menu prices charged to customers and reductions in the number of hours employees are permitted to work. Further reductions in employee hours have been implemented to offset the effect of what would otherwise have been a $500,000 increase in annual payroll costs attributable to the January 1, 2009 increase.

The federal minimum wage for non-tipped employees increased from $5.15 per hour to $5.85 per hour in July 2007 and to $6.55 per hour in July 2008. It is currently scheduled to increase to $7.25 per hour in July 2009. Through December 2008, the effect of the federal increases has not been significant because 1) Ohio's (where more than two-thirds of the Company's payroll costs are incurred) minimum wage already exceeds the federal requirement, 2) conditions in most markets already dictate higher wage rates and 3) the minimum rate for tipped employees remains at $2.13 per hour except in Ohio.

RESULTS of OPERATIONS

Sales

The Company's sales are primarily generated through the operation of Big Boy restaurants and Golden Corral restaurants. Big Boy sales also include wholesale sales from the Company's commissary to restaurants licensed to other operators and the sale of Big Boy's signature brand tartar sauce to grocery stores. Same store sales comparisons are a key metric that management uses in the operation of the business. Same store sales are affected by changes in customer counts and menu price increases. Changes in sales also occur when new restaurants are opened and older restaurants are closed. Below is the detail of consolidated restaurant sales:

                                         Third Quarter         First Three Quarters
                                      Mar. 10,    Mar. 4,      Mar. 10,      Mar. 4,
                                        2009        2008         2009         2008
                                                      (in thousands)
      Big Boy restaurant sales        $  41,131   $ 40,617   $    139,840   $ 139,021
      Wholesale sales to licensees        1,974      2,023          6,993       7,020
      Other wholesale sales                 486        431            976         856

      Total Big Boy Sales                43,591     43,071        147,809     146,897

      Golden Corral sales                24,094     23,547         78,850      78,461

      Consolidated restaurant sales   $  67,685   $ 66,618   $    226,659   $ 225,358

Higher Big Boy sales shown in the above table include a same store sales increase of .7 percent in the Third Quarter of Fiscal 2009 (on a customer count decrease of 2.4 percent) and a .5 percent increase for the First Three Quarters of Fiscal 2009 (on a 2.8 percent decrease in customer counts). The Big Boy same store sales comparisons include average menu price increases of 1.4 percent and 1.6 percent implemented respectively in February 2009 and February 2008. Also included are increases of 2.4 percent and 1.2 percent implemented respectively in September 2008 and September 2007, and a .5 percent increase was added in April 2008. Another increase is currently being planned for September 2009.

The Company operated 89 Big Boy restaurants as of March 10, 2009, including two new ones that opened respectively in August and October 2008. Also, a high volume suburban Cincinnati unit was temporarily out of service for three months (June 8, 2008 to September 8, 2008) in order to replace it with a new facility. Two low volume Big Boy restaurants ceased operating at the end of Fiscal 2008. No new Big Boy restaurants are currently under construction. An older suburban Cincinnati restaurant is scheduled to be replaced with new building on a superior nearby site in September 2009. No interruption of sales is expected.

Higher Golden Corral sales shown in the above table include a same store sales increase of 2.3 percent in the Third Quarter of Fiscal 2009 (on a customer count decrease of 1.5 percent) and a .6 percent increase in the First Three Quarters of Fiscal 2009 (on a 2.9 decrease in customer counts). The Golden Corral same store sales comparisons include average menu price increases of 2.5 percent (September 2008), .5 percent (June 2008), .8 percent (March 2008) and 3.2 percent (October 2007). Customer counts increased 5.4 percent in the last four weeks of the Third Quarter of Fiscal 2009, the result of a new national cable television advertising program. This development is an encouraging signal that the same store sales decreases that have been experienced in most of the last 22 quarters may be coming to an end.

The Company operated 35 Golden Corral restaurants as of March 10, 2009. No further development is currently planned.

Gross Profit

Gross profit for the Big Boy segment includes wholesale sales and cost of
wholesale sales. Gross profit differs from restaurant level profit discussed in
Note G (Segment Information) to the consolidated financial statements, as
advertising expense is charged against restaurant level profit. Gross profit for
both operating segments is shown below:



                                        Third Quarter         First Three Quarters
                                     Mar. 10,    Mar. 4,     Mar. 10,       Mar. 4,
                                       2009        2008        2009          2008
                                                     (in thousands)
       Big Boy gross profit         $    5,684   $  5,814   $    17,741    $  19,697
       Golden Corral gross profit        1,599        658         2,753        1,514


       Total gross profit           $    7,283   $  6,472   $    20,494    $  21,211

The operating percentages shown in the following table are percentages of total sales, including Big Boy wholesale sales. The table supplements the discussion that follows which addresses cost of sales for both the Big Boy and Golden Corral reporting segments, including food cost, payroll and other operating costs.

                              12 weeks 3/10/09         12 weeks 3/4/08        40 weeks 3/10/09        40 weeks 3/04/08
                                     Big                     Big                     Big                     Big
                            Total    Boy     GC     Total    Boy     GC     Total    Boy     GC     Total    Boy     GC
Sales                       100.0   100.0   100.0   100.0   100.0   100.0   100.0   100.0   100.0   100.0   100.0   100.0

Food and Paper               35.1    33.4    38.0    35.9    34.0    39.5    35.9    34.3    39.1    35.5    33.5    39.1

Payroll and Related          32.7    34.8    28.8    32.7    34.5    29.4    32.8    34.6    29.4    33.0    34.6    29.8

Other Operating Costs
(including opening costs)    21.5    18.7    26.6    21.7    18.0    28.3    22.2    19.1    28.1    22.2    18.5    29.1

Gross Profit                 10.7    13.1     6.6     9.7    13.5     2.8     9.1    12.0     3.4     9.3    13.4     2.0

Unfavorable commodity markets finally began to retreat during the Third Quarter of Fiscal 2009. The welcome decline in wholesale prices followed a 7.9 percent increase in 2008 and a 7.6 increase in 2007 according to the U.S. Bureau of Labor Statistics. The Company actively manages the effect of changing commodity prices with changes to the Big Boy menu mix and effective selection and rotation of items served on the Golden Corral buffet, together with periodic increases in menu prices. Rapid escalations in costs, such as that experienced in 2007 and 2008 can be problematic to effective menu management in the Big Boy segment, as can be seen in the rising percentages that were experienced during the First Three Quarters of Fiscal 2009 despite higher prices being charged to customers. Food cost percentages in the Golden Corral segment are much higher than Big Boy because of the all-you-can-eat nature of the Golden Corral concept, as well as its use of steak as a featured item on the buffet line.

The general improvements in payroll and related cost percentages presented in the above table is an indicator that the mandated increases in the minimum wage have been effectively mitigated by the higher menu prices and management's resolve to reduce the number of hours worked by hourly paid employees.

Net periodic pension cost (computed under Statement of Financial Accounting Standards No. 87, "Employers' Accounting for Pensions) was $364,000 and $286,000 respectively, in the Third Quarter of Fiscal 2009 and the Third Quarter of Fiscal 2008. Net periodic pension cost was $1,213,000 and $952,000 respectively, in the First Three Quarters of Fiscal 2009 and the First Three Quarters of Fiscal 2008. Although no contributions are needed to meet minimum funding requirements for Fiscal 2009, discretionary contributions are anticipated that are currently estimated at $1,000,000, including $500,000 that was contributed during the First Three Quarters of Fiscal 2009. Future funding of the pension plans largely depends upon the performance of investments held in trusts that have been established for the plans. Equity securities comprise 70 percent of the target allocation of the plans' assets. As a result of recent market volatility, the market values of these securities have declined significantly, which could have a material adverse effect on future funding requirements and result in the recognition of much higher net periodic pension costs in future years.

Other operating costs include occupancy costs such as maintenance, rent, depreciation, property tax, insurance and utilities, plus costs relating to field supervision, accounting and payroll preparation, franchise fees for Golden Corral restaurants, new restaurant opening costs and many other operating costs. As most of these expenses tend to be fixed costs, the percentages shown in the above table are greatly affected by changes in same store sales levels. Opening costs were $44,000 (all for Big Boy) during the Third Quarter of Fiscal 2009. There were no opening costs in the Third Quarter of Fiscal 2008. Opening costs were $575,000 (all for Big Boy) during the First Three Quarters of Fiscal 2009, compared with $608,000 ($380,000 for Big Boy and $228,000 for Golden Corral) during the First Three Quarters of Fiscal 2008.

Other operating costs are a much higher percentage of sales for the Golden Corral segment as sales volumes remain well below expectation. The reductions in Golden Corral percentages are largely from lower depreciation charges, the result of an impairment of assets charge that was taken at the end of Fiscal 2008 to lower the carrying costs of three restaurants that were determined to be impaired. The improvement in Golden Corral percentages was also aided by higher sales.

Operating Profit

To arrive at the measure of operating profit, administrative and advertising expense is subtracted from gross profit while franchise fees and other revenue are added to it. Gains and losses from the sale of real property, if any, are respectively added or subtracted. Litigation settlements and charges for impairment of assets (if any) are also included in the measure of operating profit.

Administrative and advertising expense decreased $23,000 and $106,000 respectively, in the Third Quarter of Fiscal 2009 and the First Three Quarters of Fiscal 2009 when compared with comparable periods a year ago. The decreases are attributable to lower stock-based compensation costs and a charge of $160,000 in the Third Quarter of Fiscal 2008 to write-off the deposit for development rights on sixteen Golden Corral sub-markets, which were terminated under an agreement signed in April 2008.

Revenue from franchise fees is based upon sales volume generated by Big Boy restaurants that are licensed to other operators. The fees are based principally on percentages of sales and are recorded on the accrual method as earned. As of March 10, 2009, 26 Big Boy restaurants were licensed to other operators and paying fees to the Company, a reduction of two restaurants from a year ago. Other revenue also includes certain other fees earned from licensed restaurants along with miscellaneous rent and investment income.

Gains from the sale of real property amounted to $1,116,000 during the First Three Quarters of Fiscal 2009. The gains resulted primarily from the disposition in the first quarter of fiscal 2009 of a Big Boy restaurant that had ceased operations in June 2008. Aggregate proceeds amounted to $1,581,000. Gains from the sale of real property amounted to $524,000 during the First Three Quarters of Fiscal 2008. The gains resulted from the dispositions in the first quarter of fiscal 2008 of three low volume Big Boy restaurants that ceased operations respectively in January, April and June 2007. Aggregate proceeds amounted to $1,685,000. No gains from the sale of real property were recorded during the Third Quarter of Fiscal 2009 or the Third Quarter of Fiscal 2008.

On March 4, 2009, the Company received a check for $640,000 representing full and final settlement of the arbitration award in the long-standing case against the general contractor that had constructed a Golden Corral restaurant for the Company in Canton, Ohio in 2001, which the Company had to subsequently demolish due to defective construction work by the contractor. In addition to the cash received, the Company recorded an additional credit to earnings of $250,000 to reverse a liability that had represented the general contractor's claim against the Company for the outstanding contract balance, which was eliminated when the award was made final. The combined sum resulted in $890,000 being credited to pretax earnings in the Third Quarter of Fiscal 2009.

No impairment of property and equipment assets was recorded during either the First Three Quarters of Fiscal 2009 or the First Three Quarters of Fiscal 2008.

Interest Expense

Interest expense decreased $52,000 and $285,000 respectively, in the Third Quarter of Fiscal 2009 and the First Three Quarters of Fiscal 2009 when compared with comparable year ago periods. The decreases are the result of lower debt levels and lower variable interest rates combined with much lower interest charges associated with capitalized leases. There are no longer any restaurant facilities leased by the Company that are classified as capital leases under the provisions of Statement of Financial Accounting Standards No. 13 (SFAS 13), "Accounting for Leases" as amended.

Income Tax Expense

Income tax expense as a percentage of pretax earnings has been estimated at 29 percent throughout the First Three Quarters of Fiscal 2009 and was 32 percent throughout the First Three Quarters of Fiscal 2008. The effective tax rate for Fiscal 2008 was ultimately lowered to 30.8 percent. These rates have been kept consistently low through the use of tax credits, especially the federal credit allowed for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips. In addition, the 29 percent rate used throughout the First Three Quarters of Fiscal 2009 reflects the statutory elimination of corporate income tax in the state of Ohio.

LIQUIDITY and CAPITAL RESOURCES

Sources of Funds

Food sales to restaurant customers provide the Company's principal source of cash. The funds from sales are immediately available for the Company's use, as substantially all sales to restaurant customers are received in cash or are settled by debit or credit cards. The primary source of cash provided by operating activities is net earnings plus depreciation. Other sources of cash may include borrowing against credit lines, proceeds received when stock options are exercised and occasional sales of real estate. In addition to servicing debt, these cash flows are utilized for discretionary objectives, including capital projects (principally restaurant expansion) and dividends.

Working Capital Practices

The Company has historically maintained a strategic negative working capital position, a common practice in the restaurant industry. As significant cash flows are consistently provided by operations, and credit lines remain readily available, the use of this practice should not hinder the Company's ability to satisfactorily retire any of its obligations when due, including the aggregated contractual obligations and commercial commitments shown in the following table.

Aggregated Information about Contractual Obligations and Commercial Commitments
March 10, 2009




                                                         Payments due by period (in thousands)            more
                                                                                                         than 5
                                         Total      year 1     year 2     year 3    year 4    year 5     years
    Long-Term Debt                      $ 31,969   $  8,026   $  9,453   $  5,120   $ 4,046   $ 2,539   $  2,785
    Rent due under Capital Lease
    Obligations                              777        287        262        190        38        -          -
1   Rent due under Operating Leases       20,993      1,791      1,503      1,506     1,425     1,441     13,327
2   Unconditional Purchase
    Obligations                           22,873     12,135      3,182      3,298     3,318       940         -
3   Other Long-Term Obligations            1,374        225        228        231       234       237        219
    Total Contractual Cash
    Obligations                         $ 77,986   $ 22,464   $ 14,628   $ 10,345   $ 9,061   $ 5,157   $ 16,331

1 Not included in the table is a secondary liability for the performance of a ground lease that has been assigned to a third party. The annual obligation of the lease approximates $48 through 2020. Should the third party default, the Company has the right to re-assign the lease. Operating leases include option periods considered to be part of the lease term under the provisions of Statement of Financial Accounting Statement No. 13, "Accounting for Leases," as amended.

2 Primarily consists of commitments for certain food and beverage items, plus capital projects including commitments to purchase real property.

3 Deferred compensation liability.

The working capital deficit was $16,201,000 as of March 10, 2009 and was $20,142,000 as of June 3, 2008. The improvement in the deficit includes an increase in cash, reflecting improved sales and the fact that no new restaurant construction was in progress as of March 10, 2009. One new Big Boy was under construction as of June 3, 2008. In addition, advance delivery of inventory was taken prior to March 10, 2009 in order to secure availability of certain product at favorable pricing.

If needed to fund temporary working capital needs, a $5,000,000 revolving credit facility (currently unused) is immediately available to be drawn upon through September 1, 2010. A construction draw credit facility is also in place through September 1, 2010 with $4,500,000 in current availability.

Operating Activities

Operating cash flows were $16,484,000 in the First Three Quarters of Fiscal 2009, which compares with $13,166,000 in the First Three Quarters of Fiscal 2008. The increase in operating cash flows is primarily attributable to normal changes in assets and liabilities such as prepaid expenses, inventories and accounts payable, all of which fluctuate widely from quarter to quarter. Management measures cash flows from the operation of the

business by using the simple method of net earnings plus non-cash expenses such as depreciation, losses (net of any gains) on disposition of assets, charges for impairment of assets (if any) and stock based compensation cost. Under this method, which is shown in the consolidated statement of cash flows as a sub-total, cash flows from the operation of the business in the First Three Quarters of Fiscal 2009 amounted to $17,544,000. The comparable amount during the First Three Quarters of Fiscal 2008 was $17,468,000.

Investing Activities

Capital spending is the principal component of the Company's investing activities. Capital spending was $12,913,000 during the First Three Quarters of Fiscal 2009, an increase of $3,248,000 from the First Three Quarters of Fiscal 2008. This year's capital spending includes $11,174,000 for Big Boy restaurants and $1,739,000 for Golden Corral restaurants. These capital expenditures consisted of new restaurant construction, remodeling existing restaurants including kitchen and dining room expansions, routine equipment replacements and other capital outlays.

Proceeds from the disposition of property during the First Three Quarters of Fiscal 2009 amounted to $1,584,000, primarily resulting from the sale of an older Big Boy restaurant that had ceased operations in June 2008. Its sale resulted in a gain of $1,072,000, which was reported in the first quarter of . . .