Brinker International Inc · 10-K · For 6/29/94

Filed On 9/27/94   ·   SEC File 1-10275   ·   Accession Number 703351-94-27

Annual Report   ·   Form 10-K
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Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        1994 - Form 10-K                                      53±   233K 
 2: EX-27       Financial Data Schedule                                1      7K 

10-K   ·   1994 - Form 10-K
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SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C.  20549 

FORM 10-K 

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

For the fiscal year ended June 29, 1994        Commission File No.    1-10275 

BRINKER INTERNATIONAL, INC. 

(Exact name of registrant as specified in its charter)  

Delaware                                 75-1914582             
(State or other jurisdiction of              (I.R.S. employer                   
incorporation or organization)              identification no.)                 

6820 LBJ Freeway, Dallas, Texas                  75240                          
(Address of principal executive offices)       (Zip Code)                       

Registrant's telephone number,  
including area code (214) 980-9917  

Securities registered pursuant to Section 12(b) of the Act:  None               
Securities registered pursuant to Section 12(g) of the Act:                     

Title of Each Class 
Common Stock, $0.10 par value 

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

    Indicate  by check mark if  disclosure of delinquent  filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,  
to the best of the registrant's knowledge, in definitive proxy  or information  
statements  incorporated by  reference in Part  III of  this Form  10-K or any  
amendment to this Form 10-K.  ______                                            

    The aggregate market  value of the  voting stock  held by persons  other
than  directors  and  officers  of  registrant  (who  might  be deemed  to  be  
affiliates of registrant) at September 9, 1994 was $1,754,066,362.00.           

    Indicate  the number of shares  outstanding of each  of the registrant's
classes of common stock, as of the latest practicable date.                     

                  Outstanding at
Class                               September 9, 1994               

Common Stock, $0.10 par value             71,647,592 Shares                     
</PAGE>                                                                         

DOCUMENTS INCORPORATED BY REFERENCE 

    Portions  of the  registrant's  Annual Report  to  Shareholders for  the
fiscal year ended June 29, 1994 are incorporated by reference into Parts I, II  
and IV hereof,  to the extent indicated herein.   Portions of the registrant's  
Proxy   Statement  dated  September  29,  1994,  for  its  annual  meeting  of  
shareholders  on November 3, 1994, are incorporated by reference into Part III  
hereof, to the extent indicated herein.                                         

PART I  

Item 1.     BUSINESS.                                                           

General                                                           

     Brinker International, Inc.  (the "Company") is principally engaged  in
     the operation and development of the  Chili's Grill & Bar  ("Chili's"),
     Grady's American Grill ("Grady's"),  Romano's Macaroni Grill ("Macaroni
     Grill"), Spageddies  Italian Kitchen ("Spageddies")  and On The  Border
     Cafes  ("On  The  Border")  restaurant  concepts.     The  Company  was
     organized under the laws of the State of  Delaware in September 1983 to
     succeed   to  the   business  operated   by  Chili's,  Inc.,   a  Texas
     corporation, organized  in  August  1977.   The Company  completed  the
     acquisitions of Grady's, Macaroni Grill,  Spageddies and On  The Border
   in February 1989, November 1989, June 1993 and May 1994 respectively.

Restaurant Concepts and Menus                                     

Chili's Grill & Bar                                               

     Chili's    establishments    are    full-service    Southwestern-themed
     restaurants,  featuring  a  casual  atmosphere and  a  limited  menu of
     freshly prepared chicken,  beef and seafood entrees, hamburgers,  ribs,
     fajitas, sandwiches, salads, appetizers and desserts, all  of which are
prepared fresh daily according to special Chili's recipes.        

     Chili's  restaurants  feature   quick,  efficient  and  friendly  table
     service  designed to  minimize  customer waiting  time  and  facilitate
     table  turnover,   with  an   average  turnover  time   per  table   of
     approximately  45 minutes.   Service personnel are  dressed casually in
     jeans or  slacks,  knit shirts  and  aprons  to reinforce  the  casual,
     informal environment.   The decor of  a Chili's  restaurant consists of
     booth  seating, tile-top  tables,  hanging plants  and  wood  and brick
walls covered with interesting memorabilia.                       

     Emphasis  is placed on  serving substantial  portions of fresh, quality
     food at  modest prices.   Entree selections  range in  menu price  from
     $4.75 to $9.95, with the average  revenue per meal, including alcoholic
     beverages,  approximating  $8.55 per  person.   A  full-service bar  is
     available at  each Chili's restaurant,  with frozen margaritas  offered
     as the  concept's specialty  drink.   During  the year  ended June  29,
     1994, food and  non-alcoholic beverage sales constituted  approximately
     86%  of  the  concept's  total  restaurant  revenues,  with   alcoholic
beverage sales accounting for the remaining 14%.                  

Grady's American Grill                                            

     Grady's restaurants are casual, upscale dinner house restaurants  which
     feature a  broad menu  focusing on  fresh seafood,  prime rib,  steaks,
     chicken  and  pasta entrees,  salads, sandwiches,  appetizers, desserts
     and a  full-service bar.  Grady's  restaurants feature  booth and table
     seating, wood and brick walls, and  brass fixtures.  Service  personnel
     are dressed smartly,  in casual slacks, buttoned-down shirts and  ties,
to reinforce the upscale atmosphere.                              

     The restaurant appeals to a slightly  more sophisticated customer  than
     Chili's.  Entree selections range  in price from $5.45  to $16.95, with
     the   average  revenue   per  meal,   including   alcoholic  beverages,
     approximating $10.95 per person.  During the year ended  June 29, 1994,
     food and  non-alcoholic beverage sales  constituted approximately   88%
     of the  concept's total  restaurant revenues,  with alcoholic  beverage
sales accounting for the remaining 12%.                           

Romano's Macaroni Grill                                           

     Macaroni  Grill   is  an   upscale  Italian   theme  restaurant   which
     specializes  in  family-style  recipes  and  features  seafood,   meat,
     chicken and pasta  entrees, salads, pizza, appetizers and desserts with
     a  limited wine  and beer  selection in  most  restaurants and  a full-
     service bar in recent and future  openings.  Exhibition cooking,  wood-
     burning  ovens and  rotisseries provide  an enthusiastic  and  exciting
     environment in  the restaurants.   Macaroni  Grill restaurants  feature
     white linen-clothed  tables, fireplaces, a  pizza oven, sous  stations,
     rotisseries  and prominent displays  of wines.   Service  personnel are
     dressed in white, starched shirts and  aprons, dark slacks, and  bright
ties.                                                             

     Entree  selections  range in  menu  price  from  $6.25  to $15.95  with
     certain specialty items priced on  a daily basis.   The average revenue
     per meal,  including alcoholic beverages,  is approximately $13.50  per
     person.   During the year  ended June 29, 1994,  food and non-alcoholic
     beverage sales  constituted approximately  83% of  the concept's  total
     restaurant revenues, with  alcoholic beverage sales accounting for  the
remaining 17%.                                                    

Spageddies Italian Kitchen                                        

     Spageddies  restaurants  are casual,  full-service,  moderately-priced,
     family  oriented  Italian  restaurants  featuring  rotisserie  chicken,
     steak and pasta entrees, salads, pizza,  appetizers and desserts with a
     full-service  bar.    Spageddies   restaurants  feature  an  exhibition
     kitchen,  a  wood-burning pizza  oven,  booth  and  table seating,  and
     prominent  displays  of  peppers,  parmesan  and  tomatoes.     Service
     personnel are dressed casually in black  pants and striped polo  shirts
to reinforce the casual, informal, open environment.              

     Entree selections range in  menu price from $4.25  to $12.95, with  the
     average revenue per meal,  including alcoholic beverages, approximating
     $9.25 per  person.  During the year  ended June 29, 1994, food and non-
     alcoholic  beverage   sales  constituted  approximately   92%  of   the
     concept's total  restaurant  revenues,  with alcoholic  beverage  sales
accounting for the remaining 8%.                                  

On The Border Cafes                                             

     On  The  Border restaurants  are  full-service,  casual  Tex-Mex  theme
     restaurants   featuring  Southwest   mesquite-grilled  specialties  and
     traditional Tex-Mex entrees and appetizers served in generous  portions
     at modest  prices.   On The  Border serves  "Texas-sized" non-alcoholic
     beverages in addition  to offering a  full-service bar.  On  The Border
     restaurants  feature an  outdoor patio,  booth  and table  seating  and
     brick  and  wood  walls  with  a  Southwest   decor.    On  The  Border
     restaurants also offer enthusiastic table service intended to  minimize
     customer   waiting   time   and   facilitate   table   turnover   while
     simultaneously providing  customers  with  a satisfying  casual  dining
experience.                                                       

     Entree selections range in  menu price from $5.45  to $12.95, with  the
     average revenue per meal, including  alcoholic beverages, approximating
     $10.00 per person.  During the  year ended June 29, 1994, food and non-
     alcoholic  beverage   sales  constituted  approximately   74%  of   the
     concept's total  restaurant  revenues,  with alcoholic  beverage  sales
accounting for the remaining 26%.                                 

Restaurant Locations                                              

     At June  29, 1994,  Brinker  International, Inc.'s  system of  company-
     operated, joint venture  and franchised units included 458  restaurants
     located in  43 states,  Canada, Singapore,  Malaysia and  Mexico.   The
Company's portfolio of restaurants is illustrated below:          

                 June 29, 1994

Chili's:                                                          
Company-Operated                      277                     
Franchise                              83                     

Grady's                                  34                       

Macaroni Grill:                                                   
Company-Operated                       34                     
Franchise                               1                     

Spageddies                                6                       

On The Border:                                                    
Company-Operated                       14                     
Franchise                               7                     

R&D Concepts:                                                     
Company-Operated                        1                     
Joint Venture                           1                     
    TOTAL        458

Business Development                                              

     The  Company's long-term  objective  is  to continue  expansion of  its
     restaurant concepts by  opening Company-operated units in strategically
     desirable markets.   The Company intends to concentrate on  development
     of  certain identified  markets to  achieve penetration  levels  deemed
     desirable by the Company in order  to improve the Company's competitive
     position,  marketing potential  and profitability.    Expansion efforts
     will be  focused on major metropolitan  areas in the  United States and
     smaller market areas which can adequately  support any of the Company's
restaurant concepts.                                              

     The Company  considers the restaurant  site selection process  critical
     to  its  long-term  success  and  devotes  significant  effort  to  the
     investigation of  new locations  utilizing a  variety of  sophisticated
     analytical  techniques.    The  site  selection  process focuses  on  a
     variety  of  factors including:    trading-area  demographics  such  as
     target population  density and household  income levels; an  evaluation
     of site characteristics  such as visibility, accessibility and  traffic
     volume;  proximity  to   activity  centers  such  as  shopping   malls,
     hotel/motel complexes  and offices;  and an  analysis of  the potential
     competition.   Members of  senior management  inspect and  approve each
restaurant site prior to its acquisition.                         

     The Company  periodically reevaluates restaurant  sites to ensure  that
     site  selection   attributes  have  not   deteriorated  below   minimum
     standards.  In the event site deterioration were to  occur, the Company
     makes a  concerted effort  to improve the  restaurant's performance  by
     providing  physical,  operating and  marketing  enhancements  unique to
     each restaurant's  situation.    If  internal efforts  to  restore  the
     restaurant's   performance   to  acceptable   minimum   standards   are
     unsuccessful, the  Company considers  relocation to  a proximate,  more
     desirable  site, or  evaluates closing the restaurant  if the Company's
     criteria,  such as return  on investment  and area  demographic data do
     not support  a relocation.   Since  inception, the  Company has  closed
     only three  restaurants, including one  in fiscal  1993 and two  in the
     second  quarter  of  fiscal  1994,  which  were  performing  below  the
     Company's   standards   primarily   due   to   declining   trading-area
     demographics.  These  and future closings will  be key to a  successful
reallocation of resources to the stronger performing stores.      

     The  following  table illustrates  the  system-wide  restaurants either
     opened or acquired  in fiscal 1994 and  the planned openings in  fiscal
1995:                                                             

                             Restaurant Openings
                       Fiscal 1994     Fiscal 1994         Fiscal 1995
                             Openings    Net Acquisitions   Projected Openings

Chili's:                                                          
 Company-Operated      31               11                 30-34
 Franchise             14              (13)                25-30

Grady's                 10              -0-                 10-11 

Macaroni Grill:                                                   
 Company-Operated      12              -0-                 15-16
Franchise              1              -0-                  0-2

Spageddies               3              -0-                  6-7  

On The Border:                                                    
Company-Operated      -0-              14                  3-4
Franchise             -0-               7                  -0-

R&D Concept--                                                     
Joint Venture          1              -0-                  2-3

           TOTAL       72               19                91-107

     The restaurants acquired by the Company  in fiscal 1994 relate to three
     acquisitions.   In October 1993, the  Company acquired the  assets of a
     franchisee,  which  operated four  Chili's restaurants  in Pennsylvania
     and Ohio  for approximately $8,165,000.00  in cash.   In May 1994,  the
     Company acquired 100% ownership interest in  On The Border in  exchange
     for  1,239,130  shares  of  Company  common   stock.    On  The  Border
     operations included 14  company-operated and 7 franchised On The Border
     restaurants in Texas, Florida, Tennessee,  Colorado and Missouri.  Also
     in  May  1994, the  Company  acquired  the  remaining  50% interest  in
     Northwest Restaurants  Joint Venture  ("NRJV") from  its joint  venture
     partner in  exchange for 256,576 shares  of Company common stock.  NRJV
operated nine Chili's restaurants in California and Nevada.       

     The  Company  anticipates  that  some  of  the  fiscal  1995  projected
     restaurant  openings will  be constructed  pursuant to  "build-to-suit"
     agreements,  in which the lessor  contributes the land cost and all, or
     substantially  all, of  the  building  construction  costs.   In  other
     cases, the Company either leases  the land, and pays  for the building,
     furniture,  fixtures and  equipment from  its  own  funds, or  owns the
     land,  building, furniture,  fixtures  and equipment.    The  Company's
     restaurant concept  portfolio allows the  Company to purchase  multiple
     site  locations, which offers  the Company  a competitive  advantage in
the real estate market.                                           

     As  of June 29,  1994, the  Company has  completed obtaining  sites for
     fiscal 1995  projected openings and  has lease  or purchase commitments
     for future construction  of 44 Chili's, 12 Grady's, 17 Macaroni  Grill,
     6 Spageddies  and 2  On The  Border restaurant  sites.  The  Company is
     currently in  the process of locating  sites for  fiscal 1996 projected
openings.                                                         

     The  following  table  illustrates  the   approximate  average  capital
investment for a typical unit in our primary restaurant concepts: 

                                                                · Download Table

                Chili's     Grady's  Macaroni Grill   Spageddies  On The Border
                                                                               

Land           $620,000  $  800,000   $  900,000       $750,000      $720,000  
Building        850,000   1,100,000    1,050,000        975,000       975,000  
Furniture and                                                                  
 Equipment      450,000     560,000      475,000        550,000       575,000  
Other            80,000      90,000      125,000         75,000        80,000  

   TOTAL     $2,000,000  $2,550,000   $2,550,000     $2,350,000    $2,350,000  

     The specific rate at  which the Company is able to open new restaurants
     is  determined   by  its  success   in  locating  satisfactory   sites,
     negotiating  acceptable lease  or purchase  terms, securing appropriate
     local governmental  permits  and  approvals,  and by  its  capacity  to
supervise construction and recruit and train management personnel.

Joint Venture and Franchise Operations                            

     The Company intends  to continue  its expansion  through joint  venture
     and  franchise  development,  both  domestically  and  internationally.
     During the year ended  June 29, 1994, 14  new Chili's and one  Macaroni
Grill franchised restaurants were opened.                         

     During  the  past   two  years,  the   Company  entered   into  several
     international  franchise   agreements,  which  will  bring  Chili's  to
     Australia, France, Puerto  Rico, and the United  Kingdom in the next 12
     months.   In fiscal 1994, the  first Chili's  restaurants outside North
     America  opened in  Singapore  and  Malaysia  on February 4,  1994  and
     June 15,  1994, respectively.   The  third, fourth  and  fifth overseas
     Chili's  locations  opened  in Egypt,  Australia  and  Puerto  Rico  on
 July 19, 1994, August 28, 1994 and September 6, 1994, respectively.

     The Company  intends to continue  pursuing international expansion  and
     is  currently  contemplating  development  in  other  countries.    The
     Company  has  entered  into  a separate  joint  venture  agreement  for
     research  and development activities  related to  the testing  of a new
     restaurant concept and  has a 50% interest in this joint venture, which
     is accounted for under  the equity method.   A typical joint venture or
     franchise  development   agreement   provides  for   payment  of   area
     development  and  initial franchise  fees  in  addition  to  subsequent
     royalty and advertising  fees based on the  annual gross sales of  each
     restaurant.  Future  joint venture or franchise development  agreements
     are  expected  to remain  limited  to  enterprises  having  significant
     experience  as restaurant  operators and  proven financial  ability  to
develop multi-unit operations.                                    

     At  June 29, 1994,  20  total joint  venture  or  franchise development
     agreements existed.  The Company anticipates  that an additional 25  to
     30 franchised Chili's,  0-2 franchised Macaroni Grill restaurants,  and
   1 franchised Spageddies restaurant will be opened during fiscal 1995.

Restaurant Management                                             

     The Company's  philosophy to  maintain and  operate each  concept as  a
     distinct and separate entity ensures  that the culture, recruitment and
     training  programs and  unique  operating environments  are  preserved.
These factors are critical to the viability of each concept.      

     The Company's restaurant management  structure varies by  concept.  The
     individual  restaurants  themselves  are  led  by  a  management   team
     including  a General  Manager  and  between three  to  five  additional
     managers.    The  level  of restaurant  supervision  depends  upon  the
     operating  complexity  and sales  volume  of  each  concept.   An  Area
     Director/Supervisor is responsible for the supervision of, on  average,
     three to  seven restaurants.   For  those concepts  with a  significant
     number  of units  within a  geographical region,  additional levels  of
     management may be  provided.  Each concept  is directed by a  President
or Senior Vice President.                                         

     The  Company believes  that there  is  a  high correlation  between the
     quality  of  restaurant  management  and the  long-term  success  of  a
     concept.   In that regard, the  Company encourages  increased tenure at
     all management positions through various short and long-term  incentive
     programs,  including equity ownership.  These programs,  coupled with a
     general  management  philosophy  emphasizing  quality  of  life,   have
     enabled  the  Company  to attract  and retain  management  employees at
levels above the industry norm.                                   

     The  Company  ensures consistent  quality  standards  in  all  concepts
     through  the issuance  of Operations  Manuals covering all  elements of
     operations and  Food  &  Beverage Manuals  which provide  guidance  for
     preparation of Company formulated recipes.   Routine visitation  to the
     restaurants by all levels  of supervision enforce  strict adherence  to
Company standards.                                                

     The  Director  of  Training   for  each  concept   is  responsible  for
     maintaining  each   concept's  operational   training  program,   which
     includes  a  four   to  five  month  training  period  for   restaurant
     management  trainees,  a continuing  management  training  process  for
     managers and supervisors,  and training  teams consisting of groups  of
     employees  experienced in  all  facets of  restaurant  operations  that
     train employees to open new restaurants.   The training teams typically
     begin on-site training at  a new restaurant seven to ten days prior  to
     opening  and  remain on  location  two  to  three  weeks following  the
opening to ensure the smooth transition to operating personnel.   

Purchasing                                                        

     The  Company's  ability to  maintain  consistent  quality  of  products
     throughout each of its restaurant  concepts depends upon acquiring food
     products and related items from reliable  sources.  Suppliers are  pre-
     approved by the  Company and are required along with the restaurants to
     adhere  to  strict  product  specifications  established  through   the
     Company's newly created quality  assurance program to  ensure that high
     quality, wholesome  food  and  beverage  products  are  served  in  the
     restaurants.  The Company negotiates directly with the major  suppliers
     to  obtain competitive prices and uses purchase commitment contracts to
     stabilize  the potentially  volatile  pricing associated  with  certain
     commodity  items.    All  essential  food  and  beverage  products  are
     available,  or  upon  short   notice  can  be   made  available,   from
     alternative qualified  suppliers in all cities  in which the  Company's
     restaurants are located.  Because of  the relatively rapid turnover  of
     perishable food  products, inventories in  the restaurants,  consisting
     primarily of  food, beverages  and supplies,  have  a modest  aggregate
dollar value in relation to revenues.                             

Advertising and Marketing                                         

     The  Company's concepts generally  focus on  the 18 to 54  year old age
     group,  which  constitutes approximately  half  of  the  United  States
     population.  Members of  this population segment grew up on fast  food,
     but the Company believes that, with  increasing maturity, they prefer a
     more adult, upscale  dining experience. To  attract this  target group,
     the  Company  relies  primarily  on  television,  radio,  direct   mail
  advertising and word-of-mouth information communicated by customers.

     The Company's  franchise agreements  require advertising  contributions
     to the  Company to be used  exclusively for the purpose of maintaining,
     directly  administering  and  preparing  standardized  advertising  and
     promotional activities.  Franchisees spend additional amounts on  local
advertising when approved by the Company.                         

Competition                                                       

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

Employees                                                         

     At June  29, 1994, the Company  employed approximately 38,000  persons,
     of  whom  approximately  650  were  corporate  personnel,  1,300   were
     restaurant  managers   or  trainees   and  36,050   were  employed   in
     non-management restaurant positions.  Of the   650 corporate employees,
     250 were  in management  positions and approximately  400 were  general
     office employees.    The executive  officers  of  the Company  have  an
     average  of  more  than  19  years  of  experience  in  the  restaurant
industry.                                                         

     The Company  considers its employee relations  to be  good and believes
     that  its employee turnover  rate is  lower than  the industry average.
     Most  employees,  other  than   restaurant  management  and   corporate
     personnel, are paid on  an hourly basis.  The Company believes that  it
     provides  working conditions  and  wages that  compare  favorably  with
     those of  its competition.  The  Company's employees are not covered by
any collective bargaining agreements.                             

Service Marks                                                     

     The   Company   has    registered,   among   other   marks,    "Brinker
     International",   "Chili's",  "Grady's",   "Romano's  Macaroni  Grill",
     "Spageddies", "Spageddies  Italian Italian Food",  and "On The  Border"
     as service  marks with the United  States Patent  and Trademark Office.
     In  addition, the Company  has a  service mark  application pending for
"Grady's American Grill" and "Spageddies Italian Kitchen".        

Seasonality                                                       

     The Company's  sales volumes  fluctuate seasonally,  and are  generally
higher in the summer months and lower in the winter months.       

Governmental Regulation                                           

     Each  of  the  Company's  restaurants   is  subject  to  licensing  and
     regulation  by alcoholic  beverage control,  health, sanitation, safety
     and  fire  agencies in  the  state  and/or  municipality  in which  the
     restaurant  is   located.     The  Company  has  not   encountered  any
     difficulties  or  failures  in  obtaining  the  required  licenses   or
     approvals that could delay  or prevent the opening of a new  restaurant
and does not, at this time, anticipate any.                       

     The Company is  subject to federal and state environmental regulations,
     but these have  not had  a material  negative effect  on the  Company's
     operations.  More stringent and varied  requirements of local and state
     governmental bodies with respect to zoning, land use and  environmental
     factors  could  delay  or prevent  development  of  new restaurants  in
     particular  locations.   The  Company  is  subject  to  the Fair  Labor
     Standards  Act which governs  such matters  as minimum  wages, overtime
     and   other  working   conditions,  along   with  the   American   With
     Disabilities  Act  and various  family  leave  mandates.   The  Company
     anticipates legislation concerning mandated  health care benefits which
may have significant consequences to the Company.                 

Item 2.     PROPERTIES.                                                         

     The  following  table   illustrates  the  approximate   average  dining
capacity for each unit in primary restaurant concepts:            

                                                                · Download Table

               Chili's  Grady's  Macaroni Grill  Spageddies  On The Border
                                                                          
Square Feet     5,800    6,900        7,100        7,000         7,900    
Dining Seats   210-220  230-250      230-250      240-260       340-360   
Dining Tables   50-60    50-60        60-70        50-60         75-85    

     Certain of the Company's restaurants are leased  for an initial term of
     5  to 30  years, with  renewal terms  of  1  to 30  years.   The leases
     typically provide for a fixed rental  plus percentage rentals based  on
     sales volume.   At  June 29,  1994, the  Company owned the  land and/or
     building for 236 of the 366  Company-operated restaurants.  The Company
     has closed three  restaurants since  inception and  considers that  its
     properties are suitable,  adequate, well-maintained and sufficient  for
the operations contemplated.                                      

     The  Company  leases warehouse  space  totalling  approximately  31,500
     square feet  in  Dallas, Texas,  which  it  uses for  menu  development
     activity and  for  storage of  equipment  and  supplies.   The  Company
     purchased an  office building  containing approximately  105,000 square
     feet for its corporate headquarters in  July 1989.  Approximately 5,600
     square feet of  this building is  leased to  third party  tenants.   In
     March  1992,  the  Company  leased  additional  office  space  for  the
     expansion of its corporate headquarters.  This additional office  lease
     was expanded  in July 1994  and currently includes approximately 46,400
square feet of office space.                                      

Item 3.     LEGAL PROCEEDINGS.                                                  

None.                                                             

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

None.                                                             

PART II 

Item 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED                   
SHAREHOLDER MATTERS.                                    

     The Company's  Common Stock is  traded on the  New York Stock  Exchange
     ("NYSE")  under   the  symbol  "EAT".    Bid  prices  quoted  represent
     interdealer  prices  without  adjustment  for retail  markup,  markdown
     and/or   commissions,  and   may  not   necessarily  represent   actual
     transactions.   The following table sets  forth the  quarterly high and
    low closing sales prices of the Common Stock, as reported by the NYSE.

Fiscal year ended June 29, 1994:                                  

First Quarter          26 1/12           22 1/6                   
Second Quarter         30 2/3            25 2/3                   
Third Quarter          33 1/3            26 5/6                   
Fourth Quarter         31 1/2            20 3/8                   

Fiscal year ended June 30, 1993:                                  

First Quarter          18                13 8/9                   
Second Quarter         18 8/9            14 17/18                 
Third Quarter          21 2/3            18 5/9                   
Fourth Quarter         24 2/3            18 1/3                   

     On March 9,  1994, the Company declared a stock split,  effected in the
     form of  a 50%  stock dividend  ("Stock Dividend")  to shareholders  of
     record on  March 21, 1994, payable March 30, 1994.  Stock prices in the
preceding table have been restated to reflect the Stock Dividend. 

     As of  September 9,  1994, there  were 2,107  holders of record  of the
Company's Common Stock.                                           

     The Company has never  paid cash dividends on its Common Stock and does
     not  currently  intend to  do so  as  profits  are reinvested  into the
     Company  to fund  expansion of  its  restaurant  business.   Payment of
     dividends  in  the  future  will  depend  upon  the  Company's  growth,
     profitability, financial  condition and other  factors which the  Board
of Directors may deem relevant.                                   

Item 6.     SELECTED FINANCIAL DATA.                                            

     "Selected  Financial Data"  on  page 42  of the  Company's 1994  Annual
Report to Shareholders is incorporated herein by reference.       

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

     "Management's  Discussion  and  Analysis  of  Financial  Condition  and
     Results  of Operations" on  pages 43 through  47 of  the Company's 1994
Annual Report to Shareholders is incorporated herein by reference.

Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.                        

See Item 14(a).                                                   

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

None.                                                             

PART III  

Item 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.                 

      The information relating  to the Company's directors  (including those
      officers  who are directors) is incorporated  herein by reference from
      pages 4 through 9  of the  Company's Proxy  Statement dated  September
     29, 1994, for the annual meeting of shareholders on November 3, 1994.

Item 11.    COMPENSATION INFORMATION.                                           

      "Executive Compensation" on pages 9 through 11 of  the Company's Proxy
      Statement  dated  September  29,  1994,  for  the  annual  meeting  of
      shareholders  on   November  3,  1994,   is  incorporated  herein   by
reference.                                                      

Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.     

      "Principal  Shareholders"  on   page 2  and  "Security  Ownership   of
      Management and  Election of  Directors" on  pages 3 through  4 of  the
      Company's  Proxy Statement  dated September  29, 1994,  for the annual
      meeting of  shareholders on November 3,  1994, are incorporated herein
by reference.                                                   

Item 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                     

None.                                                           

PART IV 

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

(a)  (1) and (2) Financial Statements and Schedules.            

      Reference is made  to the listing  preceding the financial  statements
      and schedules attached hereto on  page 15 of all financial  statements
and schedules filed as a part of this Report.                   

(a)  (3)  Exhibits.                                             

      Reference  is  made  to  the  Exhibit  Index  preceding  the  exhibits
      attached hereto  on page E-1  for a  list of all  exhibits filed as  a
part of this Report.                                            

(b)  Reports on Form 8-K                                        

      The Company was  not required  to file  a current  report on  Form 8-K
during the three months ended June 29, 1994.                    
</PAGE>                                                                         
SIGNATURES  

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange  
Act of 1934, the  registrant has duly caused this  report to be signed  on its  
behalf by the undersigned, thereunto duly authorized.                           

                    BRINKER INTERNATIONAL, INC.,
              a Delaware corporation

              By:  Debra L. Smithart
                               Debra L. Smithart, Executive Vice
                                 President - Chief Financial Officer

Dated: September 27, 1994                                                       
</PAGE>                                                                         

Pursuant to  the requirements  of the Securities  Exchange Act  of 1934,  this  
report has been signed below by the following persons of the registrant and in  
the capacities indicated on September 27, 1994.                                 

Name                                      Title               

Norman E. Brinker                        Chairman of the Board, Chief         
Norman E. Brinker                         Executive Officer and Director        
                                 (Principal Executive Officer)

Debra L. Smithart                        Executive Vice President -  Chief    
Debra L. Smithart                         Financial Officer and Director        
                                        (Principal Financial and  Accounting
            Officer)

Ronald A. McDougall                      Director                             
Ronald A. McDougall                                                             

Creed L. Ford, III                       Director                             
Creed L. Ford, III                                                              

F. Lane Cardwell, Jr.                    Director                             
F. Lane Cardwell, Jr.                                                           

Roger F. Thomson                         Director                             
Roger F. Thomson                                                                

            Director
Jack W. Evans, Sr.                                                              

            Director
Rae F. Evans                                                                    

            Director
J.M. Haggar, Jr.                                                                

            Director
Ray L. Hunt                                                                     

            Director
J. Ira Harris                                                                   

            Director
Frederick S. Humphries                                                          

James E. Oesterreicher                   Director                             
James E. Oesterreicher                                                          

            Director
William F. Regas                                                                

Roger T. Staubach                        Director                             
Roger T. Staubach                                                               
</PAGE>                                                                         

INDEX TO FINANCIAL STATEMENTS AND 
FINANCIAL STATEMENT SCHEDULES 

The following is a listing of the financial statements and financial statement  
schedules  which are  included in  this Form  10-K  or which  are incorporated  
herein by reference.  The financial statements of the Company  included in the  
Company's  1994  Annual Report  to  Shareholders  are incorporated  herein  by  
reference in Item 8.                                                            
                                                        Reference Page

                                                               1994 Annual
                                                   Form 10-K   Report Page

Independent Auditors' Report                                           62       

Consolidated Balance Sheets -                                                   
June 29, 1994 and June 30, 1993                                  48-49

Consolidated Statements of Income -                                             
Years Ended June 29, 1994, June 30, 1993 and 1992                 50  

Consolidated Statements of Shareholders'                                        
Equity - Years Ended June 29, 1994 and                                
June 30, 1993 and 1992                                            51  

Consolidated Statements of Cash Flows -                                         
Years Ended June 29, 1994, June 30, 1993 and 1992                 52  

Notes to Consolidated Financial Statements                            53-61     

Independent Auditors' Report on Financial                                       
Statement Schedules                                  16             

Schedules:                                                                      

I  -  Marketable Securities - Other Investments     17            
V  -  Consolidated Property and Equipment           18            
VI  -  Consolidated Accumulated Depreciation and                    
Amortization of Property and Equipment       19     
IX  -  Consolidated Short-term Borrowings            20             
X  -  Supplemental Income Statement Information     21            

    All   other  schedules  are  omitted  as  the  required  information  is
    inapplicable  or   the  information   is  presented  in   the  financial
statements, related notes or other schedules.                       
</PAGE>                                                                         

INDEPENDENT AUDITORS' REPORT ON 
FINANCIAL STATEMENT SCHEDULES 

The Board of Directors                                                          
Brinker International, Inc.:                                                    

Under date of July 29, 1994, we reported on the consolidated balance sheets of  
Brinker International, Inc. and subsidiaries as  of June 29, 1994 and June 30,  
1993, and the related consolidated  statements of income, shareholders' equity  
and cash flows  for each of the years in the  three-year period ended June 29,  
1994,  as  contained  in  the  1994  annual  report  to  shareholders.   These  
consolidated financial statements  and our report thereon are  incorporated by  
reference in the annual report on Form  10-K for the year ended June 29, 1994.  
In connection  with our  audits of  the aforementioned  consolidated financial  
statements, we  also  audited the  related  financial statement  schedules  as  
listed in the accompanying index.  These financial statement schedules are the  
responsibility  of the Company's management.  Our responsibility is to express  
an opinion on these financial statement schedules based on our audits.          

In  our  opinion,  such  financial  statement  schedules,  when considered  in  
relation  to the  basic consolidated  financial statements  taken as  a whole,  
present fairly, in all material respects, the information set forth therein.    

             KPMG Peat Marwick LLP

Dallas, Texas                                                                   
July 29, 1994                                                                   
</PAGE>                                                                         

SCHEDULE I  

BRINKER INTERNATIONAL, INC. 
MARKETABLE SECURITIES-OTHER INVESTMENTS 
JUNE 29, 1994 
(In thousands, except share amounts)  

                                                                · Download Table

                          Number of Shares or                   Market and  
     Type of Issue        Principal Amounts        Cost       Carrying Value
                                                                            
Preferred Stocks:                                                           
  Financial Institutions       768,578          $ 24,714         $ 24,501   
  Consumer Products            284,030             9,434            9,371   
  Energy                       180,000             4,311            4,277   
  High Tech                    120,000             3,800            3,790   
  Utilities                    100,000             2,543            2,450   
  Insurance                     50,000               878              850   

Total Long-Term Investments                     $ 45,680         $ 45,239   
</PAGE>                                                                         

                      SCHEDULE V

                       BRINKER INTERNATIONAL, INC.
                       CONSOLIDATED PROPERTY AND EQUIPMENT
                      (In thousands)

                                                        · Enlarge/Download Table

                         Balance at                                                                   
                        Beginning of                                 Balance at                       
                          Period        Additions (1)  Retirements  End of Period                     
                                                                                                      
For the Year Ended                                                                                    
June 30, 1992:                                                                                        

Land                    $  38,752       $  26,008       $  (480)      $   64,280                      
Buildings and Lease-                                                                                  
 hold Improvements        136,927          35,462          (805)         171,584                      
Furniture & Equipment      89,056          33,168        (6,751)         115,473                      
Construction-in-                                                                                      
  Progress                  7,564           3,362           ---           10,926                      

    Total               $ 272,299       $  98,000     $  (8,036)      $  362,263                      

For the Year Ended                                                                                    
June 30, 1993:                                                                                        

Land                    $  64,280       $  24,128       $  (847)      $   87,561                      
Buildings and Lease-                                                                                  
 hold Improvements        171,584          52,894          (893)         223,585                      
Furniture & Equipment     115,473          31,693        (2,341)         144,825                      
Construction-in-                                                                                      
  Progress                 10,926          18,116           ---           29,042                      

    Total               $ 362,263       $ 126,831     $  (4,081)      $  485,013                      

For the Year Ended                                                                                    
June 29, 1994:                                                                                        

Land                    $  87,561       $  20,734       $(2,255)      $  106,040                      
Buildings and Lease-                                                                                  
 hold Improvements        223,585          65,252        (2,521)         286,316                      
Furniture & Equipment     144,825          33,949        (7,384)         171,390                      
Construction-in-                                                                                      
  Progress                 29,042           2,258           ---           31,300                      

    Total               $ 485,013       $ 122,193     $ (12,160)      $  595,046                      

(1)   Additions  primarily represent  costs  for acquiring  land,  constructing new  restaurants,  and
      equipping new restaurants.                                                                      
</PAGE>                                                                         
                       SCHEDULE VI

                       BRINKER INTERNATIONAL, INC.
                      CONSOLIDATED ACCUMULATED DEPRECIATION AND AMORTIZATION
                       OF PROPERTY AND EQUIPMENT
                      (In thousands)

                                                                · Download Table

                         Balance at                                          
                        Beginning of                             Balance at  
                          Period      Additions   Retirements  End of Period 
                                                                             
For the Year Ended                                                           
June 30, 1992:                                                               

Buildings and Leasehold                                                      
 Improvements           $ (26,222)    $ ( 8,434)   $    188       $  (34,468)
Furniture & Equipment     (48,752)      (15,225)      5,124          (58,853)

  Total Accumulated                                                          
   Depreciation and                                                          
   Amortization         $ (74,974)    $ (23,659)   $  5,312       $  (93,321)

For the Year Ended                                                           
June 30, 1993:                                                               

Buildings and Leasehold                                                      
 Improvements           $ (34,468)    $ (10,147)   $     72       $  (44,543)
Furniture & Equipment     (58,853)      (21,015)      2,147          (77,721)

  Total Accumulated                                                          
   Depreciation and                                                          
   Amortization         $ (93,321)    $ (31,162)   $  2,219       $ (122,264)

For the Year Ended                                                           
June 29, 1994:                                                               

Buildings and Leasehold                                                      
 Improvements           $ (44,543)    $ (17,611)   $    807       $  (61,347)
Furniture & Equipment     (77,721)      (23,988)      2,198          (99,511)

  Total Accumulated                                                          
   Depreciation and                                                          
   Amortization         $(122,264)    $ (41,599)   $  3,005       $ (160,858)
</PAGE>                                                                         

                       SCHEDULE IX

                       BRINKER INTERNATIONAL, INC.
                      CONSOLIDATED SHORT-TERM BORROWINGS
                      (In thousands)

                                                        · Enlarge/Download Table

                                                        Maximum        Average       Weighted         
                                                         Amount        Amount         Average         
                                         Weighted      Outstanding   Outstanding     Interest         
Category of Aggregate    Balance At      Average         During        During         During          
Short Term Borrowings   End of Period  Interest Rate   The Period   The Period (2)  The Period (3)    

NOTES PAYABLE                                                                                         
TO BANKS (Bank Borrowings)(1)                                                                         
                                                                                                      

Years Ended June 30,                                                                                  

       1992                 ---            ---          $ 4,000        $   612         7.094%         

       1993                 ---            ---          $12,650        $ 3,008         3.590%         

Year Ended June 29,                                                                                   

       1994                 ---            ---          $ 9,950        $ 4,229         5.005%         

(1)   Notes payable to banks represent obligations payable  under line of credit agreements with local
      banks.  Borrowings are arranged on an as needed basis at various terms.                         

(2)   The average amount outstanding during the year represents the average monthly principal balances
      outstanding during the year.                                                                    

(3)   The  weighted average  interest  rates during  the year  were  computed by  dividing  the actual
      interest accrued on short-term borrowings by the average short-term borrowings.                 
</PAGE>                                                                         

                      SCHEDULE X

                       BRINKER INTERNATIONAL, INC.
                       SUPPLEMENTAL INCOME STATEMENT INFORMATION
                      (In thousands)

                                                                · Download Table

                                               FOR THE YEARS ENDED             
                                  June 29, 1994   June 30, 1993   June 30, 1992
                                                                               
Repair and Maintenance               17,740          12,010          10,593    

Amortization                          9,902           6,573           5,401    

Property Tax                         10,285           7,244           5,651    

Advertising                          27,507          23,922          17,694    
</PAGE>                                                                         
INDEX TO EXHIBITS 

Exhibit                                                                         

3(a)       Certificate of Incorporation of the registrant, as amended. (1)    

3(b)       Bylaws of the registrant. (2)                                      

10(a)       Registrant's 1983 Incentive Stock Option Plan. (3)                  

10(b)       Registrant's 1991 Stock Option Plan for Non-Employee Directors and  
Consultants (4)                                         

10(c)       Registrant's 1992 Incentive Stock Option Plan. (5)                  

13          1994 Annual Report to Shareholders. (6)                             

21          Subsidiaries of the registrant. (7)                                 

23          Independent Auditors' Consent. (7)                                  

27          Financial Data Schedule. (8)                                        

99          Proxy Statement of registrant dated September 29, 1994. (6)         

(1)         Filed  as an  exhibit  to Registration  Statement No. 32-52705  on  
Form S-4 and incorporated herein by reference.          

(2)         Filed  as an exhibit to Registration Statement No. 2-87736 on Form  
S-1 and incorporated herein by reference.               

(3)         Filed as an exhibit to report on Form 10-K for year ended June 30,  
1990 and incorporated herein by reference.              

(4)         Filed as an exhibit to report on Form 10-K for year ended June 30,  
1991 and incorporated herein by reference.              

(5)         Filed as an exhibit to Registration Statement No. 33-61594 on Form  
S-8 and incorporated herein by reference.               

(6)         Portions filed herewith, to the extent indicated herein.            

(7)         Filed herewith.                                                     

(8)         Filed with EDGAR version.                                           

E-1 
</PAGE>                                                                         
                      EXHIBIT 13

                      1994 ANNUAL REPORT TO SHAREHOLDERS

                                                        · Enlarge/Download Table
                                        SELECTED FINANCIAL DATA                                       
                  (In thousands, except per share amounts and number of restaurants)                  

                                                 Fiscal Years                                         


                               1994       1993       1992       1991      1990                        
                                                                                                      
Income Statement Data:                                                                                

Revenues                     $878,473   $697,396   $562,361   $468,926  $385,847                      
Costs and Expenses:                                                                                   
  Cost of Sales               239,835    193,794    156,246    135,365   113,521                      
  Restaurant Expenses         446,845    355,040    294,095    245,583   202,957                      
  Depreciation and                                                                                    
    Amortization               51,501     38,223     29,031     23,245    19,232                      
  General and Administrative   45,662     37,170     30,761     26,338    21,501                      
  Interest Expense                430        395        622      1,063     2,850                      
  Merger Expenses               1,949        ---        ---        ---       ---                      
  Lawsuit Settlement            2,248        ---        ---        ---       ---                      
  Other, Net                   (5,435)    (5,232)    (3,255)    (1,516)   (1,287)                     

  Total Costs and Expenses    783,035    619,390    507,500    430,078   358,774                      

Income Before Provision for                                                                           
  Income Taxes                 95,438     78,006     54,861     38,848    27,073                      
Provision for Income Taxes     33,832     27,083     18,836     13,565     9,328                      

  Net Income                 $ 61,606   $ 50,923   $ 36,025   $ 25,283  $ 17,745                      

Primary Net Income                                                                                    
  Per Share                  $   0.83   $   0.70   $   0.50   $   0.39  $   0.31                      

Primary Weighted Average                                                                              
  Shares Outstanding           74,572     72,911     71,454     65,336    56,526                      

Balance Sheet Data                                                                                    
(end of period):                                                                                      

  Working Capital                                                                                     
   (Deficit)                 $(56,193)  $(40,596)  $(24,871)  $  1,944  $(19,713)                     
  Total Assets                558,709    454,354    354,748    276,407   207,891                      
  Long-term Obligations        38,003     30,782     26,409     24,270    28,543                      
  Shareholders' Equity        417,290    343,905    261,523    207,048   131,972                      

Number of Restaurants Open                                                                            
at End of Period:                                                                                     

  Company Operated                366        305        255        220       189                      
  Franchised                       92         78         60         51        41                      
    Total                         458        383        315        271       230                      

Prior year financial  results have been restated to reflect the fiscal 1994 acquisitions accounted for
as poolings of interests and the fiscal 1994 stock split effected in the form of a 50% stock dividend.
</PAGE>                                                                         
MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

RESULTS OF OPERATIONS FOR FISCAL YEARS 1994, 1993, AND 1992                     

The following table sets forth expenses  as a percentage of total revenues for  
the   periods  indicated  for  revenue  and  expense  items  included  in  the  
Consolidated Statements of Income.                                              

                    PERCENTAGE OF TOTAL REVENUES
                    Fiscal Years
                      1994        1993        1992

Revenues                            100.0%      100.0%      100.0%              

Costs and Expenses:                                                             
Cost of Sales                      27.3%       27.8%       27.8%            
Restaurant Expenses                50.9%       50.9%       52.3%            
Depreciation and Amortization       5.9%        5.5%        5.2%            
General and Administrative          5.2%        5.3%        5.5%            
Interest Expense                    0.0%        0.0%        0.0%            
Merger Expenses                     0.2%        ---         ---             
Lawsuit Settlement                  0.2%        ---         ---             
Other, Net                         (0.6%)      (0.7%)      (0.6%)           

Total Costs and Expenses             89.1%       88.8%       90.2%              

Income Before Provision                                                         
for Income Taxes                   10.9%       11.2%        9.8%            

Provision for Income Taxes            3.9%        3.9%        3.4%              

Net Income                      7.0%        7.3%        6.4%        

REVENUES                                                                        

Increases in  revenues of 26% and  24% in fiscal 1994  and 1993, respectively,  
primarily relate to the  increases in the number of  Company-owned restaurants  
and comparable store sales.  The  percentage increase in the average number of  
Company-owned restaurants in operation was 20% for both fiscal 1994 and  1993.  
Increases  in comparable  store sales were  2.1% and  3.8% in  fiscal 1994 and  
1993, respectively.   These favorable  trends were due  to increased  customer  
counts resulting from the  Company's commitment to providing quality  food and  
service at  an exceptional value, its  ongoing evolution of the  menu, and its  
continued  remodeling program to keep its restaurants updated and the ambiance  
inviting to the guests.  In addition, the Company continues to refine its real  
estate  site selection  process  which focuses  on trading-area  demographics,  
visibility, accessibility, and complementary concept locations.  Quality sites  
provide  a  competitive advantage  and contribute  to  stronger sales  for new  
restaurants.   Menu  price increases  had  little impact  on  the increase  in  
revenues as  weighted average price increases over the past two years averaged  
less than 1% per year.                                                          

COSTS AND EXPENSES (as a percent of Revenues)                                   

Cost of sales  decreased in fiscal  1994 compared to  fiscal 1993.   Favorable  
price changes in  produce, dairy,  poultry, and pasta,  recipe changes  toward  
lower  food  cost items,  implementation of  meat  waste control  systems, and  
increased  purchasing  leverage  offset  unfavorable  price  changes  in  non-  
alcoholic beverages.  Cost of sales remained constant in  fiscal 1993 compared  
to  fiscal  1992  as the  favorable  impact from  continued  emphasis  on food  
portioning and  waste and yield management programs were offset by product mix  
changes to menu items with higher percentage food costs.                        

Restaurant expenses  were flat in fiscal  1994.  Insurance costs  were flat as  
aggressive safety and loss management  programs implemented in the restaurants  
in fiscal 1993 have continued to be successful and offset rising insurance and  
health care costs.  Occupancy costs, however, decreased due to  an increase in  
percentage  of restaurants owned versus  leased.  Liquor  taxes also decreased  
due to the Company's expansion into states with lower liquor tax rates.  These  
decreases were  offset by increases  in manager salaries  due to  annual merit  
increases, manager training expenses to support expansion, and  property taxes  
due to increased rates.   In fiscal 1993, restaurant expenses declined  as the  
administrative hours required  of restaurant managers was reduced, programs to  
contain insurance costs were introduced, and rent expense decreased due to the  
increase in percentage of owned restaurants versus leased.                      

Depreciation  and amortization increased in fiscal 1994 and 1993 primarily due  
to continued investments in computer hardware and software which has generated  
operating efficiencies at  both the restaurants  and corporate office  support  
groups.   Also,  the  ongoing  restaurant remodeling  program,  the  continued  
replacement of restaurant furniture  and equipment, and the trend  to purchase  
new restaurant sites in favor of leasing have contributed to the increases.     

General  and administrative  expenses have  decreased in  the past  two fiscal  
years   as  a  result  of   the  Company's  focus   on  controlling  corporate  
expenditures.   Efficiencies resulting  from investments in  computer hardware  
and software allowed the Company to continue with the aggressive  expansion of  
its restaurant concepts without  incurring significant increases in  staff and  
support costs.                                                                  

Merger expenses are  one-time charges  related to  the acquisition  of On  The  
Border, such as consulting fees, legal fees, and severance costs.               

Lawsuit  settlement represents  a one-time  charge to  settle an  injury claim  
arising from an airplane  accident involving several former officers of On The  
Border.                                                                         

Other, net,  decreased in  fiscal 1994.   A gain  of approximately  $1 million  
related to the sale of land in fiscal 1994 was offset by losses resulting from  
recognition of a  permanent decline  in market value  for certain  securities.  
Net realized gains  on investment  transactions were down  slightly in  fiscal  
1994.   Dividend  and interest  income, however,  was flat.   The  increase in  
fiscal 1993 compared to fiscal 1992 is the result of  increased realized gains  
from investment transactions experienced  in fiscal 1993 offset somewhat  by a  
decrease in dividend and interest income.                                       

INCOME BEFORE PROVISION FOR INCOME TAXES                                        

As a result  of changes in  the relationships between  revenues and costs  and  
expenses, income before provision for income  taxes has increased at rates  of  
22.3% and 42.2% in fiscal 1994 and 1993, respectively.                          

INCOME TAXES                                                                    

The  Company's effective income tax rate of  35.4%, 34.7%, and 34.3% in fiscal  
1994,  1993, and  1992, respectively,  continues to  increase as  a  result of  
incremental  earnings taxed  at higher  effective  rates and  additional state  
income  tax liabilities  resulting  from expansion,  particularly relating  to  
growth in Florida and California.                                               

The  Omnibus Budget  Reconciliation  Act,  enacted  in August  1993,  mandated  
certain changes in Federal income tax  laws, which among other items, included  
an  increase in the  statutory Federal corporate  income tax rate  from 34% to  
35%,  retroactive  to January  1993, reinstatement  of  the targeted  jobs tax  
credit, retroactive to January 1993, and a  tax credit for FICA taxes paid  on  
tips, effective January 1994.  These changes did not have a material impact on  
Brinker's  fiscal 1994 and 1993 effective income  tax rate or the consolidated  
financial statements.                                                           

NET INCOME AND NET INCOME PER SHARE                                             

Net income and primary net income per share as a percent of revenues decreased  
slightly in  fiscal 1994 as a  result of one-time charges,  including the $2.2  
million  lawsuit settlement and $1.9  million of costs  incurred in connection  
with the On  The Border acquisition.   Net income and  primary net income  per  
share  increased  as a  percent of  revenues  in fiscal  1993 as  a  result of  
controlling  costs and  expenses while  continuing with  the expansion  of the  
restaurant  concepts.  The increases in the  weighted average number of common  
shares outstanding arose from common stock options exercised each year.         

STOCK DIVIDENDS                                                                 

Stock splits in each of March 1994,  May 1993, and November 1991, effected  in  
the  form of 50%  stock dividends, resulted  in the issuance  of 23.2 million,  
22.8 million, and 21.5 million shares of the Company's common stock, in fiscal  
1994, 1993, and 1992, respectively.                                             

IMPACT OF INFLATION                                                             

The Company has not  experienced a significant overall impact  from inflation.  
As  operating expenses  increase,  the Company,  to  the extent  permitted  by  
competition, recovers increased costs by increasing menu prices.                

LIQUIDITY AND CAPITAL RESOURCES                                                 

The working capital  deficit increased from $40.6 million  at June 30, 1993 to  
$56.2  million at  June 29,  1994.   Strong  operating  results from  new  and  
existing  units  and the  exercise of  employee  stock options  generated cash  
proceeds  that were  offset  by the  Company's  capital expenditures  and  the  
investment of available  cash in  long-term marketable securities.   Net  cash  
provided  by operating activities increased  to $125.5 million  in fiscal 1994  
from $106.2 million in fiscal 1993 due to the increased  number of restaurants  
in  operation, strong operating results from existing units, and the effective  
containment of costs.                                                           

The Company had available funds from credit facilities totalling $41.2 million  
at June 29, 1994.  The Company estimates that its capital expenditures  during  
fiscal  1995 will approximate $200 million.  These capital expenditures, which  
will primarily relate to  the planned expansion of each restaurant concept and  
the  Company's  ongoing   remodel  program,  will  be  funded   from  internal  
operations,  income earned  from  investments, build-to-suit  lease agreements  
with landlords, and draw downs on the Company's available lines of credit.      

The Clinton administration  continues to analyze  and propose new  legislation  
which could adversely impact  the entire business community.   Mandated health  
care  and minimum  wage  measures, if  passed,  could increase  the  Company's  
operating costs.  The Company would attempt to offset  increased costs through  
continued improvements in operating efficiencies and menu price increases.      

The Company is not  aware of any other event or  trend which would potentially  
affect its liquidity.   In the event such  a trend would develop,  the Company  
believes that there are sufficient  funds available under the lines of  credit  
and from strong internal cash generating capabilities to adequately manage the  
expansion of the business.                                                      

NEW ACCOUNTING PRONOUNCEMENT                                                    

In  November 1992, the  Financial Accounting  Standards Board  ("FASB") issued  
Statement  of  Financial  Accounting   Standards  No. 112  ("SFAS   No. 112"),  
Employers' Accounting  for Postemployment Benefits.   SFAS No. 112  sets forth  
standards of accounting and reporting for employers  that offer postemployment  
benefits.   SFAS No. 112 is  effective for  the Company in  fiscal 1995.   The  
Company does  not believe the  adoption of SFAS  No. 112 will have  a material  
impact on its consolidated financial statements.                                

                                                                · Download Table
                                      CONSOLIDATED BALANCE SHEETS           
                          (In thousands, except share and per share amounts)


                                                 1994                  1993 
                                                                            
ASSETS                                                                      

Current Assets:                                                             
  Cash and Cash Equivalents                 $    3,614            $   12,429
  Accounts Receivable, Net                      12,573                 6,016
  Assets Held for Sale and Leaseback               ---                 1,155
  Inventories                                    8,152                 6,907
  Prepaid Expenses                              18,229                12,564
  Deferred Income Taxes (Note 7)                 4,655                   ---
      Total Current Assets                      47,223                39,071

Property and Equipment, at Cost (Note 9):                                   
  Land                                      $  106,040             $  87,561
  Buildings and Leasehold Improvements         286,316               223,585
  Furniture and Equipment                      171,390               144,825
  Construction-in-Progress                      31,300                29,042
                                               595,046               485,013
  Less Accumulated Depreciation                                             
      and Amortization                         160,858               122,264
      Net Property and Equipment               434,188               362,749

Other Assets:                                                               
  Preopening Costs                          $    7,927            $    9,781
  Long-term Marketable Securities (Note 3)      45,239                28,693
  Long-term Notes Receivable                     2,231                 2,773
  Other (Notes 2 and 10)                        21,901                11,287
      Total Other Assets                        77,298                52,534
            Total Assets                    $  558,709            $  454,354

LIABILITIES AND SHAREHOLDERS' EQUITY                                        

Current Liabilities:                                                        
  Current Installments of Long-Term                                         
    Debt (Note 9)                            $     501            $      886
  Accounts Payable                              45,037                31,902
  Accrued Liabilities (Note 4)                  57,878                45,960
  Deferred Income Taxes (Note 7)                   ---                   919
      Total Current Liabilities                103,416                79,667

Long-Term Debt, Less Current                                                
  Installments (Note 9)                          4,464                 7,845
Senior Subordinated Convertible                                             
  Debentures (Note 6)                            1,200                 1,200
Deferred Income Taxes (Note 7)                  12,143                 8,837
Other Liabilities                               20,196                12,900
Commitments and Contingencies                                               
  (Notes 9, 10 and 11)                                                      

Shareholders' Equity (Notes 2 and 8):                                       
  Preferred Stock-1,000,000 Authorized Shares;                              
    $1.00 Par Value; No Shares Issued              ---                   ---
  Common Stock-100,000,000 Authorized Shares;                               
    $.10 Par Value; 71,029,522 and 69,946,814                               
    Shares Issued and Outstanding in                                        
    1994 and 1993, Respectively                  7,103                 6,995
  Additional Paid-In Capital                   182,579               170,467
  Unrealized Loss on Marketable Securities                                  
    (Note 3)                                      (441)                  ---
  Retained Earnings                            228,049               166,443
     Total Shareholders' Equity                417,290               343,905
       Total Liabilities and                                                
         Shareholders' Equity               $  558,709            $  454,354

See Accompanying Notes to Consolidated Financial Statements                 
                                                                · Download Table
                                   CONSOLIDATED STATEMENTS OF INCOME   
                               (In thousands, except per share amounts)

                                                FISCAL YEARS           

                                       1994         1993        1992   
                                                                       
Revenues                             $878,473     $697,396    $562,361 

Costs and Expenses:                                                    
  Cost of Sales                       239,835      193,794     156,246 
  Restaurant Expenses (Note 9)        446,845      355,040     294,095 
  Depreciation and Amortization        51,501       38,223      29,031 
  General and Administrative           45,662       37,170      30,761 
  Interest Expense                        430          395         622 
  Merger Expenses (Note 2)              1,949          ---         --- 
  Lawsuit Settlement (Note 11)          2,248          ---         --- 
  Other, Net (Note 3)                  (5,435)      (5,232)     (3,255)

Total Costs and Expenses              783,035      619,390     507,500 

Income Before Provision                                                
  for Income Taxes                     95,438       78,006      54,861 

Provision for Income Taxes (Note 7)    33,832       27,083      18,836 

      Net Income                     $ 61,606     $ 50,923    $ 36,025 

Primary Net Income Per Share         $   0.83     $   0.70    $   0.50 

Primary Weighted Average                                               
  Shares Outstanding                   74,572       72,911      71,454 

Fully Diluted Net Income                                               
  Per Share                          $   0.83     $   0.70    $   0.50 

Fully Diluted Weighted Average                                         
  Shares Outstanding                   74,668       73,040      71,609 

         See Accompanying Notes to Consolidated Financial Statements   
                                                        · Enlarge/Download Table
                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY                     
                                            (In thousands)                                      


                                                                Unrealized                      
                                                    Additional   Loss On                        
                                   Common Stock      Paid-In    Marketable   Retained           
                                  Shares   Amount    Capital    Securities   Earnings    Total  
                                                                                                
Balances at June 30, 1991         64,670  $ 6,467    $122,927   $ (1,841)    $ 79,495  $207,048 
Net Income                           ---      ---         ---        ---       36,025    36,025 
Recovery of Unrealized Loss on                                                                  
  Marketable Securities (Note 3)     ---      ---         ---      1,841          ---     1,841 
Issuances of Common Stock          1,638      164      16,445        ---          ---    16,609 

Balances at June 30, 1992         66,308  $ 6,631    $139,372   $    ---     $115,520  $261,523 
Net Income                           ---      ---         ---        ---       50,923    50,923 
Issuances of Common Stock          3,639      364      31,095        ---          ---    31,459 
Balances at June 30, 1993         69,947  $ 6,995    $170,467   $    ---     $166,443  $343,905 
Net Income                           ---      ---         ---        ---       61,606    61,606 
Unrealized Loss on Marketable                                                                   
  Securities (Note 3)                ---      ---         ---       (441)         ---      (441)
Issuances of Common Stock          1,083      108      12,112        ---          ---    12,220 

Balances at June 29, 1994         71,030  $ 7,103    $182,579   $   (441)    $228,049  $417,290 

                See Accompanying Notes to Consolidated Financial Statements                     
                                                                · Download Table
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS          
                                            (In thousands)                      

                                                          FISCAL YEARS          
                                                 1994         1993        1992  
                                                                                
Cash Flows From Operating Activities:                                           
  Net Income                                  $ 61,606     $ 50,923    $ 36,025 

  Adjustments to Reconcile Net Income to Net                                    
    Cash Provided By Operating Activities:                                      
    Depreciation and Amortization of                                            
      Property and Equipment                    41,599       31,162      23,659 
    Amortization of Preopening Costs             9,902        7,061       5,372 
    Gain on Sale of Land                        (1,000)         ---         --- 
    Net Gain on Sale of Long-term                                               
      Marketable Securities                     (1,543)      (1,579)        (15)
    Loss on Impairment of Long-term                                             
      Marketable Securities                      1,072          ---         --- 
    Changes in Assets and Liabilities:                                          
      (Increase) Decrease in Accounts                                           
        Receivable                              (6,557)        (948)        809 
      Increase in Inventories                   (1,245)      (1,251)     (1,017)
      Increase in Prepaid Expenses              (5,665)      (2,678)     (1,329)
      Increase in Other Assets                 (11,179)     (12,989)     (6,681)
      Increase in Accounts Payable              21,522       24,604      15,208 
      Increase in Accrued Liabilities           11,918       10,166      12,353 
      (Decrease) Increase in Deferred                                           
        Income Taxes                            (2,268)      (5,753)      3,622 
      Increase (Decrease) in Other                                              
        Liabilities                              7,296        7,487        (418)
        Net Cash Provided by Operating                                          
          Activities                           125,458      106,205      87,588 

Cash Flows From Investing Activities:                                           
    Payments for Property and Equipment       (114,994)    (124,969)    (95,276)
    Proceeds from Sale of Land                   4,180          ---         --- 
    Payment for Purchase of Restaurants                                         
      (Note 2)                                  (8,165)         ---         --- 
    Decrease (Increase) in Assets Held                                          
      for Sale and Leaseback                     1,155           13        (442)
    Purchases of Long-term Marketable                                           
      Securities                               (58,986)     (62,796)    (45,016)
    Proceeds from Sales of Long-term                                            
      Marketable Securities                     42,470       61,630      36,407 
      Net Cash Used in Investing Activities   (134,340)    (126,122)   (104,327)

Cash Flows From Financing Activities:                                           
    Payments of Long-Term Debt                  (3,766)        (298)     (2,282)
    Proceeds from Issuance of Debentures           ---          ---       1,200 
    Proceeds from Issuances of Common Stock      3,833       12,477      10,792 
    Net Cash Provided by Financing Activities       67       12,179       9,710 

  Net Decrease in Cash and Cash Equivalents     (8,815)      (7,738)     (7,029)
  Cash and Cash Equivalents at Beginning                                        
    of Year                                     12,429       20,167      27,196 
  Cash and Cash Equivalents at End of Year    $  3,614     $ 12,429    $ 20,167 

  Cash Paid During the Year:                                                    
    Interest, Net of Amounts Capitalized      $   430      $    395    $    622 
    Income Taxes                              $ 26,579     $ 11,687    $  8,847 

  Non-Cash Transactions During the Year:                                        
    Tax Benefit from Stock Options Exercised  $ 8,387      $ 18,982    $  5,817 
    Property and Equipment Received in                                          
      Exchange for Note Receivable            $   ---      $    ---    $  2,305 
    Property and Equipment Received in                                          
      Exchange for Property and Equipment     $   ---      $    ---    $  1,483 

                 See Accompanying Notes to Consolidated Financial Statements    

Brinker International, Inc. 
Notes To Consolidated Financial Statements  

1.    SIGNIFICANT ACCOUNTING POLICIES                                           

(a)   Basis of Presentation                                         

    The consolidated  financial statements  include the accounts  of Brinker
    International, Inc. and its  wholly-owned subsidiaries ("Brinker").  All
    significant intercompany accounts and transactions have  been eliminated
in consolidation.                                                   

    On March 9, 1994,  Brinker declared a stock  split in the form of  a 50%
    stock dividend to shareholders  of record on March 21, 1994,  payable on
    March 30, 1994.   As a result, 23.2 million shares  of common stock were
    issued, and  cash was paid in lieu of fractional shares.  All references
    to the number of shares and per share amounts of  common stock have been
    restated  to  reflect  this  stock  dividend.    In addition,  Brinker's
    consolidated financial  statements and notes thereto  have been restated
    to include the accounts and operations of On The Border Cafes, Inc. ("On
    The Border")  and Northwest Restaurants  Joint Venture ("NRJV")  for all
periods presented (see Note 2).                                     

    Effective July 1, 1993, Brinker adopted a 52 week fiscal year ending  on
    the last Wednesday  in June.   Most retailing  and restaurant  companies
    operate on an accounting calendar that is measured in weeks rather  than
    months.  Thus, a normal fiscal year only contains 364 days.  Every fifth
    or sixth year, lost days are recaptured by having a 53 week fiscal year.
    This change enhances Brinker's  ability to measure comparative operating
    results.  The  impact of this change was not  significant.  Fiscal years
    1994,  1993, and 1992 ended  June 29, 1994, June 30,  1993, and June 30,
1992, respectively.                                                 

    Certain  amounts in  the fiscal  1993 consolidated  financial statements
have been reclassified to conform with the fiscal 1994 presentation.

(b)   Cash and Cash Equivalents                                     

    Brinker's policy is to  invest cash in excess of  operating requirements
    in  income-producing investments.    Cash invested  in instruments  with
    maturities  of  three  months  or less  at  the  time  of  investment is
    reflected  as  cash  equivalents.   Cash  equivalents  of  $110,000  and
    $11,142,000 at  June 29, 1994  and June 30, 1993,  respectively, consist
    primarily  of  money  market  funds,  short-term  municipal  funds,  and
    commercial paper.   The carrying value of these instruments approximates
market value due to their short-term maturities.                    

(c)   Inventories                                                   

    Inventories, which consist  of food, beverages, and supplies, are stated
at the lower of cost (first-in, first-out method) or market.        

(d)   Property and Equipment                                        

    Buildings   and  leasehold   improvements   are  amortized   using   the
    straight-line method over the lesser of the life of the lease, including
    renewal  options, or  the estimated  useful lives  of the  assets, which
range from 5 to 20 years.                                           

    Furniture and  equipment are depreciated using  the straight-line method
    over the estimated useful lives of the  assets, which range from 3 to  8
years.                                                              

(e)   Capitalized Interest                                          

    Interest costs capitalized during the construction period of restaurants
    were approximately  $690,000,  $800,000, and  $1,300,000  during  fiscal
1994, 1993, and 1992, respectively.                                 

(f)   Preopening Costs                                              

    Capitalized preopening  costs include  the direct and  incremental costs
    typically  associated  with  the  opening  of  a  new  restaurant  which
    primarily consist of costs incurred to develop new restaurant management
    teams,  travel  and  lodging for  both  the  training  and opening  unit
    management teams, and the food, beverage, and supplies costs incurred to
    perform  role  play testing  of  all  equipment,  concept  systems,  and
    recipes.   Effective  July 1,  1993, Brinker  prospectively revised  its
    policy for capitalizing and  amortizing preopening costs associated with
    the  opening of  new  restaurant sites.    The amortization  period  was
    reduced from  24  months to  12 months.   The  impact of  the change  in
    accounting  policy  did   not  have  a  material   impact  on  Brinker's
consolidated financial statements.                                  

(g)   Stock Options                                                 

    Proceeds from the exercise  of common stock options issued  to officers,
    directors,  key employees,  and  certain non-employees  under  Brinker's
    stock option plans  are credited to  common stock to  the extent of  par
value and to additional paid-in capital for the excess.             

(h)   Net Income Per Share                                          

    Both  primary and fully  diluted net income  per share are  based on the
    weighted average  number of  shares outstanding  during the fiscal  year
    increased by  common equivalent shares (stock  options) determined using
    the treasury stock method.   Primary weighted average equivalent  shares
    are  determined based on the average market price exceeding the exercise
    price of the stock  options.  Fully diluted weighted  average equivalent
    shares  are  determined based  on the  higher of  the average  or ending
market price exceeding the exercise price of the stock options.     

2.    BUSINESS COMBINATIONS                                                     

    On June 30, 1993,  Brinker acquired  the remaining 50%  interest in  its
    three unit  Spageddies Italian Kitchen restaurant concept ("Spageddies")
    from  its  joint  venture partner  in  exchange  for  205,716 shares  of
    Brinker's  common stock.  The acquisition was accounted for as a pooling
    of  interests, and  accordingly,  Brinker's 1993  consolidated financial
    statements include the accounts  and operations of Spageddies  since the
commencement of its operations in July 1992.                        

    On October 7, 1993, Brinker  acquired the assets of a  franchisee, which
    operated  four  Chili's  restaurants   in  Pennsylvania  and  Ohio,  for
    approximately  $8,165,000 in cash.  The acquisition was accounted for as
    a  purchase.   Goodwill  of approximately  $6,941,000, representing  the
    excess of cost over the fair  value of the assets acquired, was recorded
    in  connection with  the acquisition  and is  included in  other assets.
    Goodwill is being amortized on a straight-line basis over 30 years.  The
    operations  of the  restaurants are  included in  Brinker's consolidated
    results of  operations from  the date  of acquisition.   The  results of
    operations on a  pro forma  basis are  not presented  separately as  the
    results  do not  differ significantly  from historical  amounts reported
herein.                                                             

    On  May 18, 1994,  Brinker consummated  a merger  agreement with  On The
    Border,  pursuant to which Brinker acquired a 100% ownership interest in
    On The Border.  Under the terms of the merger agreement, 3,767,711 fully
    diluted shares of On The Border common stock were converted to 1,239,130
    shares of Brinker common  stock (approximately 0.3 for 1  exchange).  On
    The  Border's operations  included fourteen  company-operated and  seven
    franchised casual  dining Tex-Mex  theme restaurants.   This acquisition
was accounted for as a pooling of interests.                        

    On May 25, 1994,  Brinker acquired  the remaining 50%  interest in  NRJV
    from its joint venture partner in exchange for 256,576 shares of Brinker
    common  stock.   NRJV  owned and  operated  nine Chili's  restaurants in
    California and Nevada.  This acquisition  was accounted for as a pooling
of interests.                                                       

    Revenues,  net income (loss), primary  net income (loss)  per share, and
    fully diluted net  income (loss) per share  for the period  ended May 4,
    1994, fiscal 1993,  and fiscal 1992 are presented below  for Brinker, On
    The Border, and  NRJV on a  separate and  combined basis (in  thousands,
except per share amounts):                                          

                         Period Ended May 4   Year Ended June 30
                            1994 (1)          1993      1992
 (Unaudited)
Revenues:                                                           
Brinker                     $684,901         $652,943   $519,260
On The Border                 28,169           25,615     21,765
NRJV                          19,634           22,755     24,143
 Pro forma adjustments         (2,573)          (3,917)    (2,807)
 Combined                   $730,131         $697,396   $562,361

Net income (loss):                                                  
Brinker                     $ 53,722         $ 48,933   $ 35,712
 On The Border                 (4,234)             970        (20)
NRJV                           2,135            4,020      2,119
 Pro forma adjustments           (749)          (3,000)    (1,786)
  Combined                  $ 50,874         $ 50,923   $ 36,025

Primary and fully diluted                                           
net income (loss) per share:                                        
Brinker                     $   0.72         $   0.67   $   0.50
On The Border                  (0.06)            0.01       0.00
NRJV                            0.03             0.06       0.02
 Pro forma adjustments          (0.01)           (0.04)     (0.02)
  Combined                  $   0.68         $   0.70   $   0.50

    (1)   On  The Border  amounts  are based  on  financial results  through
April 25, 1994.                                         

    Pro  forma  adjustments  represent  the  elimination  of  royalty  fees,
    franchise fees,  development fees, accounting fees,  and management fees
    charged  to NRJV by Brinker, and the elimination of Brinker's investment
    in  NRJV including  partnership  distributions and  equity  income.   In
    addition, a pro forma adjustment was made in fiscal 1994 to reinstate an
    On The  Border deferred  income  tax asset  of approximately  $1,024,000
    which was  not recognized on an  On The Border stand-alone  basis due to
    the uncertainty of On The Border's  ability to utilize the asset against
future earnings.                                                    

    Merger expenses of  $1,949,000 incurred  in fiscal 1994  related to  the
    acquisition  of On  The Border  are reported  separately to  reflect the
    impact  of  nonrecurring  charges.   These  costs  primarily  relate  to
consulting fees, legal fees, and severance costs.                   

3.    INVESTMENTS                                                               

    Brinker  adopted Statement  of  Financial  Accounting Standards  No. 115
    ("SFAS No. 115"), Accounting for Certain Investments  in Debt and Equity
    Securities,  effective June 29,  1994.   Under  SFAS  No. 115, debt  and
    equity  securities   are  classified  into  three  categories:  trading,
    available-for-sale,  and held-to-maturity.  Trading securities represent
    debt and equity securities held for  a very short period with the intent
    on  making a  profit  on the  difference  between retail  versus  dealer
    prices.   Held-to-maturity securities  represent debt securities  that a
    company has the intent and ability to hold to  maturity.  Available-for-
    sale securities represent  debt and  equity securities that  can not  be
classified as trading or held-to-maturity.                          

    As of June 29, 1994, Brinker's investment portfolio consists entirely of
    equity  securities  classified  as  available-for-sale.    SFAS  No. 115
    requires available-for-sale securities to be  carried at fair value with
    unrealized gains and unrealized losses reported as  a separate component
    of shareholders' equity.   A decline in  market value of  any available-
    for-sale  security below  cost that  is deemed  other than  temporary is
    charged to earnings resulting  in the establishment of a new  cost basis
for the security.                                                   

    Brinker's investment position at  June 29, 1994 and June 30, 1993  is as
follows (in thousands):                                             

                                       1994           1993

Cost                                      $45,680        $28,693    
Gross unrealized holding gains                 66            917    
Gross unrealized holding losses              (507)           (34)   
 Fair value                           $45,239        $29,576

    Realized  gains  and  realized  losses  are  determined  on  a  specific
    identification  basis.     Realized  gains  and   realized  losses  from
    investment  transactions  were  $1,871,000  and   $1,400,000  (including
    $1,072,000 of realized losses resulting from recognition of a  permanent
    decline in  market value  for certain  securities)  during fiscal  1994,
    $2,137,000 and  $558,000 during fiscal  1993, and $965,000  and $950,000
    during  fiscal 1992.  Dividend  and interest income  during fiscal 1994,
    1993, and 1992 was $3,624,000, $2,800,000, and $3,200,000, respectively.
    Realized  gains and  realized losses  as well  as dividend  and interest
income are included in other, net.                                  

4.    ACCRUED LIABILITIES                                                       

Accrued liabilities consist of the following (in thousands):        

                           1994           1993

Insurance                           $16,956        $10,651          
Payroll                              13,810         11,171          
Profit sharing                        6,259          5,630          
Property tax                          6,023          3,948          
Sales tax                             4,843          4,324          
Other                                 9,987         10,236          
                          $57,878        $45,960

5.    CREDIT FACILITIES                                                         

    Brinker  has available  credit facilities  aggregating $41.2  million at
    June 29, 1994.   These credit  facilities bear interest  based upon  the
    lower  of  the  banks'  "Base"  or prime  rate  plus  1%,  CD  rates, or
    Eurodollar  rates,  and expire  through  fiscal 1995.    Commitment fees
related to these credit facilities were not material.               

6.    SENIOR SUBORDINATED CONVERTIBLE DEBENTURES                                

    Prior to its acquisition by Brinker, On The Border completed the private
    placement of  $1,200,000 of senior  subordinated convertible  debentures
    ("debentures")  on March 10, 1992.  The debentures bear interest at 8.5%
    per annum and are  payable semi-annually.  If not  previously converted,
    Brinker will  be required  to redeem $300,000  of debentures on  each of
    January 15, 1996, 1997, 1998, and December 31, 1998.  The debentures may
    be converted into Brinker common stock at a rate of $24.32 per share  by
  the holders at any time and may be prepaid at the election of Brinker.

7.    INCOME TAXES                                                              

    Brinker  adopted  Statement  of  Financial Accounting  Standards  No. 96
    ("SFAS No. 96"), "Accounting  for Income  Taxes", in fiscal  1988.   The
    Financial  Accounting  Standards  Board  issued  Statement of  Financial
    Accounting Standards  No. 109 ("SFAS  No. 109"), "Accounting  for Income
    Taxes", in February 1992.   SFAS No. 109, which supersedes  SFAS No. 96,
    retained the asset and  liability approach for financial  accounting and
    reporting for income taxes as in SFAS No. 96, but reduced the complexity
    of  SFAS No. 96 and changed the criteria for recognition and measurement
    of  deferred tax assets.   Effective July 1, 1993,  Brinker adopted SFAS
    No. 109 without restatement of prior periods and the impact on Brinker's
consolidated financial statements was not material.                 

    The provision for income taxes consists of the following (in thousands):

                                            1994         1993       1992
Current income tax expense:                                         
     Federal                               $32,120      $29,335    $13,445
     State                                   3,980        3,501      1,769

   Total current income tax expense         36,100       32,836     15,214

Deferred income tax expense (benefit):                              
     Federal                                (1,935)      (5,551)     3,002
     State                                    (333)        (202)       620

Total deferred income tax expense                                   
     (benefit):                             (2,268)      (5,753)     3,622
                                           $33,832      $27,083    $18,836

    A reconciliation between the reported provision for income taxes and the
    amount computed by applying the statutory Federal income tax rate of 35%
    in  fiscal  1994 and  34%  in  fiscal 1993  and  1992  to income  before
provision for income taxes follows (in thousands):                  

                                            1994         1993       1992

   Income tax expense at statutory rate    $33,403      $26,522    $18,653
    Targeted jobs tax credit                   (709)        (588)      (919)
   FICA tax credit                          (1,097)         ---        ---
    Foreign tax credit                          (55)         (50)       (31)
    Net investment activities                  (870)      (1,094)      (650)
   State income taxes                        2,228        2,177      1,577
   Other                                       932          116        206
                                           $33,832      $27,083    $18,836

    The  income tax  effects  of temporary  differences  that give  rise  to
    significant  portions of deferred  income tax assets  and liabilities as
    determined   under  SFAS  No. 109  as  of  June  29,  1994  follows  (in
thousands):                                                         

Deferred income tax assets:                                         

Insurance reserves                          $10,399             
Leasing transactions                          2,004             
Net operating loss carryforwards              2,255             
Other, net                                    4,509             
Total deferred income tax assets           19,167           

Deferred income tax liabilities:                                      

Depreciation and capitalized interest                             
on property and equipment                   16,116            
Preopening costs amortization                  5,670              
Prepaid expenses                                 480              
Other, net                                     4,389              
Total deferred income tax liabilities       26,655            
Net deferred income tax liability          $ 7,488            

    The  income tax  effects  of temporary  differences  that give  rise  to
    significant  portions of  deferred  income tax  (assets) liabilities  as
    determined under SFAS  No. 96 as  of June 30,  1993 are  as follows  (in
thousands):                                                         

Depreciation and capitalized interest                             
on property and equipment                  $13,269            
Insurance reserves                            (6,948)             
Preopening costs amortization                  5,796              
Leasing transactions                          (1,898)             
Net operating loss carryforwards                (398)             
Other, net                                       (65)             
Net deferred income tax liability          $ 9,756            

    At June 29, 1994, Brinker has available net operating loss carryforwards
    for Federal income tax purposes  of $5,981,000 (arising from the  On The
    Border merger),  which are  available to  offset future  Federal taxable
income through fiscal 2008.                                         

    The  Omnibus Budget Reconciliation Act, enacted in August 1993, mandated
    certain changes in  Federal income  tax laws, which  among other  items,
    included  an increase in the statutory Federal corporate income tax rate
    from  34%  to 35%,  retroactive to  January  1993, reinstatement  of the
    targeted jobs tax credit, retroactive to January 1993, and a  tax credit
    for FICA taxes paid on tips,  effective January 1994.  These changes did
    not have a  material impact on Brinker's fiscal  1994 and 1993 effective
income tax rate or the consolidated financial statements.           

8.    STOCK OPTION PLANS                                                        

(a)   1983 and 1992 Employee Incentive Stock Option Plans           

    In accordance with the  Incentive Stock Option Plans adopted  in October
    1983 and November 1992,  options to purchase approximately 16.3  million
    shares  of Brinker's common stock may be granted to officers, directors,
    and key  employees.  Options are granted at  market value on the date of
    grant, are exercisable  beginning one year from the  date of grant, with
    various vesting  periods, and expire ten  years from the  date of grant.
Option prices under these plans range from $1.27 to $26.83.         

    Transactions  during fiscal  1994, 1993,  and 1992  were as  follows (in
thousands, except option prices):                                   

                                              1994       1993       1992

  Options outstanding at beginning of year   6,284      6,498      6,318
  Granted                                    1,474      1,539      1,277
   Exercised                                   (771)    (1,562)      (944)
   Canceled                                     (90)      (191)      (153)
  Options outstanding at end of year         6,897      6,284      6,498

Option price range for options                                      
    granted during the year                 $20.38     $18.95     $11.22
                                              to         to         to
                                            $26.83     $19.33     $14.55

  Options exercisable at end of year         3,282      2,702      3,059

Options available for grant                                         
    at end of year                           2,321      3,705      1,677

(b)   1984 Non-Qualified Stock Option Plan                          

    In accordance  with  the  Non-Qualified  Stock Option  Plan  adopted  in
    December 1984, options  to purchase approximately 5.0 million  shares of
    Brinker's  common stock were authorized for grant.  Options were granted
    at market value on the date of grant, are exercisable beginning one year
    from the date  of grant, with  various vesting  periods, and expire  ten
    years from the date  of grant.  Option prices under this plan range from
$.35 to $5.30.                                                      

    On  November 30,   1989,  the   Non-Qualified  Stock  Option   Plan  was
    terminated.  Consequently, no options were granted subsequent  to fiscal
    1990.   Options  granted prior to  the termination  of this  plan remain
exercisable through June 1999.                                      

    Transactions  during fiscal  1994, 1993,  and 1992  were as  follows (in
thousands):                                                         

                                              1994       1993       1992

  Options outstanding at beginning of year     858      2,741      2,871
   Exercised                                   (309)    (1,871)      (127)
   Canceled                                     ---        (12)        (3)
  Options outstanding at end of year           549        858      2,741

  Options exercisable at end of year           549        858      2,741

(c)   1991 Non-Employee Stock Option Plan                           

    In  accordance with the Stock Option Plan for Non-Employee Directors and
    Consultants adopted in May  1991, options to purchase 337,500  shares of
    Brinker's common stock were authorized for grant. Options are granted at
    market value on  the date of grant, are exercisable  beginning two years
    from the date of grant, with a three year vesting period, and expire ten
    years from the date of grant.  Option prices  under this plan range from
$11.22 to $23.92.                                                   

    Transactions  during fiscal  1994, 1993,  and 1992  were as  follows (in
thousands, except option prices):                                   

                                              1994       1993       1992

  Options outstanding at beginning of year     107         80        ---
  Granted                                       18         27         80
  Exercised                                     (3)       ---        ---
  Options outstanding at end of year           122        107         80

Option price for options granted                                    
    during the year                         $23.92     $14.67     $11.22

  Options exercisable at end of year            36        ---        ---

Options available for grant                                         
    at end of year                             213        231        258

(d)   On The Border 1989 Stock Option Plan                          

    In accordance with the Stock Option Plan for On The Border employees and
    consultants,  options to purchase 550,000 shares of On The Border's pre-
    acquisition  common  stock were  authorized  for  grant.   Options  were
    granted  at  market value  on  the date  of grant,  were  exercisable in
    installments,  and expired  three  to five  years  from date  of  grant.
    Effective May 18,  1994, the  376,000 unexercised  On  The Border  stock
    options  became exercisable  immediately  in accordance  with the  Stock
    Option Plan's change in  control clause (see Note 2) and  were converted
    to  approximately 124,000  Brinker  stock options.    These options  are
    outstanding  at June 29, 1994 and are exercisable at prices ranging from
$17.48 to $24.32.                                                   

9.    LEASES                                                                    

(a)   Capital Leases                                                

    Brinker  leases  certain  buildings   under  various  leases  which  are
    classified as capital leases.  The asset value of $7,900,000 at June 29,
    1994 and at June 30,  1993, and the related accumulated  amortization of
    $5,100,000  and   $4,800,000  at   June 29,  1994  and   June 30,  1993,
respectively, are included in property and equipment.               

(b)   Operating Leases                                              

    Brinker  leases  restaurant  facilities  and  certain   equipment  under
    operating leases having terms  expiring at various dates  through fiscal
    2022.   The restaurant leases have  renewal clauses of 5  to 30 years at
    the option of Brinker and have provisions for contingent rent based upon
    a percentage of gross sales, as defined in the leases.  Rent expense for
    fiscal  1994,   1993,  and   1992  was  $31,700,000,   $27,400,000,  and
    $24,900,000, respectively.  Contingent rent included in rent expense for
    fiscal 1994, 1993, and 1992 was $2,800,000, $2,500,000, and  $1,900,000,
respectively.                                                       

(c)   Commitments                                                   

    At June 29, 1994, future minimum lease payments on capital and operating
leases were as follows (in thousands):                              

          Fiscal Year                      Capital Leases   Operating Leases

     1995                                $  965           $ 26,724
     1996                                   955             26,577
     1997                                   949             26,390
     1998                                   771             25,938
     1999                                   657             25,355
     Thereafter                           2,881            186,927

       Total minimum lease payments       7,178           $317,911
Imputed interest                                    
(average rate of 11.5%)          2,213          

Present value of                                    
minimum payments                 4,965          
Less current installments            501            
Capital lease obligations         $4,464            

    In  July  1993, Brinker  entered  into operating  lease  agreements with
    unaffiliated groups  to begin leasing  certain restaurant sites.   These
    unaffiliated groups have  committed to make available  up to $30,000,000
    for the development of  restaurants to be leased by Brinker  for up to 5
    years.  The  agreements with these groups expire in  fiscal 1998, and do
    not provide for renewal.   Upon expiration, Brinker may  either purchase
    the properties  or  allow  the lessor  to  sell the  restaurants  to  an
    unrelated  party  and  guarantee  the residual  value  of  approximately
    $25,500,000.  At June 29, 1994,  $12,400,000 of this financing  facility
had been utilized.                                                  

    At  June 29, 1994, Brinker had  entered into other  lease agreements for
    restaurant  facilities  currently  under   construction  or  yet  to  be
    constructed.    In addition  to a  base  rent, the  leases  also contain
    provisions for  additional contingent  rent based upon  gross sales,  as
    defined  in the leases.   Classification of  these leases  as capital or
    operating  has  not  been  determined  as  construction  of  the  leased
properties has not been completed.                                  

10.   SAVINGS PLANS                                                             

    Effective  January 1,  1993,  Brinker established  the  Brinker  Savings
    Plan I  ("Plan I"), a  qualified  defined contribution  retirement  plan
    covering salaried employees who  have completed one year or  1,000 hours
    of service.  Plan I allows eligible employees to defer receipt  of up to
    20%  of  their  compensation  and contribute  such  amounts  to  various
    investment funds.    Brinker matches  25% of  the first  5% an  employee
    contributes  with Brinker  common  stock.   Employee contributions  vest
    immediately while  Brinker contributions vest 25%  annually beginning in
    the participants' second year  of eligibility since plan inception.   In
    fiscal  1994  and  1993,   Brinker  contributed  approximately  $345,000
    (representing  11,666  shares  of  Brinker common  stock)  and  $173,000
    (representing 8,162  shares of Brinker common  stock), respectively, and
    incurred  approximately  $116,000  and $48,000  in  administrative fees,
respectively.                                                       

    Effective  January 1,  1993,  Brinker  established  the  Brinker Savings
    Plan II  ("Plan II"), a  non-qualified  defined contribution  retirement
    plan  covering highly  compensated employees,  as defined  in the  plan.
    Plan II allows eligible employees to defer receipt of up to 20% of their
    base compensation and  100% of their eligible bonuses, as defined in the
    plan,  and contribute such amounts to various investment funds.  Brinker
    matches  25%  of the  first 5%  a  non-officer contributes  with Brinker
    common  stock while officers' contributions are matched at the same rate
    with  cash.    Employee  contributions vest  immediately  while  Brinker
    contributions vest  25% annually  beginning in the  participants' second
    year  of employment  since plan  inception.   In fiscal  1994  and 1993,
    Brinker  contributed  approximately  $231,000  (of  which  approximately
    $175,000 was used to purchase 7,096 shares of  Brinker common stock) and
    $69,000  (of which  approximately  $49,000 was  used  to purchase  2,373
    shares   of   Brinker   common   stock),   respectively,   and  incurred
    approximately $116,000 and $48,000 in administrative fees, respectively.
    Brinker has a  Rabbi Trust to fund Plan II obligations.   As of June 29,
    1994  and June 30, 1993,  assets of  the trust  aggregated approximately
    $2,599,000 and $566,000, respectively, and are included in other assets.
    The aggregate market value of these assets at June 29, 1994 and June 30,
1993 approximated aggregate cost.                                   

11.   LAWSUIT SETTLEMENT AND CONTINGENCIES                                      

    On  March 13, 1993, certain officers of On The Border and various family
    members  were involved  in an  airplane accident.   In fiscal  1994, the
    claim was settled  for approximately  $2,248,000 and On  The Border  was
released from further liability.                                    

    Brinker  is  engaged  in  various  legal  proceedings  and  has  certain
    unresolved  claims pending.   The  ultimate liability,  if any,  for the
    aggregate amounts claimed cannot  be determined at this time.   However,
    management of Brinker, based upon consultation with legal counsel, is of
    the opinion that there are  not matters pending or threatened which  are
    expected to  have a  material adverse  effect on  Brinker's consolidated
financial condition or results of operations.                       

12.   QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)                               

    The following summarizes the unaudited consolidated quarterly results of
operations for fiscal 1994 and 1993.                                

(in thousands, except per share amounts)                            

                               Fiscal 1994
                              Quarters Ended
                                Sept. 29   Dec. 29    March 30   June 29

Revenues                       $205,368   $212,196   $224,508   $236,401
Income Before Provision                                                 
  for Income Taxes               22,771     20,024     24,818     27,825
Net Income                       14,758     12,995     15,966     17,887
Primary Net Income Per Share       0.20       0.17       0.21       0.24
Primary Weighted Average                                                
  Shares Outstanding             74,148     74,682     74,824     74,512

                               Fiscal 1993
                              Quarters Ended
                                Sept. 30   Dec. 31    March 31   June 30

Revenues                       $161,336   $163,097   $175,286   $197,677
Income Before Provision                                                 
  for Income Taxes               17,524     16,457     20,321     23,704
Net Income                       11,777     10,789     13,077     15,280
Primary Net Income Per Share       0.16       0.15       0.18       0.21
Primary Weighted Average                                                
  Shares Outstanding             71,912     72,383     73,167     73,606

Amounts differ from those previously reported to reflect the fiscal 1994        
acquisitions accounted for as poolings of interest as discussed in Note 2.      
</PAGE>                                                                         

INDEPENDENT AUDITORS' REPORT  

The Board of Directors                                                          
Brinker International, Inc.:                                                    

We  have  audited the  accompanying  consolidated  balance sheets  of  Brinker  
International, Inc. and subsidiaries  ("the Company") as of June 29,  1994 and  
June 30,   1993,  and   the   related  consolidated   statements  of   income,  
shareholders' equity, and  cash flows for each of the  years in the three-year  
period ended June 29, 1994.   These consolidated financial statements  are the  
responsibility  of the Company's management.  Our responsibility is to express  
an opinion on these consolidated financial statements based on our audits.      

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

In  our  opinion, the  consolidated  financial  statements referred  to  above  
present  fairly, in all material  respects, the financial  position of Brinker  
International,  Inc. and subsidiaries as  of June 29, 1994  and June 30, 1993,  
and the results of  their operations and cash flows  for each of the  years in  
the  three-year  period ended  June 29,  1994,  in conformity  with  generally  
accepted accounting principles.                                                 

                               KPMG Peat Marwick LLP

Dallas, Texas                                                                   
July 29, 1994                                                                   
</PAGE>                                                                         
EXHIBIT 21  

BRINKER INTERNATIONAL, INC., A DELAWARE CORPORATION 

SUBSIDIARIES  

REGISTRANT  has other wholly-owned subsidiaries not shown herein, all of which  
operate full-service  restaurants in  various locations throughout  the United  
States.                                                                         

ON THE BORDER  CAFES, INC., a Texas corporation,  is a wholly-owned subsidiary  
of Registrant.   ON THE BORDER CAFES, INC. has other wholly-owned subsidiaries  
not shown herein.                                                               

BRINKER  RESTAURANT CORPORATION,  a  Delaware corporation,  is a  wholly-owned  
subsidiary  of Registrant.   BRINKER RESTAURANT CORPORATION  has other wholly-  
owned subsidiaries not shown herein.                                            

BRINKER SPAGEDDIES CORPORATION, a Delaware corporation (a  wholly-  
owned subsidiary of Brinker Restaurant Corporation)                 

CHILI'S BEVERAGE  COMPANY, INC., a Texas  corporation (an indirect  
wholly-owned subsidiary of Brinker Restaurant Corporation)          

GRADY'S, INC., a Tennessee  corporation (a wholly-owned subsidiary  
of Brinker Restaurant Corporation)                                  

MODERNAGE, INC., a Delaware corporation (a wholly-owned subsidiary  
of Brinker Restaurant Corporation)                                  

ROMANO'S MACARONI GRILL, INC., a Texas corporation (a wholly-owned  
subsidiary of Brinker Restaurant Corporation)                       

BRINKER  TEXAS, L.P.,  a  Texas limited  partnership (an  indirect  
wholly-owned subsidiary of Brinker Restaurant Corporation)          
</PAGE>                                                                         
EXHIBIT 23  

INDEPENDENT AUDITORS' CONSENT 

The Board of Directors                                                          
Brinker International, Inc.:                                                    

We consent to incorporation by reference in the Registration Statement No. 33-  
61594 on  Form S-8, No. 33-52705 on Form S-4 and No. 33-67318, No. 33-55181     
and No. 33-53965 on Form S-3 of Brinker International, Inc. and  subsidiaries   
of our reports dated July 29, 1994, relating to the consolidated balance        
sheets of Brinker International, Inc. and subsidiaries as of June 29, 1994      
and June 30, 1993, and the related consolidated statements of income,           
shareholders' equity, and cash flows and related schedules for each of the      
years in the three-year period ended June 29, 1994, which reports               
appear or are incorporated by reference in the June 29, 1994 annual report on   
Form 10-K of Brinker International, Inc. and subsidiaries.                      

                 KPMG Peat Marwick LLP

Dallas, Texas                                                                   
September 27, 1994                                                              
</PAGE>                                                                         
EXHIBIT 27  

FINANCIAL DATA SCHEDULE 

[Filed With EDGAR Version]  

</PAGE>                                                                         
EXHIBIT 99  

PROXY STATEMENT OF REGISTRANT 
DATED SEPTEMBER 29, 1994  

DIRECTORS AND EXECUTIVE OFFICERS  

    A brief description of each person nominated to become a director of the
Company is provided below.  All nominees are currently serving as directors of  
the  Company,  each having  been elected  at the  last  annual meeting  of the  
Company's shareholders held on November 4, 1993, except James E. Oesterreicher  
and  Frederick S. Humphries,  both  of whom  were appointed  to  the Board  of  
Directors on May 3, 1994.                                                       

    Norman E. Brinker, 63, has  been Chairman of the Board  of Directors and
Chief Executive Officer  of the Company since  September 1983, except  for the  
period  from January 27,  1993  to  May 4, 1993.    During  this time  period,  
Mr. Brinker was incapacitated  due to an  injury, and  until his recovery  the  
positions  of Chairman and CEO were  held by Ronald A. McDougall.  Mr. Brinker  
is  a  member  of the  Executive  and Nominating  Committees  of  the Company.  
Mr. Brinker was the founder of  S & A Restaurant Corp. (which was  acquired by  
The Pillsbury Company in June  1976), the developer and operator of  Steak and  
Ale   Restaurants and Bennigan's  Taverns, having served as its President from  
February 1966 through May  1977 and as its Chairman of  the Board of Directors  
and Chief  Executive Officer from May 1977 through July  1983.  From June 1982  
through  July 1983, Mr. Brinker served  as Chairman of  the Board of Directors  
and  Chief Executive Officer of Burger  King Corporation, while simultaneously  
occupying the position of President of The Pillsbury Company Restaurant Group.  
Mr. Brinker  currently serves as a member of  the Board of Directors of Haggar  
Apparel Company.                                                                

    F.  Lane Cardwell,  Jr.,  42,  was  elected Executive  Vice  President -
Strategic  Development in  June 1992,  having formerly  held the  position of 
Senior   Vice   President - Strategic   Development   since   December   1990.  
Mr. Cardwell joined the Company  as Vice President - Strategic  Development in  
August  1988, having been previously  employed by S & A  Restaurant Corp. from  
November 1978  to August 1988, during which time he served as Vice President -  
Strategic   Planning  and   Senior   Vice   President -  Strategic   Planning.  
Mr. Cardwell  has served as a member of  the Board of Directors of the Company  
since  September  1991 and  is  a member  of  the Executive  Committee  of the  
Company.                                                                        

    Creed L. Ford, III,  41, joined the  Company's predecessor in  September
1976 as  an Assistant Manager and  was promoted to the  position of Restaurant  
General Manager in March 1977.  In September 1978, Mr. Ford became Director of  
Operations of the Company.  He was elected  Vice President - Operations of the  
Company in October  1983, Senior Vice President - Operations in November 1984,  
and Executive  Vice President - Operations in April 1986.  Mr. Ford has served  
as a member of the Board of Directors of the Company since April 1985 and is a  
member of the Executive Committee of the Company.                               

    Ronald A.  McDougall,  52, was  elected  President  and Chief  Operating
Officer  of the  Company in  April  1986 having  formerly held  the office  of  
Executive  Vice President - Marketing and Strategic Development of the Company  
since  September 1983.   During the  period January 27,  1993 to  May 4, 1993,  
Mr. McDougall served  as Chairman and CEO.   Mr. McDougall is a  member of the  
Executive and Nominating Committees  of the Company.  From  March 1974 through  
June 1982, Mr. McDougall  was employed  by S & A Restaurant  Corp. in  several  
management  positions,  including  Senior  Vice  President  of  Marketing  and  
Strategic Development and a director.  During the last six months of 1982,  he  
was Executive  Vice President of  1330 Corporation, a  publishing firm.   From  
January 1983 to July 1983, he held the position of  Vice President - Marketing  
of Burger King Corporation.  Mr. McDougall has served as a member of the Board  
of Directors of the Company since September 1983.                               

    Debra L.  Smithart, 40, joined  the Company  as Assistant  Controller in
June 1985.  In February  1986 she was promoted  to the position of  Controller  
and served  in this  capacity until  December 1988 when  she was  elected Vice  
President -Controller.   In  March  1991, Ms. Smithart  was  promoted to  Vice  
President - Finance and held this  position until September 1991 when  she was  
promoted  to Executive  Vice  President - Chief Financial  Officer.   Prior to  
joining  the  Company,  Ms. Smithart  worked in  various  financial/accounting  
capacities in the public accounting, oil & gas, real estate, and manufacturing  
industries.  Ms. Smithart has served  as a member of the Board of Directors of  
the  Company  since September  1991  and  is a  member  of  the Executive  and  
Nominating Committees of the Company.                                           

    Roger F.  Thomson, 45,  joined  the Company  as  Senior Vice  President,
General Counsel and Secretary in April 1993 and was promoted to Executive Vice  
President, General Counsel and Secretary in March 1994.  From 1988 until April  
1993, Mr. Thomson  served  as  Senior  Vice  President,  General  Counsel  and  
Secretary for Burger King  Corporation.  Prior to 1988, Mr. Thomson  spent ten  
years at S & A Restaurant Corp. where he was Executive Vice President, General  
Counsel  and Secretary.  Mr. Thomson  has served as  a member of  the Board of  
Directors of the Company since September 1993.                                  

    Jack W. Evans,  72, is  currently President  of Jack  Evans Investments,
Inc.   Mr.  Evans is  a member  of the  Nominating Committee  and Compensation  
Committee of the Company and has served as a member of the Company's  Board of  
Directors  since September  1983.   He  served  as Chairman,  Chief  Executive  
Officer and President of Cullum Companies,  Inc., a retail food and  drugstore  
chain from 1977 to 1990.   He served as Mayor of  the City of Dallas from  May  
1981  to May  1983.   He is  also a  director of Texas  Utilities Corporation,  
Randall's-Tom Thumb, First Bank, and Morning Star Group.                        

    Rae  F.  Evans, 46,  is currently  Vice  President, National  Affairs of
Hallmark  Cards,  Inc.  and  has  held  such  position  since  February  1982.  
Ms. Evans is a member of  the Nominating Committee and Audit Committee  of the  
Company and has served as  a member of the  Board of Directors of the  Company  
since  January 1990.   She  is a  member of the  Business-Government Relations  
Council and is a past president of the  organization.  She is a member of  the  
Executive Committee of the National Women's Economic Alliance, the  Washington  
Federal  City  Council,  National Women's  Forum  and  the  Catalyst Board  of  
Advisors.  Additionally,  she is the founder  of Women at the  Top, a speakers  
bureau of Washington women and is an active guest speaker on government issues  
in Washington.  Ms. Evans was recently  appointed to the Board of Directors of  
Haggar Apparel Company.                                                         

    J. M. Haggar, Jr., 69, was elected as Chairman of the Board of Directors
of Haggar  Apparel  Company,  a clothing  manufacturer,  in April  1991.    He  
previously  held the  positions of  President and  Chief Executive  Officer of  
Haggar  Apparel Company  from  1971 and  1985,  respectively.   He  is also  a  
director  of  ENSERCH  Corporation.   Mr. Haggar  is  a  member  of the  Audit  
Committee of the Company and has served as a member of the Company's  Board of  
Directors since April 1985.                                                     

    J.  Ira Harris,  56, is a  Senior Partner  with Lazard  Freres & Co., an
investment banking firm,  having held such position since joining  the firm in  
January 1988.  Mr. Harris has  served as a member of the Board of Directors of  
the Company since September 1993 and is a member of the Compensation Committee  
of the Company.   He was previously a General Partner of  Salomon Brothers and  
served  as a  member of its  Executive Committee from  1978 to 1983.   He also  
served  as a Director of Phibro-Salomon.   Mr. Harris serves as a Director for  
various entities including Manpower, Inc. and Caremark International, Inc.  He  
is also Trustee of Northwestern University.                                     

    Frederick S. Humphries, 58,  is the President of  Florida A&M University
in  Tallahassee,  Florida having  held this  position  since 1985.    Prior to  
joining Florida A&M University, Dr. Humphries was President of Tennessee State  
University in Nashville for over  11 years.  Dr. Humphries serves as  Chairman  
of the  State Board of Education Advisory Committee on the Education of Blacks  
in Florida  and is Chairman of  the Board of Regents,  Five-Year Working Group  
for  Agriculture,  State University  System of  Florida  in addition  to being  
involved  in various civic and  community activities.  He is  also a member of  
the Board of Directors of Barnett Bank and Wal-Mart, Inc.                       

    Ray L.  Hunt, 51, is currently  Chief Executive Officer  and Chairman of
the  Board of Directors of Hunt Oil  Company, having held such positions since  
1975.  He  is also President and  Chairman of the  Board of Directors of  Hunt  
Consolidated, Inc.  and RRH  Corporation.   Mr. Hunt serves  as a  director of  
Dresser Industries,  Inc.  Mr. Hunt  has served  as a member  of the Board  of  
Directors  of  the  Company  since  December  1983 and  is  a  member  of  the  
Compensation Committee and the Nominating Committee of the Company.             

    James  E. Oesterreicher,  53, is  the President  of JCPenney  Stores and
Catalog, having been elected to this position  in 1992.  Mr. Oesterreicher has  
been  with  J.C. Penney  Company,  Inc.  since  1964  where  he  started  as a  
management trainee.  He serves  as a Director for various  entities, including  
Presbyterian Hospital of Plano, Circle Ten Council, Boy Scouts of America, and  
National 4-H  Council.   He also serves  as an advisory  board member  for the  
Center for Retailing, Education and Research at the University of Florida.      

    William F. Regas, 65,  co-founded, in 1982, Grady's, Inc. ("Grady's"), a
Tennessee corporation and a wholly-owned subsidiary of the Company, and served  
as its Chairman  of the Board from 1982  to 1989.  Mr. Regas is  currently Co-  
Chairman  of Grady's  Board of Directors.   Mr. Regas  has been  active in the  
National Restaurant Association, having  served as its President from  1980 to  
1981.   Mr. Regas has served  as Chairman of the  Board of Directors  of Regas  
Brothers, Inc. since 1952, and is also a general partner of Regas  Real Estate  
Company.  He serves as a member of the Audit Committee of the Company  and has  
served on the Company's Board of Directors since October 1989.                  

    Roger T.  Staubach, 52,  has  been  Chairman  of  the  Board  and  Chief
Executive  Officer of  The Staubach  Company, a  national real  estate company  
specializing in tenant representation, since 1982.  He has served  as a member  
of the Board of Directors of the Company since May 1993 and is a member of the  
Executive,   Nominating   and   Compensation   Committees   of  the   Company.  
Mr. Staubach is  a 1965 graduate  of the  U.S. Naval Academy  and served  four  
years  in the  Navy as  an officer.   In  1968, he  joined the  Dallas Cowboys  
professional  football team  as quarterback  and was  elected to  the National  
Football League Hall  of Fame in  1985.  He currently  serves on the  Board of  
Directors  of Halliburton  Company, Gibson  Greetings, Inc.,  First USA, Inc.,  
Life Partners Group and Columbus Realty Trust and is active in numerous civic,  
charity and professional organizations.                                         

Executive Officers of the Company                                               

    The following persons are  executive officers of the Company who  do not
serve on the Company's Board of Directors:                                      

    Douglas H. Brooks, 41,  joined the  Company as an  Assistant Manager  in
February 1978  and was promoted  to General Manager  in April 1978.   In March  
1979,  Mr. Brooks was promoted to Area Supervisor  and in May 1982 to Regional  
Director.   He  was again  promoted in  March 1987  to Senior  Vice President-  
Central Region  Operations and to the position of Concept Head and Senior Vice  
President-Chili's Operations in  June 1992.   Mr. Brooks was  promoted to  his  
current position of  Senior Vice  President and Chili's  Concept President  in  
June 1994.  Prior to  joining the Company, Mr. Brooks helped manage  the first  
two Luther's Barbecue units.                                                    

    Richard L.  Federico, 40, joined  the Company as  Director of Operations
for Grady's  in February  1989.   Upon the Company's  acquisition of  Romano's  
Macaroni Grill in November  1989, Mr. Federico became the Concept Head of this  
new restaurant group.   He  was promoted to  Vice President-Romano's  Macaroni  
Grill Operations in  December 1990 and  in June 1992  was promoted to  Concept  
Head and Senior Vice  President-Macaroni Grill Operations.  In  February 1994,  
Mr. Federico assumed  responsibility for the operations  of Spageddies Italian  
Kitchen and was promoted to his current position as Senior  Vice President and  
Italian  Concept President  in  June  1994.   Prior  to  joining the  Company,  
Mr. Federico worked in various management capacities with S&A Restaurant Corp.  
and  Houston's  Restaurants  and  was  a  co-founder  of  Grady's   Goodtimes,  
predecessor to Grady's American Grill.                                          

    John C.  Miller,  39,  joined  the  Company  as  Vice  President-Special
Concepts in September  1987.  In October 1988, he  was elected Vice President-  
Joint Venture/Franchise and served in this capacity until August 1993  when he  
was promoted to Senior  Vice President-New Concept Development.   In May 1994,  
Mr. Miller  assumed responsibility for the  operations of On  The Border Cafes  
and  was promoted  to his  current position  as Senior  Vice President-Mexican  
Concepts in September 1994.  Mr. Miller worked  in various capacities with the  
Taco Bueno Division of Unigate Restaurants prior to joining the Company.        

    Arthur J. DeAngelis,  40, has worked with the Company through one of its
franchise groups as a manager  and later as an  area director since 1984.   In  
1991,  Mr. DeAngelis  joined the  Company  under  the  Grady's American  Grill  
concept   and  in  June  1991   was  promoted  to  Vice  President-Operations.  
Mr. DeAngelis  was promoted to his  recent position of  Senior Vice President-  
Grady's American  Grill Concept Head  in June 1994.   Mr. DeAngelis began  his  
restaurant career  with S&A  Restaurant Corp.  in 1976  prior  to joining  the  
Company.                                                                        

Committees of the Board of Directors                                            

    The  Board  of Directors  of the  Company  has established  an Executive
Committee, Audit Committee,  Compensation Committee and  Nominating Committee.  
The  Executive  Committee  (along  with  Ms. Smithart,  comprised  of  Messrs.  
Brinker, McDougall, Ford, Cardwell and Staubach) has authority  to act for the  
Board on most matters during the intervals between Board meetings.              

    All  of the  members  of  the  Audit  and  Compensation  Committees  are
directors independent of  management who are not and never  have been officers  
or employees  of the Company.   The Audit Committee is  currently comprised of  
Ms. Evans  and Messrs. Haggar and Regas and  the Committee met once during the  
fiscal year.  Included  among the functions  performed by the Audit  Committee  
are:  the review with independent  auditors of the scope  of the audit and the  
results of the  annual audit  by the independent  auditors; consideration  and  
recommendation to the  Board of the selection of the  independent auditors for  
the next year; the review with  management and the independent auditors of the  
annual financial  statements of the Company;  and the review of  the scope and  
adequacy of internal audit activities.                                          

    The Compensation  Committee  is currently  comprised  of  Messrs. Evans,
Hunt, Harris and Staubach  and it met three (3) times  during the fiscal year.  
Functions  performed  by  the  Compensation Committee  include:  ensuring  the  
effectiveness  of senior  management and  management continuity,  ensuring the  
reasonableness   and   appropriateness  of   senior   management  compensation  
arrangements and  levels, the adoption, amendment and administration of stock-  
based  incentive  plans  (subject  to shareholder  approval  where  required),  
management  of the various stock option plans  of the Company, approval of the  
total number  of available shares to  be used each year  in stock-based plans,  
approval of the adoption  and amendment of significant compensation  plans and  
approval of all compensation  actions for officers, particularly at  and above  
the level of executive vice president.  The specific nature of the Committee's  
responsibilities as it relates to executive officers are set forth below under  
"Report of the Compensation Committee."                                         

    The purpose of the  Nominating Committee, created in September  1993, is
to  recommend to the  Board of Directors potential  non-employee members to be  
added as new or replacement members to the Board of Directors.  The Nominating  
Committee  met once during the fiscal year and is composed of Messrs. Brinker,  
Evans, Hunt, McDougall and Staubach and Ms. Smithart and Ms. Evans.             

    For  purposes  of determining  whether  non-employee  directors will  be
nominated for reelection to the Board of Directors, the non-employee directors  
have been divided into four classes.  Each non-employee director will continue  
to  be subject  to reelection by  the shareholders  of the  Company each year.  
However, after a non-employee  director has served on  the Board of  Directors  
for  four years, such  director shall  be deemed to  have been advised  by the  
Nominating  Committee that  he or  she will  not stand  for reelection  at the  
subsequent  annual meeting of shareholders and shall be considered a "Retiring  
Director".    Notwithstanding  this   policy,  the  Nominating  Committee  may  
determine  that it  is appropriate to  renominate any  or all  of the Retiring  
Directors  after  first  considering  the appropriateness  of  nominating  new  
candidates for election  to the Board of Directors.  The  four classes of non-  
employee  directors are as follows:   Messrs. Hunt and  Regas comprise Class 2  
and  will  be considered  Retiring  Directors  as  of the  annual  meeting  of  
shareholders following  the end of the 1995 fiscal year.  Mr. Haggar comprises  
Class 3 and will be considered a Retiring Director as of the annual meeting of  
shareholders following  the end of the  1996 fiscal year.   Messrs. Harris and  
Staubach comprise Class 4 and will be considered Retiring  Directors as of the  
annual  meeting of  shareholders following the  end of  the 1997  fiscal year.  
Messrs. Evans, Humphries, and Oesterreicher and Ms. Evans comprise Class 1 and  
will be considered Retiring Directors as of the annual meeting of shareholders  
following the end of the 1998 fiscal year.                                      

Directors Compensation                                                          

    Directors who are not employees  of the Company receive $1,000  for each
meeting of the Board of Directors attended and $1,000 for  each meeting of any  
committee of the Board of Directors attended (unless such committee meeting is  
held in conjunction with  a meeting of the Board of  Directors, in which event  
compensation for  attending the committee meeting will  be $750).  The Company  
also  reimburses directors for costs incurred by them in attending meetings of  
the Board.                                                                      

    Directors who are not  employees of the Company receive grants  of stock
options  under the Company's 1991 Stock Option Plan for Non-Employee Directors  
and  Consultants.  Each such  director receives 2,000  stock options annually.  
If  the  shareholders of  the Company  approve  the amendment  described under  
"Amendment  of Stock  Option  Plans-1991 Stock  Option  Plan for  Non-Employee  
Directors and Consultants", new directors who are not employees of the Company  
will have  the option at  the beginning  of each Director  term to receive  as  
additional  compensation for  serving on  the Board  of Directors  either cash  
consideration  of $30,000 per year during the term such non-employee serves as  
a director or  a one-time grant  of 12,000 stock  options under the  Company's  
1991 Stock  Option Plan for  Non-Employee Directors  and Consultants.   If the  
director is appointed to the  Board of Directors at any time other  than at an  
annual meeting of  shareholders, such director will make  such election at the  
meeting of  the Board of Directors  held contemporaneous with  the next annual  
meeting of shareholders and  the director will receive  a prorated portion  of  
the  annual cash  compensation for  the period  from the  date of  election or  
appointment  to the  Board of  Directors  until the  meeting of  the Board  of  
Directors held contemporaneous  with the next annual meeting  of shareholders.  
If the director elects to receive cash, the first payment will be made at such  
Board of Directors meeting and the following payments will be made on the date  
of each  annual meeting of shareholders thereafter.  If the director elects to  
receive stock options, they will be granted as of the  60th day following such  
meeting (or if  the 60th day is not a business  day, on the first business day  
thereafter).  The  stock options will be  granted at the fair  market value on  
the date of grant.  One-third of the options  will vest on each of the second,  
third and fourth anniversaries of the date of grant.                            

    Current directors who are not employees of the Company are also eligible
for additional compensation under this  compensation program.  Commencing with  
the meeting of the Board of Directors to be held November 3, 1994, each of the  
current non-employee directors  will have  the one-time option  to receive  as  
additional compensation for serving  on the Board of Directors  either $30,000  
cash  consideration per  year  during the  term  such non-employee  serves  as  
director or a  one-time grant of  stock options. The  number of stock  options  
received and the vesting period for such options will be prorated as set forth  
below.    The  election  of  a  current  director  to  accept  the  additional  
compensation  in cash  or in  stock  options will  be  made at  such Board  of  
Directors meeting.  If the director  elects to receive cash, the first payment  
will  be made at  such Board of  Directors meeting and  the following payments  
will be  made on the date  of each annual meeting  of shareholders thereafter.  
If a current director elects to receive stock options, they will be granted as  
of January 3,  1995.   The stock options  will be granted  at the  fair market  
value on the date of grant.                                                     

    For  purposes of applying this  new compensation program  to the current
non-employee directors of the Company, if any of Messrs. Evans, Humphries, and  
Oesterreicher or Ms. Evans  elect to receive stock options, such director will  
be granted 12,000  options on  January 3, 1995, and  one-third of the  options  
will be fully  vested on each of January 3,  1997, 1998, and 1999.   If either  
Messrs. Harris  or Staubach elect to receive stock options, such director will  
be  granted  9,000 stock  options  on January 3,  1995,  and one-third  of the  
options will be fully vested  on each of January 3, 1996, 1997, and  1998.  If  
Mr. Haggar elects  to receive  stock options, he  will be granted  6,000 stock  
options on January 3, 1995, and  one-half of the options will be  fully vested  
on each of January 3, 1996 and 1997.  If either of Messrs. Hunt or Regas elect  
to receive stock options, he will be granted 3,000 stock options on January 3,  
1995, and the options will be fully vested on January 3, 1996.                  

    If a Retiring Director is renominated to serve on the Board of Directors
for an additional four-year period, such  Retiring Director will be treated as  
a new director for purposes of determining compensation during such additional  
four-year period.                                                               

    During the  year ended  June 29, 1994, the  Board of Directors  held six
meetings; all incumbent directors were present at all of the meetings with the  
exception of Mr. Hunt who was unable to attend two meetings.                    

EXECUTIVE COMPENSATION  

Summary Compensation Table                                                      

    The  following   summary  compensation  table  sets   forth  the  annual
compensation for  the Company's  five highest compensated  executive officers,  
including  the  Chief Executive  Officer,  whose  salary  and  bonus  exceeded  
$100,000.00 in fiscal 1994.                                                     

                                                        · Enlarge/Download Table

                                                        Long-Term                 Stock               
    Name and                          Profit            Incentive     Total      Options              
Principal Position   Year    Salary   Sharing   Other(1)  Payouts   Compensation  Awarded(2)          
                                                                                                      
Norman E. Brinker    1994   $659,135  $706,592  $26,439   $93,940    $1,486,106    202,500            
 Chairman of the     1993   $573,708  $753,887  $10,933   $93,940    $1,432,468    225,000            
 Board and Chief     1992   $523,792  $360,308  $     0   $75,164    $  959,264    168,750            
 Executive Officer                                                                                    

Ronald A. McDougall  1994   $529,327  $567,439  $22,547   $93,940    $1,213,253    202,500            
 President and Chief 1993   $444,538  $585,842  $ 5,972   $93,940    $1,130,292    225,000            
 Operating Officer   1992   $406,115  $283,009  $   500   $75,164    $  764,788    135,000            

Creed L. Ford, III   1994   $343,942  $275,154  $ 7,305   $68,889    $  695,290     56,250            
 Executive Vice      1993   $306,692  $309,847  $ 6,082   $68,889    $  691,510     67,500            
 President --        1992   $290,146  $169,406  $   500   $50,109    $  510,161     67,500            
   Operations                                                                                         

Debra L. Smithart    1994   $232,500  $186,000  $ 5,471   $50,101    $  474,072     56,250            
 Executive Vice      1993   $183,309  $186,640  $   500   $31,313    $  401,762     67,500            
 President -- Chief  1992   $134,208  $ 30,935  $   500   $25,055    $  190,698     45,000            
 Financial Officer                                                                                    

Douglas H. Brooks    1994   $232,884  $135,772  $12,582   $43,839    $  425,077     45,000            
 Senior Vice         1993   $206,231  $174,199  $ 2,746   $43,839    $  427,015     38,250            
 President-Chili's   1992   $184,280  $ 75,598  $   500   $37,582    $  297,960     38,250            
 Grill & Bar                                                                                          
 Operations                                                                                           

(1)   Other compensation represents Company match on deferred compensation, club memberships and dues,
      tax preparation services and relocation benefits.                                               

(2)   Stock options awarded  have been restated to reflect the March  1994 stock split effected in the
      form of a 50% stock dividend.                                                                   

Option Grants During 1994 Fiscal Year                                           

    The following table contains certain information concerning the grant of
stock options to the executive officers named in the above  compensation table  
during the Company's last fiscal year:                                          

                                                        · Enlarge/Download Table

                              % of Total                              Realizable Value of Assumed
                            Options Granted                           Annual Rates of Stock Price
                   Options   to Employees   Exercise or  Expiration  Appreciation for Option Term
    Name           Granted  in Fiscal Year  Base Price      Date        5%              10%      
                                                                                                 

Norman E. Brinker   15,000                    $26.833    02/04/2004   $  253,127     $  641,473  
                   187,500                    $20.375    06/28/2004   $2,402,574     $6,088,594  
                   202,500      13.75%                                $2,655,701     $6,730,067  

Ronald A. McDougall 15,000                    $26.833    02/04/2004   $  253,127     $  641,473  
                   187,500                    $20.375    06/28/2004   $2,402,574     $6,088,594  
                   202,500      13.75%                                $2,655,701     $6,730,067  

Creed L. Ford, III  11,250                    $26.833    02/04/2004   $  189,845     $  481,105  
                    45,000                    $20.375    06/28/2004   $  576,618     $1,461,263  
                    56,250       3.82%                                $  766,463     $1,942,368  

Debra L. Smithart   11,250                    $26.833    02/04/2004   $  189,845     $  481,105  
                    45,000                    $20.375    06/28/2004   $  576,618     $1,461,263  
                    56,250       3.82%                                $  766,463     $1,942,368  

Douglas H. Brooks    7,500                    $26.833    02/04/2004   $  126,563     $  320,737  
                    37,500                    $20.375    06/28/2004   $  480,515     $1,217,719  
                    45,000       3.06%                                $  607,078     $1,538,456  

Stock Option Exercises and Fiscal Year-End Value Table                          

    The following table shows  stock option exercises by the  named officers
during  the last fiscal  year, including the  aggregate value of  gains on the  
date  of exercise.   In  addition, this  table includes  the number  of shares  
covered  by both exercisable and non-exercisable stock options at fiscal year-  
end.  Also  reported are the values for "in-the-money" options which represent  
the position  spread between the exercise  price of any such  existing options  
and the $21.00 fiscal year-end price of the Company's Common Stock.             

                                                        · Enlarge/Download Table

                      Shares                                            Value of Unexercised   
                     Acquired               Number of Unexercised     In-the-Money Options at  
                        On      Value    Options at Fiscal Year End       Fiscal Year End      
    Name             Exercise  Realized  Exercisable  Unexercisable  Exercisable  Unexercisable
                                                                                               
Norman E. Brinker          0  $        0   421,875       511,875      $ 4,364,635    $1,036,060
Ronald A. McDougall  150,938   3,312,804   195,000       495,000        1,724,191       927,301
Creed L. Ford, III   225,000   5,806,595   738,144       157,500       11,420,035       358,167
Debra L. Smithart      9,000     191,731    48,938       146,250          442,278       285,661
Douglas H. Brooks     35,972     990,919   337,953       102,375        5,228,379       210,462

Long-Term Executive Profit Sharing Plan and Awards                              

    Executives of  the Company participate in the Long-Term Executive Profit
Sharing  Plan.   See  "Report  of  the  Compensation  Committee  --  Long-Term  
Incentives" for more  information regarding  this plan.   The following  table  
represents  awards granted  in  the  last  fiscal  year  under  the  Long-Term  
Executive Profit Sharing Plan.                                                  

      Number of       Estimated Future Payouts
Name           Units Awarded    Under Non-Stock Based Plans         
                       (Dollars)

                       Threshold     Target    Maximum

Norman E. Brinker         900        $60,000     $90,000       *                
Ronald A. McDougall       900        $60,000     $90,000       *                
Creed L. Ford, III        600        $40,000     $60,000       *                
Debra L. Smithart         600        $40,000     $60,000       *                
Douglas H. Brooks         400        $26,667     $40,000       *                

* There is no maximum future payout under the Long-Term Executive Profit        
Sharing Plan.                                                               

PRINCIPAL SHAREHOLDERS  

    The following table sets  forth certain information as to  the number of
shares  of Common  Stock of  the Company  beneficially owned by  the principal  
shareholders of the Company.                                                    

                          Beneficial Ownership

           Number of
Name and Address                           Shares           Percent             

Provident Investment Counsel            4,577,115 (1)        6.39%              
300 North Lake Avenue                                                           
Pasadena, California 91101                                                      

IDS Financial Corporation               4,137,950 (2)        5.78%              
IDS Tower 10                                                                    
Minneapolis, Minnesota 55440                                                    

    (1)   As  of  September 8,  1994.   Based  on  information contained  in
Schedule 13G dated  as of  December 31, 1993,  as  supplemented by  subsequent  
communication.                                                                  

    (2)    As of  August 31,  1994.    Based  on  information  contained  in
Schedule 13G  dated as  of December 31,  1993,  as supplemented  by subsequent  
communication.                                                                  

SECURITY OWNERSHIP OF MANAGEMENT  
AND ELECTION OF DIRECTORS 

    Fifteen (15) directors are to  be elected at the meeting.   Each nominee
will  be  elected  to  hold  office  until  the  next  annual  meeting of  the  
shareholders or  until his or her  successor is elected and  qualified.  Proxy  
holders will  not be able to  vote the proxies held  by them for  more than 15  
persons.   To be elected a director, each nominee  must receive a plurality of  
all of  the votes cast at the  meeting for the election  of directors.  Should  
any nominee become unable  or unwilling to accept nomination or  election, the  
proxy holders may  vote the proxies for the election, in  his or her stead, of  
any other  person the  Board of  Directors may recommend.   All  nominees have  
expressed  their intention  to serve  the entire  term for  which  election is  
sought.    The  following  table  sets forth  certain  information  concerning  
security ownership of  management and  the persons nominated  for election  as  
directors of the Company:                                                       

Number of Shares          
of Common Stock           
            Beneficially Owned as           Percent of
Name             as of September 9, 1994(1)          Class          

Norman E. Brinker          1,562,134 (2)                   2.18%                

Douglas H. Brooks            337,975                         *                  

F. Lane Cardwell, Jr.         79,772                         *                  

Creed L. Ford, III           755,354                       1.06%                

Ronald A. McDougall          195,022                         *                  

Debra L. Smithart             50,460                         *                  

Roger F. Thomson               1,000                         *                  

Jack W. Evans, Sr.            71,717                         *                  

Rae F. Evans                   1,585                         *                  

J.M. Haggar, Jr.             130,645                         *                  

J. Ira Harris                  2,000 (3)                     *                  

Frederick S. Humphries           -0-                        -0-                 

Ray L. Hunt                   33,750                         *                  

James E. Oesterreicher           -0-                        -0-                 

William F. Regas             109,287 (4)                     *                  

Roger T. Staubach              1,500                         *                  

All executive officers                                                          
and directors as a                                                          
group (19 persons)       3,528,510                       4.93%              

*     Less than one percent (1%)                                    

    (1)   Includes  shares of Common Stock which may be acquired by exercise
of exercisable options granted under the Company's 1983 Incentive Stock Option  
Plan,  the  1984 Non-Qualified  Stock Option  Plan,  the 1992  Incentive Stock  
Option Plan  and the  1991 Stock  Option Plan for  Non-Employee Directors  and  
Consultants, as applicable.                                                     

    (2)   Includes 20,250 shares of Common Stock held of  record by a family
trust of which Mr. Brinker is trustee.                                          

    (3)   Includes 2,000 shares of Common Stock held of record by a trust of
which Mr. Harris is trustee.                                                    

    (4)   Includes  4,658 shares of Common Stock  held of record by a family
trust of which Mr. Regas is trustee.                                            

    The Company has established  a guideline that all senior officers of the
Company own  stock in the Company,  believing that it is  important to further  
encourage  and support an ownership  mentality among the  senior officers that  
will continue to align  their personal financial interests with  the long-term  
interests  of  the Company's  shareholders.   Pursuant  to the  guideline, the  
minimum amount of Company Common Stock that a senior officer  will be required  
to own  will be determined  by such officer's  position within the  Company as  
well as annual  compensation.  The  guideline requires  that each Senior  Vice  
President own an amount of  Common Stock equal in value to such officer's base  
salary, each Executive  Vice President own an amount of  Common Stock equal in  
value to  twice such officer's  base salary,  the President own  an amount  of  
Common Stock  equal in  value to three  times his base  salary, and  the Chief  
Executive Officer  own an amount of Common Stock equal  in value to four times  
his base  salary.  The  guideline also  encourages all other  officers of  the  
Company to similarly acquire Common Stock in the Company.  It is expected that  
phase-in  of the guideline  will begin  by the end  of 1994,  for those senior  
officers who  do not  currently meet  the minimum  stock  ownership levels  as  
established by the guideline.                                                   

Dates Referenced Herein   and   Documents Incorporated By Reference

This 10-K Filing		Date		Other Filings
		3/10/92
		6/30/92
		1/1/93
		1/27/93
		3/13/93
		5/4/93
		6/30/93
		7/1/93
		10/7/93
		11/4/93
		12/31/93
		2/4/94
		3/9/94
		3/21/94
		3/30/94		10-Q
		4/25/94
		5/3/94
		5/4/94
		5/18/94
		5/25/94
		6/15/94
For The Period Ended		6/29/94		DEF 14A, PRE 14A
		7/19/94
		7/29/94
		8/28/94
		8/31/94
		9/6/94
		9/8/94
		9/9/94
Filed On / Filed As Of		9/27/94
		9/29/94
		11/3/94
		1/3/95
		1/3/96
		1/15/96
		1/3/97
		1/15/97
		1/3/98
		1/15/98
		12/31/98
		1/3/99
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