"Public Company Costs"

As a public company, we will incur significant legal, accounting and other costs that we have not previously incurred as a private company. The Sarbanes-Oxley Act of 2002 and related rules of the SEC and The NASDAQ Stock Market regulate corporate governance practices of public companies. We expect that compliance with these public company requirements, including ongoing costs to comply with
Section 404 of the Sarbanes-Oxley Act, which includes documenting, reviewing and testing our internal controls, will increase our general and administrative costs. These costs will also include the costs of our independent accounting firm to issue an opinion on our assessment and the effectiveness of our internal controls on an annual basis. We also may incur higher costs for director and officer liability insurance. Our expected reporting will be $10,000 for an independent audit assessment and $20,000 in legal fees associated with compliance. We cannot predict or estimate the amount of additional costs we may incur as a result of being a public company or the timing of such costs."

Plan of Operations for the next 12 months -

The Company's primary short and long-term purpose is to continue to cause "Famous Uncle Al's Hot Dogs & Grille" franchised restaurants to be opened.

The Company utilizes an industry standard structure of selling, or assigning, defined geographic territories to developers, also known as regional franchisee or territory director. The assigned developers are required to sell a prescribed number of franchise contracts. Developers work in cooperation with the Company to attract prospective franchisees through various forms of advertising and marketing methods.

Developers may meet with prospects individually or in formal group presentations. Part of the selling process may include visits to existing units, discussions with existing franchise owners and contact with Company management.

The Company will continue this process by investing in additional advertising, generating new sales and marketing materials, developing new marketing methods and other means. The Company intends to continue to recruit additional developers and franchise owners into the foreseeable future.

During the next 12 months the Company will implement a plan to enhance the Company's position within the industry and with the public. The Company will focus on improving brand recognition, targeting both consumers and the foodservice industry.

Besides continuing its sales efforts through its network of developers the Company will also target Franchise and restaurant investor groups. These groups typically purchase and operate multiple unit franchise operations that meet particular criteria. The Company will identify and approach those groups for whom Famous Uncle Al's Hot Dogs & Grille would be a suitable multiple unit investment.

Cash requirements of Company

The Company operates on a low fixed overhead. Cash requirements can be satisfied by maintaining the Company's modest growth pattern. Additional funds will be required to implement an aggressive accelerated growth plan.

Our plan of operations, whether for modest or accelerated growth, consists of marketing the sale of franchises and regional franchises. Advertising is used to attract prospects to the individual and regional franchise opportunities. Follow up meetings with individual prospects as well as seminar style meetings for groups of prospects are the methods used to present a comprehensive description of the Famous Uncle Al's Hot Dogs & Grille opportunity to prospects. Marketing for new restaurant franchised stores is targeted in areas where existing restaurants are operating and a regional franchisee is assigned. Regional franchise prospects are targeted in areas that do not have regional franchisees in place.

Marketing efforts and methods, currently considered modest, will be accelerated to the extent that additional capital will support. Currently our efforts are limited by the number of qualified personnel available to implement the marketing strategy and advertising and marketing budget constraints.

Plans for additional funds

Additional funds will be required to implement accelerated growth plans. The Company has made no significant effort to secure additional sources financing at this time. The Company intends to seek funding of up to $ 2,000,000 to support an accelerated marketing effort. Funds will be utilized to hire qualified sales and marketing personnel, increased advertising and to pay for other expenses associated with marketing such as travel, lodging and entertainment. Selling franchises is dependent, in great part, on the ability of the Company representative to present the opportunity in a highly professional manner to prospects. The Company works closely with regional Franchisees to market individual franchises in each territory.

If efforts to raise significant capital fail to procure any funds then the Company will continue with its current "modest" growth pattern indefinitely or until the Company successfully raises the desired capital. If the Company rises less, or more, than the desired amount then efforts will be scaled to the amount of funds available.

Product development or research planned during next 12 months

The Company will continue to refine its in-store operating systems, menu offerings, location strategy and local consumer targeted marketing tactics. The Company will continue to refine its administrative systems including information technology, installing a system wide remote polling and automatic ACH royalty collection system.

Upcoming purchases or sale of plant or equipment

The Company has no plans for any significant plant or equipment purchases.

Expected changes in number of employees

The Company expects to employ or contract for additional field support and inside administrative support personnel as needed to support its growth. The Company does not expect a significant change in the next 12 months.

Results of Operations

Results of operations for 2008 was a net loss of ($ 619,,487) compared to a net loss of

($ 1,503,592) for 2007. The loss includes a one time charge to earnings of $ 120,000 for impairment of long-lived assets and $ 261,080 for value of shares issued for services, $ 1500 for depreciation and $ 3,472 for amortization of debt discount. Cash flow used by the Company was $ 227,815. This results in a decreased net loss of $ 884,105 and a 58% reduction in net loss compared to 2007. This is due primarily to reduced G&A expenses related to the issue of shares and warrants. .

Revenue for 2008 was $ 118,065 compared to $ 155,832 in 2007. This is a decrease in revenue of $ 37,767 or a 24% decrease.. This decrease is due primarily to reduced franchise sales compared to 2007. Franchise sales in 2008 were $ 21,500 compared to $ 72,000 in 2007.

Total costs and expenses in 2008 were $ $ 737,553 compared to $ 1,659,425 in 2007. The reduction in expenses is due primarily to reduced G&A expenses related to the issue of shares and options.

The Company's revenue consisted of $ 21,500 from franchise fees, $ 63,072 from royalties and $ 33,494 from other sources.

Franchise sales in 2008 were $ 21,500 compared to $ 72,000 in 2007 resulting in a decrease in franchise sales of $ 50,500 or a 70% decrease. Weekly continuation fee (royalty) revenue in 2008 was $ 63,072 compared to $ 58,592 in 2007 resulting in a increase of

$ 4480 or a 7.6% increase. Other revenue(primarily marketing rebates) in 2008 were $ 33,494 compared to $ 25,240 in 2007 resulting in an increase of $ 8,254 or a 32% increase.

The Company's primary sources of revenue are fees collected from the sale of regional territories to developers, fees from the sale of individual franchises and continuing royalties from individual franchised stores.

Geographic territories are sold to developers at a cost of approximately $ 40,000 to $60,000. Developers are authorized to sell individual franchises within the territory. The territories are based on population density, local economic conditions, availability of suitable retail sites, demographics and to some extent the ability of the developer. Each territory contract requires the developer to fulfill an annual quota of sold franchises. Developers receive a portion of the individual franchise fee and a portion of the continuing royalties from each unit. The Company has determined that there are at least 80 territories in the US that can be considered for sale to developers.

Franchises are sold on an individual basis to franchisees within the Regional territories. The franchise fee is $ 17,500. The selling developer receives $ 10,000 from each franchise sold. Based on information regarding other US franchise systems the Company believes that there is as many as 5000 suitable retail locations in the US.

Financial condition, changes in financial condition, and results of operations for last two fiscal years.

Activities of the Company for the last three fiscal years have been primarily start up and development related. The Company expended significant resources in the development and refinement of the Company's franchise product, a turn key restaurant franchise based on a proprietary menu and operation system. The Company created and refined its menu offerings, store design and theme, food preparation methods and equipment and product sourcing. The Company compiled the information into related operations manuals and other informational packages.

A conforming Uniform Franchise Offering Document was completed to comply with Federal Trade Commission requirements as well as some individual State requirements.

Those activities were funded through investments and sales revenue generated by the sale of regional territories and individual franchise sales.

Loans and borrowings

The assignor company, Famous Uncle Al's Hot Dogs, Inc., utilized funds from private placements and loans to develop the original concept of locally owned hot dog restaurants into a marketable franchise opportunity. This included legal fees associated with complying with relevant franchise laws and regulations, developing a broader menu selection, creating a uniform décor package, designing store layout options to accommodate specified cooking and preparation equipment and furniture arrangements. Funds were utilized to develop sources of specified products including development of proprietary private labeled meat products.
Funds were also utilized for office rents and general overhead.

In the last twelve months the Company has received the following loans, as detailed:

The Company has received loan proceeds of $ 27,700 from officers.

The Company has received $ 35,000 from other debt borrowings.

In the past twelve months the Company has received a total of $ 163,500 from private placements.

The Company has received, from loans and private placements, a total of $ 226,200 in funding. The Company depended on these funds for legal fees (SEC and franchise attorney), product enhancements and development, G&A, marketing, advertising and other expenses.

The Company has long term debt liabilities of 111,090 debt liabilities remaining from part of the settlement agreement with the franchise license assignor.

The Company has assumed $55,000 in notes payable to 6 individuals in connection with its purchase of the licensing rights. The collective original amount of the notes was $85,000. $ 25,000 has been paid through a stock issuance. The notes are to be paid through proceeds derived from the sale of future franchises in or near the original subject store territory. The Company intends to pay in accordance with the terms of the notes or prepay from earned income, replacement or refinancing of the loan, or future offerings or a combination of these means.

The Company intends to repay those funds from revenues generated by continued operations.

The Company has long term debt liability of $ 27,700 consisting of loans from an
officer.


The Company has short term debt liability of $ 26,806 consisting of convertible
notes.

Past and future financial condition and results

The Company believes that the most significant start up and development costs associated with the primary business of the Company have been expended. The Company will continue to refine all aspects of its operations but does not require any further significant investment in developing the basic aspects of the Company's primary offerings, franchise or retail.

With the start up and development stages completed, management has now turned its full attention to aggressively marketing its franchise offerings.

Key variables and qualitative/quantitative factors necessary to understand/evaluate business

The business requires a multi tiered administrative and sales structure to support an exponential growth pattern. The Company utilizes regional developers to extend the Company's sales and field administration capacity. Developers are independent contractors that are responsible for the sale of franchised restaurants in their territory and for continuing monitoring and enforcement of the Company's requirements for restaurant operations. The Company believes that this structure provides the most cost effective means to provide field management and a national sales force.

The Company's ability to attract suitable regional developers and the ability of the individual developer are important factors to the growth of the Company.

The Company's long-term success is dependent on the royalty stream generated by individual franchised units. Royalty fees are 7% of each unit's volume, collected weekly. Out of that stream the developer is paid 2% of the volume on units within that territory, netting the

Company a 5% royalty stream. This net revenue is unencumbered by any further commissions or direct expenses. The royalty is based on the gross retail sales generated by each franchised unit and is not discounted or adjusted. The actual profitability of the franchised unit, revenue less expense, is not a direct factor in determining the revenue to, or profitability of, the Company.

The Company will focus on increasing the royalty stream by adding additional franchised units to the system and increasing same store sales. Although individual profitability of each unit does not directly impact the Company's revenues or profits it is imperative that the Company assure the profitability of the individual units. Units closed because of lack of unit profitability for the franchisee will result in reduced revenue for the Company. Reduced sales volume in a unit will result in reduced royalty revenue to the Company. Vital to attracting franchisees is the reasonable expectation of profitability to be derived from a franchised restaurant. Franchisees will purchase a franchise only if they believe it has a good chance of profitability. Those profit expectations can most accurately be extrapolated from information derived from existing units. Negative profitability reports from existing units can dramatically impact the ability of the Company to continue to attract franchisees.

The Company is dependent on the sale, and continuing operation of, individual franchised restaurants. The Company will continue to streamline restaurant operations, adjust menu offerings, source products, and arrange product discounts for the benefit of the individual units.

Local, regional and national consumer targeted advertising programs will be implemented to impact restaurant retail sales.

Known trends or factors reasonably likely to have a material impact on short or long term liquidity

The Company does not foresee any known trends or uncertainties within the foodservice industry that might have a material impact on the business or liquidity. The Company does not anticipate any event that would require the Company to strain its resources. The Company's fixed overhead and expenses are limited. Variable expenses are directly related to the level and intensity of the Company's sales and marketing efforts. These expenditures are controllable and generally produce a short-term return at least equal to the expenditure.

Liquidity and Capital Resources

The Company is dependent on continuing sales of Regional and individual Franchises and continuing royalties for liquidity. At December 31, 2008, the Company had working capital deficiency of approximately $ 400,000.

The Company's operations have been financed to date through sales of its common stock through private placements, loans, sales of franchise territory agreements and royalties from franchisee sales. The Company requires significant additional capital for the expansion of its franchising operations. The Company believes that revenue generated from existing stores and $ 250,000 from anticipated Regional and individual franchise sales and additional royalty revenue will be required to fund its operations until at least December, 31, 2009. Cash flows used by operating activities in 2008 was ($ 227,815). Revenue in 2008 was $ 118,065 including franchise fees of $ 21,500 and ongoing royalty revenue of $ 63,072 and other revenue of $ 33,494.. Some of the franchised stores from which royalty revenue was

generated were opened for less than the full year and some stores were granted a temporary 'royalty holiday". Based on existing stores continued operations and continuing "royalty holiday" for some stores the Company currently generates ongoing royalty revenue at an annual rate of $ 65,000. If the Company terminates all "royalty holidays" the Company will generate $ 150,00. If regional and individual franchise sales and additional royalty revenue of at least $ 250,000 do not materialize then the Company will require additional funding to continue operations.

Material commitments for capital expenditures and source of such funds

The Company does not anticipate any significant capital expenditure.

Known trends or factors reasonably expected to have material impact on net sales or revenue or income from continuing operations

The prevailing trend in the quick serve foodservice industry is towards the limited service casual dining experience. This trend is in line with the Company's Famous Uncle Al's Hot Dogs & Grille concept. The Company's restaurants offer limited table service with quick service at moderate prices. Knowledge of this industry trend is more likely to impact investment decisions by franchise investment groups and franchise financing companies than that of individual franchisees. Although an important beneficial trend for the Company, management does not expect any specific quantifiable impact.

The Company's business is not subject to any particular events other than general economic conditions. Being a moderately priced dining establishment the Company believes that the economic downturn has not and will not significantly impact retail sales in existing locations. The Company believes that the economic downturn has and will continue to affect the ability to attract new franchisees.

The Company's core retail product is hot dogs. An interruption in the supply of hot dogs would have a major material impact on retail operations. A dramatic price increase for the product would also impact retail sales and/or the profitability of individual franchises.

The Company uses private label Famous Uncle Al's hot dogs packed exclusively for the Company. A disruption in supply from the packer would be temporarily disruptive; however equivalent quality product can be obtained from other sources.

The Company's hot dog product contains beef and pork. A general interruption in the supply of either of those commodities would be detrimental.

Significant elements of income or loss not arising from continuing operations

In previous years significant expenditures were for development and start up costs. Going forward the Company does not anticipate any significant element of income or loss not related to continuing operations.

Causes for any material changes from period to period in one or more line items of financial statements

Material changes in line items would be most substantially increases in income from Regional franchise and franchise fees. Expense items would most likely be advertising costs.

Seasonal aspects of business having a material effect on financial condition or results of operation

Individual restaurants are subject to local seasonal effects. However the Company expects that operating units will be in various areas of the US and that their individual operating fluctuations will be balanced and have limited impact on the Company's seasonal revenue.

Material commitments of Regional Franchise operators

There are several regional franchise operators. Each regional franchise operator is committed by contract to sell a minimum number of individual franchises within a designated geographic area. Each regional franchise operator is responsible for advertising and promotional activities within their assigned territory to attract franchise prospects. Each regional franchise operator is responsible for supervising the opening process for each unit, assisting the franchisee with site selection, lease negotiations, contractor and build out coordination, equipment installation and local marketing. Regional franchise operators are trained to comply with FTC and state franchising regulations.

See Risk Factors included at Item 1 above.

ITEM 7.

FINANCIAL STATEMENTS



                      Famous Uncle Al's Hot Dogs & Grille, Inc.
                                    Balance Sheet
                                                December 31, 2008  December 31, 2007

                     Assets

  Current Assets
  Cash                                                      $1,210             $2,825
  Accounts receivable                                            0             32,000
  Prepaid expenses                                               0                  0
   Total current assets                                      1,210             34,825

  Equipment, net                                             4,348            125,848

  Other:
  Security deposits                                          5,200              5,200
  Total Assets                                             $10,757           $165,873

    Liabilities and Stockholders' Deficiency

  Current Liabilities:
  Trade accounts payable                                   $67,985           $101,640
  Accrued expenses                                         226,578            184,305
  Deferred income                                                0             35,000
  Convertible notes due in less than one year               26,806                  0
  Current portion of long term debt                        111,090            111,090
   Total current liabilities                               432,459            432,035

  Long-term debt:
  Related party                                             27,700                  0

  Stockholders' Deficiency:
  Common stock-70,000,000 authorized $0.001
  par value
  14,688,875 issued & issuable (12,688,875 in
  2007)                                                     14,689             12,689
  Additional paid in capital                             2,792,024          2,357,778
  Accumulated Deficit                                  (3,256,115)        (2,636,629)
  Total Stockholders' Deficiency                         (449,402)          (266,162)

  Total Liabilities & Stockholders' Deficiency             $10,757           $165,873

                    Famous Uncle Al's Hot Dogs & Grille, Inc.
                             Statement of Operations
                     Years Ended December 31, 2008 and 2007
                                                     2008            2007
        Initial franchise fees-unit
        agreements                                $21,500         $72,000
        Initial franchise fees-developer
        agreements                                      0               0
        Ongoing weekly continuation fees           63,072          58,592
        Other                                      33,494          25,240
        Franchising revenue                       118,065         155,832


        Costs & Expenses:
        Franchise sales                           188,411         151,125
        General & administrative                  419,670       1,458,418
        Impairment of long-lived assets           120,000               0
        Interest                                    9,472          49,881
         Total Costs & Expenses                   737,553       1,659,424

        Loss before income taxes                (619,487)     (1,503,592)

        Income taxes                                    0               0
        Net Loss                               ($619,487)    ($1,503,592)
        Net Loss Per Share, basic                 ($0.04)         ($0.13)
        Weighted average shares, basic         13,810,714      11,614,533

                      Famous Uncle Al's Hot Dogs & Grille, Inc.
                               Statement of Cash Flows
                       Years Ended December 31, 2008 and 2007

                                                           2008                 2007

   Cash flows from operating activities:
   Net Loss                                          ($619,487)         ($1,503,592)
   Adjustments required to reconcile net income
     to cash used in operating activities:
   Depreciation expense                                   1,500                1,500
   Amortization of debt discount                          3,472               27,580
   Impairment                                           120,000                    0
   Fair value of options issued for services                  0            1,096,717
   Stock issued for services                            261,080               79,800
   (Increase) decrease in accounts receivable            32,000             (13,900)
   Increase (decrease) in accounts payable & accrued
   expenses                                            (26,380)              149,975
    Cash flows used by operating activities:          (227,815)            (161,920)

    Cash flows from financing activities:
   Proceeds from issuance of common stock               163,500              124,500
   Loans from related parties                            27,700               20,000
   Proceeds of other debt borrowings                     35,000                    0
    Cash generated by financing activities              226,200              144,500

   Change in cash                                       (1,615)             (17,420)
   Cash-beginning of period                               2,825               20,245
   Cash-end of period                                    $1,210               $2,825