This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). For example, statements included in this report regarding our financial position, business strategy and other plans and objectives for future operations, and assumptions and predictions about future product demand, supply, manufacturing, costs, marketing and pricing factors are all forward-looking statements. When we use words like "intend," "anticipate," "will," "may," "should," "could," "predict," "potential," "believe," "estimate," "plan" or "expect," we are making forward-looking statements. We believe that the assumptions and expectations reflected in such forward-looking statements are reasonable, based on information available to us on the date hereof, but we cannot assure you that these assumptions and expectations will prove to have been correct or that we will take any action that we may presently be planning. We have disclosed certain important factors that could cause our actual results to differ materially from our current expectations elsewhere in this report. You should understand that forward-looking statements made in this report are necessarily qualified by these factors. We are not undertaking to publicly update or revise any forward-looking statement if we obtain new information or upon the occurrence of future events or otherwise.

Description of Business.

A.

History of the Company

Famous Uncle Al's Hot Dogs & Grille, Inc. was originally incorporated in the State of Delaware on March 4, 2005. We were formed for the purpose of receiving future and existing restaurant franchising rights from Famous Uncle Al's Hot Dogs, Inc., also a Delaware corporation. Famous Uncle Al's Hot Dogs, Inc., owned the exclusive worldwide right to franchise quick service restaurants operating under the "Famous Uncle Al's Hot Dogs" name. The Famous Uncle Al's Hot Dogs restaurants serve hot dogs and other style sandwiches that use "secret recipes" and preparation techniques created by Al Stein, the original "Uncle Al". We maintain offices at One Plaza West, 100 Mill Plain Road, Danbury, CT 06811, and our phone number is (203) 616-2930. Our Internet website address is www.fdoginc.com or www.famousunclealshotdogs.com. Our common stock is currently traded on the OTC Bulletin board.

The Famous Uncle Al's restaurant concept has been in operation since 1985 when the original "Uncle Al", Al Stein, opened the first restaurant in Virginia Beach, VA. That restaurant continues to operate successfully under Al Stein's management. Seven additional Famous Uncle Al's Hot Dogs restaurants were opened by independent operators in the Virginia Beach area under various licensing agreements with Al Stein and continue to operate. One store is owned and operated by Mr. Stein's son and one by a former employee.

The franchise assignor sold several regional franchise territories prior to assigning the franchise to us. Company came into those agreements under the global type of arrangement provided for under the Settlement Agreement of October 6, 2006, under which Company agreed to assume the debts, liabilities and obligations of the Company from which we were acquiring the franchise license in exchange for licensing rights.

B.

Current status of business

The primary business of the Company is selling Famous Uncle Al's Hot Dogs & Grille Franchised restaurants. The Company also sells regional franchises, also known as Territorials or Area Developer agreements. Regional franchises are responsible for the development of franchised restaurants in designated geographic territories. The Company derives revenue from three primary sources.
1) One time fees for individual franchised stores. 2) One time fees for regional franchise territories. 3) Continuing royalties from operating franchised stores (ongoing weekly continuation fees). As of September 30, 2009, we have suspended active operations.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company may not have adequate readily available resources to fund operations through December 31, 2009. This raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty

Results of Operations

The following discussion and analysis provides information, which our management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and related notes that appear elsewhere in this report.

Nine months ended September 30, 2009 and September 30, 2008

Profit/Loss

The Company realized a net loss of $ 81,161 in the first nine months of 2009 compared to a net loss of $ 442,515 for the first nine months of 2008 resulting in a decrease in loss of $ 361,354. The decrease in loss was due primarily to decreased expenses which include the issue of shares in the first nine months of 2008 as payment for services valued at $ 261,080.

Revenue

Total revenue for the first nine months of 2009 was $ 34,358 compared to $ 122,537 for the first nine months in 2008 resulting in a decrease in revenue of $ 88,179 or a 72% decrease.. The decrease in revenue was due primarily to decreased franchise sales and reduced royalties due to store closings.

Royalty and other revenue, which includes marketing contributions from vendors, for the first nine months of 2009 was $ 23,653 compared to $ 50,604 in the first nine months of 2008 resulting in a decrease of $ 26,951 or a 53% decrease. Several stores have suspended royalty payments due to the difficult economic climate. We have determined not to pursue collection of theses royalties.

Franchise (unit agreements) and Regional Franchise (developer agreements) revenue for the first nine months of 2009 was $ 0 compared to $ 52,500 in the first nine months in 2008 resulting in a decrease of $ 52,500 or a 100% decrease..

Expenses

Expenses for the first nine months of 2009 were $ 115,520 compared to $ 565052 for the first nine months in 2008 resulting in a decrease in expenses of $ 449,532. The decrease in expenses was due primarily to $261,080 in non-cash expenses incurred in 2008 not incurred in 2009.

Three Months ended September 30,2009 and September 30, 2008

Profit/Loss

The Company realized a net loss of $ 2,274 in the third quarter of 2009 compared to a net loss of $ 32,479 for the third quarter of 2008 resulting in a decreased loss of $ 29,755. The decrease in loss was due primarily to decreased expenses. All ongoing services and sales operations have been suspended. We have released all our support staff and terminated franchise sales indefinitely.

Revenue

Total revenue for the third quarter of 2009 was $ 6,260 compared to $ 23,360 for the third quarter in 2008 resulting in a decrease in revenue of $ 17,100 or a 73% decrease. Royalties decreased by $14,193 of the $17,100. Several stores have suspended royalty payments due to the difficult economic climate. We have determined not to pursue collection of theses royalties.

No Franchise (unit agreements) and Regional Franchise (developer agreements) revenue for the third quarter of 2009 or 2008 was recognized. The company has suspended all franchise sales initiatives at this time.

Expenses

Expenses for the third quarter of 2009 were $ 8,985 compared to $ 55,839 for the third quarter of 2008 resulting in a decrease in expenses of $ 46,874. The decrease in expenses was due primarily to decreased marketing and promotional activities.

Operating Restaurants


There are currently 11 franchised restaurants opened and operating at September
30, 2009.  There are 2 restaurants scheduled to open during the fourth quarter
of 2009. This will result in 13 operating restaurants.


             Operating Restaurants            Scheduled to open
           Location          Quantity Location                  Quantity

           Las Vegas, NV     2        Somers, NY (lease signed) 1
           Danbury, CT       1
           Norfolk, VA       1
           Franklin, VA      1
           Phoenix, AZ       1
           Melbourne, FL     1

C.

Management Plans

Management believes that the Company will require additional funding to maintain operations and to accelerate growth. The Company has been limited in its ability to attract regional franchisees and franchisees. Management believes that current economic conditions, in particular the inability of prospective franchisees to secure bank loans to fund a Famous Uncle Al's Hot Dogs & Grille restaurant, has had a significant negative impact on the Company's ability to sell franchises. The general economic downturn has also affected existing store sales resulting in diminished royalty revenue.

Management is considering alternative means to expand the Company other than just through Regional and Individual franchise sales. Management is negotiation for debt funding to support the opening of corporately owned units. One beneficial result of the current economic downturn is an increased availability of commercial retail locations. There are an increasing number of locations that are particularly well suited for our restaurants. Many available locations include partial build outs and some included equipment that can be reused by a Famous Uncle Al's restaurant. In general, lease costs have declined considerably over the last year. Management believes that the increased availability of commercial space, declining lease costs and more cooperative and flexible landlords presents an excellent opportunity for the Company to open corporately owned or corporately sponsored franchised restaurants.

Management believes that the existing business and operating franchised restaurants is a suitable platform for expansion and to attract funding. The fundamentals of the restaurant operating system, menu offerings, store décor and procedures are completed. There is no significant expenditure required for development. The Company will seek additional funding under terms acceptable to the Company to support the opening of Company owned units.

Although the Company will pursue funding to open corporately owned restaurants, it will continue to offer its regional and individual franchise for sale and believes that these sales remain critical to the success of the Company.

Liquidity and Capital Resources

D.

Capital Resources

The Company is experiencing a burn rate of approximately $ 13,000 per month for the first nine months of 2009. The Company has not developed sufficient ongoing royalty revenue to support operations. Until the Company develops sufficient ongoing revenue from royalties, the Company will be dependent on franchise and regional franchise fees to support operations. In lieu of such sales materializing, the Company is dependent on loans and alternative sources of revenue.

During the first quarter of 2009 we issued 170,000 shares at $ 0.05 per share for a total of $ 8,500 cash as follows; 2/05/2009 issued 100,000 shares for $ 5,000, 3/24/2009 issued 70,000 shares for $ 3,500.

During the third quarter of 2009 expenses totaling $ 5,000 were paid by a related party on behalf of the Company.

The Company believes that regional franchise sales and franchise sales are critical to the success of the Company. Failure of these sales to materialize will have a detrimental effect on the Company. Failure to either secure additional funding or generate revenue through regional franchise and franchise fees will have a detrimental effect on the Company's ability to support ongoing operations. We have been unsuccessful in raising the required capital in 2009.

Each regional franchisee fee is $50,000. Regional franchises are designated geographic territories. Each regional franchisee is responsible for developing individual franchised restaurants in the territory. The Company believes there are at least 50 suitable regions available for sale.

A regional franchisee purchases a defined geographic area and is obligated to develop Famous Uncle Al's Hot Dogs & Grille restaurants in their defined territory. Regional franchisees endeavor to sell the individual franchise opportunity to prospects. The Company benefits in the short term by receiving a one-time fee from the regional franchisee and a one-time fee from each individual franchisee that the regional franchisee sells. The Company benefits long term from the weekly ongoing royalties collected from each individual franchise. This structure is designed to create a network of regional franchisees that serve as a sales force for the Company. Regional franchisees are compensated on a commission basis only. The Company believes that this structure will allow the Company to develop a dedicated national sales and marketing infrastructure without incurring the financial liability of supporting employed sales persons

E.

Employees:

Three full time employees. As of September 30, 2009 all employees have been terminated.

F.

Research and Development and Expenditures

No direct costs have been incurred for research and development in the last 2 years. The Company believes that the basic restaurant concept has been developed but continues to work to enhance menu selection and products. The Company does not maintain research and development facilities and utilizes existing franchised restaurants to test menu items and vendors to develop products.

G.

Subsidiaries

The Company has no subsidiaries.

H.

Patents and Trademarks

The Company markets itself under its Famous Uncle Al's Hot Dogs trademark. The Company has received trademark and service mark protection of this name and related designs from the United States Patent and Trademark Office and considers these trademarks and service marks to be important to its business. The Company received the right to this trademark by virtue of its application to the U.S. Patent and Trademark Office, and the

approved assignment of it to us, dated August 16, 2005. The continuing right to license under this assignment is considered essential by the Company.

I.

Reports to Security Holders

At this time, the Company has not provided annual reports to security holders.
However, shareholders and the general public may view copies of all of our filings with the SEC, by visiting the SEC website (http://www.sec.gov) and performing a search of Famous Uncle Al's Hot Dogs & Grille, Inc.'s electronic filings.