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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

For the fiscal year ended December 28, 2003

OR

For the transition period from                      to                     

Commission file number 0-21423

CHICAGO PIZZA & BREWERY, INC.

(Exact name of registrant as specified in its charter)

16162 Beach Boulevard

Suite 100

Huntington Beach, California 92647

(714) 848-3747

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

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

Securities registered pursuant to Section 12(g) of the Act:

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 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.  x

Indicate by check mark if the filer is an accelerated filer (as defined in Rule 12B-2 of the Act).  YES  x  NO  ¨

As of February 19, 2004, 19,648,586 shares of the common stock of the Registrant were outstanding. The aggregate market value of the common stock of the Registrant (“Common Stock”) held by non-affiliates was approximately $108,356,236, calculated based on the closing price of our common stock as reported by the NASDAQ Stock Market on June 27, 2003.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the following documents are incorporated by reference into Part III of this Form 10-K: The Registrant’s Proxy Statement for the Annual Meeting of Shareholders.

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CHICAGO PIZZA & BREWERY, INC.

PART I

GENERAL

Chicago Pizza & Brewery, Inc. (the “Company” or “BJ’s”) owns and operates 32 restaurants located in California, Oregon, Colorado, Arizona and Texas and receives fees from one licensed restaurant in Lahaina, Maui. Each of our restaurants is operated either as a BJ’s Restaurant & Brewery, a BJ’s Pizza & Grill, a BJ’s Restaurant & Brewhouse or a Pietro’s Pizza restaurant. Our menu features our BJ’s award-winning, signature deep-dish pizza, our own hand-crafted beers as well as a wide selection of appetizers, entrees, pastas, sandwiches, specialty salads and desserts. Our nine BJ’s Restaurant & Brewery restaurants feature in-house brewing facilities where BJ’s hand-crafted beers are produced. Our three Pietro’s Pizza restaurants serve primarily Pietro’s thin-crust pizza in a very casual, counter-service environment. We entered into an agreement to sell all of our Pietro’s restaurants to key employees of those restaurants, as further described elsewhere herein, in a transaction that will be effective March 15, 2004.

We were incorporated in California on October 1, 1991 originally to assume the operation of the then existing five BJ’s restaurants. In January 1995, we purchased the BJ’s restaurants and concept from its founders. Since that time, we have completed the (i) expansion of our BJ’s menu to include high-quality sandwiches, pastas, entrees, specialty salads and desserts; (ii) enhancement of our BJ’s concept through a comprehensive logo and identity program, uniforms, an interior design concept and redesigned signage; (iii) addition of our BJ’s microbreweries to the concept to produce our own hand-crafted beers; and (iv) purchase of the Pietro’s Pizza chain in the Northwest in March 1996, accounting for six currently operating restaurants in Oregon, three of which will be sold effective March 15, 2004.

The popularity of our BJ’s concept continues to grow contributing to same store sales increases at our BJ’s restaurants open the entire comparable periods of 3.3%, 3.3%, and 4.0% for the years 2003, 2002, and 2001, respectively. In calculating same store sales, we include a restaurant in the comparable base once it has been open for eighteen months.

The opening of our first microbrewery in Brea, California in August 1996 marked the beginning of our production of award-winning, hand-crafted, specialty beers which are distributed to all of our restaurants. The breweries have added an exciting dimension to the BJ’s concept which further distinguishes BJ’s from many other restaurant concepts. In 2002 we received the prestigious Large Brew Pub of the Year award at the Great American Beer Festival in Denver, Colorado.

Our current focus is on the development of the larger footprint BJ’s restaurants in high profile locations with favorable demographics. During 2003, we opened a BJ’s Restaurant and Brewery in Clear Lake, Texas and BJ’s Restaurant and Brewhouses in Addison, Texas, Cerritos, California and San Jose, California in January, May, July and October, respectively. During 2002, we opened a BJ’s Restaurant and Brewhouse in Westlake Village, California, a BJ’s Restaurant and Brewery in Oxnard California and BJ’s Restaurant and Brewhouses in Lewisville, Texas and Cupertino, California in August, September, November and December, respectively. We anticipate opening BJ’s Restaurant & Brewhouses in Willowbrook, Texas, Summerlin, Nevada, Rancho Cucamonga, California, San Bernardino, California, Fresno, California and Roseville, California and a BJ’s Restaurant and Brewery in Laguna Hills, California in 2004 and we are in negotiations for additional sites in California, Arizona, Colorado, and Texas.

Our fundamental business strategy is to grow through the additional development and expansion of the BJ’s brand. The BJ’s brand represents exceptional food and specialty beers at a great value, in a fun, casual environment.

In addition to developing new BJ’s restaurant and brewery operations, we may pursue acquisition opportunities, which may involve conversions to the BJ’s concept.

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There can be no assurance that future events, including problems, delays, additional expenses and difficulties encountered in expansion and conversion of restaurants, will not adversely impact our ability to meet our operational objectives or require additional financing, or that such financing will be available.

Our internet address is www.bjsbrewhouse.com. Electronic copies of our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are available free of charge by visiting the “Investor Relations” section of www.bjsbrewhouse.com. These reports are posted as soon as reasonably practicable after they are electronically filed with the Securities and Exchange Commission.

RESTAURANT CONCEPT AND MENU

We believe we are positioned for competitive advantage by offering customers excellent food at moderate prices from a broad menu of over 100 items featuring award-winning pizza, specialty salads, soups, pastas, sandwiches, entrees and desserts.

Our objective in developing BJ’s broad menu is to ensure that all items on the menu maintain and enhance BJ’s reputation for quality. BJ’s offers large portions of high quality food, creating a real value proposition. Because of the relatively low food cost associated with pizza and hand crafted beers, which represent a significant portion of sales, our restaurants are able to maintain favorable gross profit margins while providing a superior value to the customer.

BJ’s core product, our deep-dish, Chicago-style pizza, has been highly acclaimed since it was originally developed in 1978. This unique version of Chicago-style pizza is unusually light, with a crispy, flavorful crust. We believe BJ’s lighter crust helps give it a broader appeal than some other versions of deep-dish pizza. The pizza is topped with high-quality meats, fresh vegetables and whole-milk mozzarella cheese. BJ’s pizza consistently has been awarded “best pizza” honors by restaurant critics and public opinion polls in Orange County, California.

Our BJ’s restaurants provide a variety of beers for every taste, offering a constantly evolving selection of domestic, imported and micro-brewed beers. BJ’s own hand-crafted beers are the focus of the beer selection and feature six standard beers along with a rotating selection of seasonal specialties. While the BJ’s beers are produced predominantly at our central brewery locations, they are distributed to, and offered at all of the BJ’s and Pietro’s restaurants. We believe that internally produced beer provides a variety of benefits, including:

MARKETING

Our marketing program is focused on community-based promotions and customer referrals. Our philosophy relating to the BJ’s restaurants has been to “spend our marketing dollars on the plate,” or use funds that would typically be allocated to marketing to provide a better product and value to our existing guests. We believe that this results in increased frequency of visits and greater customer referrals. Our expenditures on advertising and marketing were less than 1% of sales in both 2003 and 2002.

We are very much involved in the local community and charitable causes, providing food and resources for many worthwhile events. We are committed to helping others, and this philosophy has benefited us in our relations with our surrounding communities. Our commitment to supporting worthwhile causes is exemplified by

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our “Cookies for Kids” program, which provides a donation to the Cystic Fibrosis Foundation for each Pizookie sold. The Pizookie, our popular dessert, is a cookie, freshly baked in a mini pizza pan, and topped with vanilla bean ice cream. Contributions under the “Cookies for Kids” program were $154,000 and $123,000 in 2003 and 2002, respectively. In addition, we donated preopening sales proceeds of $50,000 related to the four new store openings in 2003 to the Cystic Fibrosis Foundation and $9,000 to the Long Beach Memorial Medical Foundation.

Pietro’s marketing strategy relies primarily on the distribution of discount coupons. Expenditures for marketing relating to the Pietro’s restaurants were 4.4% and 5.0% of Pietro’s sales (excluding discounts) in 2003 and 2002, respectively.

OPERATIONS

Our policy is to staff our restaurants with enthusiastic people, who can be an integral part of BJ’s fun, casual atmosphere. Prior experience in the industry is only one of the qualities management looks for in our employees. Enthusiasm, motivation and the ability to interact well with our customers are the most important qualities for BJ’s management and staff.

Our management and staff undergo thorough formal training prior to assuming their positions at the restaurants. We have designated certain managers, servers and cooks as “trainers,” who are responsible for properly training and monitoring all new employees. In addition, our Director of Training & Development manages and maintains the training process and its related functions.

We purchase our food products from several wholesale distributors. The majority of our food and operating supplies for our California restaurants are purchased from Jacmar Foodservice Distribution, a related party. Product specifications are very strict and we insist on using fresh, high-quality ingredients.

COMPETITION

The restaurant industry is highly competitive. A great number of restaurants and other food and beverage service operations compete both directly and indirectly with us in many areas, including food quality and service, the price-value relationship, beer quality and selection, and atmosphere, among other factors. Many competitors who use concepts similar to that of ours are well established, and often have substantially greater resources.

Because the restaurant industry can be significantly affected by changes in consumer tastes, national, regional or local economic conditions, demographic trends, traffic patterns, weather and the type and number of competing restaurants, any changes in these factors could adversely affect us. In addition, factors such as inflation and increased food, liquor, labor and other employee compensation costs could adversely affect us. We believe, however, that our ability to offer high-quality food at moderate prices with superior service in a distinctive dining environment will be the key to overcoming these obstacles.

RELATED PARTY TRANSACTIONS

As of December 28, 2003, Jacmar Companies and their affiliates (collectively referred to herein as “Jacmar”) owned approximately 41.6% of our outstanding common stock.

Jacmar, through its specialty wholesale food distributorship, is our largest supplier of food, beverage and paper products. Jacmar sells products to us at prices comparable to those offered by unrelated third parties. Jacmar supplied us with $14.6 million, $11.5 million and $8.9 million of food, beverage and paper products for the 2003, 2002 and 2001 fiscal years, respectively, and we had trade payables related to these products of $1.1 million and $1.0 million at December 28, 2003 and December 29, 2002, respectively.

See Item 3 “Legal Proceedings” for a description of a legal action and related settlement terms where the following related parties were participants in the settlement; Jacmar, Inc. and ASSI, Inc. (a former shareholder and option holder).

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GOVERNMENT REGULATIONS

We are subject to various federal, state and local laws, along with rules and regulations that affect our business. Each of our restaurants are subject to licensing and regulation by a number of governmental authorities, which may include alcoholic beverage control, building, land use, health, safety and fire agencies in the state or municipality in which the restaurant is located. Difficulties obtaining or maintaining the required licenses or approvals could delay or prevent the development of a new restaurant in a particular area or could adversely affect the operation of an existing restaurant. We believe, however, that we are in compliance in all material respects with all relevant laws, rules, and regulations. Furthermore, we have never experienced abnormal difficulties or delays in obtaining the licenses or approvals required to open a new restaurant or to continue the operation of our existing restaurants. Additionally, we are not aware of any environmental regulations that have had or that we believe will have a materially adverse effect upon our operations.

Alcoholic beverage control regulations require each of our restaurants to apply to a federal and state authority and, in certain locations, municipal authorities for a license and permit to sell alcoholic beverages on the premises. Typically, licenses must be renewed annually and may be revoked or suspended for cause by such authority at any time. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of our restaurants, including minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling, and storage and dispensing of alcoholic beverages. We have not encountered any material problems relating to alcoholic beverage licenses or permits to date and we do not expect to encounter any material problems going forward. The failure to receive or retain, or a delay in obtaining, a liquor license in a particular location could adversely affect our ability to obtain such a license elsewhere.

We are subject to “dram-shop” statutes in California and other states in which we operate. Those statutes generally provide a person who has been injured by an intoxicated person the right to recover damages from an establishment that has wrongfully served alcoholic beverages to such person. We carry liquor liability coverage as part of our existing comprehensive general liability insurance which we believe is consistent with coverage carried by other entities in the restaurant industry and will help protect us from possible claims. Even though we carry liquor liability insurance, a judgment against us under a dram-shop statute in excess of our liability coverage could have a materially adverse effect on us.

Various federal and state labor laws, along with rules and regulations, govern our relationship with our employees, including such matters as minimum wage requirements, overtime and working conditions. Significant additional governmental mandates such as an increased minimum wage, an increase in paid leaves of absence, extensions in health benefits or increased tax reporting and payment requirements for employees who receive gratuities, could negatively impact our restaurants.

EMPLOYEES

At February 9, 2004, we employed 3,352 employees at our 32 restaurants. We also employed 49 administrative and field supervisory personnel at our corporate offices. We believe that we maintain favorable relations with our employees, and currently no unions or collective bargaining arrangements exist.

INSURANCE

We maintain workers’ compensation insurance and general liability insurance coverage which we believe will be adequate to protect our business, assets and operations. There is no assurance that any insurance coverage maintained by us will be adequate, that we can continue to obtain and maintain such insurance at all or that our premium costs will not rise to an extent that they adversely affect our ability to economically obtain or maintain such insurance.

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TRADEMARKS AND COPYRIGHTS

Our registered trademarks and service marks include, among others, the word mark “BJ’s Chicago Pizzeria”, and our stylized logo, which includes the words “BJ’s Pizza, Grill, Brewery”. In addition, we have registered the word marks “BJ’s Restaurant & Brewery,” “BJ’s Restaurant & Brewhouse” and “BJ’s Pizza & Grill,” for our restaurant services and “BJ’s Tatonka” and “Harvest Hefeweizen” for our proprietary beer and “Pizookie” for our proprietary dessert. We have registered all of our marks with the United States Patents and Trademark Office. We believe that the trademarks, service marks and other proprietary rights have significant value and are important to our brand-building effort and the marketing of our restaurant concepts, however, there are other restaurants using the name BJ’s throughout the United States. We have in the past, and expect to continue to, vigorously protect our proprietary rights. We cannot predict, however, whether steps taken by us to protect our proprietary rights will be adequate to prevent misappropriation of these rights or the use by others of restaurant features based upon, or otherwise similar to, our concept. It may be difficult for us to prevent others from copying elements of our concept and any litigation to enforce our rights will likely be costly.

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RESTAURANT LOCATIONS AND EXPANSION PLANS

The following table sets forth data regarding our existing and future restaurant locations:

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In addition to the above locations, we are evaluating potential markets in California, Arizona, Colorado, Nevada, Illinois and Texas. Our ability to open additional restaurants will depend upon a number of factors, including, but not limited to, the availability of qualified restaurant management staff and other personnel, the cost and availability of suitable locations, regulatory limitations regarding common ownership of breweries and restaurants in certain states, cost effective and timely construction of restaurants (which can be delayed by a variety of controllable and non-controllable factors), and securing of required governmental permits and approvals. There can be no assurance that we will be able to open our planned restaurants in a timely or cost effective manner, if at all.

All of our restaurants are on leased premises and are subject to varying lease-specific arrangements. For example, some of the leases require base rent, subject to regional cost-of-living increases, and other leases include base rent with specified periodic increases. Additionally, many leases require contingent rent based on a percentage of gross sales. In addition, certain of these leases expire in the near future, and there is no automatic renewal or option to renew. No assurance can be given that leases can be renewed, or, if renewed, that rents will not increase substantially, both of which would adversely affect us. Other leases are subject to renewal at fair market value, which could involve substantial increases. Total lease expense in 2003 was $6.1 million.

With respect to future restaurant sites, we believe the locations of our restaurants are important to our long-term success and we devote significant resources to analyzing prospective sites. Our strategy is to open our restaurants in high-profile locations with strong customer traffic during day, evening and weekend hours. We have developed specific criteria for evaluating prospective sites, including demographic information, visibility and traffic patterns.

Our executive headquarters provides management and financial reporting in an 8,017 square-foot leased facility in Huntington Beach, California. The lease expires on September 30, 2005 and currently provides for $150,000 in annual rent as well as additional charges for taxes and operating expenses.

On December 31, 2002, we sold our Pietro’s restaurant on Lombard Street in Portland, Oregon. This sale yielded no gain after recording a reserve of $23,000 for our guarantee of the lease liability, which extends through a portion of 2005. Additionally, on June 15, 2003, we closed our BJ’s restaurant on Stark Street in Portland, Oregon. The net book value of the restaurant’s assets was included in the reserve for store closures; therefore no loss was recorded in 2003 as a result of the closing.

In the fourth quarter of 2003, the tenant at Lombard became delinquent in rent payments. The Lombard landlord sought relief under our guarantee of the lease liability. In February 2004, the landlord released us from any additional liability in exchange for a cash payment of $55,000 which was included in our closed store reserve at December 28, 2003.

Restaurants such as those operated by us are subject to litigation in the ordinary course of business, most of which we expect to be covered by our general liability insurance. Punitive damages awards and employee unfair practice claims, however, are not covered by our general liability insurance. To date, we have not paid punitive damages with respect to any claims, but there can be no assurance that punitive damages will not be awarded with respect to any future claims, employee unfair practice claims or any other actions.

The following paragraphs describe certain legal actions recently settled or pending:

The ASSI Action

On April 30, 2002, we received a copy of a complaint filed on behalf of ASSI Inc., a Nevada Corporation (“ASSI”) in the Superior Court of Orange County, California (the “ASSI Action”). The defendants initially named in that complaint were BJ Chicago, LLC, the Jacmar Companies, James A. Dal Pozzo, and William H. Tilley (collectively, “Jacmar”). We were not a party to the ASSI Action. Jacmar, however, constitutes our largest shareholder group and several of its principals. On June 10, 2002, ASSI amended its complaint in the ASSI Action, by which it added two of our officers and directors, Paul A. Motenko and Jeremiah J. Hennessy.

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As of December 24, 2003, we and our two Co-Chief Executive Officers, Paul Motenko and Jeremiah Hennessy, entered into a confidential settlement agreement with, among others, ASSI and its affiliates, resolving all disputes between the parties, including all claims made in the ASSI Action. Although we are a party to the settlement agreement, we are not a party to the ASSI Action. Each of the parties in the Action have submitted requests for dismissal with prejudice with respect to all claims made in the ASSI Action.

Prior to the parties entering into the settlement agreement, the Court had issued rulings that, as a matter of law, each of the claims being asserted by ASSI in the ASSI Action against Messrs. Motenko and Hennessy were without merit or barred, and that Messrs. Motenko and Hennessy were, therefore, entitled to summary judgment on all such claims.

In connection with the resolution of the ASSI Action: (i) ASSI withdrew its allegations that Messrs. Motenko and Hennessy, or any of the Jacmar parties, us, or any of the attorneys for the foregoing persons or entities, engaged in any illegal, improper, unethical, unprofessional, or actionable conduct; (ii) none of Messrs. Motenko or Hennessy, us or any of the Jacmar parties (or any person or entity acting in their behalf) made any payment to ASSI and (iii) Messrs. Motenko and Hennessy, and the Jacmar parties withdrew their allegations that ASSI engaged in actionable conduct.

Also in connection with the resolution of the ASSI Action, ASSI exercised all of the options and received net shares of 144,132, all of which were sold by ASSI under a registration statement previously filed by us.

We received a cash payment of $700,000 from ASSI in connection with the settlement of all disputes between the parties and the disposition of ASSI’s option rights. In a separate agreement between us and the Jacmar parties, we agreed to pay $450,000 of the $700,000 received from ASSI to one of the Jacmar parties in return for a release from the Jacmar parties of any claims they might have for indemnity from us arising as a result of the ASSI Action or other claims asserted by ASSI.

Our share of the settlement proceeds of $250,000 was recorded as other income in the fourth quarter of 2003.

Labor Related Matters

On March 10, 2003, a former employee of ours, on behalf of himself and other employees and former employees of ours similarly situated and working in California, filed a class action complaint in the Superior Court of California for the County of Orange against us. The complaint alleges that we violated provisions of the California Labor Code covering meal and rest beaks for employees, along with associated acts of unfair competition and seeks payment of wages for all meal and rest breaks allegedly denied to our California employees for the period from October 1, 2000 to the present. We reached a tentative proposal (“Proposal”) with class counsel to settle the meal and rest break class action case pending in California. The Proposal, which is subject to a definitive agreement and is not yet binding, and which will be subject to Court approval if finalized between counsel, provides that members of the plaintiff class may make claims for certain lost wages against a $950,000 settlement fund, funded by us. Pursuant to the Proposal, our liability to the employees would not exceed the amount of the settlement fund. If the Agreement is approved by the Court, the action will be dismissed with prejudice, after the parties obligations under the Agreement are satisfied. The Proposal was developed from mediation which was concluded in December of 2003. Accordingly, we recorded $950,000 in other expense during the fourth quarter of 2003 to reflect this liability at December 28, 2003.

On February 5, 2004, another former employee of ours, on behalf of herself, and all others similarly situated, filed a class action complaint in Los Angeles County Superior Court, claiming: (1) failure to pay reporting time minimum pay; (2) failure to allow meal breaks; (3) failure to allow rest breaks; (4) reimbursement for fraud and deceit; (5) punitive damages for fraud and deceit; and (6) disgorgement of illicit profits. It is possible that this matter will be consolidated with the class action currently pending in Orange County Superior Court. It is not certain what effect the filing of the new action will have on the approval of the Proposal by the Court.

No matters were submitted to a vote of security holders in the fourth quarter of 2003.

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PART II

On October 8, 1996, our Common Stock and Redeemable Warrants became listed on the NASDAQ Small Cap Market (“NASDAQ”) (Symbols: CHGO and CHGOW) in connection with our Initial Public Offering. All of the Redeemable Warrants were either exercised or expired on April 8, 2002. On July 23, 2002, our Common Stock was approved for a NASDAQ National Market listing. On February 9, 2004, the closing price of our Common Stock was $11.99 per share. The table below shows our high and low common stock sales prices as reported by NASDAQ. The sales prices represent inter-dealer quotations without adjustments for retail mark-ups, mark-downs or commissions.

As of February 9, 2004 we had 121 shareholders of record (not including beneficial owners holding shares in nominee accounts).

DIVIDEND POLICY

We have not paid any dividends since our inception and have currently not allocated any funds for the payment of dividends. Rather, it is our current policy to retain earnings, if any, for expansion of our operations, remodeling of existing restaurants and other general corporate purposes. We have no plans to pay any cash dividends in the foreseeable future. Should we decide to pay dividends in the future, such payments would be at the discretion of the Board of Directors.

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The selected consolidated financial data should be read in conjunction with the Consolidated Financial Statements and related notes thereto as well as with the discussion below.

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The year ended December 28, 2003, includes a $950,000 charge related to our meals & rest period settlement, offset by a $250,000 benefit related to settlement proceeds received in connection with the ASSI Action.

FORWARD LOOKING STATEMENTS

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and notes thereto included elsewhere in this Form 10-K. Except for the historical information contained herein, the discussion in this Form 10-K contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-K should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-K. Our actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, without limitation, those factors discussed herein: (i) our ability to manage growth and conversions, (ii) construction delays, (iii) marketing and other limitations as a result of our historic concentration in Southern California, (iv) restaurant and brewery industry competition, (v) impact of certain brewery business considerations, including without limitation, dependence upon suppliers and related hazards, (vi) consumer trends, (vii) potential uninsured losses and liabilities, (viii) fluctuating commodity costs including food and energy, (ix) trademark and servicemark risks, (x) government regulations, (xi) licensing costs, and (xii) other general economic and regulatory conditions and requirements.

GENERAL

We own and operate 32 restaurants located in California, Oregon, Colorado, Arizona and Texas and receive fees from one licensed restaurant in Lahaina, Maui. Each of our restaurants are operated either as a BJ’s Restaurant & Brewery, a BJ’s Pizza & Grill, a BJ’s Restaurant & Brewhouse or a Pietro’s Pizza restaurant. Our menu features our award-winning, signature deep-dish pizza, our own handcrafted beers as well as a wide selection of appetizers, entrees, pastas, sandwiches, specialty salads and desserts. We have nine BJ’s Restaurant & Brewery restaurants that feature in-house brewing facilities where our handcrafted beers are produced. Our three Pietro’s Pizza restaurants serve primarily Pietro’s thin-crust pizza in a very casual, counter-service environment. All three of the Pietro’s restaurants will be sold effective March 15, 2004.

In calculating our comparable restaurant sales, we include a restaurant in the comparable base once it has been opened for eighteen periods.

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RESULTS OF OPERATIONS

The following table sets forth, for the years indicated, our Consolidated Statements of Income expressed as percentages of total revenues.

FISCAL YEAR 2003 COMPARED TO FISCAL YEAR 2002

Revenues. Total revenues for 2003 increased to $103.0 million from $75.7 million in 2002, an increase of $27.3 million or 36.1%. The increase is primarily the result of:

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Cost of Sales. Cost of food, beverages and paper (cost of sales) for our restaurants increased to $27.3 million in 2003 from $19.2 million in 2002, an increase of $8.1 million or 42.2%. As a percentage of sales, cost of sales increased to 26.5% in 2003 from 25.4% in 2002. This increase is a result of the following: (i) conducting business in new markets where we have a higher cost of sales mix and higher per unit purchase costs and (ii) an increase in selected commodity costs primarily cheese and beef. We continue to work with our vendors to control food costs; however, there can be no assurance that future supplies and costs for commodities used in our restaurants will not fluctuate due to weather and other market conditions.

Labor and Benefits. Labor and benefits costs for our restaurants increased to $36.8 million in 2003 from $28.1 million in 2002, an increase of $8.7 million or 31.0%. As a percentage of sales, labor and benefits costs decreased to 35.8% in 2003 from 37.1% in 2002. This decrease is primarily a result of management directed productivity improvements at the restaurant level and the presence of more restaurants in tip credit states. In tip credit states, which include Texas, Arizona and Colorado, we are permitted to reduce hourly labor costs up to approximately $4.00 per hour.

Occupancy. Occupancy costs increased to $7.9 million in 2003 from $6.0 million in 2002, an increase of $1.9 million or 31.7%. The increase reflects the four additional restaurants we opened in August, September, November and December 2002 and the four additional restaurants we opened in January, May, July and October 2003, partially offset by the closure of our Pietro’s Portland, Oregon restaurant (Lombard Street) in December 2002 and our BJ’s Portland, Oregon restaurant (Stark Street) in June 2003. As a percentage of revenues, occupancy costs decreased to 7.7% in 2003 from 7.9% in 2002. This decrease is primarily due to the fact that four out of the eight restaurants opened over the last year had ground leases with monthly lease payments below our historical rent levels.

Operating Expenses. Operating expenses increased to $11.8 million in 2003 from $8.4 million in 2002, an increase of $3.4 million or 40.5%. As a percentage of sales, operating expenses increased to 11.4% in 2003 from 11.0% in 2002. The increase is primarily due to the following: (i) increased utility costs, (ii) increased repair and maintenance costs related to stores open for a number of years, (iii) increased supply costs related to the implementation of a management driven labor productivity program, and (iv) increased marketing costs related to new markets and the continuing promotion of existing markets. Operating expenses include restaurant-level operating costs, the major components of which include marketing, repairs and maintenance, insurance, supplies, credit cards, and utilities.

General and Administrative Expenses. General and administrative expenses increased to $8.5 million in 2003 from $7.8 million in 2002, an increase of $700,000 or 9.0%. As a percentage of revenues, general and administrative expenses decreased to 8.3% in 2003 from 10.3% in 2002. This decrease is primarily due to a 36.1% increase in sales versus an increase of 9.0% in general and administrative costs as the 2002 expenditures for infrastructure were spread across higher sales volumes.

Depreciation and Amortization. Depreciation and amortization increased to $3.9 million in 2003 from $2.7 million in 2002, an increase of $1.2 million or 44.4%. The increase was primarily due to our acquisition of restaurant equipment, furniture, leasehold improvements and brewery equipment totaling $11.7 million and $12.0 million for the four restaurants opened in 2003 and the four restaurants opened in 2002, respectively, coupled with four restaurants opened over the last year that had ground leases resulting in higher leasehold improvement costs.

Restaurant Opening Expense. Restaurant opening expense decreased to $1.5 million in 2003 from $1.7 million in 2002, a decrease of $200,000. The overall decrease is primarily due to management directed programs to enhance expense control and reduce new employee hiring costs. Additionally, 2003 includes costs of $177,000

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related to our Willowbrook, Texas restaurant that opened in January 2004, but are offset by $112,000 of costs incurred in 2002 related to our Clear Lake, Texas restaurant that opened in January 2003. Our opening costs will fluctuate from period to period, depending upon, but not limited to, the number of restaurant openings, the size and concept of the restaurants being opened and the complexity of the staff hiring and training process.

Restaurant Closing (Recovery) Expense. During 2003, our store closure reserve was reduced by $56,000, of which $31,000 was utilized for property, equipment and lease payments in connection with the closure of our Stark and Lombard restaurants in Oregon. The remaining balance of $25,000 was recorded as a reduction in our store closure expense primarily due to more favorable lease settlements than we anticipated. At December 28, 2003, the balance of our reserve, which included $55,000 in current liabilities and $74,000 in long-term liabilities, was for the lease liability related to our Lombard restaurant and the remaining lease liability related to our McMinnville restaurant that was sold in 2001.

Interest Income (Expense), Net. Interest income (expense), net increased to $376,000 in 2003 from $262,000 in 2002, an increase of $114,000. During 2002, approximately 7.3 million redeemable warrants and approximately 188,000 stock options were exercised, providing approximately $36.3 million in cash proceeds to us, net of approximately $229,000 of related costs. The overall increase in interest income, net is primarily due to a decrease in interest expense related to the payoff of our term loan in April 2002 with an outstanding balance of $3.1 million offset by the decrease in interest income primarily due to (i) less cash to invest after the opening of our four new restaurants over the past year and (ii) decreased interest rates.

Other (Expense) Income, Net. Net other (expense) income decreased to ($228,000) in 2003 from $414,000 in 2002, a decrease of $642,000. The decrease was primarily due to the $950,000 charge related to our meals & rest periods settlement, offset by the $250,000 received in connection with the ASSI Action and increased gaming income at our Pietro’s Pizza locations.

Income Tax Expense. Income tax expense increased to $1.8 million in 2003 from $880,000 in 2002, an increase of $920,000 or 104.5%. The increase was primarily due to increased income before taxes of $2.9 million. Additionally, our effective tax rate decreased from 34.6% in 2002 to 33.9% in 2003 as a result of higher utilization of our FICA credits.

FISCAL YEAR 2002 COMPARED TO FISCAL YEAR 2001

Revenues. Total revenues for 2002 increased to $75.7 million from $64.7 million in 2001, an increase of $11.0 million or 17.0%. The increase is primarily the result of:

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Cost of Sales. Cost of food, beverages and paper (cost of sales) for our restaurants increased to $19.2 million in 2002 from $17.4 million in 2001, an increase of $1.8 million or 10.3%. As a percentage of sales, cost of sales declined to 25.4% from 26.9% in 2001.

The overall improvement in cost of sales percentage was primarily due to more favorable commodity prices related to poultry, seafood and cheese, newly negotiated vendor contracts with more favorable pricing and our menu price increase posted at the beginning of 2002. As noted above, we entered into new vendor contracts to control food costs, however, there can be no assurance that future supplies and costs for commodities used in our restaurants will not fluctuate due to weather and other market conditions.

Labor and Benefits. Labor and benefit costs for our restaurants increased to $28.1 million in 2002 from $23.2 million in 2001, an increase of $4.9 million or 21.1%. As a percentage of revenues, labor and benefit costs increased to 37.1% in 2002 from 35.9% in 2001. This increase was primarily a result of higher workers compensation rates, increased minimum wage rates in California effective January 1, 2002, and increased health insurance rates.

Occupancy. Occupancy costs increased to $6.0 million in 2002 from $5.0 million in 2001, an increase of $1.0 million, or 20.0%. This increase reflects our additional restaurant which opened in the last half of 2001, and our four new restaurants opened in August, September, November and December 2002, partially offset by the sale or closure of our three restaurants in Oregon, the sale of our Hawaii joint venture in 2001 and the closure of our Eugene, Oregon restaurant in February 2002. As a percentage of revenues, occupancy costs were relatively stable, increasing to 7.9% in 2002 from 7.7% in 2001.

Operating Expenses. Operating expenses increased to $8.4 million in 2002 from $6.8 million in 2001, an increase of $1.6 million or 23.5%. As a percentage of sales, operating expenses increased to 11.0% in 2002 from 10.6% in 2001. The increase is primarily due to the following; (i) increased insurance costs, (ii) increased repair and maintenance costs related our stores open for a number of years, and (iii) increased utility costs, especially in California. Operating expenses include restaurant-level operating costs, the major components of which include marketing, repairs and maintenance, supplies and utilities.

General and Administrative Expenses. General and administrative expenses increased to $7.8 million in 2002 from $5.1 million in 2001, an increase of $2.7 million or 52.9%. As a percentage of revenues, general and administrative expenses increased to 10.3% in 2002 from 7.8% in 2001. This increase is directly related to our investment in infrastructure to support our growth including; (i) a one time hiring related cost of approximately $132,000, (ii) an increase in salary and benefits of approximately $1,272,000 associated with the hiring of three new executives, a store opening team and new area directors, (iii) approximately $333,000 in travel expenses related to new markets, (iv) approximately $99,000 in nonrecurring NMS NASDAQ fees, (v) approximately $235,000 in legal fees primarily related to human resource matters and employment agreements, and $130,000 in legal fees related to the ASSI complaint, and (vi) approximately $51,000 of costs associated with the termination of an agreement to acquire a multiple-site real estate package.

Depreciation and Amortization. Depreciation and amortization increased to $2.7 million in 2002 from $2.1 million in 2001, an increase of approximately $600,000 or 28.6%. The increase was due to our acquisition of restaurant equipment, furniture and improvements and brewery equipment totaling $12.0 million and $4.9 million for our four restaurants opened in 2002 and our two restaurants opened in 2001, partially offset by the $147,000 decrease in goodwill amortization expense in 2002 which resulted from the adoption of Statement of Financial Accounting Standards No.142, Goodwill and Other Intangible Assets.

Restaurant Opening Expense. Restaurant opening expense increased to $1.7 million in 2002 from approximately $700,000 in 2001, an increase of $1 million or 142.9%. This increase is primarily the result of the opening of our four restaurants in 2002 in comparison to the opening of our two restaurants in 2001. Also included in 2002, were $112,000 of costs related to our Clear Lake, Texas location opened on January 22, 2003. In addition, these costs will fluctuate from period to period, depending upon, but not limited to, the number of restaurant openings, the size and concept of the restaurants being opened and the complexity of the staff hiring and training process.

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Restaurant Closing (Recovery) Expense. During 2000, we identified four restaurants in Oregon that had historically not been profitable and were not considered essential to our future plans. During 2000, a $1.4 million reserve was established to provide for probable costs associated with closing these restaurants.

During 2001, the store closure reserve was reduced by $1.2 million, of which $393,000 was utilized for property, equipment and goodwill written off in connection with store closures. The remaining balance of $799,000 was recorded as a reduction in store closure expense primarily due to more favorable lease settlements than anticipated. Pursuant to our 2000 plan, we closed and sold our BJ’s Burnside, BJ’s Gresham and McMinnville locations in 2001. We recognized a non-cash gain of $398,000 on the sale of our Burnside and Gresham locations in 2001 due to closure on terms more favorable than projected in 2000. When the store closure reserve was established in 2000, we projected that it was unlikely a subtenant would be located for our McMinnville property. Accordingly, the reserve included a provision for the full amount of lease payments to the end of the lease term. We assigned our McMinnville lease to a subtenant in 2001, but we remain liable for the lease if the subtenant defaults. The subtenant is current with its obligations. Our McMinnville reserve was adjusted down by approximately $90,000 resulting in a gain to reflect the subtenant and a more favorable outcome in the disposition of this property. At the end of 2000, we projected there was low likelihood that a subtenant would be located for our Eugene II property. Accordingly, eighty percent of the lease payments to the end of the lease were provided for in our closed store reserve. In the first quarter of 2001, our landlord at Eugene II decided to demolish the existing structure. We received approximately $40,000 in compensation for our leasehold interest and we were released from future lease obligations in 2002, and our closed store reserve was reduced by $350,000 in 2001 to reflect this favorable outcome on the Eugene II property. The remaining charge of $39,000 is primarily due to a reserve recorded in 2001 for the net book value of assets at one of our other restaurants in Oregon due to unprofitable results of operations.

During 2002, our store closure reserve was reduced by $26,000, of which $18,000 was utilized for property, equipment and lease payments in connection with the closure of our Eugene II property in Oregon. The remaining balance of $8,000 was recorded as a reduction in our store closure expense primarily due to more favorable lease settlements than we anticipated. At December 28, 2002 the balance of our reserve which included $66,000 in current liabilities and $145,000 in long-term liabilities, was for our two Pietro’s restaurants, one that had historically not been profitable and was not considered essential to our future plans, and the other for our remaining lease liability related to a restaurant that we sold in 2001.

Interest Income (Expense), Net. We recognized net interest income of $262,000 in 2002 versus net interest expense of $345,000 in 2001, a change of $607,000, or 175.9%. Interest income increased primarily due to our investment of approximately $36.3 million in proceeds from issuance of common stock, and interest expense decreased primarily due to the payoff of our term loan with an outstanding balance of $3.1 million in April 2002.

Other Income, Net. Net other income increased to $414,000 in 2002 from $168,000 in 2001, an increase of $246,000 or 146.4%. The increase was primarily due to increased lottery earnings at our Pietro’s Pizza locations and license fee income from our interest in our BJ’s Lahaina, Maui, Hawaii location which more than offset the gain on the sale of our BJ’s Lahaina location of $119,000 recorded in 2001.

Income Tax Expense. Income tax expense decreased to $880,000 in 2002 from $1.8 million in 2001, a decrease of $920,000 or 51.1%. The decrease was primarily due to decreased income before taxes of $2.4 million.

LIQUIDITY AND CAPITAL RESOURCES

Our overall operating activities, as detailed in our Consolidated Statements of Cash Flows, provided $8.6 million of net cash from operations during the year ended December 28, 2003, a $2.0 million or 30.3% increase from the $6.6 million generated during the year ended December 29, 2002. The increase in cash from operating activities at December 28, 2003 in comparison to December 29, 2002 was due primarily to an increase in net income and depreciation partially offset by a decrease in accounts payable.

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Total capital expenditures for the acquisition of our restaurant and brewery equipment and leasehold improvements to construct new restaurants were $11.7 million and $12.0 million for the year ended December 28, 2003 and December 29, 2002, respectively. These expenditures were primarily related to the development of our new restaurants in Clear Lake, Texas, Addison, Texas, Cerritos, California, and San Jose, California in 2003 and Westlake Village, Oxnard and Cupertino, California and Lewisville, Texas in 2002. In addition, included in construction in progress at December 28, 2003 is $2.2 million for the Willowbrook, Texas location which opened on January 28, 2004. In 2003, we received two landlord contributions totaling $250,000 to partially offset the cost of tenant improvements at the Clear Lake, Texas and Oxnard, California locations. In 2002, we received a landlord contribution totaling $27,000 to partially offset the cost of tenant improvements at the Irvine, California location.

We have signed leases for, and plan to open, restaurants in Willowbrook, Texas and Summerlin, Nevada in the first half of 2004, and Rancho Cucamonga, California, San Bernardino, California, Fresno, California, Roseville, California and Laguna Hills, California in the second half of 2004. Additionally, we have signed a lease for, and plan to open, a restaurant in Folsom, California in the winter of 2004/2005. Our capital expenditures planned for 2004 total approximately $18.4 million, including $17.2 million for new restaurants to open in 2004 and 2005.

SALE OF PIETRO’S RESTAURANTS

In February 2004, we executed an agreement to sell our three Pietro’s restaurants effective March 15, 2004. The buyers, formerly key employees, purchased the restaurant assets and related trademarks for the Pietro’s brand. The $2.2 million sales price includes cash proceeds of $1.2 million and two notes receivable from the buyers totaling $950,000, with terms of five and ten years. The ten-year note is in the amount of $700,000, bears interest at prime plus one percent with a minimum interest rate of 5% and a maximum interest rate of 7% and requires fixed monthly payments of principal and interest over the ten year term. The five-year note is in the amount of $250,000, bears interest at prime plus one percent and requires fixed monthly payments of principal and interest over the five year term. The sale will yield a gain before taxes of $1.7 million in the first quarter of 2004.

Sales and pre-tax income for our three Pietro’s restaurants were $3.0 million and $590,000, respectively, in 2003. The net book value of the assets sold as of December 28, 2003 was $342,000.

RESTAURANT DEVELOPMENT LOAN AND INTEREST RATE SWAP

Credit Facility

In February 2001, we entered into an agreement with a bank for a collateralized credit facility for a maximum amount of $8 million. There was an initial funding consisting of a term loan of $4 million to replace an existing loan on terms more favorable to us and a revolving portion that allowed for borrowings not to exceed $4 million. The credit facility bore interest at 2.0% per annum in excess of the bank’s LIBOR rate. The rates keyed to LIBOR would be fixed for various lengths of time at our option.

On April 11, 2002, we terminated the credit facility and utilized approximately $3.2 million of the proceeds from the exercise of the warrants to pay off the term loan, including a $95,000 fee to terminate a related interest rate swap agreement on the term loan.

Interest Rate Swap

During 2001, we entered into an interest rate swap agreement with a notional amount equal to the amount outstanding on the term loan ($3.3 million at December 31, 2001) to reduce the impact of changes in interest rates on our debt. The agreement effectively fixed the interest rate on the term loan at 7.5% through February 13, 2006.

We recorded the fair value of the interest rate swap of approximately $114,000 as a liability at December 31, 2001. We recorded a net unrealized loss on the interest rate swap of approximately $114,000 as a charge to other comprehensive income (loss), included in the statement of shareholders’ equity for the year ended December 31, 2001. Upon termination of the interest rate swap agreement, the actual loss was recognized in earnings.

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IMPACT OF INFLATION

The impact of inflation on food, labor, energy and occupancy costs can significantly affect our operations. Many of our employees are paid hourly rates related to Federal and State minimum wage laws. Minimum wages have been increased numerous times and remain subject to future increases.

SEASONALITY AND ADVERSE WEATHER

Our results of operations have historically been impacted by seasonality, which directly impacts tourism at our coastal locations. The summer months (June through August) have traditionally been higher volume periods than other periods of the year.

CRITICAL ACCOUNTING POLICIES

We believe the following areas comprise our critical accounting policies: 1) accounting for property and equipment and 2) accounting for deferred taxes.

Property and equipment accounting requires estimates of the useful lives for the assets for depreciation purposes and selection of depreciation methods. We believe the useful lives reflect the actual economic life of the underlying assets. We have elected to use the straight-line method of depreciation for financial statement purposes. Renewals and betterments that materially extend the useful life of an asset are capitalized while maintenance and repair costs are charged to operations as incurred. Judgment is often required in the decision to distinguish between an asset which qualifies for capitalization versus an expenditure which is for maintenance and repairs.

We review property and equipment (which includes leasehold improvements) and intangible assets with finite lives for impairment when events or circumstances indicate these assets might be impaired. We test impairment using historical cash flows and other relevant facts and circumstances as the primary basis for our estimates of future cash flows. The analysis is performed at the restaurant level for indicators of impairment. This process requires the use of estimates and assumptions, which are subject to a high degree of judgment. If these assumptions change in the future, we may be required to record impairment charges for these assets.

Deferred tax accounting requires that we evaluate net deferred tax assets to determine if these assets will more likely than not be realized in the foreseeable future. This test requires projection of our taxable income into future years to determine if there will be income sufficient to realize the tax assets (future tax deductions and FICA tax credit carryforwards). The preparation of the projections requires considerable judgment and is subject to change to reflect future events and changes in the tax laws. Our net deferred tax asset at December 28, 2003 totaled $1.0 million.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

In July 2002, the FASB issued Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS 146). SFAS 146 provides a model for accounting and reporting for costs associated with exit or disposal activities, whereby such costs are initially recognized and measured at fair value in the period in which they are incurred. Under SFAS 146, in many cases, costs will be recognized as liabilities in periods following a commitment to a plan, not at the date of commitment. SFAS 146 is effective for exit or disposal activities initiated after December 29, 2002. The adoption of SFAS 146 did not impact our consolidated financial position, results of operations or cash flows for the year ended December 28, 2003.

In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure (SFAS 148). SFAS 148 amends FASB Statement No. 123, Accounting for Stock-Based Compensation (SFAS 123), to provide alternative methods of transition to the fair value method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure provisions of SFAS 123 to require disclosure in the summary of significant accounting policies of the effects of an entity’s

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accounting policy with respect to stock-based employee compensation on reported net income. SFAS 148 does not amend SFAS 123 to require companies to account for their employee stock-based awards using the fair value method. However, the disclosure provisions are required for all companies with stock-based employee compensation, regardless of whether they utilize the fair value method or the intrinsic value method of accounting for stock-based compensation. SFAS 148’s amendment of the transition and annual disclosure provisions of SFAS 123 are effective for fiscal years ending after December 15, 2002. We adopted the disclosure provisions of SFAS 148 in fiscal year 2002. This adoption did not impact our consolidated financial position, results of operations or cash flows for the year ended December 28, 2003.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin (ARB) No. 51, Consolidated Financial Statements (Interpretation 46). Interpretation 46 significantly changes previous consolidation guidance pertaining to special purpose entities (“SPEs”). Interpretation 46 clarifies the application of ARB No. 51 to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. These entities are defined as variable interest entities or VIEs. Most SPEs will be evaluated for consolidation under the Interpretation as VIEs. All enterprises with variable interests in VIEs created after January 31, 2003 are required to apply the provisions of the Interpretation immediately. All enterprises with variable interests in VIEs created before February 1, 2003 are required to apply the provisions of the Interpretation during the fiscal quarter ended March 31, 2004. The adoption of Interpretation 46 did not impact our consolidated financial position, results of operations or cash flows for the year ended December 28, 2003.

CONTRACTUAL OBLIGATIONS

The following table summarizes our future estimated cash payments under existing contractual obligations as of December 28, 2003, including estimated cash payments due by period (in thousands).

Our market risk exposures are related to cash and cash equivalents and investments. We invest our excess cash in highly liquid short-term investments with maturities of less than twelve months as of the date of purchase. These investments are not held for trading or other speculative purposes. Changes in interest rates affect the investment income we earn on our investments and, therefore, impact our cash flows and results of operations. During 2003, the average interest rate earned on cash and cash equivalents and investments was approximately 1.5%.

See the Index to Financial Statements attached hereto.

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None

Our management, including our principal executive officers and principal financial officer, conducted an evaluation of our disclosure controls and procedures; as such term is defined under Rule 13(a)-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Based on their evaluation, our principal executive officers and principal financial officer concluded that our disclosure controls and procedures are effective.

PART III

The information required by this Item is incorporated herein by reference to the information contained in the Proxy Statement relating to the Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission no later than 120 days after the close of the year ended December 28, 2003.

The information required by this Item is incorporated herein by reference to the information contained in the Proxy Statement relating to the Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission no later than 120 days after the close of the year ended December 28, 2003.

The information required by this Item is incorporated herein by reference to the information contained in the Proxy Statement relating to the Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission no later than 120 days after the close of the year ended December 28, 2003.

Equity Compensation Plan Information:

The information required by this Item is incorporated herein by reference to the information contained in the Proxy Statement relating to the Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission no later than 120 days after the close of the year ended December 28, 2003.

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The information required by this Item is incorporated herein by reference to the information contained in the Proxy Statement relating to the Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission no later than 120 days after the close of the year ended December 28, 2003.

PART IV

The following documents are contained in Part II, Item 8 of this Annual Report on Form 10-K:

Report of Independent Auditors.

Consolidated Balance Sheets at December 28, 2003 and December 29, 2002.

Consolidated Statements of Income for each of the three fiscal years in the period ended December 28, 2003.

Consolidated Statements of Shareholders’ Equity for each of the three fiscal years in the period ended December 28, 2003.

Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended December 28, 2003.

Notes to the Consolidated Financial Statements.

All schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto.

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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 our behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

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CHICAGO PIZZA & BREWERY, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders

Chicago Pizza & Brewery, Inc.

We have audited the accompanying consolidated balance sheets of Chicago Pizza & Brewery, Inc. as of December 28, 2003 and December 29, 2002, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three fiscal years in the period ended December 28, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chicago Pizza & Brewery, Inc. at December 28, 2003 and December 29, 2002, and the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended December 28, 2003, in conformity with accounting principles generally accepted in the United States.

As discussed in Note 1 to the financial statements, in 2002, the Company changed its method of accounting for goodwill and other intangible assets.

/s/    ERNST & YOUNG LLP

Irvine, California

February 19, 2004

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CHICAGO PIZZA & BREWERY, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)