SecProbe.io

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Pizza Inn
3551  Plano  Parkway
The  Colony,  TX  75056
(469)  384-5000

February  24,  2005

VIA  EDGAR  AND  FACSIMILE  (202.942.9648)

Securities  and  Exchange  Commission
450  Fifth  Street,  N.W.
Washington,  D.C.  20549

     RE:  Form  10-K  for  the  fiscal  year  ended  June  27,  2004
          File  Date:  September  24,  2004
          File  No.  0-12919

          Forms  10-Q  for  the periods ended September 26 and December 26, 2004

Ladies  and  Gentlemen:

     As  requested  by  the  Securities and Exchange Commission, Pizza Inn, Inc.
hereby  furnishes  the  following  responses and supplemental information to the
comment  letter  dated  February 14, 2005 from the Commission to Pizza Inn.  The
following  responses  and supplemental information are keyed to the Commission's
comments,  which  are  set  forth  in  italics  below.

                FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 27, 2004
                -------------------------------------------------

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of  Operations
--------------

Results  of  Operations
-----------------------

Fiscal  2004  Compared  to  Fiscal  2003
----------------------------------------

1.     In future filings please consider including an overview section that adds
context  for  the  remainder  of  the  discussion  by  providing  a  balanced,
executive-level  discussion  that  identifies the most important themes or other
significant  matters  with which management is concerned primarily in evaluating
the  company's  financial condition and operating results.  See Section III.A of
SEC  Release  33-8350.

     Response:
     --------

We  will  include an introductory or overview section in management's discussion
and analysis of financial condition and results of operations in future filings,
as  appropriate,  in  an  effort  to  address  this  comment.

2.     Throughout  this  section,  you  refer  to  two  or  more  factors  that
contributed  to  material  changes  over  the  reported  periods  of the various
components  of  your results of operations. In future filings rather than simply
using  the  term  "primarily"  in describing changes, quantify the amount of the
change that is attributable to the primary source you identify as they relate to
these  components.  In  addition to quantifying the dollar effect of the various
contributing  factors  ensure  that you provide information about the quality of
and  potential variability of your earnings, so that investors can ascertain the
likelihood  that  past  performance  is  indicative  of  future performance. See
Section  III.D  of  SEC  Release  33-6835.

Response:
--------

We will quantify the contribution of factors that cause material year-to-year or
period-to-period changes in line items and provide information about the quality
and potential variability of earnings in management's discussion and analysis of
financial  condition  and results of operations in future filings, as reasonably
practicable and to the extent necessary to an understanding of our businesses as
a  whole,  in  an  effort  to  address  these  comments.

3.     We  note that 34 new franchise units were opened and 39 units were closed
during  fiscal  2004.  Please tell us and disclose in future filings what impact
these  events  had  on  your  operations  as  well  as  the  impact,  if any, on
collectibility  of any outstanding receivables and royalties due to the company.
Additionally,  please  consider including a rollforward within your MD&A to show
beginning  units,  units  closed,  new units and ending units for all applicable
years  to supplement your discussion of results of operations and to enhance the
ability to evaluate trends in franchise operations. This disclosure should cover
each  franchise  format  (e.g., Buffet's, Delco's and Express locations). If you
believe  other  information  is  more  meaningful or appropriate, please advise.

     Response:
     --------

We  will disclose what impact openings and closings had on operations as well as
the  impact,  if  any,  on  collectibility  of  any  outstanding receivables and
royalties  due  to  us  and other more meaningful or appropriate information, if
any,  and  consider  including such a rollforward in management's discussion and
analysis  of financial condition and results of operations in future filings, as
applicable  and  appropriate,  in  an  effort  to  address  these  comments.

We  do not believe that these closings had any material impact on collectibility
of any outstanding receivables and royalties due to us because (i) these amounts
have  previously  been reserved for by us with respect to units that were closed
during  fiscal  2004  and  (ii) these closed units were lower volume units whose
financial  impact  on  our  business as a whole was immaterial.  For those units
that  are anticipated to close or exhibiting signs of financial distress, credit
terms  are  typically restricted, weekly food orders are required to be paid for
on  delivery  and/or  with certified funds, and royalty and advertising fees are
collected,  as  add-ons  to  the  delivered  price  of  weekly  food  orders.

<PAGE>

4.     It  appears that at least 10% of your franchised locations have closed in
each  of  the past two years. Tell us, and revise your MD&A in future filings to
address,  whether  this  level of store turnover is consistent with management's
expectations.  If  the  level  of  store  closures  is  above the level you have
experienced  historically,  please  discuss  the reasons, if known, for the high
level  of  turnover  and  the  potential  impact  on  your  future  prospects.

     Response:
     --------

Please  refer  to  the  table  of  store  count  below.

<TABLE>
<CAPTION>

PIZZA INN'S RESTAURANT PROGRESSION:

FISCAL YEAR ENDING JUNE 27, 2004

                                     Beginning                  Concept  End of
<S>                                  <C>        <C>      <C>     <C>      <C>
                                     of Period  Opened   Closed  Change   Period
                                     ---------  -------  ------  -------  ------
 Buffet . . . . . . . . . . . . . .        221       12      20      (1)     212
 Delco. . . . . . . . . . . . . . .         55        4       8       2       53
 Express. . . . . . . . . . . . . .         75       10      11      (1)      73
 International. . . . . . . . . . .         59        8       -       -       67
                                     ---------  -------  ------  -------  ------
 Total Restaurants. . . . . . . . .        410       34      39       -      405

 FISCAL YEAR ENDING JUNE 29, 2003

                                   Beginning. . . . . . . . . . .Concept  End of
                                    of Period.  Opened   Closed   Change  Period
                                   ----------  -------  -------  ------  -------
 Buffet . . . . . . . . . . . . . .        233        5      19       2      221
 Delco. . . . . . . . . . . . . . .         54        7       6       -       55
 Express. . . . . . . . . . . . . .         82        6      11      (2)      75
 International. . . . . . . . . . .         60        6       7       -       59
                                     ---------  -------  ------  -------  ------
 Total Restaurants. . . . . . . . .        429       24      43       -      410

 FISCAL YEAR ENDING JUNE 30, 2002

                                    Beginning. . . . . . .  . .  Concept   End of
                                    of Period.  Opened   Closed   Change  Period
                                   ----------  -------  -------  ------  -------
 Buffet . . . . . . . . . . . . . .        244       10      29       8      233
 Delco. . . . . . . . . . . . . . .         56       12       6      (8)      54
 Express. . . . . . . . . . . . . .         86        7      11       -       82
 International. . . . . . . . . . .         60        8       8       -       60
                                     ---------  -------  ------  -------  ------
 Total Restaurants. . . . . . . . .        446       37      54       -      429

</TABLE>

The level of store turnover described above was not materially inconsistent with
management's  expectations.  Although  management  believes that a comparison of
historical  closings  may  not  be  predictive  of  future closings or otherwise
meaningful  because  the  factors that contributed to historical closings may no
longer  contribute to future closings, we will include the chart set forth above
in  future  Form  10-K  filings  and will also provide an explanation as to what
caused  any  unusual  activity  in store openings or closings, as applicable and
appropriate,  in  an  effort  to  address  these  comments.

Contractual  Obligations  and  Commitments
------------------------------------------

5.     In  future  filings  please  revise your contractual obligations table to
include  estimated interest payments on your debt. Because the table is aimed at
increasing  transparency  of  cash  flow,  we  believe  these payments should be
included  in  the table. If you choose not to include these payments, a footnote
to  the  table  should  clearly  identify  the  excluded  items  and provide any
additional  information  that  is  material  to  an  understanding  of your cash
requirements. See Section 1V.A and footnote 46 to the Commission's MD&A Guidance
issued  December  19,  2003  available  at  www.sec.gov.
                                            -----------

     Response:
     --------

     We  will  revise  the  contractual  obligations  table in future filings to
include  estimated interest payments or a footnote or footnotes to the table, as
applicable  and  appropriate,  in  an  effort  to  address  these  comments.

Financial  Statements
---------------------

Consolidated  Balance  Sheets
-----------------------------

6.     You disclose in the proxy statement that the company expected the balance
of  the  Clairday  Debt  of  $335,318  to  be paid in full pending completion of
negotiations with Mr. Clairday. Please tell us the status of these negotiations.
In  light  of  the  age  of  the related receivables and the lack of significant
payment/set-off  activity  in  recent  years  we  assume  that  you classify any
unreserved  balance  associated  with  these receivables as a non-current asset.
Please  confirm  that  our  understanding is correct, or tell us why you believe
that  current  classification is appropriate. In this regard we refer you to ARB
43  Chapter  3  (especially  paragraphs  4  and  6).

Response:
--------

     We  are  actively  pursuing payment discussions with Mr. Clairday regarding
repayment  of  his debt, through the company's credit and collection function as
we  do with other past due receivables, and at the board level. Mr. Clairday, as
a  member  of  the  Company's board of directors, is entitled to receive monthly
board fees of $1,417 and board meeting fees of $1,000. We intend to withhold all
such  amounts  and  apply them to reduce the principal balance of Mr. Clairday's
debt.  Assuming  four board meetings annually, we anticipate an annual offset of
$21,000.  Additionally,  Mr.  Clairday is considering the sale of certain of his
real  estate  holdings,  the  proceeds  of  which he has indicated to us will be
applied  to  reduce  the  balance  of  his  debt.

     The  account receivable is classified as a current asset because we believe
collection  will  occur  within  the  next  fiscal  year.

Consolidated  Statement  of  Operations
---------------------------------------

7.     The  company  discloses  that  it  has a wholly-owned insurance operation
(PIBCO  Ltd).  Tell us, with a view towards future disclosure, whether this is a
captive  insurance  operation  for  the  purpose  of  managing  the  company's
self-insured  risk  exposures  and  tax  planning  or  an  operating  insurance
enterprise  that  serves  third-party  customers.  To the extent that PIBCO Ltd.
serves  third  party  customers,  tell  us:

-     the  nature  of  the  insurance  operations (e.g., types of risks insured,
duration  of  policies,  nature  of  customers,  etc.);
-     gross  dollar amount of coverage outstanding for policies in force and, to
the  extent  applicable,  the  extent  to which risk associated with policies in
force  bus  been  assumed  by  reinsurance  arrangements;
-     the  amount of premium revenues and associated expenses reflected for each
period  presented;
-     where revenues and related costs of insurance operations are classified on
the  consolidated  statement  of  operations;  and
-     where  insurance  related obligations are classified on the balance sheet.

Response:
--------

PIBCO,  Ltd.,  a  wholly  owned  insurance subsidiary of Pizza Inn, is a captive
insurance  operation  that  was  originally  and  primarily  intended to provide
general business insurance to our franchisees.  PIBCO does not serve parties not
affiliated  with Pizza Inn.  PIBCO has effectively ceased operations, except for
operations  concerning  the servicing of three (3) claims pending as a result of
incidents  occurring  on restaurant premises operated by franchisees. Currently,
the total claim service is approximately $3,500 per month. We intend to dissolve
or  otherwise  dispose of PIBCO after these remaining claims have been resolved.

Note  A-  Organization  and  Summary  of  Significant  Accounting  Policies
---------------------------------------------------------------------------

Revenue  Recognition
--------------------

8.     Please confirm for us supplementally and revise your future disclosure to
specify,  if  true,  that  title  and  risk  of  loss  transfer upon shipment in
accordance  with  the terms of your agreements with your franchisees, or tell us
why  recognition  of  revenue  upon  shipment  is  appropriate.  Clarify whether
equipment  sales require installation or testing prior to franchisee acceptance.
Refer  to  SAB  104  for  guidance.

     Response:
     --------

     Title and risk of loss for products we sell transfer upon delivery. Revenue
has  been  historically recognized upon shipment, which approximates the results
of  recognition  upon  delivery  to within an insignificant degree.  This occurs
because  the  product  shipment  and  delivery cycle (the length of time between
loading  an  order  on  our  trucks and receipt by the franchisee) is relatively
short  and  consistent  between reporting periods.  To validate and quantify the
immaterial difference between recognition on shipment and delivery at the end of
each  reporting period, we analyze merchandise in transit to evaluate the amount
of  revenue  that  should not be recognized at the end of the quarter then ended
and  compare  it to the similar amount from the previous quarter. The difference
is  consistently  below $15,000. Since these differences offset at the beginning
and  ending  of  each  quarter,  there  is  no  cumulative  effect  on  revenue
recognition.  The  results historically show that the difference between revenue
recognition  at  time  of  shipment  and  delivery  to  be  immaterial.

     Equipment  we  sell  does  require  installation  prior  to  acceptance.
Recognition  of  revenue  occurs  upon  installation  of  such  equipment.

However,  consistent  with  the  requirements  of SAB 104, we will revise future
disclosure, as appropriate, to specify that title and risk of loss transfer upon
delivery  of  product or installation of equipment or discuss why recognition of
revenue upon shipment is appropriate and clarify whether equipment sales require
installation  or  testing  prior  to  franchisee  accepta