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   Filed by Automated Filing Services Inc. (604) 609-0244 - Elephant & Castle Group Inc. - SEC Response Letter

Elephant & Castle Group Inc.

  1190 Hornby Street

  Vancouver, B.C. Canada V6Z 2K5

September 23, 2005

Ms. Linda Cvrkel
Branch Chief
United States Securities
and Exchange Commission
Division of Corporate Finance
Washington, DC
20549-0510

    Re:

    Elephant & Castle Group Inc. (the
      “Company”)
File No. 001-12134
Amendment No. 1 to Form 10-K for the
      year ended December 26, 2004 (the “Form 10-K”)
Form 10-Q for the
      Quarterly Period Ended March 27, 2005 (the “first quarter Form 10-Q”).

Form 10-Q for the Quarterly Period Ended June 26, 2005 (the “second
      quarter
Form 10-Q”, together with the Form 10-K and first quarter From
      10-Q, the “Filings”).

Dear Ms. Cvrkel:

          We
are responding to your letter dated August 24, 2005, relating to the
above-referenced filings. The comments contained in that letter and our
responses are set forth below.

FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 26,
2004

ITEM 6. SELECTED FINANCIAL DATA

SEC COMMENT:

    1.
    Based on our review of the proposed disclosures provided
        in your response to our prior comment number 2, we note that various US
        GAAP amounts presented in these proposed disclosures do not agree to the
        proposed disclosures provided in response to our prior comment numbers
        20, 21 and 22. Please ensure that all of the revised US GAAP information
        reflected in your Selected Financial Data is in agreement with the revised
        disclosures provided in Note 16 to your financial statements.

ELEPHANT & CASTLE’S RESPONSE:

The following disclosures have been corrected and are now
consistent with the proposed amendment to Note 16 to the financial statements.
The Company intends to further amend its Form 10-K to include the following
disclosures:

Five-Year Selected Data - United States GAAP

    2004

    2003

    2002

    2001

    2000

    Sales
    27,615

    26,270

    27,716

    30,235

    33,723

    Income (loss) from restaurant operations
    2,744

    2,677

    2,669

    2,967

    1,489

    Per share
    0.52

    0.52

    0.52

    0.76

    0.57

    Diluted per share
    0.35

    0.32

    0.33

    0.48

    0.35

    Earnings (loss) before income
      taxes
    23

    (1,229
    )
    (1,868
    )
    (30
    )
    (8,263
    )

    Per share
    0.00

    (0.24
    )
    (0.36
    )
    (0.01
    )
    (3.16
    )

    Diluted per share
    0.00

       n/a

       n/a

       n/a

       n/a

    Net income (loss)
    (155
    )
    (1,162
    )
    (1,672
    )
    (353
    )
    (7,885
    )

    Per share
    (0.03
    )
    (0.23
    )
    (0.32
    )
    (0.09
    )
    (3.01
    )

    Diluted per share
           n/a

    n/a

           n/a

           n/a

           n/a

    Total assets
    12,876

    10,046

    9,886

    12,025

    12,274

    Shareholders' equity (deficit)
    (3,020
    )
    (4,176
    )
    (3,348
    )
    (1,540
    )
    (2,281
    )

    Long term debt
    13,386

    10,677

    9,628

    9,955

    10,259

    Weighted average shares
    5,244,507

    5,163,271

    5,163,354

    3,890,000

    2,619,000

    Diluted weighted average shares

    7,802,309

    8,268,578

    8,085,848

    6,164,000

    4,251,021

Selected financial data - reconciliation from CDN GAAP to US
GAAP

    2004

    2003

    2002

    2001

    2000

    Sales (CDN GAAP)
    28,202

    26,725

    27,716

    30,235

    33,723

    Less proportional share of San Fran JV
    (587
    )
    (455
    )
    0

    0

    0

    Sales (US GAAP)
    27,615

    26,270

    27,716

    30,235

    33,723

    Income (loss) from restaurant operations (CDN
      GAAP)
    2,918

    2,740

    2,640

    3,041

    1,417

    Amortization of improvement
      costs
    6

    (2
    )
    (6
    )
    (39
    )
    (41
    )

    Pre-opening costs expensed under US GAAP
    45

    (45
    )
    35

    (36
    )
    112

    Less proportional share of
      San Fran JV
    (26
    )
    (16
    )
    0

    0

    0

    Less asset impairment charge
    (199
    )
    0

    0

    0

    0

    Income (loss) from restaurant operations
      (US GAAP)
    2,744

    2,677

    2,669

    2,967

    1,489

    Earnings (loss) before income taxes (CDN
      GAAP)
    (710
    )
    173

    (1,514
    )
    192

    (8,335
    )

    Amortization of improvement
      costs
    6

    (2
    )
    (6
    )
    (39
    )
    (41
    )

    Pre-opening costs expensed under US GAAP
    45

    (45
    )
    35

    (36
    )
    112

    Dividend on paid-in capital,
      interest under US GAAP
    (333
    )
    (347
    )
    (330
    )
    (156
    )
    0

    Gain on exchange of junior notes,
    201

    0

    0

    0

    0

    contributedd surplus under
      CDN GAAP

    Gain/loss on translation of convertible
      notes,
    814

    (1,008
    )
    (53
    )
    9

    0

    using period end rate for US
      GAAP

    Earnings (loss) before
      income taxes (US GAAP)
    23

    (1,229
    )
    (1,868
    )
    (30
    )
    (8,263
    )

    Net income (loss) (CDN GAAP)

    (888
    )
    228

    (1,344
    )
    192

    (7,956
    )

    Amortization of improvement costs
    6

    (2
    )
    (6
    )
    (39
    )
    (41
    )

    Pre-opening costs expensed
      under US GAAP
    45

    (45
    )
    35

    (36
    )
    112

    Dividend on paid-in capital, interest under
      US GAAP
    (333
    )
    (335
    )
    (304
    )
    (479
    )
    0

    Gain on exchange of junior
      notes,
    201

    0

    0

    0

    0

    contributedd surplus under CDN GAAP

    Gain/loss on translation of
      convertible notes,
    814

    (1,008
    )
    (53
    )
    9

    0

    using period end rate for US GAAP

    Net income (loss) (US GAAP)
    (155
    )
    (1,162
    )
    (1,672
    )
    (353
    )
    (7,885
    )

Selected financial data - reconciliation from CDN GAAP to US
GAAP

    2004

    2003

    2002

    2001

    2000

    Total assets (CDN GAAP)
    15,164

    10,677

    10,656

    13,043

    12,974

    Adjust for proportional share of assets in JV

    (34
    )
    (40
    )
    0

    0

    0

    Deferred financing costs
    (1,876
    )
    (162
    )
    (387
    )
    (606
    )
    (363
    )

    Amortization of improvement costs
    (378
    )
    (384
    )
    (382
    )
    (376
    )
    (337
    )

    Pre-opening costs expensed
      under US GAAP
    0

    (45
    )
    (1
    )
    (36
    )
    0

    Total assets (US GAAP)

    12,876

    10,046

    9,886

    12,025

    12,274

    Shareholders' equity
      (deficit) (CDN GAAP)
    (2,642
    )
    2,470

    1,908

    3,421

    (1,945
    )

    Convertible notes, debt under US GAAP
    0

    (5,541
    )
    (5,205
    )
    (4,933
    )
    0

    Amortization of improvement
      costs
    (378
    )
    (384
    )
    (382
    )
    (376
    )
    (337
    )

    Pre-opening costs expensed under US GAAP
    0

    (45
    )
    (1
    )
    (36
    )
    0

    Gain/loss on translation of
      convertible notes,
    0

    (676
    )
    331

    384

    0

    using period end rate for US GAAP

    Shareholders' equity
      (deficit) (US GAAP)
    (3,020
    )
    (4,176
    )
    (3,348
    )
    (1,540
    )
    (2,281
    )

    Long term debt (CDN GAAP)
    15,262

    4,622

    5,142

    6,012

    10,622

    Convertible notes, debt under US GAAP
    0

    6,217

    4,873

    4,549

    0

    Deferred financing costs
    (1,876
    )
    (162
    )
    (387
    )
    (606
    )
    (363
    )

    Long term debt (US
      GAAP)
    13,386

    10,677

    9,628

    9,955

    10,259

ITEM 8. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF OPERATIONS, PAGE 4

SEC COMMENT:

    2.
    We note your response to our prior comment 7, but
        do not believe that you fully responded to our prior comment. As previously
        requested, please provide us with your proposed disclosures to present
        separately revenues and costs related to franchisor-owned restaurants
        from revenues and costs related to franchised restaurants, or disclose
        why it is not practicable to do so. The above presentation should separately
        disclose within cost related to franchise restaurants, cost associated
        with administering and supporting the franchise operations, which based
        on your response to our prior comment 7 is included within General and
        Administrative expenses. If you are note able to determine the cost specifically
        related to franchised restaurants, please state this in your response
        and in your future disclosure. Also if there were significant changes
        in franchisor-owned outlets or franchised outlets during the year, please
        disclose the number of (a) franchises sold, (b) franchises purchased during
        the year, (c) franchised outlets in operation, and (d) franchisor-owned
        outlets in operation. Additionally, we note from your response to our
        prior comment 7 that the Company has cost obligations related to earning
        the initial franchise fee revenue, which is not recognized until these
        obligations are fulfilled. Please tell us and revise to disclose the services
        you have agreed to provide in connection with earning franchise fees.
        Refer to the requirements of paragraph 20 of SFAS No. 45.

ELEPHANT & CASTLE’S RESPONSE:

The Company provides operational support and advice to its
franchise partners on an ongoing basis. This support is provided by the same
operational management teams that supports the Company’s corporately owned
restaurants, and as such cannot be separately identified and reported. These
costs are included within the Company’s General and Administrative expenses, as
are the costs associated with marketing and selling new franchises. The Company
intends to further amend its Form 10-K to include the following disclosure:

Notes to Consolidated Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (a)
    Franchise fees

    The Company recognizes initial fees from the sale
        of franchises as revenue once the Company has fully complied with its
        obligations to the new franchisee in providing operational support and
        training regarding the opening of the restaurant. Continuing franchise
        royalties are shown as a separate line item within sales as they are earned.
        The Company has no obligated costs in connection with continuing franchise
        royalties, but provides on-going operational support and advice to franchisees.
        This support is provided by the same operational management teams that
        supports the Company’s corporately owned restaurants, and as such
        cannot be separately identified and reported. These costs are included
        within the Company’s General and Administrative expenses, as are
        the costs associated with marketing and selling new franchises.

    The following table summarizes the number of franchised
        restaurants currently in operation:

    2004
    2003
    2002

    Franchised restaurants
      operating at start of year
    8
    9

           8

    New franchised restaurants
      opened
    0
    1

           1

    Franchised restaurants closed
    (1)
    (2)

       0

    Franchised restaurants operating at end of
      year
    7
    8

       9

Note 6. Financing Structure, page 12

SEC COMMENT:

    3.
    We note your response to our prior comment number
        13. Please revise the notes to your financial statements to explain the
        accounting treatment that has or will be used for the acquisition of 699,534
        common shares and 487,196 preferred shares in exchange for $215,000 and
        for the warrant to acquire an additional 5% of the Company’s common
        and preferred shares in exchange for $108,000. Your revised disclosure
        should include a discussion of the rationale for treatment the amounts
        as deferred financing costs in your financial statements.

ELEPHANT & CASTLE’S RESPONSE:

The Company intends to further amend its Form 10-K to include
the following disclosure:

Notes to Consolidated Financial Statements

Note 8(b)(vi) Accounting treatment

(a)      Preferred shares

Holders of Preferred Shares, Series…

 (b)      Transactions with
Management

During the year ended December 26, 2004, the Company entered
into an agreement with three senior managers (note 6(c)) whereby in order for
the lenders to renegotiate the existing debt, the lenders required management to
commit to the purchase of 699,354 common and 487,196 preferred shares for total
proceeds to the Company CDN$265 (US$215). The price was agreed by way of arms
length negotiation, and was deemed to represent fair market value for the shares
acquired. As the commitment is directly related to the renegotiation of the
debt, any difference between the agreed upon purchase price and the share price
as at that date or redemption price per share will be accounted for as debt
issue costs.

The common shares have a negotiated purchase price of US$0.10
per share representing fair value at the date of issuance. Any difference
between the share price as at that date and the purchase price of US $0.10 per
share will be recorded in the balance sheet as a deferred financing fee to be
amortized over the remaining life of the GEIPPPII debt.

The Preferred shares have a negotiated price of US$0.30 per
share and a redemption value of CDN $2.00 (US$ 1.63) per share. As described in
note 8 (b)(vi)(a) the preferred shares are treated as a liability, and
accordingly, will be recorded as a liability in the books of the Company at the
time of issuance. The difference between the negotiated

price of US$0.30 per share and the redemption price will be
recorded in the balance sheet as a deferred financing cost and amortized over
the remaining life of the related debt.

Warrants issued to management are exercisable in five years
from the date of issue, exercisable for a 60 day period provided all the new
notes and Crown debt are fully repaid. Past experience indicates the likelihood
such warrants will be exercised is not high. Accordingly, no value has been
assigned to these warrants.

Note 16. Difference Between Canadian and United States
Generally Accepted Accounting Principle (Canadian GAAP and
US GAAP) (b)Reconciliation of total assets, liabilities and shareholders’ equity
(deficit), page 29 (c)Reconciliation of earnings (loss) reported in accordance
with Canadian GAAP and US GAAP, page 30

SEC COMMENT:

    4.
    We note your response to prior comment 20. Please
        explain in your disclosures why the amounts in the line item entitled
        “convertible notes, debt under US GAAP”, do not agree to the
        amounts reflected in the line item “convertible notes, debt under
        US GAAP” included in the reconciliation of long-term debt under Canadian
        GAAP to that under US GAAP. Please revise as appropriate to explain the
        factors responsible for the difference.

ELEPHANT & CASTLE’S RESPONSE:

Further to the response provided for SEC comment 5 following
the first table relating to the accounting for the change in functional
currency, under Canadian GAAP, the Convertible Junior notes were considered an
equity instrument and as such recorded in the equity section of the balance
sheet translated at a historical rate of US$1.00 = Cdn$1.45. Under US GAAP,
these notes are considered a liability instrument and since the functional
currency at that time was the Canadian dollar, this liability had to be
translated at each balance sheet date at the period end rate of exchange. As a
result, t