SecProbe.io

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

								March 23, 2005
Mail Stop 0305

Via U.S. Mail and Facsimile

Richard Dutkiewicz
Chief Financial Officer
New World Restaurant Group, Inc.
1687 Coles Blvd.
Golden, Colorado 80401

RE:	New World Restaurant Group, Inc. (the "Company")
	Form 10-K for the fiscal year ended December 28, 2004
	File No. 0-27148

Dear Mr. Dutkiewicz:

Based upon an examination restricted solely to considerations of
the
Financial Statements, Management`s Discussion and Analysis, and
Selected Financial Data, the staff has the following comments on
the
above-referenced documents.  We think you should revise all future
filings in response to these comments.  If you disagree, we will
consider your explanation as to why our comments are inapplicable
or
a revision is unnecessary.  Please be as detailed as necessary in
your response.  In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

Please understand that the purpose of our review process is to
assist
you in your compliance with the applicable disclosure requirements
and to enhance the overall disclosure in your filing.  We look
forward to working with you in these respects.  We welcome any
questions you may have about our comments or on any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Please respond to confirm that such comments will be complied
with,
or, if certain of the comments are deemed inappropriate by the
Company, advise the staff of the reason thereof.

Pursuant to Rule 101(a)(3) of Regulation S-T, your response should
be
submitted in electronic form, under the label "corresp" with a
copy
to the staff.  Please respond within ten (10) business days.

Form 10-K for the fiscal year ended December 28, 2004

Item 7 - Management`s Discussion and Analysis

Results of Operations for Fiscal Years 2004, 2003 and 2002
- Gross Profit, page 22

1. Please revise future filings to describe the significant
components of costs of sales.  Specifically, tell us and describe
the
types of costs that comprise retail or manufacturing costs (e.g.
rent, employee salaries, etc.) as presented on the face of your
consolidated income statement.  Also, we note that you state in
the
second sentence of the first paragraph of your gross profit
discussion that store-level operating expenses other than
depreciation, amortization and taxes impact your retail margins.
Please tell us and disclose how "store-level operating expenses"
differ from or compare to retail and manufacturing costs of sales
as
it unclear from your current disclosures.

Contractual Obligations, page 26

2. We note that in connection with your sale of Willoughby`s
Coffee
and Tea you executed a two-year supply agreement to purchase
coffee
from the buyer; however, it does not appear that the purchase
obligations under this agreement have been included in your table.
Please clarify for us and revise the table in future filings as
necessary.

Non-GAAP Measures, page 26

3. Reference is made to your presentation of EBITDA.   From your
disclosure, you define this non-GAAP measure as earnings before:
(1)
interest, (2) taxes, (3) depreciation and amortization, (4)
integration and reorganization charges, (5) cumulative change in
fair
value of derivatives, (6) gain/loss on the investment, sale,
disposal
or exchange of assets, (7) impairment and other related charges
and
(8) other income, which you used as a basis to measure financial
performance and liquidity. Please note this is not appropriate, as
you should only adjust net loss by interest, taxes and
depreciation
and amortization in reconciling to EBITDA.  Please revise your
presentation and disclosure of the non-GAAP measure EBITDA to
comply
with Item 10(e) of Regulation S-K and Section I of FR-65 which
describes EBITDA as "earnings before interest, taxes, depreciation
and amortization."  Please also similarly revise your reference to
EBITDA in the business section of your filing (page 3).

4. Also, to the extent that these items from your calculation of
EBITDA are considered non-recurring, Item 10(e) of Regulation S-K
prohibits adjusting for items which are reasonably likely to recur
within two years or a similar charge or gain was recognized within
the prior two years.  While there is no prohibition against
removing
recurring items, registrants` must demonstrate the usefulness of
any
measure that excludes recurring items, especially if the non-GAAP
financial measure is used to evaluate operating performance.  In
this
regard, for each item that is excluded, registrants` are required
to
disclose:

* the manner in which management uses the non-GAAP measure to
conduct
or evaluate its business;

* the economic substance behind management`s decision to use such
a
measure;

* the material limitations associated with use of the non-GAAP
financial measure as compared to the use of the most directly
comparable GAAP financial measure;

* the manner in which management compensates for these limitations
when using the non-GAAP financial measure; and

* the substantive reasons why management believes the non-GAAP
financial measure provides useful information to investors.

Refer to the guidance in FR-65 and "Frequently Asked Questions
Regarding the Use of Non-GAAP Financial Measures" maintained on
the
Commissions` website at www.sec.gov.

Consolidated Statements of Operations, page 38

5. We note that you have classified the "loss (gain) on sale,
disposal or abandonment of assets, net" under other expense
(income)
on the face of your consolidated income statement.  Pursuant to
footnote 68 of Staff Accounting Bulletin No. 104 (Topic 13) and
paragraph 25 and 45 of SFAS No. 144, gain (loss) on sale of assets
should be reported in operating income (loss).  In this regard,
please revise your presentation to include the gain (loss) on
sale,
disposal or abandonment of assets, net within operating expenses.
Similarly revise your presentation of the selected financial data
on
page 16.

Consolidated Statements of Cash Flows, page 40

6. We note that you present activity associated with proceeds
(repayments) of your line credit on a "net" rather than gross
basis
in your consolidated statements of cash flows.  Please tell us why
you believe it is appropriate to reflect the activity associated
with
your line of credit on a net basis in your consolidated statements
of
cash flows pursuant to paragraphs 11 through 13 of SFAS No. 95.
Alternatively, you may revise future filings accordingly.

Note 2 - Summary of Significant Accounting Policies

- Goodwill, Trademarks and Other Intangibles, page 45

7. We note the disclosure in Note 2 indicating that the Company
completed a longevity analysis of certain brands and determined
that
certain trademarks had an estimated remaining useful life of 4
years.
We also note that these trademarks were previously treated as a
non-
amortizing intangible and accordingly, were reclassified as an
amortizing intangible at June 29, 2004. Please tell us when these
trademarks were initially acquired and why the Company previously
concluded that these trademarks should be treated as an indefinite
lived intangible at the time they were acquired. Also, tell us the
nature and specific timing of the events or circumstances that
resulted in the Company`s determination that the remaining useful
life of these trademarks was much more limited than the Company
had
previously assumed and explain how the Company estimated or
determined the revised useful life for these assets of four years.
In
addition, please explain in detail how the Company determined that
these trademarks were not impaired at December 31, 2004, given
their
significantly reduced useful life. Your response should explain
the
methods and significant assumptions used to determine that the
assets
were not impaired. We may have further comment upon receipt of
your
response.

- Guarantees, page 45

8. We note the disclosure in Note 2 indicating that you are liable
for certain lease assignments and guarantees and record a
liability
for your exposure under the lease assignments and guarantees when
such exposure is "probable and estimable". Please clarify how your
accounting treatment with respect to such guarantee arrangements
complies with the requirements of FIN 45. As outlined in paragraph
9
of FIN 45, the provisions of paragraphs 8 through 12 of SFAS No.5
regarding the guarantors contingent obligation under a guarantee,
should not be interpreted as prohibiting the guarantor from
initially
recognizing a liability for that guarantee even though it is not
probable that payments will be required under the guarantee.
Please
explain in further detail why you believe your current treatment
with
respect to your guarantees is appropriate given that you do not
record a liability for such arrangements until payment is
considered
probable.

- Net Loss per Common Share, page 47

9. Please tell us and explain in the notes to your financial
statements why you believe it is appropriate to reflect "shares
contingently issuable" in the weighted average shares used to
compute
your basic and diluted net loss per share for the fiscal years
ended
December 30, 2003 and December 31, 2002. As part of your response,
please explain why you believe inclusion of these shares in your
weighted average shares outstanding is in accordance with the
guidance outlined in paragraph 10 of SFAS No.128.

Note 4 - Franchise and Other Receivables, page 50

10. Please supplementally describe and disclose in detail the
nature
of vendor rebates and how they are accounted for within your
consolidated financial statements.  Specifically tell us where you
record vendor rebates in your income statement and provide us with
the relevant guidance that supports your accounting treatment.

Note 10 - Senior Notes and Other Long-Term Debt

11. We note the disclosure on page 13 in Item 5 that you are
precluded from paying dividends on your common stock under the
terms
of your financing arrangements. Please revise the notes to your
financial statements in future filings to disclose the nature and
terms of the dividend restrictions imposed under the terms of your
financing arrangements. Refer to the requirements of Rule 4-08(e)
of
Regulation S-X.

Note 13 - Fiscal 2003 Debt Refinancing and Equity
Recapitalization,
page 57

12. Your current disclosures regarding the terms of the equity
recapitalization transaction that occurred during 2003 are overly
vague. Please tell us and revise the notes to the Company`s
consolidated financial statements to disclose in further detail
the
significant terms of the "equity recapitalization" transaction. As
part of your response and your revised disclosure, please indicate
the parties involved in this recapitalization transaction, the
nature
and terms of the interests in the Company that they held prior to
the
recapitalization transaction and the nature and terms of the
interests that they received as a result of the transaction. Also,
tell us and explain in the notes to your financial statements in
further how you determined the fair value of any consideration
issued
by the Company as a result of this transaction and any resultant
loss
recognized in connection with this transaction. Your response and
your revised disclosures should also explain the terms of any
warrants issued or redeemed in connection with the equity
recapitalization and should explain in detail how they were valued
and accounted for in connection with the transaction.

Note 16 - Stock Option and Warrant Plans
- Warrants, page 61

13. Your current disclosures regarding your stock warrants do not
comply with the requirements of Rule 4-08(i) of Regulation S-X.
Please revise to disclose the exercise prices associated with your
outstanding warrants. Also, please tell us in detail and explain
in
the notes to your financial statements how you valued and
accounted
for the warrants issued during fiscal 2003 and fiscal 2002.
Additionally, explain in further detail the nature and significant
terms of the transaction associated with the 227,747 warrants
"converted" during 2003. Your response and your revised disclosure
should explain what consideration these warrants were converted
into
since it does not appear the warrants were exercised.

Note 23 - Related Party Transactions, page 66

14. In future filings, please disclose in the notes to your
financial
statements that Greenlight Capital L.L.C. and its affiliates
beneficially own approximately 97% of your common stock and
therefore
have control over the Company`s operations. Refer to the
requirements
of paragraph 2 of SFAS No.57.

Note 25 - Litigation
- Employment Related, page 68

15. Please tell us and disclose in future filings whether the
resolution of the litigation with former employee, Tristan
Goldstein
and current employee, Valerie Bankhordar had or is expect to have
a
material effect on your consolidated financial statements.  Also,
to
the extent the loss or possible range of losses exceeds the amount
accrued and, is material; you should disclose the respective
amount(s) within the notes to the consolidated financial
statements
and elsewhere within the document as appropriate.  Also, tell us
and
disclose the amount accrued in your fiscal 2003 financial
statements
representing the estimate to settle the litigation, and under
which
caption the expenses related to legal settlements, if any, have
been
included within your statements of operations.  Refer to paragraph
9
of SFAS No. 5.

Other

We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filing reviewed by the staff to be
certain
that they have provided all information investors require for an
informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our comments on your filing.

* * * * *

You may contact Jean Yu at (202) 824-5421 or Linda Cvrkel, Branch
Chief, at (202) 942-1936 if you have questions regarding comments
on
the financial statements and related matters.

								Sincerely,

								Linda Cvrkel
								Branch Chief
??

??

??

??

Richard Dutkiewicz
New World Restaurant Group, Inc.
March 23, 2005
Page 1

</TEXT>
</DOCUMENT>