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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.