April 28, 2005
Mail Stop 0305

Via U.S. Mail and Facsimile

Stephen C. Travis
Director of Finance
EACO Corporation
2113 Florida Boulevard
Neptune Beach, Florida 32266

RE:	EACO Corporation (the "Company")
	Form 10-K for the fiscal year ended December 29, 2004
	File No. 0-14311

Dear Mr. Travis:

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.



Annual Report for the fiscal year ended December 29, 2004

Management`s Discussion and Analysis
- - Results of Operations
- - 2004 Compared to 2003, page 7

1. Please explain to us and revise your significant accounting
policies in future filings to disclose in detail how you account
for
purchases of marketable securities using margin debt within your
consolidated financial statements.  Your response should include
the
balance sheet and income statement accounts that are affected and
the
journal entries used to record these types of transactions.  Also,
tell us the specific accounting guidance, if any, which supports
your
treatment and why you believe it is appropriate.  Describe the
circumstances under which you use debt margin and the specific
risks
and returns that you evaluate prior to entering into a debt margin
transaction.  We may have further comment upon receipt of your
response.

Financial Statements

Consolidated Statements of Operations, page 16

2. We note that you present undeclared cumulative preferred stock
dividends of $19,100 for the fiscal year ended December 29, 2004
on
the face of your consolidated statement of operations.  Please
explain the reason(s) why there are amounts reflected as
"preferred
stock dividends paid" of $6,500 in your consolidated financial
statements (refer to your consolidated statements of cash flows on
page 19), when it does not appear that preferred stock dividends
have
been declared as of December 29, 2004.  Provide us with a
reconciliation of the amounts.  Similarly revise your notes in
future
filings to include an explanation of the differences between the
amounts in your statements of operations and consolidated
statements
of shareholders` equity and cash flows.

Consolidated Statements of Cash Flows, page 19

3. We note that you reflect "loss on disposition of assets held
for
sale and other property" within operating activities of your
statements of cash flows in the amount of $29,000 for the fiscal
year
ended December 29, 2004.  However, we also note that you disclose
in
your MD&A section on page 12 that you recognized a net gain on the
sale of property related to the four restaurants sold in the
amount
of $62,700.  Please reconcile and explain to us why these amounts
do
not agree.  Also, revise future filings to similarly disclose this
information.

4. We note that you present "principal receipts on mortgages
receivable" within investing activities in your statements of cash
flows.  However, we note little, if any, information describing
these
amounts in your financial statements or elsewhere in the filing.
In
this regard, please tell us and revise your footnotes in future
filings to explain in detail the nature and terms of mortgages
receivable transactions.  Your response should also include, but
not
be limited to, how mortgages receivables are accounted for within
your consolidated financial statements and the parties that are
involved in these types of transactions.  Also, to the extent you
enter into such transactions in the future and if considered
material, we believe you should provide related discussion and
analysis in the liquidity and capital resource section of your
MD&A.
We may have further comment upon receipt of your response.

5. We note that you present "Expenses from sale of property held
for
sale" as a cash outflow item of $153,000 within investing
activities
as of December 29, 2004.  However, it is unclear from your notes
to
financial statements or disclosures within the liquidity and
capital
resource section of your MD&A, the nature of these amounts and why
they are classified as an investing activity.  In this regard,
please
explain in detail the nature, facts and circumstances of this item
and why you believe classifying these expenses as an investing
activity pursuant to paragraph 15 and 17 of SFAS 95 is
appropriate.
We may have further comment upon receipt of your response.

Summary of Significant Accounting Policies
- - Securities Sold, Note Yet Purchased, page 21

6. Please tell us and revise your notes to explain in further
detail
how you account for short-selling transactions within your
financial
statements.  Explain how you evaluate the risks and rewards in
determining when to enter into a short-selling arrangement and
your
policy for assessing when to satisfy your obligation to purchase
securities on those borrowed in such short-selling transactions.
We
may have further comment upon receipt of your response.

Note 4 - Asset Impairment Charges, page 25

7. Please revise future filings to include all disclosures as
required under paragraphs 26 and 47 of SFAS No. 144 as applicable.
Your revised disclosure should include a description of the
impaired
long-lived asset (asset group) and the facts and circumstances
leading to the impairment, and the method or methods for
determining
the fair value.  Please provide us with your proposed revised
disclosure.


Note 9 - Income Taxes, page 29

8. Please tell us and revise future filings to explain in further
detail the nature of the $409,200 amount described as "adjusted
book
to tax accrual" in the reconciliation of your income taxes at the
statutory tax rate to that reflected in your 2004 statement of
operations. We may have further comment upon receipt of your
response.

Note 10 - Common Shareholders` Equity

- - Earnings per share, page 30

9. Please revise future filings to disclose the number of shares
issuable upon exercise of outstanding stock options and conversion
of
preferred stock that could potentially dilute basic EPS in the
future
which were excluded in the computation of diluted EPS for the
various
periods presented as their effect would have been antidilutive.
Refer to paragraph 40(c) of SFAS No. 128.

- - Stock Options, page 31

10. We note that you disclose the weighted average fair value of
options granted during fiscal 2004 and 2002 was $.01 and $.01,
respectively.  However, it does not appear the appropriate
information required under paragraph 47(b) of SFAS No. 123 has
been
disclosed.  It appears the weighted-average exercise price of the
stock options granted during the year rather than the weight-
average
grant-date fair value has been reported for each of the periods
presented.  Please revise future filings to correct this
disclosure
error.

- - Preferred Stock, page 32

11. We note that the holders of the Series A cumulative
convertible
preferred stock have the right to convert the liquidation
preference
of $25 per share of preferred stock into shares of the Company`s
common stock at a conversion price of $.90 per share.  In this
regard, please tell us whether the conversion price represents a
beneficial conversion feature as defined in EITF No. 98-5.  If so,
tell us how you valued and accounted for the beneficial conversion
feature and further, how your treatment complies with the guidance
outlined EITF No. 98-5.  If the conversion price does not
represent a
beneficial conversion feature, provide us with the reason(s) as to
why and the market value of your common stock on the date the
preferred shares were issued.  We may have further comment upon
receipt of your response.


Note 13 - Quarterly Consolidated Financial Data (Unaudited), page
35

12. We note the disclosure in Note 13 indicating that the Company
increased its workers compensation liability by $274,000 during
the
quarter ended December 31, 2003 and by $199,000 during the quarter
ended December 29, 2004. Please tell us in further detail why
these
adjustments to your workers` compensation liability did not occur
until the fourth quarter of these fiscal years. If you review and
analyze your worker`s compensation reserves on only an annual
basis,
please explain why you believe this treatment is appropriate given
your quarterly reporting obligations. We may have further comment
upon receipt of your response.

Note 15 - Subsequent Events

- - Unaudited Pro Forma Financial Statement

13. Please note that pro forma financial statements should
generally
be preceded by an introductory paragraph which describes (a) each
transaction for which pro forma effects are presented, (b) the
entities involved, (c) the periods presented and (d) an
explanation
of what the pro forma presentation shows.  Further, pro forma
adjustments must be factually supportable, directly attributable
to
the transaction and must have a continuing impact on the Company`s
results of operations.  Also, assumptions involved in determining
the
pro forma adjustments should be clearly explained in the
footnotes.
Refer to the requirements of Article 11 of Regulation S-X.  Please
confirm that you will comply with the requirements of Article 11
of
Regulation S-X to the extent you disclose pro forma information in
future filings.

14. Reference is made to pro forma adjustment (A).  We note that
you
have netted together several pro forma adjustments which effect
cash
and cash equivalents.  Generally, adjustments should be presented
gross rather than net on the face of pro forma statements or
alternatively, the components of the adjustments are broken down
in
sufficient detail in the notes to the pro forma statements to
arrive
at the netted pro forma adjustment amount.  In this regard, please
explain in detail how you arrive at the pro forma adjustment of
$25,522,600 as it relates to cash and cash equivalents since it is
unclear based on your current footnote disclosure.  Further,
please
tell us supplementally the type and amount of costs comprising the
$600,000 in closing costs that you expect to incur as a result of
the
proposed transaction.  Your response should include the
calculation
of how you arrive at the pro forma adjustment of $600,000 and
basis
for the amounts included in the adjustment.  Also, tell us the
amount
of the total gain recognized on the sale and explain how it was
calculated.  Also, if a gain was recognized as a result of the
$4.0
million note received, please explain why you believe recognition
of
this potion of the gain is appropriate.  We may have further
comment
upon receipt of your response.

15. Reference is made to pro forma adjustments (C) and (E).
Please
explain how you arrive at the pro forma adjustments for estimated
income tax liability and interest expense of $1,163,000 and
$1,566,000, respectively.  Supplementally provide us with the
computations for each adjustment, the assumptions involved in
calculating the pro forma adjustments and basis supporting the
amounts included in the adjustments.

16. Please tell us in further detail the nature of the "deferred
gains" associated with certain restaurants that were recognized as
a
result of the sale transaction. As part of your response, please
tell
us the nature and timing of the transactions that originally
generated these deferred gains.

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) 551-3305 or Linda Cvrkel, Branch
Chief, at (202) 551-3813 if you have questions regarding comments
on
the financial statements and related matters.

								Sincerely,


								Linda Cvrkel
								Branch Chief
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Stephen C. Travis
EACO Corporation
April 28, 2005
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