FORM 10-Q


                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549

      [X]  Quarterly report pursuant to section 13 or 15 (d) of the
                     Securities Exchange Act of 1934

            For the quarterly period ended SEPTEMBER 30, 1997
                                   or

      [  ]Transition report pursuant to section 13 or 15 (d) of the
                     Securities Exchange Act of 1934


                         Commission File Number
                                 1-6553

                           CARROLS CORPORATION
         (Exact name of registrant as specified in its charter)


                 DELAWARE                                16-0958146
      (State or other jurisdiction of             (I.R.S. Employer
     incorporation or organization)           Identification Number)


                               968 JAMES STREET
          SYRACUSE, NEW YORK                             13203
       (Address of principal executive offices)         (Zip Code)


Registrant's telephone number including area code (315) 424-0513


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


Common stock, par value $1.00, outstanding at November 14, 1997

                                            10 SHARES

                              Page 1 of 16
<PAGE>
                        PART 1 - FINANCIAL INFORMATION

                     CARROLS CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                   SEPTEMBER 30, 1997 AND DECEMBER 31, 1996



<TABLE>
<CAPTION>
                                                                          (Unaudited)
<S>                                                     <C>                           <C>
                        ASSETS                                      September 30,                      December 31,
                                                                      1997                              1996
Current assets:
  Cash and cash equivalents                                              $  2,109,000                  $  1,314,000
  Trade and other receivables                                                 753,000
                  793,000
  Inventories                                                               2,973,000
                  2,163,000
  Prepaid real estate taxes                                                   803,000
                  725,000
  Prepaid expenses and other current assets                             1,310,000
                                                                                                         932,000
  Deferred income taxes                                                 3,264,000
                  3,264,000
        Total current assets                                               11,212,000
                  9,191,000
Property and equipment, at cost:
  Land                                                                     10,800,000
                  9,066,000
  Buildings and improvements                                               18,671,000
                  16,175,000
  Leasehold improvements                                                   42,190,000
                  37,921,000
  Equipment                                                                60,037,000
                  46,834,000
  Capital leases                                                           14,548,000
                  14,548,000
  Construction in progress                                                775,000
                                                                                                         895,000
                                                                          147,021,000
                  125,439,000
  Less accumulated depreciation
    and amortization                                                  (67,370,000)
                  (63,356,000)
      Net property and equipment                                           79,651,000
                  62,083,000
Franchise rights, at cost (less accumulated
amortization       of $24,174,000 at September  30,
1997 and                       $21,787,000 at December                    107,506,000
31, 1996).                                                                                               46,203,000
Beneficial leases, at cost (less accumulated
amortization
  of $8,329,000 at September 30, 1997 and $7,748,000                        6,326,000
                  6,907,000
at December 31, 1996).
Excess of cost over fair value of assets  acquired
(less        accumulated amortization of $621,000 at
September 30,   1997 and $578,000 at December 31,                           1,690,000
                  1,733,000
1996).
Deferred income taxes                                                       6,637,000
                  6,637,000
Other assets                                                            7,948,000
                                                                                                       5,834,000
                                                                    $ 220,970,000
                  $138,588,000
</TABLE>

                                       2
<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS (CONT'D)
                   SEPTEMBER 30, 1997 AND DECEMBER 31, 1996






<TABLE>
<CAPTION>
                                                                          (Unaudited)
<S>                                                     <C>                           <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                          September 30,                  December 31,
                                                                          1997                           1996
Current liabilities:
  Accounts payable                                                          7,804,000                     9,319,000
  Accrued liabilities:
    Payroll and employee benefits                                           4,417,000                     3,837,000
    Taxes - income and other                                                1,287,000                     2,334,000
    Interest                                                                1,804,000                     4,741,000
    Other                                                                   4,270,000                     3,382,000
  Current portion of long-term debt                                         3,834,000                         8,000
  Current portion of capital lease obligations                                464,000                       574,000
        Total current liabilities                                          23,880,000                    24,195,000
Long-term debt, net of current portion                                    170,765,000                   118,180,000
Capital lease obligations, net of current portion                           2,169,000                     2,503,000
Deferred income - sale/leaseback of real estate                             2,064,000                     2,154,000
Accrued postretirement benefits                                             1,574,000                     1,522,000
Other liabilities                                                       2,459,000                       1,696,000
        Total liabilities                                                 202,911,000                   150,250,000
Stockholders' equity (deficit):
  Common stock, par value $1; authorized
    1,000 shares, issued and outstanding - 10 shares                               10                            10
  Additional paid-in capital
   1,411,990
                                                                           30,411,990
  Accumulated deficit                                                                                    (12,353,000)
   (10,574,000)
  Less: Note receivable - redemption of
    warrants
                                                                           -                            (2,500,000)
    Total stockholders' equity (deficit)
   (11,662,000)
                                                                           18,059,000
                                                                                                         $220,970,000
   $138,588,000
</TABLE>





                                       3
<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                  (Unaudited)







<TABLE>
<CAPTION>
                                                                        September 30,                 September 30,
<S>                                                     <C>                           <C>
                                                                           1997                       1996
                                                                           (13 weeks)                    (13 weeks)
Revenues:
  Sales                                                                  $ 76,589,000                  $ 62,079,000
Costs and expenses:
  Cost of sales                                                            22,303,000                    17,397,000
  Restaurant wages and  related expenses                                   23,283,000                    18,013,000
  Other restaurant operating expenses                                      15,965,000                    12,378,000
  Depreciation and amortization                                             3,741,000                     2,819,000
  Administrative expenses                                                   3,667,000                     2,408,000
  Advertising expense                                                       3,302,000                     2,749,000
    Total operating expenses                                             72,261,000                    55,764,000
Operating income                                                            4,328,000                   6,315,000
  Interest expense                                                          3,978,000                     3,580,000
    Income before taxes                                                    350,000                      2,735,000
Provision (credit) for taxes                                                (191,000)                     1,260,000
     Net income                                                    $       541,000                   $    1,475,000
</TABLE>

















                                       4
<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                  (Unaudited)







<TABLE>
<CAPTION>
                                                                        September 30,                 September 30,
<S>                                                     <C>                           <C>
                                                                           1997                       1996
                                                                           (39 weeks)                    (39 weeks)
Revenues:
  Sales                                                                  $207,113,000                  $177,638,000
Costs and expenses:
  Cost of sales                                                            59,600,000                    50,333,000
  Restaurant wages and related expenses                                    63,539,000                    52,310,000
  Other restaurant operating expenses                                      43,005,000                    36,524,000
  Depreciation and amortization                                            10,578,000                     8,178,000
  Administrative expenses                                                   9,337,000                     7,566,000
  Advertising expense                                                       9,093,000                     7,903,000
  Costs associated with change in control                                   -                             449,000
    Total operating expenses                                            195,152,000                   163,263,000
Operating income                                                           11,961,000                  14,375,000
  Interest expense                                                         11,059,000                    10,605,000
    Income before taxes                                                    902,000                      3,770,000
Provision for taxes                                                           181,000                     1,900,000
     Net income                                                    $       721,000                  $     1,870,000
</TABLE>
















                                       5
<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                        September 30,                 September 30,
<S>                                                     <C>                           <C>
                                                                          1997                         1996
                                                                           (39 weeks)                    (39 weeks)
Cash flows from operating activities:
  Net income                                                            $     721,000                   $ 1,870,000
  Adjustments to reconcile net income
    to cash provided by operating activities:
      Depreciation and amortization                                        10,578,000                     8,178,000
      Change in assets and liabilities                                    (4,248,000)                   (3,339,000)
      Cash provided by operating activities                                 7,051,000                     6,709,000
Cash flows from investing activities:
  Capital expenditures:
    Property and equipment                                                (4,561,000)                   (5,699,000)
    Construction of new restaurants                                       (6,391,000)                   (1,981,000)
    Acquisitions of restaurants                                          (78,056,000)                   (8,597,000)
  Proceeds from sale of property, equipment and
franchise rights                                                            1,092,000                     2,338,000
  Other                                                                     (3,000)                      572,000
      Net cash used for investing activities                          $  (87,919,000)             $  (13,367,000)
Cash flows from financing activities:
  Proceeds from long-term debt                                          $  66,300,000                 $   7,514,000
  Financing costs associated with long-term debt                          (2,397,000)                             -
  Principal payments on long-term debt                                      (200,000)                     (152,000)
  Principal payments on capital leases                                      (444,000)                     (463,000)
  Purchase of senior notes                                                   (25,000)                     (838,000)
  Retirement of long-term debt                                            (9,669,000)                     (450,000)
  Proceeds from issuing stock                                              30,442,000                             -
  Proceeds from sale-leaseback transactions                                                               1,659,000
  Dividends paid                                                       (2,349,000)                      (618,000)
  Other                                                                         5,000                  -
     Net cash provided by financing activities                         81,663,000                      6,652,000
     Increase (decrease) in cash and cash equivalents                         795,000                       (6,000)
Cash and cash equivalents,
  beginning of period                                                   1,314,000                      1,463,000
    Cash and cash equivalents,
      end of period                                                  $  2,109,000                  $   1,457,000
</TABLE>
                                       6
<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS




1.  STATEMENT OF MANAGEMENT

     The  accompanying  consolidated  financial  statements  have been prepared
without  audit,  pursuant  to  the rules and regulations of the Securities  and
Exchange Commission and do not include all of the information and the footnotes
required by generally accepted accounting  principles  for complete statements.
In  the  opinion of management, all normal and recurring adjustments  necessary
for a fair  presentation  of  such  financial consolidated statements have been
included.

     The results of operations for the  three  and  nine months ended September
30, 1997, are not necessarily indicative of the results  to be expected for the
full year.

     The preparation of consolidated financial statements  in  conformity  with
generally  accepted accounting principles requires management to make estimates
and assumptions  that affect the reported amounts of assets and liabilities and
disclosure of contingent  assets  and  liabilities at the date of the financial
statements  and  the  reported  amounts of revenues  and  expenses  during  the
reporting period.  Actual results could differ from those estimates.

     These consolidated financial statements should be read in conjunction with
the consolidated financial statements  and  notes  thereto  for  the year ended
December 31, 1996 contained in the Company's 1996 Annual Report on  Form  10-K.
The  December  31,  1996  balance  sheet data is derived from audited financial
statements.

     Certain amounts for prior periods have been reclassified to conform to the
current period presentation.


2.   INVENTORIES

     Inventories at September 30, 1997 and December 31, 1996, consisted of:

<TABLE>
<CAPTION>
                                                September 30,           December 31,
<S>                                      <C>                      <C>
                                                   1997                     1996
   Raw materials (food and
     paper products)                  $   2,014,000            $   1,386,000
   Supplies                                         959,000             777,000
                                      $   2,973,000            $   2,163,000
</TABLE>





                                       7
<PAGE>
                        CARROLS CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  (continued)




3.   INCOME TAXES

     The income tax provision was comprised of the following:

<TABLE>
<CAPTION>
                                                September 30,           September 30,
<S>                                      <C>                      <C>
                                                   1997                     1996
   Current                             $    181,000            $     300,000
   Deferred                                   _- _                 1,600,000
                                       $    181,000             $  1,900,000
</TABLE>

     For  1997  and  1996  the  difference  between  the expected tax provision
     resulting from application of the federal statutory  income  tax  rate  to
     pre-tax  income  and  the reported income tax provision result principally
     from state taxes and the deferred disposition of stock options.

     A tax benefit of $907,000 resulting from the deferred disposition of stock
     options associated with  the 1996 change in control transaction previously
     reported on Form 10-K was credited directly to paid in capital.

4.   ACQUISITIONS

     On March 28, 1997, the Company  purchased  certain  assets  and  franchise
     rights of twenty-three Burger King restaurants in North and South Carolina
     for a cash price of approximately $21 million.

     On  August  20,  1997,  the Company purchased certain assets and franchise
     rights of sixty-three Burger  King  restaurants,  primarily in Western New
     York  State,  Indiana and Kentucky for a cash price of  approximately  $52
     million.

     The following proforma  results  of  operations  assume these acquisitions
     occurred as of the beginning of the respective periods:


                                         Nine Months Ended September 30,
<TABLE>
<CAPTION>
                                      1997                      1996
<S>                             <C>                       <C>
   Revenues                  $ 253,566,000             $ 243,860,000
   Operating income           $ 15,584,000              $ 20,794,000
   Net income                $   1,297,000             $   3,815,000
</TABLE>

                                       8
<PAGE>
                        CARROLS CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  (continued)




4.   ACQUISITIONS - continued


     The   preceeding   proforma   financial  information  is  not  necessarily
     indicative of the operating results  that  would  have occurred had either
     acquisition  been  consummated  as  of  the  beginning of  the  respective
     periods, nor are they necessarily indicative of future operating results.


5.   LONG-TERM DEBT


     On March 27, 1997, the Company entered into a  loan  agreement  (the "Loan
     Agreement")  among  the Company, Texas Commerce Bank National Association,
     as Agent, and other lenders  (collectively  the  "Lender") who are parties
     thereto.  The Loan Agreement provides for: (i) a $127,000,000 Advance Loan
     Facility under which the Company may borrow, through December 31, 1999, up
     to 75% of the purchase costs incurred in connection  with  the acquisition
     and;  (ii)  a  $25,000,000  Revolving  Loan  Facility  which replaced  the
     Company's  revolving  credit  facility  with Heller Financial,  Inc.   The
     Revolving  Loan Facility is available to finance  restaurant  acquisitions
     and new restaurant  development  by  the  Company,  and  for other working
     capital and general corporate purposes.

     The Loan Agreement provides for interest rate options of:  (i) the greater
     of  the prime rate (or the Federal Funds Rate plus .50%) plus  a  variable
     margin  between  0.00% and 1.00% (.50% at September 30, 1997); or (ii) the
     London Interbank offering  rate  plus  a variable margin between 1.50% and
     2.50% (2.00% of September 30, 1997), based  upon debt to cash flow ratios.
     Commitment fees on the unused balances of the  Advance  Loan  Facility and
     the Revolving Loan Facility are payable quarterly at the annual  rates  of
     0.25% and 0.375%, respectively.

     The Revolving Loan Facility has a maturity date of December 31, 2001 while
     the  Advance  Loan  Facility requires quarterly principal repayments at an
     annual rate of 6% beginning  with the end of the second quarter after each
     advance loan and increasing 2%  per  year  through the sixth year with the
     remainder repayable on June 30, 2003.

     At  September 30, 1997, $62.5 million was outstanding  under  the  Advance
     Loan  Facility  and  $3.6 million was outstanding under the Revolving Loan
     Facility.  Substantially  all assets of the Company are or will be pledged
     to the Lender as collateral  security under the loans made pursuant to the
     Loan Agreement.






                                       9
<PAGE>
                        CARROLS CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  (continued)





6.   CHANGE IN STOCKHOLDERS' EQUITY


     As reported in the Company's 1996 Annual report on Form 10-K and in a Form
     8-K dated March 27, 1997, the  change  in  control of the Company's parent
     company, Carrols Holdings Corporation ("Holdings"),  occurred on March 27,
     1997.  In connection with this, the Company received additional capital of
     approximately $30.4 million.

     Holdings has exercised its option to purchase certain  warrants to acquire
     its common stock by cancellation of a note receivable from  the  holder of
     the warrants.  The note receivable was previously reflected as an increase
     to the December 31, 1996 stockholders deficit.































                                      10
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                     OF OPERATIONS AND FINANCIAL CONDITION
                           ________________________


RESULTS OF OPERATIONS

THREE  MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996.

     SALES.   Sales increased $14.5 million, or 23.4%, as compared to the three
months ended September  30, 1996. The Company operated an average of 293 Burger
King restaurants for the  third  quarter  of  1997  as compared to 228 in 1996.
Average  restaurant  unit  sales decreased 4.0% when comparing  1997  to  1996.
Sales at comparable restaurants,  the  216  units operating for the entirety of
the compared periods, decreased $1.6 million,  or  2.7%.  Sales were negatively
impacted for two weeks in August due to negative publicity  surrounding  events
at Hudson Foods, a Burger King beef supplier.  The differential in the decrease
of  average  restaurant  sales  and  comparable  restaurant  sales is primarily
attributable to the acquisition of restaurants in 1997 which had  lower average
sales volumes than the Company's existing restaurants.

     COST  OF  SALES.  Cost of sales (food and paper costs) as a percentage  of
sales, increased  from  28.0%  in 1996 to 29.1% in 1997 due primarily to a 5.6%
increase in beef commodity costs for the quarter and increased discounts due to
the introductory promotion of the Big King sandwich in September 1997.

     RESTAURANT  WAGES AND RELATED  EXPENSES.   Restaurant  wages  and  related
expenses as a percentage of sales increased from 29.0% in 1996 to 30.4% in 1997
due mainly to increased wage rates (including the increases in the minimum wage
rate effective October  1,  1996 and September 1, 1997) and related payroll tax
costs.

     OTHER RESTAURANT OPERATING  EXPENSES.  Other restaurant operating expenses
increased as a percentage of sales  from  19.9%  in  1996  to 20.8% in 1997 due
primarily to the fixed portion of occupancy and related costs  associated  with
lower comparable store sales.

     DEPRECIATION  AND  AMORTIZATION.   Depreciation and amortization increased
from 4.5% of sales in 1996 to 4.9% of sales  in 1997 due to the fixed nature of
restaurant level depreciation and amortization  compared  to  lower  comparable
store sales.

     ADMINISTRATIVE  EXPENSES.   Administrative  expenses,  as a percentage  of
sales  increased  from  3.9%  in  1996  to  4.8% in 1997 due in part  to  costs
associated  with  the  assimilation of acquired  restaurants,  the  decline  in
comparable restaurant sales,  and a gain of $.3 million in the third quarter of
1996 relative to the sale of a parcel of land.

     ADVERTISING EXPENSE.  Advertising  expenses are comparable as a percentage
of  sales  due  to  no  significant  changes in  Company  directed  promotional
activities.

     INTEREST EXPENSE.  Interest expense  increased  approximately  $.4 million
due  to  borrowings associated with 1997 restaurant acquisitions, offset  by  a
lower average borrowing rate (10.6% in 1997 compared to 11.1% in 1996).

     PROVISION  FOR TAXES.  The provision for income taxes for the three months
ended September 30,  1997 reflects adjustments to the Company's expected annual
effective income tax rate.
                                      11
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                     OF OPERATIONS AND FINANCIAL CONDITION
                                  (continued)
                           ________________________


NINE MONTHS ENDED SEPTEMBER  30,  1997  COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1996

     SALES.  Sales for the nine months ended September 30, 1997 increased $29.5
million, or 16.6% as compared to the nine months ended September 30, 1996.  The
Company operated an average of 260 Burger  King  restaurants  in the first nine
months  of  1997 as compared to an average of 222 in the first nine  months  of
1996.  Average restaurant unit sales decreased 1.6% in the first nine months of
1997 as compared to 1996.  Sales at comparable restaurants, the 214 restaurants
operating for  the entirety of the compared periods, decreased $2.0 million, or
1.2%.  Sales were  negatively impacted in August 1997 due to negative publicity
surrounding events at Hudson Foods.

     COST OF SALES.   Cost  of  sales (food and paper costs) as a percentage of
sales increased from 28.3% in 1996  to  28.8%  in  1997  primarily  due to a 5%
increase in beef commodity costs.

     RESTAURANT  WAGES  AND  RELATED  EXPENSES.   Restaurant  wages and related
expenses increased from 29.4% of sales in 1996 to 30.7% of sales  in  1997  due
mainly to increased minimum wage rates and related payroll taxes.

     OTHER  RESTAURANT OPERATING EXPENSES.  Other restaurant operating expenses
increased as  a  percentage of sales from 20.6% in 1996 to 20.8% in 1997 due to
occupancy costs associated with lower comparable store sales.

     DEPRECIATION  AND  AMORTIZATION.   Depreciation and amortization increased
from 4.6% of sales in 1996 to 5.1% of sales  in  1997  due  to  similar average
restaurant  depreciation and amortization amounts compared to lower  comparable
store sales.

     ADMINISTRATIVE  EXPENSES.   Administrative expenses increased from 4.3% of
sales in 1996 to 4.5% of sales in  1997  due to increased assimilation costs of
acquired restaurants.

     ADVERTISING EXPENSE.  Advertising expense  remained  constant from 1996 to
1997 at 4.4% of sales.

     INTEREST  EXPENSE.  Interest expense increased approximately  $.5  million
due to increased  borrowings  associated  with  1997  restaurant  acquisitions,
offset  by a lower average borrowing rate (10.7% in 1997 compared to  11.1%  in
1996).

     PROVISION  FOR TAXES.  The provision for income taxes reflected during the
nine months ended  September  30,  1996 and 1997 reflects taxes at the expected
annual effective  income tax rate.





                                      12
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                     OF OPERATIONS AND FINANCIAL CONDITION
                                  (continued)
                           ________________________





LIQUIDITY AND CAPITAL RESOURCES

     The operating activities of the  Company provided $7.1 million of cash for
the nine months ended September 30, 1997.

     Capital  spending  of  $89.0  million   included  $78.1  million  for  the
acquisition of twenty-four restaurants in North  Carolina  and  South Carolina,
three restaurants in Michigan, two restaurants in Pennsylvania, and sixty-three
restaurants  in  Western  New  York, Kentucky and Indiana.  Also included  were
construction costs for seven new  restaurants  that  opened  during the period,
various  remodels and other capital maintenance projects.  One  restaurant  was
sold during the first quarter which resulted in cash proceeds of $1.1 million.

     As discussed  in  Note 5, the Company entered into a new loan agreement on
March 27, 1997 whereby a  $127.0  million Advance Loan Facility was established
for the Company to borrow up to 75%  of  the purchase costs of acquisitions.  A
$25.0 million Revolving Loan Facility ("Loan  Agreement")  was also established
as part of this agreement to refinance the Company's previous  revolving credit
facility  with  Heller Financial, Inc., to finance restaurant acquisitions  and
new store development,  and  for  other  working  capital and general corporate
purposes.

     During the nine months ended September 30, 1997,  net borrowings under the
Advance Loan Facility with Texas Commerce Bank were $66.3 million, $5.0 million
of  which  represented  the refinancing of an existing term  loan  with  Heller
Financial, Inc. and $4.6  million  of  which  was  used  to retire the previous
balance of the revolver with Heller Financial, Inc.  The remainder  was used to
finance acquisitions of restaurants.

     As reported in the Company's 1996 Annual report on Form 10-K and in a Form
8-K  dated  March  27,  1997,  the  change  in control of the Company's parent,
Carrols Holdings Corporation, occurred on March  27,  1997.  In connection with
this  change  of  control, the Company received net proceeds  from  new  common
equity of approximately  $30.4 million.  Under the 1993 Indenture governing the
Company's Senior Notes,(the "Indenture") the change in control gave each holder
of Senior Notes the right  to require the Company to repurchase all or any part
of such holder's Senior Notes  at  a  repurchase  price  equal  to  101% of the
principal amount of the Senior Notes being repurchased plus accrued and  unpaid
interest.  A total of $25,000 in Senior Notes were presented for redemption.








                                      13
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                     OF OPERATIONS AND FINANCIAL CONDITION
                                  (continued)
                           ________________________





LIQUIDITY AND CAPITAL RESOURCES - continued

     While  interest is accrued monthly, payments of approximately $6.2 million
for interest  on  the  Senior  Notes  are  made each February 15{th} and August
15{th} thus creating semi-annual cash needs.   The Company believes that future
cash  flow  from  operations  together  with  funds available  under  the  Loan
Agreement will be sufficient to meet all interest  and principal payments under
its  indebtedness,  fund  the  maintenance  of  property  and  equipment,  fund
restaurant remodeling required under the Burger King franchise  agreements  and
meet  required payments in respect of Holdings' Preferred Stock (subject to the
terms of  the  Indenture  and  the Loan Agreement) for at least the next twelve
months.  The balance will provide funds for future acquisitions.


INFLATION

     The Company has historically been able to minimize the effect of inflation
on  its costs, such as minimum wage  increases,  through  periodic  menu  price
increases.   However,  due  to the current competitive pricing environment, the
Company has had limited increases in its menu prices in 1997.























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<PAGE>
                          PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

     There were no material legal proceedings commenced by or initiated against
the  Company during the reported  quarter,  or  material  developments  in  any
previously reported litigation.

Item 2.  Changes in Securities

     None

Item 3.  Default Upon Senior Securities

     None

Item 4.  Submission of Matters to a Vote of Security Holders

     None

Item 5.  Other Information

     None

Item 6.  Exhibits and Reports on Form 8K

     (a)   The following exhibit is filed as part of this report.

           EXHIBIT NO.
               27     Financial Data Schedule

     (b)  During the quarter the Company filed the following current reports on
Form 8-K:

           .  The  Company  filed  Form  8-K dated August 15, 1997, reporting a
              change in the Company's certifying accountant under Item 4.

           .  The Company filed Form 8-K and  a  related 8-K/A dated August 20,
              1997,  reporting  the  acquisition  of  sixty-three  Burger  King
              restaurants  under  Item  2  and  the  financial  statements  and
              proforma financial information required by Item 7.











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<PAGE>




                                   SIGNATURE




     Pursuant to the requirements of the Securities Exchange  Act  of 1934, the
registrant  has  duly  caused  this  report  to be signed on its behalf by  the
undersigned thereunto duly authorized.

                                            CARROLS CORPORATION
                                            968 James Street
                                            Syracuse, New York 13203
                                            (Registrant)


November 14, 1997                     /S/ ALAN VITULI
Date                                        (Signature)
                                            Alan Vituli
                                            Chairman and Chief Executive
                                            Officer




November 14, 1997                     /S/ PAUL R. FLANDERS
Date                                        (Signature)
                                            Paul R. Flanders
                                            Vice President - Finance




















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