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 MARCH 31, 1998
                              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 May 14, 1998

                             10 SHARES


                                 1 of 13

<PAGE>
                        PART 1 - FINANCIAL INFORMATION

                     CARROLS CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                     MARCH 31, 1998 AND DECEMBER 31, 1997




<TABLE>
<CAPTION>
                           ASSETS                                            March 31,                     December 31,
                                                                               1998                           1997
<S>                                                           <C>                          <C>
Current assets:
  Cash and cash equivalents                                                   $  2,189,000                 $  2,252,000
  Trade and other receivables                                                      496,000
                       748,000
  Inventories                                                                    3,055,000
                       3,355,000
  Prepaid real estate taxes                                                      1,179,000
                       939,000
  Prepaid expenses and other current assets                                      1,319,000
                       1,388,000
  Refundable income taxes                                                         -
                                                                                                              2,141,000
  Deferred income taxes                                                          2,605,000
                                                                                                              2,605,000
        Total current assets                                                    10,843,000
                       13,428,000
Property and equipment, at cost:
  Land                                                                           6,564,000
                       7,280,000
  Buildings and improvements                                                    12,844,000
                       12,487,000
  Leasehold improvements                                                        45,407,000
                       43,146,000
  Equipment                                                                     64,280,000
                       61,331,000
  Capital leases                                                                14,548,000
                                                                                                             14,548,000
                                                                               143,643,000
                       138,792,000
  Less accumulated depreciation
    and amortization                                                         ( 70,569,000)
                       (67,908,000)
      Net property and equipment                                                73,074,000
                       70,884,000
Franchise rights, at cost (less accumulated      amortization
of $26,503,000 at March 31,       1998 and $25,047,000 at
December 31, 1997)                                                             108,138,000
                       108,938,000
Intangible assets, at cost less accumulated      amortization
of $9,048,000 and $8,900,000 at
  March 31, 1998 and December 31, 1997,
  respectively                                                                   7,715,000
                       7,864,000
Other assets                                                                    7,641,000                   7,778,000
Deferred income taxes                                                           6,436,000
                                                                                                              6,436,000
                                                                            $213,847,000
                       $215,328,000
</TABLE>






The accompanying notes are an integral part of these financial statements.


                                       2

<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONT'D)
                     MARCH 31, 1998 AND DECEMBER 31, 1997






<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                                               March 31,                 December 31,
                                                                                   1998                           1997
<S>                                                           <C>                            <C>
Current liabilities:
  Accounts payable                                                              $ 14,190,000                 $ 11,950,000
  Accrued interest                                                                 1,761,000                    4,770,000
  Accrued payroll, related taxes and benefits                                      6,345,000                    6,299,000
  Accrued income taxes                                                               169,000                            -
  Other liabilities                                                                4,242,000                    5,104,000
  Current portion of long-term debt                                                3,375,000                    3,137,000
  Current portion of capital lease obligations                                       422,000                      441,000
        Total current liabilities                                                 30,504,000                   31,701,000
Long-term debt, net of current portion                                           154,094,000                  154,649,000
Capital lease obligations, net of current        portion
                                                                                   1,951,000                    2,060,000
Deferred income - sale/leaseback of
  real estate                                                                      4,493,000                    4,555,000
Accrued postretirement benefits                                                    1,672,000                    1,627,000
Other liabilities                                                                3,382,000                    3,289,000
        Total liabilities                                                        196,096,000                  197,881,000
Stockholders' equity:
  Common stock, par value $1; authorized
    1,000 shares, issued and outstanding -
    10 shares                                                                             10                           10
  Additional paid-in capital
          28,362,990
                                                                                  28,271,990
  Accumulated deficit                                                                                          (
          (10,916,000)
                                                                                 10,521,000)
    Total stockholders' equity
                                                                                  17,751,000                  17,447,000
                                                                                                               $213,847,000
          $215,328,000
</TABLE>








The accompanying notes are an integral part of these financial statements.


                                       3

<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  THREE MONTHS ENDED MARCH 31, 1998 AND 1997








<TABLE>
<CAPTION>
                                                                                    1998                        1997
<S>                                                           <C>                            <C>
                                                                                  (13 weeks)                   (13 weeks)
Restaurant sales                                                               $  87,451,000                  $58,305,000
Costs and expenses:
  Cost of sales                                                                   25,391,000                   16,506,000
  Restaurant wages and related expenses                                           26,756,000                   18,540,000
  Advertising expense                                                              4,005,000                    2,731,000
  Other restaurant operating expenses                                             18,291,000                   12,514,000
  Administrative expenses                                                          3,749,000                    2,665,000
  Depreciation and amortization                                                    4,203,000                    2,902,000
    Total operating expenses                                                     82,395,000                  55,858,000
Operating income                                                                   5,056,000                  2,447,000
  Interest expense                                                                 4,334,000                    3,556,000
    Income (loss) before income taxes                                              722,000                    (1,109,000)
(Provision) benefit for income taxes                                               (327,000)                      369,000
    Net income (loss)                                                         $    395,000                   $  (740,000)
</TABLE>




















The accompanying notes are an integral part of these financial statements.



                                       4

<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  THREE MONTHS ENDED MARCH 31, 1998 AND 1997





<TABLE>
<CAPTION>
                                                                              1998                       1997
<S>                                                              <C>                          <C>
                                                                          (13 weeks)                  (13 weeks)
Cash flows from operating activities:
  Net income (loss)                                             $    395,000                                              $
                                                                                              (740,000)
  Adjustments to reconcile net income (loss)
    to cash provided by (used for) operating
activities:
      Depreciation and amortization                                4,203,000                     2,902,000
      Deferred income taxes                                            -                          (494,000)
      Gain on sale of property and equipment                        (187,000)                     (234,000)
      Change in assets and liabilities                             1,115,000                    (6,334,000)
      Cash provided by (used for) operating
activities                                                         5,526,000                    (4,900,000)
Cash flows from investing activities:
  Capital expenditures:
    New restaurant development                                    (2,642,000)                   (1,042,000)
    Remodels and other capital expenditures                       (3,656,000)                   (1,022,000)
    Acquisitions of restaurants                                     (614,000)                  (24,816,000)
  Proceeds from sales of property and equipment                      157,000                     1,082,000
      Net cash used for investing activities                      (6,755,000)                  (25,798,000)
Cash flows from financing activities:
      Proceeds from long-term debt                                   400,000                   16,532,000
      Principal payments on long-term debt                          (717,000)                      (2,000)
      Principal payments on capital leases                          (128,000)                    (153,000)
      Proceeds from issuing stock                                      -                       22,128,000
      Proceeds from sale-leaseback transactions                    1,702,000                        -
      Dividends paid                                                 (91,000)                       -
      Net cash provided by financing activities                    1,166,000                   38,505,000
Increase (decrease) in cash and cash
equivalents                                                          (63,000)                   7,807,000
Cash and cash equivalents,
      beginning of period                                          2,252,000                    1,314,000
Cash and cash equivalents,
      end of period                                              $ 2,189,000                  $ 9,121,000
</TABLE>






The accompanying notes are an integral part of these financial statements.


                                       5
<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 statements have been included.

     The results  of  operations for the three months ended March 31, 1998, are
not necessarily indicative of the results to be expected for the full year.

     The preparation of  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,  1997 contained in the Company's 1997 Annual Report on Form 10-K.
The December 31,  1997  balance  sheet  data  is  derived  from  these  audited
financial statements.

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

2.   INVENTORIES

     Inventories at March 31, 1998 and December 31, 1997, consisted of:

<TABLE>
<CAPTION>
                                                  March 31,             December 31,
<S>                                      <C>                      <C>
                                                   1998                    1997
   Raw materials (food and
     paper products)                     $1,916,000              $ 2,111,000
   Supplies                                1,139,000               1,244,000
                                         $3,055,000              $ 3,355,000
</TABLE>







                                       6

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





3.   INCOME TAXES

     The  income  tax  (provision) benefit for the three months ended March 31,
     1998 and 1997 was comprised of the following:

<TABLE>
<CAPTION>
                                                  1998                      1997
<S>                                      <C>                      <C>
   Current                             $  (327,000)            $   (125,000)
   Deferred                                  -                       494,000
                                       $  (327,000)             $    369,000
</TABLE>

     For  1998  and  1997  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 non-deductible amortization of franchise rights.


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 for the three months ended
     March 31, 1997 assume these acquisitions  occurred  as of the beginning of
     the period:

<TABLE>
<CAPTION>
<S>                                <C>                       <C>
Revenues                           $107,627,000
Operating income                   $  6,364,000
Net income                         $    549,000
</TABLE>

     The preceding 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.

                                       7

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




5.   HEDGE ACCOUNTING

     In the first quarter of 1998  the  Company entered into hedge transactions
     in anticipation of a possible refinancing  transaction  of  certain of its
     existing debt.  The Company's accounting policy is to defer any  gains  or
     losses  resulting  from  the  hedge  until  the  date  of  the anticipated
     transaction and amortize any gains or losses over the life of  the  future
     debt instrument.

     At March 31, 1998, the notional amount of the Company's hedge transactions
     was  $75,000,000.   Deferred gains on these transactions at March 31, 1998
     were approximately $300,000.






































                                       8
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                     OF OPERATIONS AND FINANCIAL CONDITION
                           ________________________


RESULTS OF OPERATIONS

     The following table sets  forth, for the three months ended March 31, 1998
and 1997, selected operating results as a percentage of restaurant sales:

<TABLE>
<CAPTION>
                                                             1998                   1997
<S>                                                 <C>                    <C>
Restaurant sales                                      100.0%                 100.0%
Costs and expenses:
 Cost of sales                                         29.0                   28.3
 Restaurant wages and related expenses                 30.6                   31.8
 Other restaurant expenses including
  advertising                                          25.5                   26.1
 Administrative expenses                                4.3                    4.6
 Depreciation and amortization                          4.8                    5.0
Operating income                                        5.8%                   4.2%
EBITDA                                                 10.6%                   9.2%
</TABLE>


     RESTAURANT SALES  Restaurant  sales  for  the three months ended March 31,
1998, increased 50.0% to $87.5 million from $58.3  million in the first quarter
of 1997.  The increase in sales was primarily the result  of  the growth in the
number of Burger King restaurants operated by the Company which  increased from
261  at  the  end  of the first quarter of 1997 to 339 at the end of the  first
quarter of 1998.  During  the  twelve  months ended March 31, 1998, the Company
opened   12   new  restaurants,  acquired  67  restaurants   and   closed   one
underperforming  restaurant.  Sales at the Company's 227 comparable restaurants
(those units operating for the entirety of the compared periods) increased 7.2%
for the first quarter of 1998.

     OPERATING COSTS  AND  EXPENSES  Cost of sales (food and paper costs), as a
percentage of sales, were 29.0%  for  the  three  months  ended  March 31, 1998
compared  to  28.3%  for the first quarter of 1997.  The increase in  1998,  in
part, reflected higher food commodity costs associated with the introduction of
a new french fry product  in January 1998.  In addition, the Company's food and
paper cost relationships have been somewhat higher for its newly acquired units
prior to these units becoming  fully  integrated  into  the Company's operating
systems.

     Restaurant wages and related expenses decreased as a  percentage  of sales
during  the  first  quarter  from  31.8%  in  1997  to 30.6% in 1998 due to the
reduction of restaurant labor hours and the effect of  increased sales on fixed
management labor, offset by the effect of an increase in  the  Federal  minimum
wage  rate from $4.75 per hour to $5.15 per hour which took effect in September
1997.




                                       9
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                     OF OPERATIONS AND FINANCIAL CONDITION
                           ________________________



     Other  restaurant  operating expenses decreased from 21.5% of sales in the
first quarter of 1997 to  20.9%  in  the  first quarter of 1998, due in part to
reduced  utility  costs  associated  with  a milder  winter  in  the  Company's
operating areas, as well as the effect of higher  sales on the fixed components
of the Company's costs.

     Administrative expenses increased approximately $1.1 million, however as a
percentage of sales, decreased from 4.6% in the first  quarter  of 1997 to 4.3%
in the first quarter of 1998.  The increase in dollars reflects the addition of
field  supervision  and  corporate support as a result of the 1997 addition  of
over  100  restaurants  and  to  support  the  Company's  plans  for  continued
expansion.

     Earnings before interest,  taxes, depreciation and amortization ("EBITDA")
increased from $5.3 million in the first quarter of 1997 to $9.3 million in the
first quarter of 1998.  As a percentage of sales, EBITDA increased from 9.2% in
the first quarter of 1997 to 10.6%  in the first quarter of 1998 as a result of
the factors discussed above.

     Depreciation and amortization increased  $1.3 million in the first quarter
of  1998 due primarily to the increase in goodwill  and  purchased  intangibles
resulting  from  the  purchase method of accounting for restaurants acquired in
1997.

     Interest expense was $4.3 million in the first quarter of 1998 compared to
$3.6 million in the first quarter of 1997.  The increase in 1998 was the result
of higher average debt balances due to funding the acquisition and construction
of additional restaurants in 1997.

     The provision for income taxes of $327,000 in the first quarter of 1998 is
based on an estimated effective  income tax rate for 1998 of 45%.  This rate is
higher than the Federal statutory  tax  rate  due  to state franchise taxes and
non-deductible amortization of intangible assets.


LIQUIDITY AND CAPITAL RESOURCES

     The  Company  does  not  have  significant receivables  or  inventory  and
receives trade credit based upon negotiated  terms  in purchasing food products
and other supplies.  The Company is able to operate with  a substantial working
capital deficit because (i) restaurant operations are conducted on a cash basis
(ii) rapid turnover allows a limited investment in inventories,  and (iii) cash
from  sales is usually received before related accounts for food, supplies  and
payroll  become  due.  The Company's cash requirements arise primarily from the
need to finance the  opening  and  equipping  of  new  restaurants, for ongoing
capital  reinvestment  in  its  existing  restaurants, for the  acquisition  of
existing Burger King restaurants, and for debt service.



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



     The  Company's  operations  in  the  first   quarter   of  1998  generated
approximately $5.5 million in cash, compared with a use of cash of $4.9 million
for the first quarter of 1997.

     Capital expenditures represent a major investment of cash for the Company,
and totaled $6.9 million in the first quarter of 1998 and $26.9  million in the
first  quarter  of 1997.  1997 capital expenditures included $24.8 million  for
the acquisition of 29 restaurants.

     The  sale and  leaseback  of  two  restaurant  properties  in  March  1998
generated $1.7 million, the proceeds of which were used to reduce amounts which
had be borrowed under the Company's credit agreement.

   At March  31,  1998,  the  Company  had  $21.1  million  available under its
Revolving  Loan  facility after reserving $1.0 million for a letter  of  credit
guaranteed by the  facility, and $64.3 million available under its Advance Loan
Facility.  While interest  is  accrued  monthly, payments of approximately $6.2
million  for  interest  on the Company's 11.50%  Senior  Notes  are  made  each
February 15th and August  15th  thus  creating  semi-annual  cash  needs.   The
Company  believes  that  its  operations  and  capital  resources  will provide
sufficient   cash   availability   to   cover   its  working  capital,  capital
expenditures,  planned  development  and  debt  service  requirements  for  the
foreseeable future.

   The  Company's  loan  agreements impose limitations  on  certain  restricted
payments, which include dividends and preferred stock redemptions.  The Company
has sufficient unrestricted  amounts to enable it to make the required payments
to satisfy preferred stock dividend and redemption requirements.






















                                      11
<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)  There were no reports on Form 8-K filed during the reported quarter.






















                                      12

<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)


May 11, 1998                                /s/                     __
Date                                        (Signature)
                                            Alan Vituli
                                            Chairman and Chief Executive
                                            Officer




May 11, 1998                                /s/
Date                                        (Signature)
                                            Paul R. Flanders
                                            Vice President - Finance

























                                      13