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 June 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 August 14, 1997

                         10 SHARES



<PAGE>
                        PART 1 - FINANCIAL INFORMATION

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



<TABLE>
<CAPTION>
                           ASSETS                                             June 30,                     December 31,
                                                                               1997                          1996
<S>                                                           <C>                          <C>
Current assets:
  Cash and cash equivalents                                                   $  3,320,000                 $  1,314,000
  Trade and other receivables                                                      382,000
                       793,000
  Inventories                                                                    2,391,000
                       2,163,000
  Prepaid real estate taxes                                                        565,000
                       725,000
  Deferred income taxes                                                        3,264,000
                       3,264,000
  Prepaid expenses and other current assets                                    1,066,000
                                                                                                              932,000
        Total current assets                                                    10,988,000
                       9,191,000
Property and equipment, at cost:
  Land                                                                           9,513,000
                       9,066,000
  Buildings and improvements                                                    16,533,000
                       16,175,000
  Leasehold improvements                                                        39,329,000
                       37,921,000
  Equipment                                                                     51,888,000
                       46,834,000
  Capital leases                                                                14,548,000
                       14,548,000
  Construction in progress                                                     1,760,000
                                                                                                              895,000
                                                                               133,571,000
                       125,439,000
  Less accumulated depreciation
    and amortization                                                          (67,190,000)
                       (63,356,000)
      Net property and equipment                                                66,381,000
                       62,083,000
Franchise rights, at cost (less accumulated      amortization
of $23,246,000 at June  30,       1997 and $21,787,000 at
December 31, 1996).                                                             65,944,000
                                                                                                             46,203,000
Beneficial leases, at cost (less
  accumulated amortization of $8,169,000 at      June 30,
1997 and $7,748,000 at
  December 31, 1996).                                                            6,486,000
                       6,907,000
Excess of cost over fair value of assets         acquired
(less accumulated amortization of
  $607,000 at June 30, 1997 and $578,000 at     December 31,
1996).                                                                           1,704,000
                       1,733,000
Deferred income taxes                                                            7,422,000
                       6,637,000
Other assets                                                                   8,071,000
                                                                                                            5,834,000
                                                                           $ 166,996,000
                       $138,588,000
</TABLE>



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






<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)                                      June 30,                 December 31,
                                                                                    1997                          1996
<S>                                                           <C>                            <C>
Current liabilities:
  Current portion of long-term debt                                             $    580,000                  $     8,000
  Current portion of capital lease obligations                                       491,000                      574,000
  Accounts payable                                                                 5,897,000                    9,319,000
  Accrued liabilities:
    Payroll and employee benefits                                                  3,467,000                    3,837,000
    Taxes - income and other                                                       1,674,000                    2,334,000
    Interest                                                                       4,743,000                    4,741,000
    Other                                                                          3,522,000                    3,382,000
        Total current liabilities                                                 20,374,000                   24,195,000
Long-term debt, net of current portion                                           120,635,000                  118,180,000
Capital lease obligations,
  net of current portion                                                           2,281,000                    2,503,000
Deferred income - sale/leaseback of real
  estate                                                                           2,094,000                    2,154,000
Accrued postretirement benefits                                                    1,557,000                    1,522,000
Other liabilities                                                                2,397,000                    1,696,000
        Total liabilities                                                        149,338,000                  150,250,000
Stockholder's 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
                                                                                  30,547,990
  Accumulated deficit                                                                                          (
          (10,574,000)
                                                                                 12,890,000)
  Less: Note receivable - redemption of
    warrants
                                                                                                              (2,500,000)
    Total stockholder's equity (deficit)
          (11,662,000)
                                                                                  17,658,000
                                                                                                               $166,996,000
          $138,588,000
</TABLE>





<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   THREE MONTHS ENDED JUNE 30, 1997 AND 1996








<TABLE>
<CAPTION>
                                                                                    June 30,                     June 30,
<S>                                                           <C>                            <C>
                                                                                    1997                        1996
                                                                                  (13 weeks)                   (13 weeks)
Revenues:
  Sales                                                                         $ 72,237,000                 $ 61,197,000
  Other income                                                                        62,000                      66,000
                                                                                  72,299,000                   61,263,000
Costs and expenses:
  Cost of sales                                                                   20,796,000                   17,380,000
  Restaurant wages & related expenses                                             21,901,000                   17,855,000
  Other restaurant operating expenses                                             14,366,000                   12,385,000
  Depreciation and amortization                                                    3,934,000                    2,696,000
  Administrative expenses                                                          3,052,000                    2,695,000
  Advertising expense                                                              3,060,000                    2,723,000
  Costs associated with change of control                                                                         449,000
    Total operating expenses                                                      67,109,000                  56,183,000
Operating income                                                                   5,190,000                   5,080,000
  Interest expense                                                                 3,525,000                    3,501,000
    Income before taxes                                                           1,665,000                    1,579,000
Provision for taxes                                                                  741,000                      755,000
     NET INCOME                                                               $     924,000                  $    824,000
</TABLE>
















<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    SIX MONTHS ENDED JUNE 30, 1997 AND 1996








<TABLE>
<CAPTION>
                                                                                    June 30,                     June 30,
<S>                                                           <C>                            <C>
                                                                                    1997                        1996
                                                                                  (26 weeks)                   (26 weeks)
Revenues:
  Sales                                                                         $130,542,000                 $115,559,000
  Other income                                                                       145,000                     115,000
                                                                                 130,687,000                  115,674,000
Costs and expenses:
  Cost of sales                                                                   37,302,000                   32,936,000
  Restaurant wages & related expenses                                             40,605,000                   34,458,000
  Other restaurant operating expenses                                             26,716,000                   24,061,000
  Depreciation and amortization                                                    6,836,000                    5,359,000
  Administrative expenses                                                          5,800,000                    5,171,000
  Advertising expense                                                              5,791,000                    5,154,000
  Costs associated with change of control                                                                         449,000
    Total operating expenses                                                     123,050,000                 107,588,000
Operating income                                                                   7,637,000                   8,086,000
  Interest expense                                                                 7,081,000                    7,050,000
    Income before taxes                                                             556,000                    1,036,000
Provision for taxes                                                                  372,000                      640,000
     NET INCOME                                                               $     184,000                  $    396,000
</TABLE>

















<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                    SIX MONTHS ENDED JUNE 30, 1997 AND 1996


               Increase (Decrease) in Cash and Cash Equivalents


<TABLE>
<CAPTION>
                                                                    June 30,                     June 30,
<S>                                                             <C>                           <C>
                                                                      1997                         1996
                                                                   (26 weeks)                  (26 weeks)
Cash flows from operating activities:
  Net income                                                    $     184,000                                   $   396,000
  Adjustments to reconcile net income
    to cash used for operating activities:
      Depreciation and amortization                                 6,836,000                   5,360,000
      Deferred income taxes                                           122,000                     440,000
      (Gain) loss on sale of property and
equipment                                                            (244,000)                      3,000
      Change in assets and liabilities:
        Trade and other receivables                                   411,000                     299,000
        Inventories                                                  (228,000)                   (150,000)
        Prepaid expenses and other current assets                       9,000                     (61,000)
        Other assets                                                 (577,000)                   (598,000)
        Accounts payable                                           (3,422,000)                 (1,786,000)
        Accrued interest                                                2,000                     (68,000)
        Accrued taxes - income and other                             (660,000)                    (74,000)
        Accrued payroll and employee benefits                        (370,000)                   (645,000)
        Other accrued liabilities                                     140,000                     100,000
        Other                                                         676,000                    (106,000)
      Cash provided by operating activities                         2,879,000                   3,110,000
Cash flows from investing activities:
  Capital expenditures:
    Property and equipment                                         (2,027,000)                 (3,607,000)
    Construction of new restaurants                                (3,107,000)                   (634,000)
    Acquisition of restaurants                                    (25,365,000)                    (22,000)
    Franchise rights                                                 (325,000)                   (171,000)
  Notes and mortgages issued                                           (3,000)
  Payments received on notes and mortgages
    receivable                                                          8,000                      18,000
  Proceeds from sale of property, equipment and      franchise
rights                                                              1,092,000                     635,000
  Other investments                                                                             1,330,000
      Net cash used for investing activities                    $ (29,727,000)                $(2,451,000)
</TABLE>

<PAGE>
                     CARROLS CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT'D)
                    SIX MONTHS ENDED JUNE 30, 1997 AND 1996


               Increase (Decrease) in Cash and Cash Equivalents


<TABLE>
<CAPTION>
                                                                                     June 30,                     June 30,
<S>                                                             <C>                           <C>
                                                                                    1997                         1996
                                                                                   (26 weeks)                   (26 weeks)
Cash flows from financing activities:
  Proceeds from long-term debt                                                    $12,700,000                  $     7,000
  Financing costs associated with long-term debt                                  (2,097,000)
  Principal payments on long-term debt                                                (4,000)                    (829,000)
  Principal payments on capital leases                                              (305,000)                    (314,000)
  Purchase of senior notes                                                                                       (838,000)
  Retirement of long-term debt                                                    (9,669,000)
  Proceeds from issuing stock                                                      30,442,000
  Exercise of employee stock options                                                                                12,000
  Proceeds from sale-leaseback transactions                                                                      1,659,000
  Dividends paid                                                                  (407,000)                     (423,000)
  Redemption of preferred stock                                                   (1,806,000)
     Net cash provided by (used for)
      financing activities                                                      28,854,000                      (726,000)
     Increase (decrease) in cash and cash
equivalents                                                                         2,006,000                     (67,000)
Cash and cash equivalents,
  beginning of period                                                            1,314,000                     1,463,000
    CASH AND CASH EQUIVALENTS,
      END OF PERIOD                                                            $ 3,320,000                   $ 1,396,000
Supplemental disclosures:
 Interest paid on debt                                                         $ 7,079,000                     $ 7,118,000
 Taxes paid                                                                    $ 1,358,000                     $    98,000
</TABLE>


<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 and six months ended June 30,
1997, 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,  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.


2.   INVENTORIES

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

<TABLE>
<CAPTION>
                                                  June 30,              December 31,
<S>                                      <C>                      <C>
                                                   1997                    1996
   Raw materials (food and
     paper products)                     $1,454,000              $ 1,386,000
   Supplies                                  937,000                 777,000
                                         $2,391,000              $ 2,163,000
</TABLE>



<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>
                                                  June 30,                 June 30,
<S>                                      <C>                      <C>
                                                  1997                     1996
   Current                              $   250,000             $    200,000
   Deferred                                 122,000                  440,000
                                        $   372,000             $    640,000
</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.

     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  and
     increased the deferred income tax asset.

4.   ACQUISITION

     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 $21.0 million.   The  following proforma
     results  of operations assume the acquisition occurred as  of  January  1,
     1997:

                             SIX MONTHS ENDED JUNE  30,
<TABLE>
<CAPTION>
                                          1997
<S>                             <C>
   Revenues                  $ 136,590,000
   Operating income          $   7,784,000
   Net income                $     272,000
</TABLE>

     The  proforma  financial  information is not necessarily indicative of the
     operating  results that would  have  occurred  had  the  acquisition  been
     consummated  as of January 1, 1997, nor are they necessarily indicative of
     future operating results.
<PAGE>
                        CARROLS CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  (continued)




5.   LONG-TERM DEBT

     On March 27, 1997,  the  Company  entered  into a 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").  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  margin
     currently at .75% but variable between 0.00% and 1.00%; or (ii) the London
     Interbank offering  rate  plus  a  margin  currently at 2.25% but variable
     between 1.50% and 2.50%, 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 6{th}  year  with  the
     remainder repayable during the 7{th} year.

     At  June  30,  1997,  $12.7 million was outstanding under the Advance Loan
     Facility  including  $5.0   million   used  to  refinance  the  previously
     outstanding  term  loan  with Heller Financial,  Inc.   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.

<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.


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



RESULTS OF OPERATIONS

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

     SALES.   Sales  for  the  three months ended June 30, 1997 increased $11.0
million, or 18.0%, as compared to  the  three  months  ended June 30, 1996. The
Company  operated  an  average of 262 Burger King restaurants  for  the  second
quarter of 1997 as compared  to  220  in  1996.   Average restaurant unit sales
decreased 1.0% when comparing 1997 to 1996.  Sales  at  comparable restaurants,
the  218  units operating for the entirety of the compared  periods,  decreased
$0.6 million,  or  1.0%.   Net  restaurant  selling  prices remained relatively
stable.

     COST OF SALES.  Cost of sales (food and paper costs)  for the three months
ended June 30, 1997 increased in dollars due to higher sales.   As a percentage
of  sales,  these  costs  increased  .4%  from  1996  to 1997 due primarily  to
increases in commodity costs, especially beef, partially  offset  by the effect
of fewer discount promotions.

     RESTAURANT  WAGES  AND  RELATED  EXPENSES.   Restaurant  wages and related
expenses  increased  from  29.2% of sales to 30.3% of sales when comparing  the
three months ended June 30,  1996  to  1997  due mainly to increased wage rates
(including the increase in the minimum wage rate effective October 1, 1996) and
related payroll tax costs.

     OTHER RESTAURANT OPERATING EXPENSES.  Other  restaurant operating expenses
increased in dollars due to higher sales and more restaurants  but decreased as
a  percentage  of  sales  from  20.2% in 1996 to 19.9% in 1997.  A decrease  in
average utility expense, repair and  maintenance  costs, operating supplies and
linen were the principal causes of this decrease.

     DEPRECIATION AND AMORTIZATION.  Additional depreciation  and  amortization
from new and acquired restaurants was partially offset by the effect  of assets
becoming  fully  depreciated  causing depreciation and amortization to increase
$1.2 million when comparing 1997 to 1996.

     ADMINISTRATIVE EXPENSES.   Administrative  expenses  increased $.4 million
when  comparing  the  three months ended June 30, 1997 to 1996  due  mainly  to
increased costs associated  with  more  restaurants  and  costs associated with
anticipated future expansion.  However, as a percentage of sales these expenses
decreased from 4.4% the three months ended June 30, 1996 to  4.2%  in  the same
period of 1997.

     ADVERTISING  EXPENSE.  An increase in advertising payments to Burger  King
Corporation of $0.4 million (based on sales levels) was the principal cause for
the increase in advertising  expense  when  comparing  1997  to 1996.  This was
partially  offset  by  a  .1%  decrease  in  expenditures  on other promotional
activity.


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


     INTEREST  EXPENSE.   A  modest  increase  in  the  average  loan  balances
outstanding  from  1996 to 1997 was offset by a slight decrease in the  average
interest rate.

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


SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

     SALES.  Sales for the six  months  ended  June  30,  1997  increased $15.0
million,  or  13.0%  as  compared  to the six months ended June 30, 1996.   The
Company operated an average of 249 Burger  King  restaurants  in  the first six
months  of  1997  as  compared to an average of 219 in the first six months  of
1996.  Average restaurant  unit  sales decreased .4% in the first six months of
1997 as compared to 1996.  Sales at comparable restaurants, the 216 restaurants
operating for the entirety of the  compared periods, decreased $0.6 million, or
 .5%.   Net  restaurant  selling  prices  remained  relatively  stable  for  the
comparable six month periods.

     COST OF SALES.  Cost of sales  (food  and  paper costs) for the six months
ended June 30, 1997 increased in dollars due to higher sales.  Cost of sales as
a percentage of sales increased from 28.5% in 1996 to 28.6% in 1997 as a result
of increases in certain commodity costs, especially beef.

     RESTAURANT  WAGES  AND  RELATED EXPENSES.  Restaurant  wages  and  related
expenses increased from 29.8% of sales to 31.1% of sales when comparing the six
months  ended  June 30, 1997 to  1996  due  mainly  to  increased  wage  rates,
increased group insurance costs, and some increases in unemployment tax rates.

     OTHER RESTAURANT  OPERATING EXPENSES.  Other restaurant operating expenses
increased in dollars due  to higher sales and more restaurants but decreased as
a percentage of sales from  20.8%  in  1996  to  20.5% in 1997 as a result of a
decrease in average repair and maintenance cost, operating  supplies  and linen
costs.

     DEPRECIATION  AND  AMORTIZATION.  Additional depreciation and amortization
from new and acquired restaurants  was partially offset by the effect of assets
becoming fully depreciated causing depreciation  and  amortization  to increase
$1.5 million when comparing 1997 to 1996.

     ADMINISTRATIVE  EXPENSES.   Administrative expenses increased $.6  million
when comparing the six months ended  June  30,  1997  to  1996  due  mainly  to
increased  costs  associated  with  more  restaurants and costs associated with
anticipated  future  expansion.   However, as  a  percentage  of  sales,  these
expenses decreased 4.5% in the six  months  ended  June 30, 1996 to 4.4% in the
same period of 1997.


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


     ADVERTISING EXPENSE.  An increase in advertising  payments  to Burger King
Corporation of $0.6 million (based on sales levels) was the principal cause for
the increase in advertising expense when comparing 1997 to 1996.

     INTEREST  EXPENSE.   A  modest  increase  in  the  average  loan  balances
outstanding  from  1996  to 1997 was offset by a slight decrease in the average
interest rate.

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


LIQUIDITY AND CAPITAL RESOURCES

     The operating activities of the Company  provided $2.9 million of cash for
the six months ended June 30, 1997 after using $6.2 million for the semi-annual
payment of accrued interest on the Company's 11-  1/2  %  Senior  Notes  (  the
"Senior Notes").

     Capital  spending  for  property,  equipment and franchise rights of $30.8
million included $25.8 million for the acquisition  of  24 restaurants in North
Carolina and South Carolina, three restaurants in Michigan  and two restaurants
in Pennsylvania.  Also included were construction costs for four new restaurant
units  that  opened  during  the  period,  various  remodels and other  capital
maintenance projects.  One restaurant unit 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  was  also  established 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  six  months  ended June 30, 1997, the Company borrowed  $12.7
million under the Advance Loan Facility  with Texas Commerce Bank, $5.0 million
of  which represented the refinancing of an  existing  term  loan  with  Heller
Financial, Inc. and $4.6 million to retire the previous balance of the revolver
with Heller Financial, Inc.


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


     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.

     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  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

     While  inflation  can have a significant impact on food, paper, labor  and
other operating costs, the  Company  has historically been able to minimize the
effect of inflation through periodic price  increases,  and believes it will be
able to offset future inflation with price increases, if necessary.




<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  a  current  report on Form 8-K
dated March 27, 1997, reporting Item 1 "Change in Control of Registrant";  Item
5 "Other Events"; and Item 7 "Proforma Financial Information".

<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)


August 13, 1997                             /S/ ALAN VITULI
Date                                        (Signature)
                                            Alan Vituli
                                            Chairman and Chief Executive
                                            Officer




August 13, 1997                             /S/ PAUL R. FLANDERS
Date                                        (Signature)
                                            Paul R. Flanders
                                            Vice President - Finance