SECURITIES AND EXCHANGE COMMISSION
      
                            Washington, D.C. 20549
      
                                 FORM 10-QSB
      
              QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
      
      
               For the quarterly period ended September 30, 1997
      
                      Commission file number 0-13642
      
      
                       HUDSON'S GRILL OF AMERICA, INC.
               (Name of small business issuer in its charter)
      
      
                              California
               (State or other jurisdiction of incorporation)
      
                              95-3477313
                   (IRS Employer Identification Number)
      
            16970 Dallas Parkway, Suite 402, Dallas, Texas  75248
                  (Address of Principal Executive Offices)
      
      
             Issuer's telephone number, including area code:
                           (972) 931-9237
      
      <PAGE>
      
           Check whether the issuer (1) filed all reports
      required to be filed by Section 13 or 15(d) of the
      Exchange Act during the past 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
      
              APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                 PROCEEDINGS DURING THE PRECEDING FIVE YEARS
      
           Check whether the registrant filed all documents and
      reports required to be filed by Section 12, 13 or 15(d) of
      the Exchange Act after the distribution of securities
      under a plan confirmed by a court.  Yes        No
      
      
                  APPLICABLE ONLY TO CORPORATE REGISTRANTS
      
           State the number of shares outstanding of each of the
      issuer's classes of common equity, as of the latest
      practicable date. 6,056,986
      
      
      <PAGE>
      
                        HUDSON'S GRILL OF AMERICA, INC.

                         CONSOLIDATED BALANCE SHEETS 
                                  (UNAUDITED)


                              ASSETS               
                         
                                        September 30,  December 29,
                                            1997           1996            

CURRENT ASSETS:
  Cash and cash equivalents             $   102,547     $    78,680
  Accounts receivable, net of allowance
    for doubtful accounts of $36,000
    and $22,907 respectively                 36,740          66,165
  Current portion of notes and leases
    receivable                              100,652         121,055
  Prepaid expenses and other                 35,477          16,492   

       Total current assets                 275,416         282,392

PROPERTY AND EQUIPMENT, at cost:
  Leasehold improvements                    558,211         614,706
  Restaurant equipment                      358,699         518,674
       Furniture and fixtures               120,149         188,507

       Total property and equipment       1,037,059       1,321,887

  Less accumulated depreciation
    and amortization                       (845,135)     (1,080,338)

       Property and equipment, net          191,924         241,549


LONG TERM PORTION OF NOTES
  AND LEASES RECEIVABLE                     838,608         748,222 

LIQUOR LICENSES-net of 
  accumulated amortization
  of $28,500 at September 30, 1997
  and $30,000 at December 29, 1996           31,500          45,186
     
OTHER ASSETS                                 23,905          34,711

      Total assets                      $ 1,361,353     $ 1,352,060



      <PAGE>

                        HUDSON'S GRILL OF AMERICA, INC.

                         CONSOLIDATED BALANCE SHEETS 
                                  (UNAUDITED)


                  LIABILITIES AND SHAREHOLDERS' EQUITY
                  
                                           September 30, December 29,
                                                1997          1996    


CURRENT LIABILITIES:
  Current portion of long-term debt         $              $   35,542
  Accounts payable                              29,822         46,922
  Accrued liabilities                           23,877         82,500

    Total current liabilities                   53,699        164,964

LONG-TERM DEBT

OTHER LONG-TERM LIABILITIES                    243,046        293,908

DEFERRED INCOME                                777,181        612,360

COMMITMENTS AND CONTINGENCIES
   (Note 4)

SHAREHOLDERS' EQUITY:
  Preferred stock, 5,000,000 
    shares authorized, none 
    issued or outstanding
  Common stock, no par value
     100,000,000 shares authorized
     6,056,986 shares issued and 
     outstanding                             4,456,457      4,456,457
  Accumulated deficit                       (4,169,030)    (4,175,629)
    Total shareholders' equity                 287,427        280,828 

    Total liabilities and
      and shareholders' equity              $1,361,353     $1,352,060




      <PAGE>



                        HUDSON'S GRILL OF AMERICA, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

                                           For the nine months ended 
                                         September 30,   September 30,
                                             1997            1996    

REVENUES:                              
  Net sales                              $   103,890      $   109,806
  Joint venture revenues                                       30,019
  Franchising fees from restaurants
    under sales contracts                     15,573           84,386
  Franchise revenues                         252,463          221,010
  Equipment lease income                      56,139           49,030
  Gain on sales of restaurants                53,165           27,775
  Other income                                51,440              422     
    Total revenues                           532,670          522,448

COSTS AND EXPENSES:
  Cost of sales                              116,938          157,803
  General and administrative                 445,584          477,992
  Depreciation and amortization               24,371           32,501
    Total costs and expenses                 586,893          668,296

    Income (loss) from operations            (54,223)        (145,848)

OTHER INCOME (EXPENSE):
  Interest expense                              (672)         (73,075)
  Interest income                             61,494          131,105
    Total other income (expense)              60,822           58,030


INCOME (LOSS) BEFORE INCOME TAXES              6,599          (87,818)

Provision for income taxes                                           

NET INCOME (LOSS)                        $     6,599      $   (87,818)

INCOME (LOSS) PER SHARE
  Net income (loss) per share            $     .0007      $    (.0145)
             


      <PAGE>


                        HUDSON'S GRILL OF AMERICA, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

                                          For the three months ended  
                                         September 30,   September 30,
                                             1997            1996    

REVENUES:                              
  Net sales                              $   103,890     $   
  Joint venture revenues                                        3,080
  Franchising fees from restaurants
    under sales contracts                      3,316           34,504
  Franchise revenues                          69,604           73,274
  Equipment lease income                      18,097           13,691
  Gain on sales of restaurants                17,021           13,140
  Other income                                17,177              422     
    Total revenues                           229,105          138,111

COSTS AND EXPENSES:
  Cost of sales                              116 938            3,246
  General and administrative                 168,158          129,544
  Depreciation and amortization                8,068            8,808
    Total costs and expenses                 293,164          141,598

    Income (loss) from operations            (64,059)          (3,487)

OTHER INCOME (EXPENSE):
  Interest expense                                            (24,059)
  Interest income                             20,315           47,212
    Total other income (expense)              20,315           23,153


INCOME (LOSS) BEFORE INCOME TAXES            (43,744)          19,666 

Provision for income taxes                                           

NET INCOME (LOSS)                        $   (43,744)     $    19,666 

INCOME (LOSS) PER SHARE
  Net income (loss) per share            $     (.007)     $      .002 
             


      <PAGE>



                        HUDSON'S GRILL OF AMERICA, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOW

                                           For the nine months ended 
                                         September 30,   September 30,
                                             1997            1996     
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                       $    6,599     $  (87,818)
  Adjustments to reconcile net income
   (loss) to net cash used by operating
   activities:
     Depreciation and amortization            24,371         32,502
     (Gain) loss on sales and closures
       of restaurants                        (53,165)       (27,775)
  Changes in assets and liabilities:
     Accounts receivable                       3,944        (15,726)
     Prepaid expenses and other               (8,315)         4,264
     Accounts payable                        (17,100)       (23,356)
     Accrued liabilities and other          (118,848)       (68,108)
       Net cash used by operating
       activities                           (162,514)      (186,017)
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net proceeds from sale of assets             4,634          7,913 
  Notes receivable principal payments        170,125        155,861
  Leases receivable principal payments        51,692        157,114
  Fixed assets and other                      (4,528)         4,799
      Net cash provided (used) by  
      investing activities                   221,923        325,687
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments of notes payable                (35,542)       (65,173)
      Net cash provided (used) by  
      financing activities                   (35,542)       (65,173)
NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                            23,867         74,497 
CASH AND CASH EQUIVALENTS, beginning
  of period                                   78,680         48,295
CASH AND CASH EQUIVALENTS, end 
  of period                               $  102,547     $  122,792 

SUPPLEMENTAL CASH FLOW INFORMATION:
     Interest paid                        $      902     $   70,894
     Income taxes paid                    $              $    4,800



      <PAGE>



                        HUDSON'S GRILL OF AMERICA, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS,  continued

SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:

Period ended September 30, 1997
In connection with the sale of a restaurant and equipment, the Company
received a note receivable of $114,200 and a lease receivable of $240,000.

Period ended September 30, 1996
In connection with the sale of the Oxnard, CA restaurant, the Company
received a note receivable of $282,086 and a lease receivable of $450,000. 
The note and lease receivable were foreclosed on during 1996 and the fixtures
and equipment repossessed.

A note and lease receivable in the total amount of $195,000 relating to the
Westlake, CA restaurant were foreclosed upon by the Company and the location
repossessed.

In connection with the sale of the Hornblowers restaurant, the Company
received a note receivable in the amount of $294,000.

      <PAGE>


                     HUDSON'S GRILL OF AMERICA, INC.

                Notes to Consolidated Financial Statements


A.   Basis of Presentation

     Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations, although management believes the disclosures are
adequate to make the information presented not misleading.  These
interim financial statements should be read in conjunction with the
Company's annual report and most recent audited financial statements
included in the report on Form 10-KSB for the year ended December 29,
1996, filed with the Securities and Exchange Commission.

     The interim financial information included hereto is unaudited;
however, such information reflects all the adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results of operations and
cash flows for the interim periods.  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.

      <PAGE>


      
   Item 2.  Management Discussion and Analysis.
      
     Material changes in the financial condition of the issuer and in
the results of its operations since the end of its last fiscal year and
its results from the comparable period in its last fiscal year include
the following.

     The issuer's accounts receivable at September 30, 1997 ("Q3") were 
$36,740 as compared to $66,165 at December 29, 1996 ("FYE").  The 
current portion of issuer's notes and leases receivable at Q3 was 
$100,652 as compared to $121,055 at FYE.  Leasehold improvements at Q3 
were $558,211, while at FYE they were $614,706.  At the same time, 
restaurant equipment decreased from $518,674 at FYE to $358,699 at Q3.

     The decreases in these last two asset accounts were due mostly from
the sale of a restaurant in the first quarter.  For that same reason,
the long term portion of notes receivable increased in the first nine
months from $748,222 to $838,608.
      
     Current liabilities decreased at Q3 to $53,699 from $164,964 at
FYE.  The current portion of long term debt, accounts payable, and
accrued liabilities all decreased in Q3, as debts were being paid. 
Deferred income increased at Q3 to $777,181 from $612,360 at FYE. This
reflects the sale of a restaurant in the first quarter.      

    Material changes in the results of operations of Q3 compared to the 
third quarter of 1996 ("Q96") include the following.  Net Sales
increased to $103,890 in Q3 from $0 in Q96, and cost of sales also
increased to $116,938 in Q3 from $3,246 in Q96.  These are a result of
the repossession of a restaurant during the third quarter of 1997; it is
currently operated by a subsidiary of the Company.  Franchising fees
from restaurants under contract decreased from $34,504 in Q96 to $3,316
in Q3 because there are currently no restaurants operating while under a
sales contract.
      
     General and administrative expenses increased in Q3 to $168,158
from $129,544 in Q96.  This was due to expenses incurred in opening the
registrant's first international franchise in Guatemala.  Interest
expense decreased to $0 in Q3 from $24,059 in Q96 as various notes have
been paid off during the past year.

     The issuer incurred a loss of $43,744 (($.007) per share) in Q3 as 
compared to a profit of $19,666 ($.002 per share) in Q96.


                 PART II - OTHER INFORMATION

     Item 1.  Legal Proceedings.
      
     The registrant incorporates by reference its response in its Form
10-KSB filed with the Securities and Exchange Commission on April 15, 
1997.  Currently all major litigation involving the registrant has been 
settled, and the registrant is not aware of any material litigation in 
process.

     Item 2.  Changes in Securities.

     There were no changes in securities or in the rights of the holders 
of the registrant's securities during Q3.

     Item 3.  Defaults Upon Senior Securities.

     The registrant does not currently have any senior securities
outstanding.  Consequently, there are no defaults on senior securities.

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

    There were no matters submitted to a vote of security holders during
Q3.

     Item 5.  Other Information.

     The registrant has been in "off and on" discussions with various 
potential franchisees to develop restaurants.  No new agreements have 
been signed since the signing of the registrant's first franchise in 
Michigan, which was announced in April 1997.  The registrant has 
contracted with a regional investment broker with the hope of raising
capital for the registrant. The registrant is not currently aware of any
genuine prospects for new capital or credit as a result of its agreement
with the regional investment broker.

     A lease has been signed by the registrant as part of a plan to open
a company owned restaurant for the purpose of using the new restaurant
as a model and training site.  The registrant plans to have the
restaurant open for business in February or March 1998.  Negotiations to
purchase two restaurants from a franchisee that is affiliated with the
registrant's`president, Mr. Osborn, have ceased without any agreement. 
Future negotiations are currently not anticipated.

     Item 6.  Exhibits and Reports on Form 8-K.
      
     (a)  Exhibit Index.  Following are the exhibits required under Item
601 of Regulation S-B for Form 10-QSB:

     Item 601
     Exhibit No.   Description                      Page Number
      
     (2)           Plan of Acquisition, Reorgani-
                    zation, Arrangement, Liquida-
                    tion, or Succession              n/a
      
     (4)           Instruments Defining the Rights
                    of Holders Including Indentures  n/a
      
     (6)           No Exhibit Required.              n/a
      
     (11)          Statement Re: Computation of
                    Per Share Earnings               n/a <FN1>
      
     (12)          No Exhibit Required.              n/a
      
     (15)          Letter on Unaudited Interim
                    Financial Information            n/a <FN2>
      
     (18)          Letter on Change in Accounting
                    Principles                       n/a
      
     (19)          Previously Unfiled Documents      n/a
      
     (20)          Reports Furnished to Security
                    Holders                          n/a
      
     (23)          Published Report Regarding
                    Matters Submitted to Vote        n/a
      
     (24)          Consent of Experts and Counsel    n/a
      
     (25)          Power of Attorney                 n/a
      
     (27)          Financial Data Schedule           attached
      
     (28)          Additional Exhibits               n/a
      
      <PAGE>
      
     <FN1>     No explanation of the computation of per share earnings
on both the primary and fully diluted basis is necessary because the 
computation can be clearly determined from the financial statements and 
the notes to the financial statements.

     <FN2>     No reports on unaudited interim financial information
have been prepared by the Company's independent accountants, and
therefore, no letter is required from the Company's independent
accountants.

     (b)  Reports on Form 8-K.  The following reports on Form 8-K were
filed during the quarter ending September 30, 1997:

     1.  July 21, 1997.  The Company announced that it filled a vacancy
on its board of directors; that two area representation and franchise
development agreements were terminated; and that it had reduced its
consulting agreement with its inside consultant, Dalm's, Inc.

     2. September 16, 1997.  The Company announced that its Guatemala
franchisee opened the first international Hudson's Grill restaurant;
that it had signed a lease for a build to suit restaurant in Dallas; and
that a franchisee had closed a restaurant.

    <PAGE>
      
                                 SIGNATURES
      
     In accordance with Section 13 or 15(d) of the Exchange Act, the 
registrant caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.


                 (Registrant)     HUDSON'S GRILL OF AMERICA, INC.
      
      
                                 By: s/s David L. Osborn
                                     David L. Osborn, President
      
      
                                     Date:     November 15, 1997
      
      
      
      elink\filing\10QSB.973