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 March 31, 1998
      
                      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>
                         PART I  FINANCIAL INFORMATION

   Item 1.  Financial Statements


                      HUDSON'S GRILL OF AMERICA, INC.

                       CONSOLIDATED BALANCE SHEETS 
                                (UNAUDITED)

                              ASSETS               
                         
                                          March 31,    December 28,
                                            1998           1997            

CURRENT ASSETS:
  Cash and cash equivalents             $    65,211     $    42,401
  Accounts receivable, net of allowance
    for doubtful accounts of $47,425
    and $49,000 respectively                 43,506          69,830
  Current portion of notes and leases
    receivable                              100,000         100,000
  Prepaid expenses and other                 38,531          23,185   

       Total current assets                 247,248         235,416

PROPERTY AND EQUIPMENT, at cost:
  Leasehold improvements                      3,986           2,969
  Restaurant equipment                       33,678          33,378      
Furniture and fixtures                        5,851           5,851

       Total property and equipment          43,515          42,198

  Less accumulated depreciation
    and amortization                         (8,728)         (7,030)

       Property and equipment, net           34,787          35,168


LONG TERM PORTION OF NOTES
  AND LEASES RECEIVABLE, net of 
  allowance for doubtful accounts
  of $33,000 and $33,000 respectively       775,865         791,858 

LIQUOR LICENSES-net of 
  accumulated amortization
  of $31,500 at March 31, 1998    
  and $30,000 at December 28, 1997           28,500          30,815
     
OTHER ASSETS                                 17,318          23,463
      Total assets                      $ 1,103,718     $ 1,116,720


                      HUDSON'S GRILL OF AMERICA, INC.

                       CONSOLIDATED BALANCE SHEETS 
                                (UNAUDITED)


                  LIABILITIES AND SHAREHOLDERS' EQUITY
                  
                                              March 31,  December 28,
                                                1998          1997    


CURRENT LIABILITIES:
  Accounts payable                          $   74,527     $   40,886
  Accrued liabilities                          217,124        201,343

    Total current liabilities                  291,651        242,229

LONG-TERM DEBT

OTHER LONG-TERM LIABILITIES                    179,645        206,494

DEFERRED INCOME                                762,881        778,367

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                       (4,586,916)    (4,566,827)
    Total shareholders' equity                (130,459)      (110,370)

    Total liabilities and
      and shareholders' equity              $1,103,718     $1,116,720







                      HUDSON'S GRILL OF AMERICA, INC.

                   CONSOLIDATED STATEMENTS OF OPERATIONS
                         AND COMPREHENSIVE INCOME
                                (UNAUDITED)

                                           For the three months ended 
                                           March 31,        March 31, 
                                             1998            1997     

REVENUES:                            
  Net sales                              $   226,745      $          
  Franchising fees from restaurants
    under sales contracts                                       8,093
  Franchise revenues                          82,974           75,988
  Equipment lease income                      12,515           16,812
  Gain on sales of restaurants                11,423           16,103
  Other income                                16,330           16,471     
    Total revenues                           349,987          133,467

COSTS AND EXPENSES:
  Cost of sales                              235,549
  General and administrative                 139,014          134,234
  Depreciation and amortization                3,280            8,299
    Total costs and expenses                 377,843          142,533

    Income (loss) from operations            (27,856)          (9,066)

OTHER INCOME (EXPENSE):
  Interest expense                                               (566)
  Interest income                              7,767           20,357
    Total other income (expense)               7,767           19,791


INCOME (LOSS) BEFORE INCOME TAXES            (20,089)          10,725 

Provision for income taxes                                           

NET INCOME (LOSS) AND
 COMPREHENSIVE INCOME (LOSS)             $   (20,089)     $    10,725 

INCOME (LOSS) PER SHARE
 Basic and diluted net income
 (loss) and comprehensive
 income (loss) per share                 $     (.003)     $      .001 
             


                      HUDSON'S GRILL OF AMERICA, INC.

                   CONSOLIDATED STATEMENTS OF CASH FLOW

                                           For the three months ended 
                                            March 31,       March 31, 
                                             1998            1997      
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                       $  (20,089)    $   10,725 
  Adjustments to reconcile net income
   (loss) to net cash used by operating
   activities:
     Depreciation and amortization             3,280          8,299
     (Gain) loss on sales and closures
       of restaurants                        (11,424)       (16,103)
  Changes in assets and liabilities:
     Accounts receivable                       5,129         29,829 
     Prepaid expenses and other                1,292            758         
Accounts payable                              33,641        (32,305)
     Accrued liabilities and other            (1,819)       (59,143)
       Net cash provided (used)
       by operating activities                10,010        (57,940)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net proceeds from sale of assets                            4,634 
  Notes receivable principal payments          7,337         37,106
  Leases receivable principal payments         7,385         17,923
  Fixed assets and other                      (1,922)              
      Net cash provided (used) by  
      investing activities                    12,800         59,663

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments of notes payable                               (19,771)
      Net cash provided (used) by  
      financing activities                                  (19,771)

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                            22,810        (18,048)

CASH AND CASH EQUIVALENTS, beginning
  of period                                   42,401         78,680

CASH AND CASH EQUIVALENTS, end 
  of period                               $   65,211     $   60,632 

SUPPLEMENTAL CASH FLOW INFORMATION:
     Interest paid                        $              $      691
     Income taxes paid                    $              $         





                      HUDSON'S GRILL OF AMERICA, INC.

             CONSOLIDATED STATEMENTS OF CASH FLOWS,  continued

SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:

Period ended March 31, 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.









                   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 28, 1997, 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 months ended March 31, 1998, 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 March 31, 1998 ("Q1") were 
$43,506 as compared to $69,830 at December 28, 1997 ("FYE").
      
     Accounts payable increased at Q1 to $74,527 from $40,886 at FYE.

     Material changes in the results of operations of Q1 compared to the 
first quarter of 1997 ("Q97") include the following.  Net Sales
increased to $226,745 in Q1 from $0 in Q97, and cost of sales also
increased to $235,549 in Q1 from $0 in Q97.  These are a result of the
repossession of a restaurant during the first quarter of 1998 and the
continued operation of another location; they were operated by
subsidiaries and affiliates of the Company, and their results were
consolidated into the financial statements of the Company.  Franchising
fees from restaurants under contract decreased from $8,093 in Q97 to $0
in Q1 because there are currently no restaurants operating while under a
sales contract.  Franchising fees, franchise revenues, equipment lease
income, gains on sale of restaurants, and other income remained about
the same from Q97 to Q1.  Income from operations decreased slightly from
a loss of ($9,066) to a loss of ($27,856).
      
     General and administrative expenses also remained about the same
from Q97 to Q1.  Interest income has dropped from $20,357 in Q97 to
$7,767 in Q1.  Some of this is due to the declining principal of the
Company's notes receivable.

     The issuer incurred a loss of ($20,089) (($.003) per share) in Q1
as compared to a profit of $10,725 ($.001 per share) in Q97.


                 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 May 5, 
1998.  The registrant is not aware of any other litigation not already
disclosed in its recently filed SEC Form 10-KSB.

     Item 2.  Changes in Securities.

     There were no changes in securities or in the rights of the holders 
of the registrant's securities during Q1.

     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
Q1.

     Item 5.  Other Information.

     The registrant does not have any material new information that has
not already been disclosed in Forms 8-K and 10-KSB filed since January
1, 1998.

     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 March 31, 1998, or shortly thereafter:

     1. April 3, 1998. The Company announced that in March 1998 it had
signed a new franchise agreement with Sharfe, L.L.C. to build a Hudson's
Grill in Marquette, Michigan, and had already received a franchise fee
from Sharfe.  Sharfe plans to build a freestanding Hudson's Grill
restaurant.

The Company's directors decided to ask for a shareholder vote at the
next annual meeting to ratify the transfer of assets to Hudson's Grill
International, Inc.; to recommend a vote to register the shares of
Hudson's Grill International; and then to distribute the shares to the
shareholders of the Company.  On January 20, 1998, the Company formed a
subsidiary, Hudson's Grill of Denton/Trinity, Inc., to operate the
Carrollton, Texas,  Hudson's Grill on a month to month basis. Hudson's
Grill of Whittier, Inc., a subsidiary that operated the Westlake,
California, Hudson's Grill, shut down operations at the Westlake
location and turned the premises and furniture, non-proprietary fixtures
and equipment over to the landlord on March 9, 1998.  Also, the
Guatemala City, Guatemala, Hudson's Grill was closed in February 1998 by
the local franchisee because of insufficient sales.

    <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:     May 15, 1998
      
      
      
      elink\filing\10QSB.981