FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



(Mark One)



[x]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended:    June 30, 2000

OR



[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from______________ to ________________





Commission file number:   0-11927





Moto Photo, Inc.





(Exact name of registrant as specified in its charter)





Delaware		                            	31-1080650  	(State or other jurisdiction of			(IRS Employer Identification Number)

Incorporation or organization)





4444 Lake Center Dr. Dayton, OH  45426



(Address of principal executive offices with Zip Code)





(937) 854-6686



(Registrant's telephone number, including area code)





No Change



(Former name, former address, and former fiscal year, if changed since last report)











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  ____





APPLICABLE ONLY TO ISSUERS IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS.



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed
by a court.



Yes______ No______





APPLICABLE ONLY TO CORPORATE ISSUERS



Indicate the number of shares outstanding of each of the issuer's classes of common stock:

As of  August 1, 2000:

7,741,290 - Voting Common,   0 - Non - Voting Common

Index



Moto Photo, Inc. and Subsidiaries



Part I.	Financial Information

Item 1.	Financial Statements (Unaudited)



Consolidated Balance Sheets - June 30, 2000 and December 31, 1999

Consolidated Statements of Operations - Three months ended June 30, 2000 and 1999 and six months ended June 30, 2000 and 1999

Consolidated Statements of Cash Flows - Six months ended June 30, 2000 and 1999

Notes to Consolidated Financial Statements - June 30, 2000

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Part II.	Other Information



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

Item 6.	Exhibits and Reports on Form 8-K



Signature

|Part I.      Financial Information |                                                  |                                |                      
|---------------------------------- | ------------------------------------------------ | ------------------------------ | ---------------------
|Item 1.     Financial Statements   |                                                  |                                |                      
|Moto Photo, Inc. and Subsidiaries  |                                                  |                                |                      
|                                   |                                                  |                                |                      
|Consolidated Balance Sheets        |                                                  |                                |                      
|(Unaudited)                        |                                                  |                                |                      
|                                   |                                                  |                                |                      
|                                   |                                                  |                                |                      
|                                   |                                                  |                                |                      
|                                   |                                                  |                                | June 30,             
|                                   |                                                  |                                | 2000                 
|Assets                             |                                                  |                                |                      
|Current Assets:                    |                                                  |                                |                      
|                                   | Cash                                             | $                 678,022      |                      
|                                   | Accounts receivable, less allowances of $705,000 |                                |                      
|                                   |                                                  | in 2000 and $636,000 in 1999   | 3,090,057            
|                                   | Notes receivable, less allowances of  $55,000 in |                                |                      
|                                   |                                                  | 2000 and $89,000 in 1999       | 221,669              
|                                   | Inventory                                        | 2,166,635                      |                      
|                                   | Income taxes receivable                          | 710,048                        |                      
|                                   | Deferred tax assets                              | 1,063,000                      |                      
|                                   | Prepaid expenses                                 | 263,096                        |                      
|Total current assets               | 8,192,527                                        |                                | 12,361,659           
|                                   |                                                  |                                |                      
|Property and equipment             | 5,307,312                                        |                                | 5,315,573            
|                                   |                                                  |                                |                      
|Other assets:                      |                                                  |                                |                      
|                                   | Notes receivable, less allowances of $1,571,000  |                                |                      
|                                   |                                                  | in 2000 and $1,536,000 in 1999 | 1,018,444            
|                                   | Cost of franchises and contract acquired         | 103,629                        |                      
|                                   | Goodwill                                         | 3,565,590                      |                      
|                                   | Deferred tax assets                              | 130,000                        |                      
|                                   | Other assets                                     | 950,000                        |                      
|Total assets                       | $             19,267,502                         |                                | $          23,916,814
|                                   |                                                  |                                |                      
|                                   |                                                  |                                |                      
|See accompanying notes.            |                                                  |                                |                      









|Moto Photo, Inc. and Subsidiaries          |                                                 |                                           |                      
|------------------------------------------ | ----------------------------------------------- | ----------------------------------------- | ---------------------
|                                           |                                                 |                                           |                      
|Consolidated Balance Sheets, continued     |                                                 |                                           |                      
|(Unaudited)                                |                                                 |                                           |                      
|                                           |                                                 |                                           |                      
|                                           |                                                 |                                           |                      
|                                           |                                                 |                                           |                      
|                                           |                                                 |                                           | June 30,             
|                                           |                                                 |                                           | 2000                 
|Liabilities and stockholders' equity       |                                                 |                                           |                      
|Current liabilities:                       |                                                 |                                           |                      
|                                           | Accounts payable                                | $              1,703,654                  |                      
|                                           | Accrued payroll and benefits                    | 624,835                                   |                      
|                                           | Accrued expenses                                | 390,723                                   |                      
|                                           | Accrued income taxes                            | 342,828                                   |                      
|                                           | Current portion of long-term obligations        | 602,000                                   |                      
|                                           | Other                                           | 212,138                                   |                      
|Total current liabilities                  | 3,876,178                                       |                                           | 8,012,153            
|                                           |                                                 |                                           |                      
|                                           | Long-term debt                                  | 9,089,626                                 |                      
|                                           | Capitalized leases                              | 1,022,228                                 |                      
|                                           | Deferred revenue                                | 110,544                                   |                      
|Total liabilities                          | 14,098,576                                      |                                           | 18,160,022           
|                                           |                                                 |                                           |                      
|Stockholders' equity                       |                                                 |                                           |                      
|                                           | Preferred stock $.01 par value:                 |                                           |                      
|                                           |                                                 | Authorized shares - 2,000,000:            |                      
|                                           |                                                 | Amended Series G (Series G in 1999)       |                      
|                                           |                                                 | cumulative non-voting preferred shares,   |                      
|                                           |                                                 | 1,000,000 shares issued and outstanding   |                      
|                                           |                                                 | with preferences aggregating $10,000,000  | 10,000               
|                                           | Common shares $.01 par value:                   |                                           |                      
|                                           |                                                 | Authorized shares - 30,000,000:           |                      
|                                           |                                                 | Issued and outstanding shares - 7,884,565 |                      
|                                           |                                                 | in  2000 and 1999                         | 78,845               
|                                           | Treasury stock, at par (143,275 shares in  2000 |                                           |                      
|                                           |                                                 | and 151,300 shares in 1999)               | (1,433)              
|                                           | Paid-in capital                                 | 6,417,952                                 |                      
|                                           | (Deficit) retained earnings subsequent to       |                                           |                      
|                                           |                                                 | June 30, 1991                             | (1,336,438)          
|Total stockholders' equity                 | 5,168,926                                       |                                           | 5,756,792            
|Total liabilities and stockholders' equity | $             19,267,502                        |                                           | $          23,916,814
|                                           |                                                 |                                           |                      
|                                           |                                                 |                                           |                      
|See accompanying notes.                    |                                                 |                                           |                      

Moto Photo, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

|                                              |                                      | Three Months Ended |                 | Six Months Ended
|--------------------------------------------- | ------------------------------------ | ------------------ | --------------- | ----------------
|                                              |                                      | June 30,           |                 | June 30,        
|                                              |                                      | 2000               |                 | 1999            
|                                              |                                      |                    |                 |                 
|Revenue                                       |                                      |                    |                 |                 
|                                              |                                      |                    |                 |                 
|                                              | Sales and other revenue              | $  9,432,391       |                 | $ 9,308,361     
|                                              | Interest income                      | 37,882             |                 | 59,485          
|                                              |                                      | 9,470,273          |                 | 9,367,846       
|                                              |                                      |                    |                 |                 
|Expenses                                      |                                      |                    |                 |                 
|                                              |                                      |                    |                 |                 
|                                              | Cost of sales and operating expenses | 7,045,140          |                 | 6,678,725       
|                                              | Selling, general, and administrative | 1,521,973          |                 | 1,446,552       
|                                              | Advertising                          | 422,582            |                 | 315,502         
|                                              | Depreciation and amortization        | 375,259            |                 | 280,194         
|                                              | Interest expense                     | 187,385            |                 | 97,000          
|                                              |                                      | 9,552,339          |                 | 8,817,973       
|                                              |                                      |                    |                 |                 
|Income (Loss) before income taxes             | (82,066)                             |                    | 549,873         |                 
|                                              |                                      |                    |                 |                 
|Income tax benefit (expense)                  | 29,000                               |                    | (143,000)       |                 
|Net income (loss)                             | (53,066)                             |                    | 406,873         |                 
|                                              |                                      |                    |                 |                 
|Dividend requirement on preferred shares      | (180,498)                            |                    | (66,630)        |                 
|Net income (loss) applicable to common shares | $   (233,564)                        |                    | $    340,243    |                 
|                                              |                                      |                    |                 |                 
|Net income (loss) per common share:
Basic     | $          (.03)                     |                    | $           .04 |                 
|Diluted                                       | $          (.03)                     |                    | $           .04 |                 
|                                              |                                      |                    |                 |                 
|Weighted average shares outstanding:
Basic    | 7,738,529                            |                    | 7,845,072       |                 
|Diluted                                       | 7,738,529                            |                    | 7,845,072       |                 



See accompanying notes.

Moto Photo Inc and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

|                                                                    |                                                                | Six Months Ended June 30,
|------------------------------------------------------------------- | -------------------------------------------------------------- | -------------------------
|                                                                    |                                                                | 2000                     
|                                                                    |                                                                |                          
|Operating activities                                                |                                                                |                          
|Net income (loss)                                                   | $       (599,307)                                              |                          
|Adjustments to reconcile net cash utilized by operating activities: |                                                                |                          
|                                                                    | Depreciation and amortization                                  | 745,735                  
|                                                                    | Provision for losses on inventory and receivables              | 122,682                  
|                                                                    | Notes receivable increases as a result of franchise activities | (15,000)                 
|                                                                    | Loss on disposition of assets                                  |                          
|                                                                    | Issuance of stock for directors fees                           | 30,422                   
|Increase (decrease) resulting from changes in:                      |                                                                |                          
|                                                                    | Income tax receivable                                          | 320,048                  
|                                                                    | Accounts receivable                                            | 147,994                  
|                                                                    | Inventory and prepaid expenses                                 | 228,339                  
|                                                                    | Other assets                                                   | -                        
|                                                                    | Accounts payable and accrued expenses                          | (2,303,381               
|                                                                    | Other liabilities                                              | (31,592)                 
|Net cash utilized by operating activities                           | (1,354,060)                                                    |                          
|                                                                    |                                                                |                          
|Investing activities                                                |                                                                |                          
|                                                                    | Purchases of property and equipment                            | (262,675)                
|                                                                    | Payments received on notes receivable                          | 700,985                  
|                                                                    | Other assets                                                   | (5,498)                  
|Net cash provided (utilized) by investing activities                | 432,812                                                        |                          
|                                                                    |                                                                |                          
|Financing activities                                                |                                                                |                          
|                                                                    | Proceeds from long-term obligations                            | 292,806                  
|                                                                    | Principal payments on  long-term debt and capital              |                          
|                                                                    | lease obligations                                              | (2,627,931)              
|                                                                    | Payments of preferred dividends                                | -                        
|                                                                    | Purchase of common shares for treasury stock                   | (20,393)                 
|                                                                    | Contributed capital                                            | 1,413                    
|Net cash utilized by financing activities                           | (2,354,105)                                                    |                          
|                                                                    |                                                                |                          
|Decrease in cash                                                    | (3,275,353)                                                    |                          
|Cash at beginning of period                                         | 3,953,375                                                      |                          
|Cash at end of period                                               | $       678,022                                                |                          
|                                                                    |                                                                |                          
|                                                                    |                                                                |                          
|See accompanying notes                                              |                                                                |                          



Moto Photo, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2000

"Unaudited"



A.	Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (all of which are of normal
recurring nature) considered necessary for a fair presentation have been included.  Operating results for the six-month period ended June 30, 2000, are not necessarily indicative of the results that may be expected for the year ended December 31, 2000.



The internal accounting for the Company is on a fiscal calendar quarter basis.  The fiscal quarter dates may vary from the calendar quarter dates, (i.e., July 1vs. June 30 for the
second quarter 2000), except for the fourth quarter which ends on December 31.  The differences in ending dates are immaterial.



The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect amounts reported in the financial statements.  Actual results could differ from those
estimates.



For further information, refer to the consolidated financial statements and footnotes thereto included in Moto Photo, Inc. and Subsidiaries' annual report on Form 10-K for the year ended December 31, 1999.

B.	Reclassification

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

C.	Supplemental Cash Flow Information

Noncash items in the first half of 2000 included $400,129 of capital expenditures for the company store segment from entering into capitalized leases and trade-in of equipment.  Cash paid for interest during the first six months of 2000 was $398,266
compared to $204,525 for the same period in 1999.  Cash paid for income taxes was $200 for the first six months of 2000 and $6,350 for the same period in 1999.



























1. Segment Information

Three Months Ended June 30, 2000

|                                                                                                                                            | Development       | Company Stores | Royalties and Advertising | Wholesale   | Total      
|------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | -------------- | ------------------------- | ----------- | -----------
|                                                                                                                                            |                   |                |                           |             |            
|Sales and other revenue                                                                                                                     | $          75,046 | $ 3,820,183    | $     1,238,582           | $ 4,298,580 | $ 9,432,391
|                                                                                                                                            |                   |                |                           |             |            
|Depreciation and amortization                                                                                                               | 762               | 310,299        | 2,993                     | 1,273       | 315,327    
|                                                                                                                                            |                   |                |                           |             |            
|Operating segment contribution prior
       to interest income and expense, 
       income taxes and unallocated 
       corporate expenses | (161,973)         | (548,660)      | 801,924                   | (25,636)    | 65,655     
|                                                                                                                                            |                   |                |                           |             |            
|Capital expenditures                                                                                                                        | -                 | 252,918        | -                         | -           | 252,918    
|                                                                                                                                            |                   |                |                           |             |            





Three Months Ended June 30, 1999

|                                                                                                                                            | Development      | Company Stores | Royalties and Advertising | Wholesale  | Total     
|------------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | -------------- | ------------------------- | ---------- | ----------
|                                                                                                                                            |                  |                |                           |            |           
|Sales and other revenue                                                                                                                     | $         60,500 | $3,215,950     | $    1,315,230            | $4,716,681 | $9,308,361
|                                                                                                                                            |                  |                |                           |            |           
|Depreciation and amortization                                                                                                               | 980              | 202,730        | 3,226                     | 2,306      | 209,242   
|                                                                                                                                            |                  |                |                           |            |           
|Operating segment contribution prior
       to interest income and expense, 
       income taxes and unallocated 
       corporate expenses | (133,538)        | (265,490)      | 904,775                   | 92,635     | 598,382   
|                                                                                                                                            |                  |                |                           |            |           
|Capital expenditures                                                                                                                        | -                | 328,841        | -                         | -          | 328,841   
|                                                                                                                                            |                  |                |                           |            |           

1. 
2. Segment Information (continued)

Six Months Ended June 30, 2000

|                                                                                                                                            | Development     | Company Stores | Royalties and Advertising | Wholesale   | Total      
|------------------------------------------------------------------------------------------------------------------------------------------- | --------------- | -------------- | ------------------------- | ----------- | -----------
|                                                                                                                                            |                 |                |                           |             |            
|Sales and other revenue                                                                                                                     | $       125,796 | $ 6,894,091    | $    2,291,585            | $ 7,353,356 | $16,664,828
|                                                                                                                                            |                 |                |                           |             |            
|Depreciation and amortization                                                                                                               | 1,641           | 611,298        | 5,986                     | 2,770       | 621,695    
|                                                                                                                                            |                 |                |                           |             |            
|Operating segment contribution prior
       to interest income and expense, 
       income taxes and unallocated 
       corporate expenses | (327,648)       | (1,505,560)    | 1,458,437                 | (253,810)   | (628,581)  
|                                                                                                                                            |                 |                |                           |             |            
|Identifiable segment assets                                                                                                                 | 85,628          | 10,418,131     | 678,284                   | 3,572,545   | 588        
|                                                                                                                                            |                 |                |                           |             |            
|Capital expenditures                                                                                                                        | -               | 609,173        | -                         | -           | 609,173    
|                                                                                                                                            |                 |                |                           |             |            
|                                                                                                                                            |                 |                |                           |             |            

Six Months Ended June 30, 1999

|                                                                                                                                            | Development      | Company Stores | Royalties and Advertising | Wholesale   | Total      
|------------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | -------------- | ------------------------- | ----------- | -----------
|                                                                                                                                            |                  |                |                           |             |            
|Sales and other revenue                                                                                                                     | $        148,920 | $ 5,886,260    | $      2,349,269          | $ 7,898,895 | $16,283,344
|                                                                                                                                            |                  |                |                           |             |            
|Depreciation and amortization                                                                                                               | 1,959            | 406,472        | 6,452                     | 4,612       | 419,495    
|                                                                                                                                            |                  |                |                           |             |            
|Operating segment contribution prior
       to interest income and expense, 
       income taxes and unallocated 
       corporate expenses | (252,223)        | (795,524)      | 1,584,314                 | (171,838)   | 364,729    
|                                                                                                                                            |                  |                |                           |             |            
|Identifiable segment assets                                                                                                                 | 79,859           | 8,865,516      | 1,214,347                 | 4,109,867   | 14,269,589 
|                                                                                                                                            |                  |                |                           |             |            
|Capital expenditures                                                                                                                        | -                | 668,952        | -                         | 878         | 669,830    
|                                                                                                                                            |                  |                |                           |             |            



|                                                     | Three Months Ended
June 30, |  | Six Months Ended
June 30,
|---------------------------------------------------- | --------------------------- |  | -------------------------
|Revenue                                              | 2000                        |  | 1999                     
|Total sales and other revenue forreportable segments | $  9,432,391                |  | $  9,308,361             
|Interest income                                      | 37,882                      |  | 59,485                   
|Total consolidated revenues                          | $  9,470,273                |  | $  9,367,846             









1. Segment Information (continued)

|Other Significant Items                                                                                                                                 |         | Segment Totals    | Corporate         | Consolidated Total 
|------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | ----------------- | ----------------- | -------------------
|                                                                                                                                                        |         |                   |                   |                    
|Three Months Ended June 30, 2000                                                                                                                        |         |                   |                   |                    
|Depreciation and amortization                                                                                                                           |         | $         315,327 | $          59,932 | $           375,259
|Operating segment contribution prior to                                                                                                                 |         |                   |                   |                    
|interest income and expense,  income 
      taxes and unallocated corporate expenses 
      for segment totals reconciled to income 
      before taxes | 65,655  | (147,721)         | (82,066)         
|Capital expenditures                                                                                                                                    |         | 252,918           | 43,082            | 296,000            
|                                                                                                                                                        |         |                   |                   |                    
|Three Months Ended June 30, 1999                                                                                                                        |         |                   |                   |                    
|Depreciation and amortization                                                                                                                           |         | $        209,242  | $          70,952 | $           280,194
|Operating segment contribution prior to                                                                                                                 |         |                   |                   |                    
|Interest income and expense,  income 
      taxes and unallocated corporate expenses 
      for segment totals reconciled to income 
      before taxes |         | 598,382           | (48,509)          | 549,873            
|Capital expenditures                                                                                                                                    |         | 328,841           | 43,832            | 372,673            
|                                                                                                                                                        |         |                   |                   |                    
|Six Months Ended June 30, 2000                                                                                                                          |         |                   |                   |                    
|Depreciation and amortization                                                                                                                           |         | $        621,695  | $    124,040      | $         745,735  
|Operating segment contribution prior to                                                                                                                 |         |                   |                   |                    
|Interest income and expense,  income 
      taxes and unallocated corporate expenses 
      for segment totals reconciled to income 
      before taxes |         | (628,581)         | (293,726)         | (922,307)          
|Identifiable segment assets                                                                                                                             |         | 14,754,588        | 4,512,914         | 19,267,502         
|Capital expenditures                                                                                                                                    |         | 609,173           | 53,631            | 662,804            
|                                                                                                                                                        |         |                   |                   |                    
|Six Months Ended June 30, 1999                                                                                                                          |         |                   |                   |                    
|Depreciation and amortization                                                                                                                           |         | $        419,495  | $    141,906      | $         561,401  
|Operating segment contribution prior to                                                                                                                 |         |                   |                   |                    
|interest income and expense,  income 
      taxes and unallocated corporate expenses 
      for segment totals reconciled to income 
      before taxes | 364,729 | (73,063)          | 291,666          
|Identifiable segment assets                                                                                                                             |         | 14,269,589        | 5,994,718         | 20,264,307         
|Capital expenditures                                                                                                                                    |         | 669,830           | 84,767            | 754,597            
|                                                                                                                                                        |         |                   |                   |                    









E.	Earnings Per Share Data

The following table sets forth the calculation of basic and diluted earnings (loss) per share for the periods indicated.

Three Months Ended		Six Months Ended

|                                                                    | June 30, 2000      |  | June 30, 1999      |  | June 30, 2000    |  | June 30, 1999  
|------------------------------------------------------------------- | ------------------ |  | ------------------ |  | ---------------- |  | ---------------
|                                                                    |                    |  |                    |  |                  |  |                
|Net income (loss) applicable to common shares                       | $     ( 233,564)   |  | $       340,243    |  | $  ( 955,209)    |  | $      79,712  
|                                                                    |                    |  |                    |  |                  |  |                
|Reconciliation of shares:                                           |                    |  |                    |  |                  |  |                
|Weighted average common shares outstanding                          | 7,738,529          |  | 7,845,072          |  | 7,733,971        |  | 7,842,434      
|Effect of dilutive stock options and other common stock equivalents | -                  |  | -                  |  | -                |  | 749            
|Weighted average common shares assuming dilution                    | 7,738,529          |  | 7,845,072          |  | 7,733,971        |  | 7,843,183      
|                                                                    |                    |  |                    |  |                  |  |                
|Basic earnings (loss) per share                                     | $            (.03) |  | $              .04 |  | $          (.12) |  | $           .01
|                                                                    |                    |  |                    |  |                  |  |                
|Diluted earnings (loss) per share                                   | $            (.03) |  | $              .04 |  | $         (.12)  |  | $           .01





Item 2.

Management's Discussion and Analysis

of Financial Condition

and Results of Operations

Results of Operations

The Company reported a net loss of  $53,066, or a loss per common share, basic and diluted, of $.03 for the second quarter 2000 compared to net income of $406,873, or income per common share, basic and diluted, of $.04 for the second
quarter 1999.  For the six months ended June 30, 2000, the Company recorded a net loss of $599,307, or a loss per common share, basic and diluted, of $.12, compared to a net income of $213,666, or net income per common share, basic and diluted, of $.01
for the six months ended June 30, 1999.  Per share calculations are made after provision for preferred dividend requirements.  The 2000 dividend requirement is an imputed amount, and no cash payments are required until 2003.  Due to the Company's common
share price of approximately $.56, certain securities could become dilutive and have a significant impact on diluted earnings per share in subsequent periods.



Development segment revenue decreased by $23,000, or 16%, during the first six months of 2000 compared to 1999 primarily due to the Company changing its franchise offering and having a lower cost franchise fee program for stores that
open by December 31, 2000.



Company store revenue was up by $604,000, or 19%, for the second quarter 2000 compared to 1999 and was up by $1,008,000, or 17%, for the first six months of 2000 compared to 1999.  These increases are primarily due to the 17 company
stores opened or acquired during the last half of 1999 and the first half of 2000.  Comparable store sales were down 7% in the second quarter and down 6% for the first six months.  These decreases are primarily attributable to increased discounting on
film processing instituted to maintain the Company's share of film processing in markets that are experiencing increased competition from new drug stores that offer on-site processing.  Comparable store roll processing declined 3% for the second quarter
of 2000 and 1% for the first six months of 2000.



Wholesale segment revenue decreased during the second quarter by $418,000, or 9%, and during the first six months by $546,000, or 7%, primarily as the result of lower prices in the color paper market, approximately 6% fewer franchise
stores in the system compared to last year and disruption in supplies from the Company's primary manufacturer.



Revenue from franchisee royalties and advertising



Development segment operating expenses were up $22,000 for the second quarter and $53,000 for the first six months, primarily due to expanded advertising and marketing efforts designed to increase potential franchise prospects, and
partially offset by lower compensation expenses.



Company store segment operating contribution decreased by $283,000 in the second quarter 2000 compared to the same period in 1999.  Of this, $158,000 was from losses incurred during the ramp-up phase of the new stores, and $125,000 was
from lower sales and margins at stores opened more than one year.  For the first six months of 2000, Company store segment operating contribution decreased by $710,000 from the same period in 1999.   New stores in their ramp-up phase accounted for
$459,000 of this decrease with the balance primarily caused by lower sales and margins in stores opened more than one year as discussed above.



Selling, general and administrative expenses increased $75,000 for the quarter and $144,000 for the first half of the year, primarily due to the concept development team.  The Company implemented in 2000 a concept development team whose
mission is to explore strategies to test, refine, and implement conceptual enhancements, new technologies and new methods of communicating with customers, franchisees and employees.



Advertising expense increased $107,000 in the quarter and $215,000 for the year primarily due to supporting increased company store revenue and increases in advertising for development activities.



Depreciation and amortization expense increased over 1999 by $95,000 for the quarter and $184,000 for the year, primarily as a result of the property and equipment in the new company stores.



Interest expense increased $90,000 for the quarter ended June 30, 2000 compared to the same period in 1999 and $194,000 for the six months ended June 30, 2000 compared to the same period in 1999.  This was due to increased borrowings to
support Company store asset additions, the expansion discussed above, higher interest rates this year and the effect of converting $2,700,000 of accounts payable to a term note at the end of 1999.  Interest income, which is from notes receivable and
temporary investments of cash, decreased in 2000 in both the quarter and six months due to lower balances of cash and notes receivable. During the first six months of 2000, the Company prepaid substantially all of its long-term obligations which were
scheduled to be paid during 2000.  This will lower both interest expense and interest income below what would otherwise occur during the last six months of 2000, but interest expense for the last six months of 2000 is still expected to be greater than
1999, due to higher interest-bearing obligations and higher interest rates.



Liquidity and Capital Resources



Net cash utilized by operating activities was $1,354,000 for the first six months in 2000 compared to $14,000 for the same period in 1999.  This change was largely due to a reduction of accounts payable due to timing differences and a
larger loss, partially offset by reductions in accounts receivable and inventory.



Net cash provided by investing activities was $433,000 for the first six months in 2000 compared to net cash utilized by investing activities of $596,000 for the comparable period in 1999.  Increases in collections of notes receivable
and a decrease in cash  purchases of property and equipment were primarily responsible for the differences.



Net cash utilized by financing activities was $2,354,000 for the first six months in 2000 compared to $685,000 for the same period in 1999, due primarily to prepayments of long-term debt in 2000.

The Company has an unused $1.5 million line of credit available for use as of June 30, 2000.

Item 3

Quantitative and Qualitative Disclosures About Market Risk

For information concerning market risks relating to changes in interest rates, reference is made to Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999 and the discussion of market risks under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Form 10-K.  There have been no material changes in market risk since December
31, 1999.



Forward Looking Statements

This report may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by such words as "anticipates", "believes, "
expects", "intends", "estimates", "planned", "scheduled", "may", "will", "would", or similar expressions.  Such forward-looking statements, which reflect the Company's current
views of future events and financial performance, involve known and unknown risks and uncertainties that may cause the Company's actual results to differ materially from planned or expected results.  Those risks and uncertainties include but are not
limited to competitive pressures, technological changes affecting the Company's ability to compete, the ability to expand the Company's franchising operations, new store development and expansion, consumer acceptance of new programs and services, market
prices of key supply items, continuity of management, liquidity of the franchise system, lender and supply relationships, economic conditions, the effect of severe weather or natural disasters, the continued availability of capital and financing at
acceptable interest rates, and other risks indicated in the Company's filings with the United States Securities and Exchange Commission.





PART II.	OTHER INFORMATION

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

(a)	On June 29, 2000, the Company convened its annual meeting of shareholders.  Because of a lack of quorum, the meeting was adjourned to June 30, at which time a quorum was present.

(c)	At the meeting the shareholders voted on the election of directors.  The voting tabulation for each director is set next to his name.

Votes For		Votes Withheld

Michael F. Adler				3,735,931		138,790

Frank W. Benson				3,541,526		333,195

D. Lee Carpenter				3,543,026		331,695

Leslie Charm				3,543,026		331,695

Dexter B. Dawes				3,544,026		330,695

Harry D. Loyle				3,737,131		137,590

David A. Mason				3,544,026		330,695

James F. Robeson 				3,737,281		137,440



Item 6.	Exhibits and Reports on Form 8-K

(a)	The following exhibits are filed with this report:

Exhibit 27	Financial Data Schedule



(b)	Reports on Form 8-K.  During the quarter ended June 30, 2000, the Company filed a report, dated May 25, 2000, to report, under Item 4 of Form 8-K, the resignation of Ernst & Young LLP as the Company's independent accountant.  In
addition, on July 17, 2000, the Company filed a report on Form 8-K, dated July 12, 2000, to report, under Item 4 of Form 8-K, the retention of Arthur Andersen LLP as the Company's independent public accountants for the examination of the financial
statements of the Company for the fiscal year ending December 31, 2000.

SIGNATURE





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



MOTO PHOTO, INC.





By /s/   David A. Mason

David A. Mason

Executive Vice President,

Treasurer, and Chief

Financial Officer



Date:		August 11, 2000



Exhibit Index

No.	Description

27	Financial Data Schedule