SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-Q



|X| Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

    For the quarterly period ended March 31, 2002, 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 No. 1-13727

                           FFP MARKETING COMPANY, INC.
             (Exact name of registrant as specified in its charter)




         Texas                                                75-2735779
(State or other jurisdiction of                           (I.R.S. employer
incorporation or organization)                         identification number)


                2801 Glenda Avenue; Fort Worth, Texas 76117-4391
           (Address of principal executive office, including zip code)

                                  817/838-4700
              (Registrant's telephone number, including area code)



     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes   X      No
                                              -----       ----

                             Common Shares 3,818,747
                (Number of shares outstanding as of May 15, 2002)


<PAGE>

                                      INDEX

                                                                    PAGE
Part I

  Item 1.  Financial Statements                                       2

  Item 2.  Management's Discussion and Analysis
           of Financial Condition and Results of
           Operations                                                 9

  Item 3.  Quantitative and Qualitative Disclosures
           About Market Risks                                        14

Part II

  Item 6.  Exhibits and Reports on Form 8-K                          15

Signatures                                                           15






<PAGE>
                  FFP Marketing Company, Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2002 AND DECEMBER 30, 2001
                                 (In thousands)
                                   (Unaudited)

                                                       March 31,    December 30,
                                                         2002           2001
                                                       ---------    -----------

                       ASSETS

Current assets -
   Cash and cash equivalents                            $10,081        $8,406
   Marketable securities                                  4,194         5,203
   Trade receivables, net                                19,521        15,763
   Notes receivable, current portion                      2,235         2,156
   Receivables from affiliates, current portion               0           722
   Inventories                                           21,463        20,742
   Deferred tax asset                                       846           898
   Prepaid expenses and other current assets              1,063         1,147
                                                       --------      --------
        Total current assets                             59,403        55,037
Property and equipment, net                              34,961        35,906
Environmental reimbursement claims                        2,272         2,237
Notes receivable, excluding current portion               4,200         4,330
Other assets, net                                         7,382         6,497
                                                       --------      --------

        Total assets                                   $108,218      $104,007
                                                       ========      ========

           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities -
   Current installments of long-term debt               $11,847        $7,577
   Current installments of capital
       lease obligations                                    245           299
   Accounts payable                                      18,369        14,769
   Money orders payable                                  16,163        16,894
   Due to affiliate                                           0         1,527
   Accrued expenses                                      14,131        13,655
                                                       --------      --------
      Total current liabilities                          60,755        54,721
Long-term debt, excluding current installments           27,069        27,461
Capital lease obligations, excluding
   current installments                                   3,706         3,742
Deferred income taxes                                       898           898
Other liabilities                                         2,571         2,571
                                                       --------      --------
        Total liabilities                                94,999        89,393
Commitments and contingencies                               --            --
Stockholders' equity -
   Common stock ($0.01 par value)                        22,235        22,235
   Accumulated deficit                                   (8,315)       (6,819)
   Accumulated other comprehensive loss                    (701)         (802)
                                                       --------      --------
      Total stockholders' equity                         13,219        14,614
                                                       --------      --------

     Total liabilities and stockholders' equity        $108,218      $104,007
                                                       ========      ========




     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>


                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               THREE MONTHS ENDED MARCH 31, 2002 AND APRIL 1, 2001
                      (In thousands, except per share data)
                                   (Unaudited)

                                                   March 31,         April 1,
                                                     2002              2001
                                                  ----------       -----------
                                                                   (As Restated-
                                                                    See Note 6)
                                                                   ------------

Revenues -
    Motor fuel sales                               $101,779          $130,769
    Merchandise sales                                23,285            24,029
    Miscellaneous                                     3,681             3,495
                                                  ---------         ---------
        Total revenues                              128,745           158,293

Costs and expenses -
    Cost of motor fuel                               96,144           125,912
    Cost of merchandise                              16,515            17,287
    Direct store expenses                            10,506            11,901
    General and administrative expenses               4,424             4,352
    Depreciation and amortization                     1,937             1,834
                                                  ---------         ---------
        Total costs and expenses                    129,526           161,286

Operating loss                                         (781)           (2,993)
    Interest income                                     507               271
    Interest expense                                  1,222             1,134
                                                  ---------         ---------

Loss before income taxes                            (1,496)           (3,856)
Deferred income tax benefit                              0            (1,311)
                                                  ---------         ---------

Net loss                                           $(1,496)          $(2,545)
                                                  =========         =========

Net loss per share -
    Basic                                           $(0.39)           $(0.67)
    Diluted                                          (0.39)            (0.67)

Weighted average number of common
  shares outstanding -
    Basic                                            3,819             3,819
    Diluted                                          3,819             3,819




     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>


                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               THREE MONTHS ENDED MARCH 31, 2002 AND APRIL 1, 2001
                                 (In thousands)
                                   (Unaudited)

                                                       March 31,      April 1,
                                                         2002          2001
                                                      ----------    -----------
                                                                   (As Restated-
                                                                    See Note 6)
                                                                   ------------

Cash Flows from Operating Activities -
  Net loss                                             $(1,496)         $(2,545)
  Adjustments to reconcile net loss to
  cash used by operating activities -
    Depreciation and amortization                        1,937            1,834
    Provision for doubtful accounts                          0              120
    Deferred income tax benefit                              0           (1,201)
    Marketable securities                               (1,299)             (33)
    Gain on sale of convenience stores                    (315)            (467)
    Loss on sale of properties                               0              161
    Net change in operating assets
      and liabilities                                   (1,940)           1,641
                                                        -------         --------
  Net cash used by operating activities                 (3,113)            (490)

Cash Flows from Investing Activities -
  Additions of property and equipment                     (783)          (1,023)
  Proceeds of sale of marketable securities,
     net of purchases                                    1,939              476
  Proceeds of sale of properties                             0               21
  Proceeds of sale of convenience stores                   159              127
  Payments on note receivable from affiliate               700               57
  Receipt of payments on notes receivable                  512               11
                                                        -------         --------
  Net cash provided (used) by investing activities       2,527             (331)

CashFlows from Financing Activities -
  Net borrowings (repayments) of notes and
    capital lease obligations                            3,788           (3,457)
  Advances from (to) affiliate                          (1,527)             264
                                                        -------         --------
  Net cash provided (used) by financing activities       2,261           (3,193)
                                                        -------         --------
Net increase (decrease) in cash and cash equivalents     1,675           (4,014)

Cash and cash equivalents at beginning of period         8,406           14,572
                                                        -------         --------
Cash and cash equivalents at end of period             $10,081          $10,558
                                                        =======         ========



Supplemental Disclosure of Cash Flow Information (in thousands):
Cash paid for interest                                  $1,222           $1,134






     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>

                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation

     The  condensed   consolidated  financial  statements  include  the  assets,
liabilities,  and results of operations of FFP Marketing Company,  Inc., and its
wholly owned subsidiaries, FFP Operating Partners, L.P., Direct Fuels, L.P., FFP
Financial Services,  L.P., Practical Tank Management,  Inc., FFP Transportation,
L.L.C.,  FFP  Money  Order  Company,  Inc.,  FFP  Operating  LLC,  Direct  Fuels
Management  Company,  Inc., and Nu-Way  Beverage  Company.  These  companies are
collectively referred to as the "Company."

     The  condensed  consolidated  balance  sheet as of March 31, 2002,  and the
condensed  consolidated  statements of  operations  and cash flows for the three
months  ended  March 31,  2002 and April 1, 2001 have not been  audited.  In the
opinion  of  management,   all  adjustments,   consisting  of  normal  recurring
adjustments,  necessary to fairly present the Company's financial position as of
March 31,  2002,  and the results of  operations  and cash flows for the periods
presented  have  been  made.  Interim  operating  results  are  not  necessarily
indicative of results for the entire year.

     The  notes  to the  audited  consolidated  financial  statements  that  are
included in the Company's Annual Report on Form 10-K for the year ended December
30, 2001, include accounting policies and additional information pertinent to an
understanding of these interim  financial  statements.  That information has not
changed other than as a result of normal  transactions in the three months ended
March 31, 2002, and as discussed below.


2.  Net Income or Net Loss per Share

     Basic net income or basic net loss per share is computed  by  dividing  net
income or net loss for the  quarter  by the  weighted  average  number of common
shares outstanding for the quarter.  Diluted net income or net loss per share is
computed  by  dividing  net income or net loss for the  quarter by the  weighted
average  number of common shares  outstanding  for the quarter plus  potentially
dilutive  common  shares.  Outstanding  options to acquire  303,667  and 253,667
common  shares at March 31,  2002,  and April 1, 2001,  respectively,  have been
excluded  from the  diluted  computation  because  the  effect  would  have been
anti-dilutive.  A  reconciliation  of the  denominators of the basic and diluted
loss per share calculations for the applicable first quarter periods in 2001 and
2000 follows:


                                                         2002          2001
                                                       -------        ------
                                                           (In thousands)

Weighted average number of
   common shares outstanding                            3,819         3,819
Effect of dilutive options                                  0             0
                                                        -----         -----
Weighted average number of
   common shares outstanding,
     assuming dilution                                  3,819         3,819
                                                        =====         =====

3.  Operating Segments

     The Company and its subsidiaries  are principally  engaged in two operating
segments:  (i) the retail sale of motor fuel,  merchandise  and other  ancillary
products and services at  convenience  stores,  truck stops,  and other gasoline
outlets ("Retail Operations"), and (ii) the wholesale sale of motor fuel and the
operation  of a motor fuel  terminal and  processing  facility  ("Wholesale  and
Terminal  Operations").  Prior to 2002,  the Company  identified  its  wholesale
operations  in the same segment with its retail  operations,  but  realigned the
wholesale  operations  in 2001  to be in the  same  segment  with  its  terminal
operations in 2001 since both of those  operations  sell motor fuel to wholesale
customers.  The  Company  has  identified  such  segments  based  on  management
responsibilities.  No major  distinctions  exist  regarding  geographical  areas
served by the Company or customer types.  The following table sets forth certain
information about each segment's financial information for the first quarters of
2002 and 2001  (with the  results  for the first  quarter  of 2001  restated  as
described in Note 6 of the condensed financial statements):

                                                    Wholesale
                                           Retail  and Terminal Elimin-  Consol-
                                        Operations Operations   tions    dated
                                        ---------- ----------   ------   ------
                                                     (In thousands)
First Quarter 2002
------------------
Revenues from external sources             $85,268   $43,477      $0   $128,745
Revenues from other segment                      0     9,087   9,087          0
Depreciation and amortization                1,645       292       0      1,937
Loss before income taxes                    (2,501)    1,005       0     (1,496)

First Quarter 2001 (As restated-see note 6)
------------------------------------------
Revenues from external sources            $104,098   $54,195      $0   $158,293
Revenues from other segment                      0     7,979   7,979          0
Depreciation and amortization                1,657       177       0      1,834
Loss before income taxes                    (3,549)     (307)      0     (3,856)


4.  Comprehensive Net Loss

     The components of comprehensive net loss for the first quarters of 2002 and
2001 (as restated) are set forth below:


                                                         2002          2001
                                                       -------        ------
                                                           (In thousands)

Net loss                                              $(1,496)     $ (2,545)
Net unrealized gains on available-
   for-sale securities, net of tax                        101           293
                                                      -------      ---------
       Comprehensive loss                             $(1,395)     $ (2,252)
                                                      =======      =========


5.   Notes Payable

     The monthly  payments and the outstanding  principal  balances at March 31,
2002 and December 30, 2001,  under the Company's notes payable are summarized in
the following table:

                                                            Outstanding Balance
                                                     Monthly -------------------
                                                    Payments      2002    2001
                                                    --------   -------- --------
                                                            (In thousands)

 Type of Loan                 Purpose of Loan
---------------------   ----------------------------

Sewer financing         Truck stop improvements           $2      $27      $34
7 to 15 year financing  1998 refinancing of 44 stores    101    7,718    7,852
7 to 15-year financing  1999 purchase of 4 stores         13      823      841
15-year financing       1999 refinancing of bank debt    256   21,718   21,946
15-year financing       Purchase of 3 stores               5      488      493
Bank line of credit     Operations                         0    8,142    3,872
                                                       -----  -------   ------
Total notes payable                                     $377   38,916   35,038
                                                       =====
  Less: current portion                                        11,847    7,577
                                                              -------   ------
Long-term notes payable                                       $27,069  $27,461
                                                              =======  =======

     In June  1998 the  Company  obtained  44 loans  in the  original  aggregate
principal amount of $9,420,000 secured by a lien against the Company's leasehold
improvements,  equipment, and inventory at 44 specific convenience stores, truck
stops and gas-only outlets.  The loans bear interest at 8.66% per annum, require
the Company to maintain a minimum fixed charge  coverage ratio of 1.25 to 1, and
will be fully  amortized at various  maturity dates ranging from October 2007 to
July  2013  by  making   principal  and  interest   payments  in  equal  monthly
installments  over their  respective  terms.  At March 31, 2002 and December 30,
2001, the Company was not in compliance  with the required fixed charge coverage
ratio  under these loans but  obtained a waiver of such  non-compliance  in June
2002 for all of those loans. At March 31, 2002 and December 30, 2001, $7,718,000
and $7,852,000, respectively, remained outstanding on the 44 loans.

     In February 1999 the Company  acquired 23 convenience  stores and two truck
stops.  Eleven of the 25 stores are third party  leasehold  locations  where the
Company purchased the existing leasehold interest, equipment, and inventory. The
Company   financed   its   purchase   of  four  of  the  11  stores   with  four
fully-amortizing  mortgage loans in the aggregate  original  principal amount of
$1,012,000  secured by a lien  against  the  Company's  leasehold  improvements,
equipment, and inventory at those four convenience stores. The loans provide for
maturity dates ranging from 86 to 180 months,  interest  payable at a fixed rate
of 9.275% per annum,  a minimum  fixed charge  coverage  ratio of 1.25 to 1, and
aggregate  monthly  payments of principal and interest of $13,000.  At March 31,
2002 and December 30, 2001, the Company was not in compliance  with the required
fixed  charge  coverage  ratio under  these loans but  obtained a waiver of such
non-compliance  in June  2002  for all but two of the  loans.  Accordingly,  the
remaining  principal  balance of $528,000 and $542,000 under those two loans has
been  classified as a current  liability on the  consolidated  balance sheets at
March 31,  2002 and  December  30,  2001,  respectively.  At March 31,  2002 and
December 30, 2001, $823,000 and $841,000, respectively,  remained outstanding on
the four loans.

     In June 1999 the Company  refinanced its previous revolving credit facility
and term loan with the  proceeds  of fixed  rate  financing  from a third  party
lender  in the  form of 49  fully-amortizing  loans  in the  original  aggregate
principal  amount of $23,800,000.  With the net loan proceeds the Company repaid
debts  aggregating  $19,988,000 and incurred an  extraordinary  loss of $375,000
($0.10  per  share),  before  applicable  income  tax  benefit,  as a result  of
prepayment  penalties  and the write off of  previously  unamortized  loan fees.
These 49 loans are payable in 180 equal, monthly installments with interest at a
fixed rate of 9.9% per annum,  maintain a minimum fixed charge coverage ratio of
1.25 to 1, and aggregate monthly payments of principal and interest of $256,000.
These loans are secured by a lien against the Company's leasehold  improvements,
equipment,  and  inventory at 49 specific  convenience  stores,  truck stops and
gas-only  outlets.  At March 31, 2002 and December 30, 2001, the Company was not
in compliance  with the required  fixed charge  coverage ratio under these loans
but  obtained a waiver of such  non-compliance  in June 2002 for all but five of
the loans.  Accordingly,  the  remaining  principal  balance of  $1,705,000  and
$1,722,000 under those five loans has been classified as a current  liability on
the  consolidated  balance  sheets  at March 31,  2002 and  December  30,  2001,
respectively.  At  March  31,  2002  and  December  30,  2001,  $21,718,000  and
$21,946,000, respectively, remained outstanding on the 49 loans.

     In August 2001 the Company  purchased three  convenience  store  properties
that it previously  operated  under a lease.  The Company  financed its purchase
with fully-amortizing  mortgage loans in the aggregate original principal amount
of $500,000 over a 15-year term,  interest payable at a fixed rate of 8% for the
first five years but variable  thereafter at prime plus an index,  and aggregate
monthly payments of principal and interest of $5,000. The Company's monthly loan
payments equal its previous  monthly rental  payments prior to the purchase.  At
March 31, 2002 and December 30, 2001, $488,000 and $493,000 remained outstanding
on the loan.

     In November 2001 the Company closed a new revolving  credit facility with a
third party  lender  providing  for  borrowings  up to  $20,000,000.  The amount
available at any time under new revolver is calculated  with a borrowing base of
85% of its eligible trade  receivables plus 70% of the inventory at its terminal
facility.  The new revolver replaced a prior revolving credit facility scheduled
to expire in 2002 that provided for borrowings up to  $10,000,000.  At March 31,
2002,  the  Company's  borrowing  base under its revolving  credit  facility was
$9,662,000,  compared  to  $5,473,000  at year end 2001.  The  revolving  credit
facility  bears interest at the lender's  prime rate plus  three-fourths  of one
percentage point (5.5% at March 31, 2002), payable monthly, and matures in 2005.
The new loan is subject to a Loan and Security  Agreement dated November 5, 2001
between the lender and two  subsidiaries  of the Company,  namely FFP  Operating
Partners,  L.P. and Direct Fuels,  L.P. The  agreement  contains  numerous,  but
customary,  covenants  including,  but not  limited  to,  a  financial  covenant
requiring Direct Fuels, L.P. to maintain a specified minimum amount each quarter
of earnings before interest, taxes, depreciation and amortization.  At March 31,
2002 and December 30, 2001, the Company met the required  fixed charge  coverage
ratio under the loan  agreement for the new revolver.  In the event of a default
under the loan,  liens on certain  assets of FFP Operating  Partners,  L.P. also
take effect.  At March 31, 2002 and  December  30, 2001,  the Company was not in
compliance  with  the  terms  of its  new  revolver  because  it had not met the
required  fixed charge  coverage  ratio under its loan  documents with its other
lenders.  Accordingly,  the principal balance of $8,142,000 and $3,872,000 under
the new revolver has been classified as a current  liability on the consolidated
balance sheets at March 31, 2002 and December 30, 2001,  respectively.  At March
31, 2002 and December 30, 2001,  $8,142,000 and $3,872,000,  respectively,  were
outstanding under the revolving lines of credit. In addition, standby letters of
credit for the benefit of third parties were issued under the revolving  line of
credit in the amount of  $482,000  at each of March 31,  2002 and  December  30,
2001.


6.   Restatement

     In early 2002, the Company became aware of certain inadvertent  bookkeeping
errors made in the accounting  records of one of its subsidiaries.  A subsequent
analysis  determined a charge of $214,000,  net of taxes,  should be made to the
net income  (loss) of the Company in the first quarter of 2001.  The  adjustment
results from bookkeeping  errors  regarding credit card accounts  receivable and
related fuel payables,  and their  resulting  effect on cost of motor fuel sold,
and then the related effect on income tax expense or benefits.  For that reason,
the Company's quarterly results for the first quarter of 2001 have been restated
to correct those errors  attributable  to that quarter,  rather than the amounts
previously  reported for the quarter.  For further  discussion of these matters,
refer to the Company's Form 10-K for the year ended December 30, 2001.


<PAGE>


                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

General

     FFP Marketing Company,  Inc. was formed as a Texas corporation  immediately
prior to the December 1997 restructuring of FFP Partners, L.P. ("FFP Partners").
In that  restructuring,  all of the assets and  businesses  of FFP  Partners was
transferred to the Company,  except that FFP Partners retained the improved real
property  previously used in its retail operations.  Unless the context requires
otherwise, references herein to the "Company" for periods or activities prior to
the December 1997  restructuring  include the activities of FFP Partners and its
then subsidiaries, which are now subsidiaries of FFP Marketing Company, Inc.

     In the December  1997  restructuring  of FFP  Partners,  the holders of its
limited partnership  interests received one share of common stock of the Company
for each  limited  partnership  unit  that  they  owned on  December  28,  1997,
resulting in each such person owning the same  economic  interest in the Company
as they had held in FFP Partners.

     The Company conducts its operations through the following subsidiaries:

    Entity                           Date Formed        Principal Activity
------------------------------      -------------   ---------------------------

FFP Operating Partners, L.P.,       December 1986   Operation of convenience
a Dalaware limited partnership                         stores and other retail
                                                       outlets and sale of
                                                       ancillary products and
                                                       services

Direct Fuels, L.P., a Texas         December 1988   Operation of fuel terminal
limited partnership                                    and wholesale fuel sales

FFP Financial Services, L.P., a     September 1990  Sale of money order services
Delaware limited partnership                           and supplies

Practical Tank Management, Inc.,    September 1993  Underground storage tank
a Texas corporation                                    monitoring

FFP Transportation, L.L.C., a       September 1994  Ownership of tank trailers
Texas limited liability company                        and other transportation
                                                       equipment

FFP Money Order Company, Inc.,      December 1996   Sale of money orders through
a Nevada corporation                                   agents

Nu-Way Beverage Company             July 1985       Sale of alcoholic beverages
Texas corporation                                      in Texas

     The Company and its subsidiaries  are principally  engaged in two operating
segments:  (i) the retail sale of motor fuel, merchandise and other products and
services at  Company-operated  convenience  stores,  truck  stops,  and gas-only
stores,  and (ii) the wholesale sale of motor fuel and operation of a motor fuel
terminal and processing facility. (See Note 3 of Notes to Condensed Consolidated
Financial Statements.)


Results of Operations for First Quarter 2002 compared
with First Quarter 2001 (as restated-see note 6)
------------------------------------------------------

     In early 2002, the Company became aware of certain inadvertent  bookkeeping
errors made in the accounting  records of one of its subsidiaries.  A subsequent
analysis  determined a charge of $214,000,  net of taxes,  should be made to the
net loss of the Company in the first  quarter of 2001.  The  adjustment  results
from bookkeeping  errors  regarding credit card accounts  receivable and related
fuel payables,  and their resulting  effect on cost of motor fuel sold, and then
the  related  effect on income tax expense or  benefits.  For that  reason,  the
Company's  quarterly results for the first quarter of 2001 have been restated to
correctly state the results for that quarter, rather than the amounts previously
reported for the quarter.

     The Company is in the process of reviewing the  administrative,  accounting
and operational policies, procedures and personnel relating to its recording and
reconciliation  of credit card receivables,  fuel receivables and payables,  and
compliance with those policies and procedures, to identify potential areas where
improvements  and increased  efficiencies  may be  implemented.  Improvements to
previous policies,  procedures and personnel have been, and will continue to be,
implemented as quickly as practicable.

     The  Company's  net  loss  before  tax in the  first  quarter  of 2002  was
$1,496,000,  reflecting a strong improvement of $2,360,000 (61.2%),  compared to
its net loss  before tax of  $3,856,000  in the first  quarter of 2001.  Primary
factors for the improvement were additional  motor fuel gross margins  ($778,000
improvement),  and reduced direct store  expenses  ($1,395,000  reduction).  The
Company  did not  record an income  tax  benefit  in the first  quarter of 2002,
compared to an income tax benefit of  $1,311,000 in the first quarter of 2001, a
100% change.

Fuel Sales and Margins
----------------------

                                               First Quarter
                               -------------------------------------------------
                                                              Change
                                                         -----------------------
                                  2002          2001       Amount       Percent
                              ---------       -------    ---------    ----------
                                      (In thousands, except per gallon data)

Fuel sales                     $101,779      $130,769     $(28,990)      (22.2%)
Fuel margin                      $5,635        $4,857         $778        16.0%
Gallons sold -
   Retail                        52,419        56,543       (4,124)       (7.3%)
   Wholesale                     48,838        48,190          648         1.3%
   Total                        101,257       104,733       (3,476)       (3.3%)
Margin per gallon (cents) -
   Retail                           6.3           7.0         (0.7)      (10.0%)
   Wholesale                        4.8           1.2          3.6       300.0%


     The Company  sold less motor fuel in the first  quarter of 2002 than in the
first quarter of 2001. Motor fuel sales was $101,779,000 in the first quarter of
2002, a 22.2% decrease compared to motor fuel sales of $130,769,000 in the first
quarter  of 2001,  primarily  as a result of a decline in the  average  price of
motor fuel sold,  but also as a result of a 3.3%  decline in gallons  sold.  For
example,  the  Company's  average  price for retail motor fuel sold in the first
quarter of 2002 was $1.12 per gallon,  a $0.24 per gallon decrease (17.6 %) from
an  average  price for retail  motor fuel sold of $1.36 in the first  quarter of
2001.

     The Company sold 101,257,000  gallons of motor fuel in the first quarter of
2002, a 3,476,000 gallon decrease (3.3%) from 104,733,000  gallons of motor fuel
sold in the comparable 2001 period. This decrease was primarily  attributable to
a  decrease  of  4,124,000  gallons  (7.3%)  sold at  retail,  offset in part by
additional  wholesale fuel sales of 648,000 gallons (1.3%).  The primary factors
for the reduction on motor fuel gallons sold was attributed to increased  retail
competition and a change in the Company's  market pricing in an effort to obtain
an improvement in the gross margin per gallon sold.

     The  Company's  overall  gross  profit  margin  on  motor  fuel  sales  was
$5,635,000 in the first  quarter of 2002, a $778,000  (16.0%)  improvement  over
gross profit  margin on motor fuel sales of  $4,857,000  in the first quarter of
2001.  Fuel  margin  increased  principally  as a  result  of  favorable  market
conditions  on wholesale  sales at the terminal.  On a per gallon basis,  retail
motor fuel margins  decreased per gallon during the first quarter of 2002,  when
compared to the initial  quarter of 2001, by 10.0%,  while  wholesale motor fuel
margin per gallon increased by 298.3%.


Merchandise Sales and Margins
-----------------------------

                                                First Quarter
                               -------------------------------------------------
                                                              Change
                                                         -----------------------
                                  2002          2001       Amount       Percent
                              ---------       -------    ---------    ----------
                               (In thousands, except average weekly sales data)

Merchandise sales               $23,285       $24,029      $(744)        (3.1%)
Merchandise margin               $6,770        $6,742        $28           0.4%
Margin percentage,
  convenience stores
  and truck stops                 27.7%         26.9%       0.8%           3.0%
Average weekly merchandise
  sales per store -
      Convenience stores        $11,028       $10,470       $558           5.3%
      Truck stops               $15,643       $15,361       $282           1.8%


     Merchandise  sales  decreased  by $744,000  (3.1%) in the first  quarter of
2002, compared to the first quarter of 2001. The primary factor for that decline
was  the  lesser  number  of  Company-operated   convenience  stores  after  the
sale/conversion  of  certain  Company-operated  convenience  stores to  gas-only
stores. For example, the Company operated only 169 convenience stores at the end
of the first quarter of 2002 compared to operating 184 convenience stores at the
end of the first quarter of 2001, an 8.2% reduction.  Average weekly merchandise
sales per  convenience  store  improved  by $558  (5.3%),  as shown in the above
table.


Other Income and Expenses
-------------------------

     Miscellaneous  income  was  $3,681,000  in the  first  quarter  of 2002,  a
$186,000 (5.3%) improvement over miscellaneous income of $3,495,000 in the first
quarter of 2001.  Miscellaneous  income includes management fees, lottery ticket
sales income, money order sales income, commissions received on alcohol beverage
sales,   check  cashing  fees,   state  excise  tax  handling   fees,   gain  on
sale/conversion  of  convenience  stores,  gain or loss on exchange  and hedging
transactions,  and  various  other  types of income.  Material  reasons  for the
increase were additional  income from  management  fees and from  investments in
marketable  securities.  Partially  offsetting the improvements in miscellaneous
income were lesser gains from exchange and motor fuel hedging  transactions  and
from the  sale/conversion  of  Company-operated  convenience  stores to gas-only
stores,  when  comparing  to such  items  for the first  quarter  of 2002 to the
comparable quarter of 2001.

     Direct store  expenses  were  $10,506,000  in the first  quarter of 2002, a
$1,395,000  (11.7%) decline  compared to direct store expenses of $11,901,000 in
the same  quarter  of the  prior  year,  as a result  of fewer  Company-operated
convenience  stores in the first  quarter  of 2001.  The  Company  operated  169
convenience  stores on March 31,  2002,  compared to 184  convenience  stores on
April 1, 2001.

     General  and  administrative   expenses  increased  by  $72,000  (1.7%)  to
$4,424,000  in  the  first  quarter  of  2002,  compared  to  $4,352,000  in the
comparable  period of the prior year.  The primary  reason to this  increase was
additional  legal  and  professional  expenses,  which  was  offset in part by a
reduction in bad debt expense.

     Depreciation  and amortization was $1,937,000 in the first quarter of 2002,
a $103,000 (5.6%) increase compared to depreciation and amortization  expense of
$1,834,000 in the first  quarter of the previous  year.  This increase  resulted
primarily as a result of additional  amortization of previously capitalized loan
costs.

     Interest  income of $507,000  in the first  quarter of 2002  represented  a
$236,000  (87.1%)  increased  from  interest  income of  $271,000 in the initial
quarter of the prior year.  Interest income  increased  primarily as a result of
additional  earning from the Company's  investments  in  marketable  securities.
Interest expense of $1,222,000 reflected an increase of $88,000 (7.8%), compared
to interest expense of $1,134,000 in the corresponding quarter of 2001. Interest
expense increased primarily because of additional borrowings under the Company's
revolving credit facility.


Liquidity and Capital Resources
-------------------------------

     The Company's  working  capital is provided by several  sources,  including
short-term   investments,   cash  flows  generated  from  operating  activities,
borrowings under a revolving line of credit facility,  short-term vendor credit,
and the  availability of funds provided by the sale of money orders prior to the
payment of those money order  obligations.  The Company believes,  but cannot be
certain, that its future sources of capital will provide sufficient liquidity to
fund  its  future  operating  costs,  debt  service  requirements,  and  capital
expenditures. Risk factors involved in determining the adequacy of liquidity and
capital  resources  include,  but are not limited to, the  insufficiency of cash
flows from operations for any reason, such as, for example, in the event that of
poor retail fuel margins,  such as that  incurred in the fourth  quarter of 2001
and the first two months of 2002 (although the Company has experienced  improved
retail fuel margins since then);  the inability of the Company to meet its goals
of increasing store revenues and decreasing direct store expense and general and
administrative expense; bad debts or uncollectible accounts; possible actions of
the Company's long-term lenders and revolving credit lender in accelerating such
indebtedness  and  charging   additional   interest  and  loan  fees;   possible
restrictions on the availability of credit from vendors;  and a possible loss of
the Company's money order sales license. The Company believes it will be able to
adjust its actual capital expenditures based on the level of cash flow generated
from operating activities and funds available from financings.

     The Company's  notes  payable at March 31, 2002,  and December 30, 2001, is
summarized in the notes to the condensed  financial  statements.  (See Note 5 of
Notes to Condensed  Consolidated  Financial  Statements.)  In November  2001 the
Company  closed  a new  revolving  credit  facility  with a third  party  lender
providing for  borrowings up to  $20,000,000.  The amount  available at any time
under revolver is calculated  with a borrowing base of 85% of its eligible trade
receivables plus 70% of the inventory at its terminal facility. The new revolver
replaced a prior  revolving  credit  facility  scheduled  to expire in 2002 that
provided for  borrowings  up to  $10,000,000.  At March 31, 2002,  the Company's
borrowing base under its revolving  credit facility was $9,662,000,  compared to
$5,473,000 at year end 2001. The revolving credit facility bears interest at the
lender's prime rate plus  three-fourths  of one percentage  point (5.5% at March
31, 2002),  payable  monthly,  and matures in 2005. The revolver is subject to a
Loan and  Security  Agreement  between  the lender and two  subsidiaries  of the
Company,  namely FFP Operating  Partners,  L.P. and Direct Fuels,  L.P. The loan
agreement  provides  that the  obligations  to the  lender  are  secured  by the
receivables,  terminal  inventory,  and terminal facility of Direct fuels, L.P.,
and that liens against FFP Operating Partners, L.P. will take effect upon in the
event of a  default  under  the loan  agreement.  The  loan  agreement  contains
numerous,  but customary,  covenants including,  but not limited to, a financial
covenant  requiring  Direct Fuels,  L.P. to maintain a specified  minimum amount
each quarter of earnings before interest,  taxes, depreciation and amortization.
In the  event of a  default  under  the  loan,  liens on  certain  assets of FFP
Operating Partners, L.P. also take effect. At March 31, 2002, the Company was in
compliance  with  its  financial  covenant  for  its  revolver  but  was  not in
compliance  with the terms of the loan agreement  because one subsidiary had not
met the required  fixed charge  coverage  ratio under loan  documents with other
lenders.  A waiver of that loan  covenant  violation  was obtained in June 2002,
which is  expected  to cure the  event of  default  under the  revolving  credit
facility. Nevertheless, the principal balance of $3,872,000 and $8,142,000 under
the revolver has been classified as a current liability on the condensed balance
sheets at March 31, 2002 and December 31, 2001, respectively.

     Management considers the losses in the fourth quarter of 2001 and the first
quarter  of 2001 to be  unacceptable.  The  Company  has begun a focused  effort
designed to improve bottom-line results and liquidity,  although no assurance is
given that its strategies will prove to increase profitability. Several of these
strategies are summarized below:

          1. Strengthen Core  Businesses.  The Company intends to strengthen its
     core  businesses  by  examining,   and  renegotiating   contracts  wherever
     possible,  in order to increase  its  revenues  and  decrease  its cost and
     expenses. This analysis and resulting action may include the sale of assets
     or components of its businesses,  the closing of certain  stores,  or other
     actions considered necessary to increase net profitability. The Company has
     experienced  decreasing retail motor fuel margins per gallon at its stores,
     not unlike other convenience store operators in the industry, especially in
     the fourth quarter of 2001. The Company has already implemented in 2002, or
     plans to implement later in 2002, a pricing structure  designed to increase
     its retail motor fuel margins and merchandise margins.  Management believes
     that an increase in retail motor fuel and merchandise margins will be a key
     component  of  future  increases  in  profitability  for the  Company.  The
     Company's  fuel margins began to improve during the month of March 2002 but
     no  assurance  that those  margins  will  remain at such  levels.  For that
     reason, the Company intends to aggressively  reassess its store operations,
     not only to cut store  operating and  inventory  costs but also to find new
     sources of  additional  store  income,  described  below.  In  addition,  a
     thorough study and  reorganization of the Company's fuel payable procedures
     and policies has already  begun.  Although the Company has  experienced  an
     increase  its  general  and   administrative   expenses  in  recent  years,
     management  believes  that its efforts to cut those costs,  if  successful,
     will be an important  factor in increasing  future  profitability.  In that
     regard,  management  is  currently  analyzing a  reorganization  of certain
     departments  in  order to  streamline  their  function  and  improve  their
     performance.

          2. Seek  Additional Fee Income.  Further,  the Company will seek other
     sources of revenue to obtain  additional profit in 2002 from its own retail
     stores,  as well as from third party  locations  that sell its money orders
     across the country.  In so doing, the Company will attempt to capitalize on
     its network of retail locations serving customers in small towns and larger
     cities in several states.

          Areas of possible sources for expanded fee income under  consideration
     include the following activities:

          o    selling additional financial products and services,

          o    selling additional telephone products and services,

          o    collecting utility payments at the Company's stores for a fee,

          o    expanding the Company's check cashing services, and

          o    expanding the Company's ATM network.

          3. Manage Convenience  Stores for Third Parties.  In the first quarter
     of 2002, the Company entered into management and fuel supply  contracts for
     114  convenience  stores on behalf of two  different  lenders that acquired
     those stores through  foreclosures  from other convenience store operators.
     In addition to  receiving  monthly  management  fees,  the Company may sell
     motor fuel to those  locations and has  contracted to sell its money orders
     at those stores under money order agency  agreements.  In addition,  stores
     currently  closed  may be added to the  number  of  stores  managed  by the
     Company under those two contracts. The owners of those stores have reserved
     the right to sell those stores in the future,  at which time the management
     contract  would end for the sold  stores.  In late May  2002,  one of those
     owners sold 40 of the stores under its management contract.  The management
     contract  is  expected  to  terminate  in late  July  2002  for 57  stores,
     resulting in 17  convenience  stores being subject to management  contracts
     thereafter.  The  Comapny  intends  to  attempt  to expand  its  management
     services  for these and other  lenders in need of  experienced  convenience
     store operations.

          4. Convert  Company-Operated  Stores to Gas-Only Stores. In situations
     where  management  believes that profitable  will be improved,  the Company
     intends to continue implementing its strategy of selling/converting certain
     of its  Company-operated  convenience  stores to  independent  third  party
     operators and continuing such outlets as Gas-Only  Stores.  The Company has
     converted  26 stores in 2001 and 34 stores in 2000 in that  manner  and has
     targeted an additional 50  Company-operated  stores as suitable  candidates
     for future conversions and will continue to search for qualified purchasers
     for these locations.

          5.  Growth  of  Wholesale  Business.  Utilizing  its new  $20  million
     revolving  credit facility  obtained in November 2001, the Company believes
     it will be able to expand its  Wholesale  and Terminal  Operations in 2002.
     The Company believes that its wholesale  business in the last few years was
     curtailed  by its lack of a larger  line of  credit,  and the  increase  in
     availability  from its new line of credit is  expected  to  facilitate  the
     profitable expansion of this growing segment.

          6.  Possible  Expansion  at the  Terminal.  The Company  continues  to
     investigate potential new sources of profits at its terminal located in the
     growing  Dallas/Fort Worth Metroplex.  The Company's current  operations at
     the terminal only comprise 13 acres of land, and its remaining 20 acres are
     available for expansion.

     The Company is party to commodity  futures  contracts and forward contracts
to buy and sell fuel,  both of which are used  principally  to satisfy  balances
owed on exchange  agreements.  Both of these types of contracts involve the risk
of dealing with others and their  ability to meet the terms of the contracts and
the risk associated with unmatched positions and market  fluctuations.  The open
positions  under  these  contracts  were  insignificant  at the end of the first
quarter of 2002.

     Over the last few years,  the  Company's  money order sales have  increased
significantly.  For example, money order payables at the end of fiscal year 1996
were  $7,809,000,  compared to money order payables of $16,163,000 at the end of
the first quarter of 2002.  Money order payables  represent those sales of money
orders  for which the payee of the money  order has not yet  requested  payment.
Although the Company  collects money order receipts on a daily basis on sales of
money  orders made by its own stores,  the Company  relies on  receiving  timely
payment from its third party money order sales agents.

     The Company had negative  working  capital of  $1,352,000 at the end of the
first quarter of 2002. In past years, the Company has operated its business with
minimal or even negative working capital,  principally because most of its sales
are cash sales and it has received  payment  terms from  vendors.  Consequently,
management  believes,  but can give no  assurance,  that its current  liquidity,
internally  generated funds,  use of trade credit,  and available line of credit
will allow its operations to be conducted in a customary manner.


Forward-Looking Statements
--------------------------

     Certain  of the  statements  made  in  this  report  are  "forward-looking"
statements that involve inherent risks and uncertainties. As defined by the U.S.
Private Securities Litigation Reform Act of 1995,  "forward-looking"  statements
include information about the Company that is based on the beliefs of management
and the assumptions made by, and information currently available to, management.
In making  such  forward-looking  statements,  the  Company is relying  upon the
"statutory  safe harbors"  contained in the  applicable  statutes and the rules,
regulations and releases of the Securities and Exchange  Commission.  Statements
that should generally be considered forward-looking include, but are not limited
to, those that contain the words  "estimate,"  "anticipate,"  "in the opinion of
management,"  "expects," "believes," and similar phrases. Among the factors that
could cause actual results to differ materially from the statements made are the
following:  general  business  conditions  in the  local  markets  served by the
Company's  convenience  stores,  truck stops, and other retail outlets,  and its
wholesale fuel markets;  the weather in the local markets served by the Company;
competitive  factors  such as changes  in the  locations,  merchandise  offered,
pricing, and other aspects of competitors' operations; increases in cost of fuel
and merchandise sold or reductions in the gross profit realized from such sales;
available  product for processing and processing  efficiencies  at the Company's
fuel terminal;  expense pressures relating to operating costs,  including labor,
repair and maintenance, and supplies; unexpected outcome of litigation;  adverse
liquidity  situations;   unanticipated  general  and  administrative   expenses,
including  employee,  taxes,  insurance,  expansion  and  financing  costs;  and
unexpected liabilities.

     Should one or more of these risks or uncertainties  materialize,  or should
any underlying assumptions prove incorrect,  actual results or outcomes may vary
materially from those  described  herein as  anticipated,  believed,  estimated,
expected, or intended.


           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS


     The Company is subject to market risks related to variable  interest  rates
and commodity  prices.  The interest rate calculated under the Company's line of
credit  facility  is based on the prime  rate of  interest,  which is subject to
change and exposes the Company to the  possibility of increasing  interest rates
on  borrowing  under that  facility.  Approximately  11% of the  Company's  note
payable  obligations  at the end of the first  quarter  of 2002 was  subject  to
variable  interest  rates.  The remainder of the Company's  notes payable is not
subject to interest rate risk because it is fixed rate financing.

     The  Company is also  subject to the market  risk of  increasing  commodity
prices and sometimes attempts to hedge that risk by purchasing commodity futures
and forward contracts.  An attempt to hedge that risk is subject to risk because
the commodities  subject to the hedging contract are not the same commodities as
those owned by the Company in its business.  Open positions  under these futures
and forward  contracts  were  insignificant  at the end of the first  quarter of
2002.


                        EXHIBITS AND REPORTS ON FORM 8-K


Exhibits
--------

     None.


Reports on Form 8-K
-------------------

     None.

                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     FFP MARKETING COMPANY, INC.
                                     Registrant

Date:  June 24, 2002                 By:    /s/ John H. Harvison
                                         ------------------------------------
                                         John H. Harvison
                                         Chairman and Chief Executive Officer

Date:  June 24, 2002                 By:    /s/ Craig T. Scott
                                         ------------------------------------
                                         Craig T. Scott
                                         Vice President - Finance and
                                         Chief Financial Officer