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 June 25, 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 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 August 8, 2000)


<PAGE>
                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                     (In thousands, except number of shares)
                                 (Unaudited)

                                                     JUNE 25,     DECEMBER 26,
                                                       2000           1999
                                                     -------      ----------

                                    ASSETS

Current assets -
    Cash and cash equivalents                         $15,401        $20,868
    Investments in stocks and bonds                     4,234          3,355
    Trade receivables                                  26,924         18,430
    Notes receivable, current portion                   1,013          1,003
    Receivables from affiliates, current portion          742            878
    Inventories                                        26,366         23,825
    Prepaid expenses and other current assets           2,284          2,236
                                                        -----          -----
        Total current assets                           76,964         70,595

Property and equipment, net                            39,269         40,072
Notes receivable, excluding current portion             2,485          1,059
Environmental reimbursement claim                       1,243          1,283
Other assets, net                                       5,397          5,397
                                                        -----          -----

        TOTAL ASSETS                                 $125,358       $118,406
                                                     ========       ========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities -
    Current installments of long-term debt             $1,244         $1,231
    Current installments of capital lease obligations     210            250
    Accounts payable                                   29,332         23,221
    Money orders payable                               15,225         12,749
    Advances from affiliates                            1,368              0
    Accrued expenses and other current liabilities     17,276         18,747
                                                       ------         ------
        Total current liabilities                      64,655         56,198

Long-term debt, excluding current installments         31,549         32,205
Capital lease obligations,
    excluding current installments                      4,454          4,627
Deferred income taxes                                   2,157          2,365
Other liabilities                                       1,729          2,046
                                                        -----          -----
        Total liabilities                             104,544         97,441
Commitments and contingencies
Stockholders' equity -
    Common stock ($0.01 par value; 9,000,000
         common shares authorized; 3,818,747
         common shares issued and outstanding)         22,235         22,235
    Accumulated deficit                                (1,421)        (1,270)
                                                       ------         ------
        Total stockholders' equity                     20,814         20,965
                                                       ------         ------

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $125,357       $118,406
                                                     ========       ========


     See accompanying Notes to Condensed Consolidated Financial Statements.


<PAGE>
                   FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In thousands, except per share data)
                                    (Unaudited)

                                    THREE MONTHS ENDED       SIX MONTHS ENDED
                                   --------------------     ------------------
                                   JUNE 25,   JUNE 27,      JUNE 25,   JUNE 27,
                                      2000      1999         2000        1999
                                     ------    ------      ------      ------

REVENUES -
    Motor fuel                          $146,401  $92,523    $269,833  $165,210
    Merchandise                           29,266   29,896      57,946    55,654
    Miscellaneous                          2,133    2,563       5,642     5,147
                                           -----    -----       -----     -----
        Total revenues                   177,800  124,982     333,421   226,011

COSTS AND EXPENSES -
    Cost of motor fuel                   137,401   85,123     254,909   151,509
    Cost of merchandise                   20,287   21,421      40,483    39,201
    Direct store expenses                 12,516   12,720      25,393    24,272
    General and administrative expenses    4,041    3,418       7,801     7,192
    Depreciation and amortization          1,736    1,669       3,460     3,168
                                           -----    -----       -----     -----
        Total costs and expenses         175,981  124,351     332,046   225,342
                                         -------  -------     -------   -------

OPERATING INCOME                           1,819      631       1,375       669

    Interest income                          367      318         717       644
    Interest expense                       1,139    1,002       2,309     1,633
                                           -----    -----       -----     -----

INCOME (LOSS) BEFORE INCOME TAXES          1,047      (53)       (217)     (320)

    Deferred income tax expense (benefit)    315       (8)         65       (85)
                                             ---       --          --       ---

NET INCOME (LOSS)                           $732     $(45)      $(152)    $(235)
                                            ====     ====       =====     =====


NET INCOME (LOSS) PER SHARE -
    Basic                                   0.19    (0.01)      (0.04)    (0.06)
    Diluted                                 0.18    (0.01)      (0.04)    (0.06)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING -

    Basic                                  3,819    3,819       3,819     3,819
    Diluted                                3,985    3,819       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
               (In thousands, except for supplementary disclosures)
                                   (Unaudited)

                                                             SIX MONTHS ENDED
                                                            -------------------
                                                           JUNE 25,     JUNE 27,
                                                             2000         1999
                                                             ----         ----

CASH FLOWS FROM OPERATING ACTIVITIES -
    Net income (loss)                                         $(152)     $(235)
    Adjustments to reconcile net income (loss) to cash
        Provided (used) by operating activities -
           Depreciation and amortization                      3,460      3,168
           Deferred income tax benefit                          (65)       (85)
           Gain (loss) on sales of property and equipment    (1,251)        77
           Increase in stocks and bonds                        (879)         0
           Net change in operating assets and liabilities    (4,386)    (7,725)
                                                             ------     ------
    Net cash used by operating activities                    (3,273)    (4,800)
                                                             ------     ------

CASH FLOWS FROM INVESTING ACTIVITIES -
    Repayments of advances to affiliate                         136        714
    Purchases of property and equipment                      (2,832)    (8,917)
    Increase (decrease) in notes receivable                     (10)       311
                                                               -----     -----
    Net cash used by investing activities                    (2,706)    (7,892)
                                                              ------    ------

CASH FLOWS FROM FINANCING ACTIVITIES -
    Advances from affiliate                                    1,368         0
    Borrowing (payments) on debt and capital leases, net        (856)   39,857
    Cash held in escrow for refinancing                            0   (23,646)
                                                               -----   -------
    Net cash provided by financing activities                    512    16,211
                                                               -----    ------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         $(5,467)   $3,519

Cash and cash equivalents at beginning of period              20,868     9,537
Cash and cash equivalents at end of period                   $15,401   $13,056




SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for interest                                        $2,309    $1,711
Purchase of inventory and equipment with note to affiliate         0     2,692




     See accompanying Notes to Condensed Consolidated Financial Statements.


<PAGE>

                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 25, 2000
                                   (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, and Direct Fuels
Management  Company,  Inc. These companies are  collectively  referred to as the
"Company."

     The  condensed  consolidated  balance  sheet as of June 25,  2000,  and the
condensed  consolidated  statements of operations and the condensed consolidated
statements of cash flows for the periods presented have not been audited. In the
opinion of management,  all  adjustments,  consisting  only of normal  recurring
adjustments,  necessary to fairly present the Company's financial position as of
June 25,  2000,  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,  which are
included in the Company's Annual Report on Form 10-K for the year ended December
26, 1999, 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 six months ended
June 25, 2000, and as discussed below.


2.  INCOME (LOSS) PER SHARE

     Basic net  income  (loss)  per share is net  income  (loss)  divided by the
weighted average number of common shares  outstanding for the year.  Diluted net
income per share is net income divided by the weighted  average number of common
shares outstanding for the year plus potentially dilutive common shares. At June
27, 1999,  outstanding  options to acquire  201,667  common shares were excluded
from the diluted  computation  because the effect would have been anti-dilutive.
The following  table  reconciles the  denominators  of the basic and diluted net
income (loss) per share  calculations for the three-month and six-month  periods
ended June 25, 2000, and June 27, 1999:

                                          THREE MONTHS ENDED    SIX MONTHS ENDED
                                          ------------------    ----------------
                                           JUNE 25, JUNE 27,   JUNE 25, JUNE 27,
                                            2000     1999        2000     1999
                                            ----     ----        ----     ----
                                                      (In thousands)

Weighted average number of common shares
    outstanding                             3,819    3,819        3,819   3,819
Effect of dilutive options                    166        0            0       0
Weighted average number of common shares
     outstanding, assuming dilution         3,985    3,819        3,819   3,819


3.  OPERATING SEGMENTS

     The  Company  adopted  SFAS No.  131,  "Disclosures  about  Segments  of an
Enterprise and Related Information," in 1998 for reporting information about its
operating segments.  The Company and its subsidiaries  principally engage in two
operating segments: (a) the retail and wholesale sale of motor fuel, merchandise
and other products and services at convenience  stores,  truck stops,  and other
gasoline outlets ("Retail and Wholesale"), and (b) the operation of a motor fuel
terminal  and  processing  facility  ("Terminal  Operations").  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 three-month and six-month periods ended
June 25, 2000, and June 27, 1999:

                                RETAIL AND   TERMINAL
                                 WHOLESALE  OPERATIONS ELIMINATIONS CONSOLIDATED
                                 ---------  ---------- ------------ ------------
                                                    (In thousands)
Six Months Ended June 25, 2000
Revenues from external sources    $293,704        $39,717          0   $333,421
Revenues from other segment              0         15,780    (15,780)         0
Depreciation and amortization        3,163            297          0      3,460
Income (loss) before income taxes     (171)           (46)         0       (217)

Six Months Ended June 27, 1999
Revenues from external sources    $225,581           $430          0   $226,011
Revenues from other segment              0          7,545     (7,545)         0
Depreciation and amortization        2,905            263          0      3,168
Income (loss) before income taxes       65           (385)         0       (320)

Second Quarter 2000
Revenues from external sources    $153,260        $24,540          0   $177,800
Revenues from other segment              0          8,239     (8,239)         0
Depreciation and amortization        1,586            150          0      1,736
Income (loss) before income taxes    1,283           (236)         0      1,047

Second Quarter 1999
Revenues from external sources    $124,714           $268          0   $124,982
Revenues from other segment              0          4,778     (4,778)         0
Depreciation and amortization        1,537            132          0      1,669
Income (loss) before income taxes       53           (106)         0        (53)



4.  COMMITMENTS AND CONTINGENCIES

     Effective  in April  2000,  the  Company  elected to  discontinue  carrying
workers'  compensation  insurance in the State of Texas,  although it does carry
insurance  against  losses  related to claims for failure to provide a safe work
environment. The Company's liability for claims under this policy are limited to
$100,000 per  occurrence.  In other states,  the Company is covered for workers'
compensation  through paid loss retrospective  policies.  Accruals for estimated
claims have been recorded for second quarter of 2000.

     The  Company is subject to  various  claims and  litigation  arising in the
ordinary course of business, particularly personal injury and employment related
claims. In the opinion of management, the outcome of any such known matters will
not have a materially  adverse effect on the consolidated  financial position or
results of operations of the Company.

<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 stores
a Delaware limited partnership                   and other retail outlets

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

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

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

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

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


RESULTS OF OPERATIONS
---------------------

     The  Company  earned  $732,000  in the  second  quarter  of  2000,  showing
considerable  improvement  when  compared to a net loss of $45,000 in the second
quarter of 1999.  The  Company's  net loss of $152,000 in the first half of 2000
compared favorably to a net loss of $235,000 in first half of 1999.

FUEL SALES AND MARGINS
----------------------

                             SECOND QUARTER             YEAR-TO-DATE
                   ----------------------------    -----------------------------
                   2000    1999  CHANGE PERCENT    2000     1999  CHANGE PERCENT
                   ----    ----  ------ -------    ----     ----  ------  ------
                  (In thousands, except average prices and per gallon data)

Fuel sales     $146,401 $92,523 $53,878    58%  $269,833 $165,210 $104,623  63%

Fuel margin      $9,001  $7,400  $1,601    22%   $14,925  $13,701   $1,224   9%

Gallons sold
 Retail          62,550  68,004  (5,454)   (8%)   122,183  130,742  (8,559) (7%)
 Wholesale       26,881  23,922   2,959    12%    49,587   46,362    3,225   7%
 Terminal        23,181     221  22,960 10389%    37,961      498   37,463 7523%
 Total          112,612  92,147  20,465    22%   209,731  177,602   32,129  18%

Average per gallon
  sales price     $1.30   $1.00   $0.30    30%     $1.29    $0.93    $0.36  39%

Margin per gallon (cents)
 Retail            11.0     9.6     1.4    15%      10.3      9.4      0.9  10%
 Wholesale          1.6     1.7     0.1    (6%)      2.8      1.8      1.0  56%
 Terminal           1.7     6.0    (4.3)  (72%)      2.6      5.9     (3.3)(56%)


     Motor fuel sales,  both in dollars of revenue and in gallons sold,  greatly
increased in the second quarter and first half of 2000 over its motor fuel sales
in the  corresponding  periods of 1999. The Company sold 112,612,000  gallons of
motor fuel in the second  quarter,  a 22%  increase  over the second  quarter of
1999, and sold  209,731,000  gallons of motor fuel in the first half of 2000, an
18% increase over in the comparable  1999 period.  Motor fuel sales, in dollars,
increased by $53,878,000 (58%) and $104,623,000 (63%), in the second quarter and
first half of 2000, respectively, compared to sales in the corresponding periods
of the prior  year.  Increases  in the  dollar  amount of motor  fuel sales were
impacted by the 30% and 39% rise in the average sales price of retail motor fuel
for the periods  presented.  Motor fuel sales, both in dollars and gallons sold,
also  increased  for  the  first  half  of 2000 as a  result  of  sales  from 25
additional convenience stores or truck stops acquired in February 1999.

     Fuel margin, in dollars,  increased in the second quarter and first half of
2000 by $1,601,000  (22%) and  $1,224,000  (9%),  compared to fuel margin in the
same periods of the previous year. Sales from the 25 convenience stores or truck
stops  acquired in February 1999  contributed to the Company's  additional  fuel
margin in the first half of 2000.

     Retail  motor fuel sales  continued to be subject to  competitive  pressure
from new retail  gasoline  outlets  located  in the  Company's  market  areas at
supermarkets,  discount stores, and low price gasoline  marketers.  As a result,
retail motor fuel sales declined by 5,454,000 gallons (8%) in the second quarter
of 2000 and by 8,559,000  gallons  (7%) in the first half of 2000.  Retail motor
fuel margins,  however,  improved in the second quarter of 2000 by 1.4 cents per
gallon  (15%)  and by 0.9  cents  per  gallon (10%) in the  first  half of 2000,
compared to  corresponding  periods of 1999.  These  increases in retail  margin
contributed significantly to the improvement in earnings of the Company for both
periods presented.

     Wholesale fuel sales in the second  quarter of 2000, in gallons,  increased
by 2,959,000  gallons (12%),  compared to the second quarter of 1999,  while the
per gallon margin on the wholesale  sales declined by 0.1 cents per gallon (6%).
In the first half of 2000,  wholesale fuel sales increased by 3,225,000  gallons
(7%),  compared  to the first half of 1999,  while the per gallon  margin on the
wholesale sales increased by 1.0 cents per gallon (56%).

     Terminal fuel sales in the second quarter of 2000, in gallons, increased by
22,960,000  gallons (10389%),  compared to the second quarter of 1999, while the
per gallon  margin on the terminal  fuel sales  declined by 4.3 cents per gallon
(72%).  In the first half of 2000,  terminal fuel sales  increased by 37,463,000
gallons (7523%), compared to the first half of 1999, while the per gallon margin
on the  terminal  fuel  sales  decreased  by 3.3 cents per gallon  (56%).  These
greatly  increased  volumes resulted from the Company's new blending activity at
the terminal, which more than made up for the lower margins per gallon.

     In pursuit of alternative  strategies for profit  improvement,  the Company
expanded both its wholesale  sales effort and its  processing  activities at the
terminal  facility.  Through its motor fuel blending and transmix  processing at
the terminal,  the Company sells wholesale motor fuel on a competitive  basis to
many well-known marketers.  The increased volumes of fuel being processed at the
terminal  primarily resulted from a connection made at the terminal late in 1999
to a pipeline transporting fuel from the Texas Gulf Coast.

     The retail versus  wholesale  (including the terminal) sales mix during the
second  quarter of 2000,  in gallons,  decreased to a retail  percentage of 56%,
compared  to retail  percentage  of 74% in the second  quarter of 1999.  For the
first half of 2000, the retail versus  wholesale  (including the terminal) sales
mix,  in  gallons,  declined  to a 58%  retail  percentage  from  a  74%  retail
percentage in the first half of 1999.  The decreases in the proportion of retail
sales to total sales primarily resulted from increasing  wholesale sales instead
of decreasing retail sales.


MERCHANDISE SALES AND MARGINS
-----------------------------

                           SECOND QUARTER                     YEAR-TO-DATE
                      -------------------------      ---------------------------
                     2000   1999   CHANGE  PERCENT  2000  1999   CHANGE  PERCENT
                     ----   ----   ------  -------  ----  ----   ------  -------
                         (In thousands, except average weekly sales data)

Merchandise sales   $29,267  $29,896  $(629) (2%)  $57,946 $55,654  $2,292   4%

Merchandise margin    8,979    8,475    504   6%    17,463  16,453   1,010   6%

Mdse margin percentage,
 convenience stores
 and truck stops      30.7%    28.3%   2.4%   8%     30.1%   29.6%    0.5%   2%

Average weekly
     mdse sales -
 Convenience stores $11,488  $11,183   $305   3%   $11,081 $10,767     314   3%
 Truck stops         17,053   16,834    219   1%    16,251  16,945    (694) (4%)

     Merchandise sales decreased by $629,000 in the second quarter of 2000 (2%),
compared to the second  quarter of 1999,  and  increased by  $2,292,000  for the
first  half of 2000  (4%),  compared  to the same  period of the prior  year.  A
principal  factor for the changes  was that the  Company  operated an average of
11.3 fewer convenience stores in the second quarter of 2000 than in same quarter
of 1999,  but  operated an average of 2.4 more  convenience  stores in the first
half of 2000 than in the first half of 1999. The second  quarter  decline in the
number of convenience  stores  resulted from the conversion of  Company-operated
stores to gas-only outlets during that period.

     Merchandise  gross  profit,  or  margin,  increased  by  $504,000  (6%) and
$1,010,000 (6%) for the three and six month periods of 2000, respectively,  when
compared to the corresponding  periods of the prior year.  Although  merchandise
sales  decreased in the second quarter of 2000, the average  merchandise  margin
increased.  In the  first  half of  2000,  merchandise  sales  and  the  average
merchandise  margin both increased.  The Company's  average  merchandise  margin
improvement resulted largely from increased margins on cigarette sales.

OTHER INCOME AND EXPENSES
-------------------------

     Miscellaneous  revenues  include  lottery ticket sales income,  money order
sales income,  commissions  received on alcohol  beverage  sales,  check cashing
fees, state excise tax handling fees,  gains on asset sales,  gains or losses on
investments,  and various other types of income. Miscellaneous revenues declined
by $430,000  (17%) in the second quarter of 2000, but improved by $495,000 (10%)
for the first half of 2000, when compared to the corresponding  periods of 1999.
Miscellaneous  revenues for the second quarter  decreased  partly as a result of
the Company's  operation of 11.3 fewer convenience  stores, on average,  than in
the second  quarter in 1999 and from  losses on stock and bond  investments.  In
order to reduce the risk of motor fuel price increases during an increasing fuel
price environment,  the Company engaged in certain financial  transactions which
resulted in exchange and motor fuel trading losses of $171,000 and $1,012,000 in
the second quarter and in the first half of 2000, respectively.  The decline was
offset in part by gains of  $1,240,000  in the  second  quarter of 2000 from the
conversion  of 13  convenience  stores  to  gas-only  outlets.  The increase  in
miscellaneous  revenues  in the first half of 2000 was largely  attributable  to
gains of $1,450,000 recognized on the conversion of 17 convenience stores to gas
only  outlets.  These  gains were  partially  offset by losses in stock and bond
investments.

     Direct store  expenses in the second  quarter of 2000 decreased by $204,000
(2%),  compared to the same  quarter in 1999,  largely as a result of  operating
fewer  convenience  stores in the second quarter of 2000.  Direct store expenses
for the six-month period increased by $1,121,000 (5%),  primarily as a result of
the 25 additional stores acquired in February 1999.

     General  and  administrative  expenses  increased  by  $623,000  (18%)  and
$609,000 (8%) in the three and six month periods of 2000, respectively, compared
to the  corresponding  periods of 1999.  These increases  resulted  largely from
increased activity in fuel transportation and the terminal.

     Depreciation  and  amortization  increased  by  $67,000  (4%) in the second
quarter  of  2000,  compared  to the  corresponding  quarter  of  1999.  For the
six-month  period  in  2000,  compared  to the  corresponding  period  in  1999,
depreciation and amortization increased by $292,000 (9%). This increase resulted
from  depreciation  of property  and  equipment  additions  during  1999.  Those
additions were primarily  comprised of 14 convenience store buildings subject to
capital  leases  entered into in February  1999 and fixtures and equipment at 25
stores acquired at the same time.

     Interest  income  rose  from  $318,000  in the  second  quarter  of 1999 to
$367,000  in the second  quarter of 2000 (15%),  and from  $644,000 in the first
half of 1999 to $717,000 in the first half of 2000 (11%). The increases were due
to interest income from stock and bond  investments held by the Company in 2000,
but not in 1999,  and more than made up for the loss of interest income received
in 1999,  but not in 2000,  from FFP Partners under its note to the Company that
was paid off in October 1999.

     Interest expense  increased by $137,000 (14%) and $676,000 (41%) during the
second  quarter  and  first  half  of  2000,  respectively,   when  compared  to
corresponding periods of 1999. This increase resulted from higher debt levels in
the first half of 2000 than in 1999.  Although interest expense has increased as
a result of the new debt,  the Company did obtain fixed  interest  rates for its
long-term  debt,  which  could be  beneficial  in the future if  interest  rates
continue  to rise as they have since the loans  were  closed.  In future  years,
these loan  payments  will also convert  slowly  towards a higher  percentage of
principal payments and a lower percentage of interest payments.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     The  majority  of the  Company's  working  capital is  provided  from three
sources: (a) liquid, short-term investments from funds provided by the repayment
in  October  1999 by FFP  Partners  of its note to the  Company,  (b) cash flows
generated  from its  operating  activities,  and (c)  borrowings  under  its new
revolving line of credit facility.  The Company believes that these investments,
operating  activities,  and short-term  working capital  facilities will provide
sufficient liquidity to fund its operations,  capital expenditures,  and service
debt  requirements,  although the rise in motor fuel prices in the last year has
impacted the Company's available  liquidity.  Actual capital expenditure funding
will be dependent on the level of cash flow generated from operating  activities
and the funds available from financings.

     In December 1999, the Company obtained a revolving line of credit providing
for  borrowings  of up to  $10,000,000,  with the amount  available  at any time
limited to a  borrowing  base  equal to 80% of certain of its trade  receivables
plus 60% of its inventory at the terminal;  provided,  however, that any amounts
which would cause outstanding borrowings under the facility to exceed $5,000,000
are  limited  to 140% of the net  value of stock  and  bond  investments  in the
Company's  trading  account at a brokerage firm. At June 25, 2000, the borrowing
base was  $9,800,000,  and the net  value of the  Company's  securities  at that
particular  brokerage firm on that date was $873,000.  The Company's  borrowings
under the revolving  credit  facility on that date were $595,000.  The revolving
credit  facility  bears  interest at the lender's prime rate plus one percentage
point,  payable monthly on amounts  borrowed,  and matures in December 2002. The
loans are  subject to a Loan  Agreement  and a Security  Agreement  between  the
lender,  the  Company  and  two  of its  subsidiaries.  The  agreement  contains
numerous,  but typical,  restrictive  covenants  including a financial  covenant
relating to the  maintenance of a specified  fixed charge coverage ratio of 1.25
to 1,  all as  defined  in the  agreement.  The  loan is  secured  by all of the
Company's trade accounts receivables and its inventory at the terminal.

     Subject to obtaining  satisfactory  deal terms, the Company in 2000 intends
to increase its sales of convenience  store operations to independent  operators
while  retaining a motor fuel concession at those  locations.  It has identified
numerous Company-operated convenience stores that it is attempting to convert to
gas-only stores in such a manner.  In the second quarter and first half of 2000,
the  Company  closed on the sale of four and 13 of those  stores,  respectively.
Those sales  generated  gains on sale of $1,240,000 and $1,450,000 in the second
quarter and first half of 2000, respectively. Typically, the sales are made with
the buyer providing 25% of the sales price in cash and paying the remainder over
60 months with interest. In addition,  sales of several other convenience stores
were under  contract at the end of the second  quarter and are expected to close
in the third quarter.  The  anticipated  benefits of making such  conversions to
gas-only outlets are not only to obtain gains on such sales, but also to improve
earnings on an ongoing basis from reduced general and  administrative  expenses,
lower theft losses,  reduced merchandise inventory financing costs, lesser legal
expenses related to store operations,  and lower store-level  salaries and other
direct store expenses.

     In  addition,  the  Company  may  consider  the  outright  sale of  certain
convenience  stores  and  truck  stops.  The  Company  may or may  not  purchase
additional  convenience  stores  in 2000 and  beyond  as the  convenience  store
industry goes through as period of greater  competition and  consolidation.  Any
such  dispositions or acquisitions  will impact the Company's  financial results
and liquidity.

     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  $15,225,000 at June 25,
2000.  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 money
order sales agents at stores not operated by the Company. The Company is subject
to the risk of not  receiving  money order  payments on a timely basis from such
third party money  order  agents,  although  the  Company  believes  that it has
sufficiently strong controls in its money order operations.

     The Company had positive  working  capital of $12,309,000 at June 25, 2000,
compared  to  $14,397,000  at the end of 1999.  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  receives  payment  terms from
vendors.  The Company is now engaged in what has  typically  been its  strongest
period  of  the  year,  when  revenues  and  cash  flows   generally   increase.
Consequently,   management  believes  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.

YEAR "2000" ISSUES
-------------------

     Over the past  several  years,  the Company has  prepared  for the possible
disruptions  that might have resulted from the date change to year 2000 ("Y2K").
No  significant  Y2K problems  have been  experienced  to date,  and the Company
believes that no material exposure to Y2K issues exists.  Total Y2K expenditures
were $700,000, of which $350,000 was capitalized.

FORWARD-LOOKING STATEMENTS
--------------------------

     Some  of  the  matters   discussed  in  this   quarterly   report   contain
"forward-looking"  statements regarding the Company's future business, which are
subject to  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  pressures 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 new 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.
However, the Company did not borrow under that facility during the first half of
2000 in  amounts  that  would have made a  material  interest  rate  risk.  Such
borrowings  in the future  could  increase,  however,  in which case the Company
could be subject to a greater risk of increasing interest rates.

     The Company is also  subject to market  risks  related to  increasing  fuel
prices  and  sometimes  attempts  to reduce  that risk by  purchasing  commodity
futures and forward contracts. Such attempts to mitigate commodity risk are also
subject to risk  because  the  commodities  under the  financial  contracts  are
normally  not of the same grade or location of fuel as that owned by the Company
in its business.  Open positions under these futures and forward  contracts were
not significant at June 25, 2000.

                                LEGAL PROCEEDINGS
                                -----------------

     A trial in the case of Xavier  Duenez,  et al., v. FFP Operating  Partners,
L.P,  d/b/a Mr. Cut Rate #602, et al.,  began in May 2000 in the County Court of
Law No. 1, Calhoun County, Texas. In the case, members of the Duenez family sued
the  Company  and the  driver of a pickup  truck who had  purchased  beer from a
Company  convenience  store just prior to causing  an  accident,  which  injured
members of the Duenez family.  The trial court dismissed the pickup truck driver
from the case, and the Company  remained as the sole defendant in the trial. The
Company  was  alleged to have  caused  the  damages to the family as a result of
certain alleged violations of liquor sales laws. After a jury verdict, the court
issued a judgment against the Company in the amount of $35 million.  The case is
now being appealed to the Corpus Christi Court of Appeals in the State of Texas.
The Company  expects to be fully covered by insurance for any  liabilities  that
exceed its deductible, which has already been paid.


                                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: August 9, 2000                  By: /s/John H. Harvison
                                      ---------------------------------
                                      John H. Harvison
                                      Chairman and
                                      Chief Executive Officer

Date: August 9, 2000                  By: /s/Craig T. Scott
                                      ---------------------------------
                                      Craig T. Scott
                                      Vice President - Finance and
                                      Chief Financial Officer