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 28, 1998, 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 3,779,415
              (Number of shares outstanding as of August 10, 1998)


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

                                                    June 28,   December 28,
                                                      1998        1997
                   ASSETS
Current Assets -
    Cash and cash equivalents                         $8,224      $9,389
    Trade receivables                                 13,798      10,732
    Notes receivable from affiliates                   1,828         426
    Notes receivable                                     736         737
    Inventories                                       16,379      15,820
    Prepaid expenses and other                         1,811       1,077
        Total current assets                          42,776      38,181

Property and equipment, net                           32,876      32,095
Note receivable from affiliate                        13,630           0
Other assets, net                                      5,512       5,054

        Total Assets                                 $94,794     $75,330

    LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities -
    Current installments of long-term debt            $1,556      $1,208
    Current installments of obligation under
      capital lease                                      648         917
    Accounts payable                                  15,574      15,319
    Money orders payable                              11,712      11,299
    Accrued expenses                                  12,379       9,623
        Total current liabilities                     41,869      38,366

Long-term debt, excluding current installments        21,182      21,465
Obligations under capital lease, excluding
     current installments                              3,214       3,110
Deferred income taxes                                  3,616       3,259
Other liabilities                                      2,578       2,866

        Total Liabilities                             72,459      69,066

Stockholders' Equity
    Common stock and retained earnings                22,335      22,202
    Reduction for joint debt obligations                   0     (15,938)
        Total Stockholders Equity                     22,335       6,264

        Total Liabilities and Stockholders' Equity   $94,794     $75,330


     See accompanying notes to condensed consolidated financial statements.


<PAGE>


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


                                  Three Months Ended     Six Months Ended
                                  June 28,  June 29,     June 28,  June 29,
                                    1998      1997         1998      1997
Revenues
    Motor fuel                     $85,059   $82,209     $161,404  $159,326
    Merchandise                     24,902    15,482       47,481    29,469
    Miscellaneous                    2,608     1,631        4,927     3,329
        Total Revenues             112,569    99,322      213,812   192,124

Costs and Expenses
    Cost of motor fuel              78,535    76,660      148,402   149,310
    Cost of merchandise             17,346    10,694       32,862    20,867
    Direct store expenses           11,201     6,691       21,867    13,533
    General and administrative       4,355     3,053        7,475     5,906
expenses
    Depreciation and amortization    1,348     1,393        2,668     2,514
        Total Costs and Expenses   112,785    98,491      213,274   192,130

Operating Income/(Loss)               (216)      831          538        (6)
    Interest expense                   119       357          320       648

Income/(loss) before income taxes     (335)      474          218      (654)

    Income tax expense/(benefit)
        Current                         50         0           97         0
        Deferred                      (182)       134         (12)       268
        Total                         (132)       134           85       268

Net Income/(Loss)                    $(203)      $340         $133     $(922)

Net income/(loss) per share -
    Basic                           $(0.05)     $0.09        $0.04    $(0.24)
    Diluted                          (0.05)      0.09         0.03     (0.24)

Weighted average number of
common shares outstanding -
    Basic                            3,779      3,779        3,779     3,779
    Diluted                          3,911      3,797        3,877     3,824



     See accompanying notes to condensed consolidated financial statements.


<PAGE>

                  FFP MARKETING COMPANY, INC., AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)


                                                    Six Months Ended
                                                  June 28,    June 29,
                                                    1998        1997
Cash Flows from Operating Activities -
    Net income/(loss)                                $133      $(922)
    Adjustments to reconcile net income/(loss)
      to cash provided by operating activities -
         Depreciation and amortization              2,668      2,514
         Deferred income tax expense/(benefit)        (12)       268
         Net change in operating assets  
            and liabilities                        (1,830)     4,672
    Net cash provided by operating activities         959      6,532

Cash Flows from Investing Activities -
    Advances from affiliate, net of reduction
      for joint debt obligations                    1,165          0
    Additions of property and equipment, net       (3,189)    (5,822)
    Net cash (used) by investing activities        (2,024)    (5,822)

Cash Flows from Financing Activities -
    Net borrowings/(repayments) under
      credit facilities                              (100)       (47)
    Net cash (used) by financing activities          (100)       (47)

Net Increase/(Decrease) in cash and
   cash equivalents                                (1,165)       663

Cash and cash equivalents at beginning of period    9,389      8,244

Cash and cash equivalents at end of period         $8,224     $8,907



     See accompanying notes to condensed consolidated financial statements.


<PAGE>

                  FFP MARKETING COMPANY, INC., AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 28, 1998
                                   (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.,  collectively  referred to as "FFP Marketing" or the
"Company."

            The condensed  consolidated  balance sheet as of June 28, 1998,  and
the consolidated  statements of operations and condensed consolidated statements
of cash flows for the three and six month periods ended June 28, 1998,  and June
29, 1997, 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 28, 1998, 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
28, 1997, 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
June 28, 1998, and as discussed below.

            Certain   amounts   previously   reported  in  the  1997   condensed
consolidated  financial statements have been reclassified to conform to the 1998
presentation.


2.  Notes Payable and Long-Term Debt

             On June 30,  1998,  the  Company  completed  the  financing  of the
purchase of 94 convenience  stores in December 1997. This financing  consists of
44  fully  amortizing  mortgage  loans  in the  aggregate  principal  amount  of
$9,420,000,  at an interest rate of 8.66%, with maturities of 112 to 180 months,
and requiring initial  aggregate  payments of principal and interest of $101,000
per month. The proceeds of these loans were used to repay the $5,735,000 balance
on the bridge loan used to finance  the  purchase of the outlets and for general
corporate purposes.  Because the refinancing was completed prior to the issuance
of these condensed consolidated financial statements, the accompanying condensed
consolidated balance sheet as of June 28, 1998, reflects the reclassification of
the bridge loan balance between current maturities and long-term debt.

             Effective June 28, 1998, the Company, FFP Partners,  L.P ("FFPLP"),
and the Company's  primary bank lender reached an agreement to  restructure  the
debt due to the lender for which FFPLP had retained the  liability in connection
with its December 1997  restructuring.  The Company  acquired its  operations in
connection with the December 1997  restructuring of FFPLP. Under this agreement,
the lender will permit a subsidiary of FFP Marketing to make a loan to FFPLP for
approximately $14,773,000 (the current balance on the debt due to the lender for
which FFPLP had retained  liability in the restructuring) and will release FFPLP
from all obligations under the Loan Agreement covering its loans to the Company.
The  interest  rate and  repayment  terms of the loan to FFPLP will  mirror such
terms (which are  unchanged  from year end 1997) of the debt to the lender.  The
agreement  with the lender  also  requires  that the loan be secured by all real
estate owned by FFPLP and be pledged as additional collateral on the debt to the
lender,  that all  proceeds  received by the  Company  from the loan to FFPLP be
applied to the term loan of the lender to the  Company,  and that FFP  Marketing
Company,  Inc.,  be added as a primary  obligor under the Loan  Agreement.  As a
result of this  agreement,  there is no longer any joint  liability  on the debt
obligations  to the lender and the  reduction of  stockholders'  equity for such
liability has been removed as of June 28, 1998.


3.  Income/(Loss) per Share

            The Company adopted Statement of Financial  Accounting Standards No.
128,  "Earnings  per Share," in the fourth  quarter of 1997.  Income/(loss)  per
share  amounts  for 1997  periods  have  been  restated  to  conform  to the new
presentation.  A  reconciliation  of the  denominators  of the basic and diluted
income/(loss) per share calculations for the 1998 and 1997 periods follows:

                                       Three Months Ended      Six Months Ended
                                       June 28   June 29       June 28  June 29
                                        1998      1997          1998      1997
                                                     In thousands
Weighted average number of common
   shares outstanding                  3,779     3,779         3,779     3,779
Effect of dilutive options               132        18            98        45
Weighted average number of common shares
   outstanding, assuming dilution      3,911     3,797         3,877     3,824

            The  number  of  options   that  could   potentially   dilute  basic
income/(loss)  per share in the future that were not included in the computation
of diluted income/(loss) per share because to do so would have been antidilutive
were -0- and 70,000 in the three months ended 1998 and 1997,  respectively,  and
were -0- and 50,000 in the six months ended 1998 and 1997, respectively.


4.  Reporting of Comprehensive Income

            At the  beginning  of its 1998  fiscal  year,  the  Company  adopted
Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting
Comprehensive  Income." SFAS No. 130 requires the presentation of "comprehensive
income" in financial  statements.  Comprehensive  income includes net income and
all revenues,  expenses,  gains,  and losses that had  previously  been recorded
directly to equity.  The Company does not have any items of other  comprehensive
income,   therefore   comprehensive   income  and  net  income  are   identical.
Accordingly,  the  effect of the  adoption  of SFAS No. 130 had no effect on the
Company's condensed consolidated financial statements.





<PAGE>


                  FFP MARKETING COMPANY, INC., AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


General

            FFP  Marketing  was  formed in  connection  with the  December  1997
restructuring of FFP Partners,  L.P. ("FFP Partners"),  in which the real estate
owned by FFP Partners and used in its retail operations was retained by it while
all other assets and businesses were transferred to FFP Marketing. FFP Marketing
then entered into  agreements to lease the real estate retained by FFP Partners.
Unless  the  context  requires  otherwise,  references  in this  report  to "FFP
Marketing" or the "Company" for periods or activities prior to the completion of
the December 1997  restructuring  include the activities of FFP Partners and its
then subsidiaries, which are now subsidiaries of FFP Marketing.


Results of Operations

Fuel Sales and Margins

            ---------Second Quarter---------  -----------Year-to-Date-----------
                              ----Change----                      ----Change----
             1998      1997   Amount Percent    1998      1997    Amount Percent
                            In thousands, except per gallon data
Fuel sales  $85,059  $82,209  $2,850    3.5%  $161,404  $159,326  $2,078   1.3%
Fuel margin   6,524    5,549     975   17.6%    13,002    10,016   2,986  29.8%
Gallons sold
  Retail     61,764   50,856  10,908   21.4%   119,259    99,717  19,542  19.6%
  Wholesale  27,373   24,096   3,277   13.6%    47,216    42,248   4,968  11.8%
  Total      89,137   74,952  14,185   18.9%   166,475   141,965  24,510  17.3%
Margin per gallon (cents)
  Retail        9.7      9.5     0.2    2.1%      10.1       8.8     1.3  14.8%
  Wholesale     1.7      2.6    (0.9) -34.6%       2.0       2.5   (0.5) -20.0%

             The increases in the Company's motor fuel sales in both the quarter
and  year-to-date  periods is the net effect of the  increases in the volumes of
fuel sold in the  respective  periods offset by declines in the price per gallon
during 1998 as compared to the 1997 periods.  The wholesale fuel sales increases
are due to the Company's  continued increase on this activity while the increase
in retail fuel volumes is due to the sales from the 94  convenience  stores that
the Company purchased in December 1997.

            The  17.6%  increase  in  fuel  margin  in  the  second  quarter  is
consistent  with the overall  18.9%  increase  in sales  volumes for the period.
However,  in the year-to-date  period,  the increase in fuel margin outpaced the
increase in volumes sold because of the 14.8%  increase in the margin per gallon
realized by the Company in the 1998 period as compared to 1997.

Merchandise Sales and Margin

            ---------Second Quarter---------  -----------Year-to-Date-----------
                              ----Change----                      ----Change----
             1998     1997    Amount Percent    1998      1997    Amount Percent
                       In thousands, except average weekly sales data
Mdse sales  $24,902  $15,482  $9,420   60.8%   $47,481  $29,469  $18,012  61.1%
Mdse margin   7,556    4,788   2,768   57.8%    14,619    8,602    6,017  69.9%
Margin percentage,
 convenience stores and
 truck stops   29.2%    29.3%   -0.1%  -0.3%      29.7%    27.4%     2.3%  8.4%
Average weekly mdse sales
 Convenience
  stores     $9,624  $10,130   $(506)  -5.0%     8,936    9,659     (723) -7.5%
 Truck stops 17,685   18,592    (907)  -4.9%    16,951   17,700     (749) -4.2%

            The  increases  in  merchandise  sales  both  time  periods  is  due
principally to the sales at the  convenience  stores  acquired in December 1997.
The slight decline in the margin  percentage on merchandise  sales in the second
quarter 1998 as compared to 1997 is due to a decline in the margin percentage on
sales at the Company's two  restaurants  operated in conjunction  with its truck
stops.  Although the margin percentage  declined,  the absolute dollar margin at
the restaurants was up slightly in the 1998 period.

            As with fuel and merchandise volumes, the increases in miscellaneous
revenues  in both the quarter  and  year-to-date  periods are largely due to the
additional revenue from the 94 convenience stores acquired in December 1997.

            Direct  store  expenses  are  those  expenses,   such  as  salaries,
utilities,  repair, maintenance, and rent, that are directly attributable to the
operation of the Company's retail outlets.  These expenses increased  $4,510,000
(67.4%) in the quarter and $8,334,000 (61.6%) in the year-to-date  period due in
part to the expenses of operating the  additional  outlets  acquired in December
1997. In addition,  as a result of the  restructuring by which FFP Marketing was
formed,  the Company now pays rent on a number of locations  that were  formerly
owned by the Company. This additional rent, approximately $216,000 per month, is
reflected in direct store expenses.

            General and administrative expenses increased $1,302,000 (42.6%) and
$1,569,000 (26.6%) in the quarter and year-to-date periods, respectively.  These
increases are principally due to the additional field  supervisory  personnel to
oversee the operations of the  convenience  stores acquired in December 1997, to
operating  costs at the Company's fuel terminal  which began  operations in June
1997,  and, in the second  quarter,  increased bad debt expenses  related to the
Company's money order activities.

            Depreciation and amortization decreased $45,000 (3.2%) in the second
quarter and increased $154,000 (6.1%) in the year-to-date  period. These changes
reflect  the  increased  depreciation  related to the  relatively  high level of
property addition during 1997, which were primarily  associated with the upgrade
of  underground   storage  tanks  to  meet  1998   environmental   requirements,
depreciation  of the  fixtures  and  equipment  acquired  in the  December  1997
purchase of the 94  convenience  stores,  and  depreciation  of equipment at the
Company's  fuel  terminal  (which began  operating in June 1997),  offset by the
reduction in depreciation on the buildings that were retained by FFP Partners in
the December 1997 restructuring mentioned above.

            The  reductions  in  interest   expense  in  both  the  quarter  and
year-to-date  time  frames  resulted  from the  retention  by FFP  Partners of a
significant  amount  of  debt  in  the  December  restructuring  offset  by  the
additional  interest on the debt  incurred to purchase  the  convenience  stores
acquired by the Company in December 1997.

            In 1997 and prior  years,  the  Company  was  treated  as a publicly
traded  partnership for income tax purposes.  Accordingly,  it recorded deferred
income taxes  associated  with  differences in the timing of the recognition for
financial  and tax  reporting of those items that were expected to reverse after
the Company  became  taxable as a  corporation  in January  1998.  The "current"
income tax "expense" or "benefit" that would otherwise have been recorded by the
Company had it been taxable as a  corporation  was  allocated  to its  partners.
However,  in January  1998,  as a result of the  expiration  of its  grandfather
status as a publicly traded partnership and in connection with the December 1997
restructuring  of FFP Partners,  the Company became taxable as a corporation and
has begun recording income tax expense  accordingly.  Therefore,  the income tax
expense reflected in the accompanying  consolidated  statement of operations for
1998 is not comparable to that shown for the prior year.


Liquidity and Capital Resources

             The Company's  working capital at the end of the second quarter was
$907,000  as  compared  to a negative  $185,000  at year end 1997.  This  change
resulted from the agreement among the Company,  FFP Partners,  and the Company's
primary  bank lender to  restructure  the debt due to the lender for which FFPLP
had retained the liability in connection  with its December 1997  restructuring.
Under this agreement, the lender will permit FFP Marketing to make a loan to FFP
Partners for approximately  $14,773,000 (the current balance of the debt due the
lender for which FFPLP had retained liability).  The interest rate and repayment
terms of this loan will mirror  such terms of the debt to the  lender.  The loan
will be secured by all real estate  owned by FFP  Partners  and the loan will be
pledged as  additional  collateral on the debt to the lender.  In addition,  all
proceeds  received by the Company  from the loan to FFPLP must be applied to the
term loan of the lender to the Company, and FFP Marketing Company, Inc., will be
added as a primary obligor under the Loan  Agreement.  Since the repayment terms
of this loan will  mirror the  repayment  terms of the debt to the  lender,  the
Company has a current  receivable  equivalent  to the current  amount due on the
debt.  In  addition,  since there is no longer any joint  liability  on the debt
obligations  to the  lender,  the  reduction  of  stockholders'  equity for such
liability has been removed as of June 28, 1998.

             The Company also completed, on June 30, the permanent financing for
the purchase of the 94  convenience  stores it acquired in December  1997.  This
financing consists of 44 loans with an aggregate principal amount of $9,420,000.
All of the loans bear interest at 8.66% and have maturities  ranging from 112 to
180 months.  The loans  require  initial  aggregate  payments of  principal  and
interest of $101,000  per month.  The proceeds of these loans were used to repay
the  $5,735,000  balance on the bridge loan used to finance the  purchase of the
outlets  and  for  general  corporate  purposes.  Because  the  refinancing  was
completed  prior to the  issuance  of  these  condensed  consolidated  financial
statements, the accompanying condensed consolidated balance sheet as of June 28,
1998,  reflects the  reclassification of the bridge loan balance between current
maturities and long-term debt.

            The  Company  believes  that  its  internally  generated  funds  and
traditional  use of trade credit,  along with its bank line of credit,  are such
that operations will 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. 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,"
"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, 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, or other aspects of competitors'
operations;  changes in the cost of refined petroleum  products,  changes in the
cost of  merchandise  items sold by the Company,  or changes in the gross profit
realized from sales of motor fuel and merchandise; expense pressures relating to
operating  costs,  including labor,  repairs,  maintenance,  and supplies;  and,
unanticipated general and administrative expenses,  including costs of expansion
and financing.



<PAGE>


                        EXHIBITS AND REPORTS ON FORM 8-K


Exhibits

   27    Financial Data Schedule [included in electronic filing only].


Reports on Form 8-K

         The  Company  did not file any  reports on Form 8-K for the  quarter
covered by this Report on Form 10-Q.









<PAGE>


                                   SIGNATURES

            Pursuant  to  the  requirements  of  Section  13  or  15(d)  of  the
Securities  and 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 17, 1998            By: /s/John H. Harvison
                                      ---------------------------------
                                      John H. Harvison
                                      Chairman and Chief Executive Officer


Date:  August 17, 1998            By: /s/Steven B. Hawkins
                                      ---------------------------------
                                      Steven B. Hawkins
                                      Vice President - Finance and
                                      Chief Financial Officer