SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF

                      THE SECURITIES EXCHANGE ACT OF 1934.

                   For the fiscal year ended December 31, 2000

                          Commission File No. 000-28108

                        SUBURBAN LODGES OF AMERICA, INC.
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             (Exact name of Registrant as specified in its charter)

                                     Georgia
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         (State or other jurisdiction of incorporation or organization)

                                    581781184
                      ------------------------------------
                      (I.R.S. Employer Identification No.)

            300 Galleria Parkway, Suite 1200, Atlanta, Georgia 30339
            --------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (770) 799-5000

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act:

 Common Stock, Par Value $0.01 Per Share
 ---------------------------------------

         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 /_/

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained herein and will not be contained, to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10K. /X/

         The aggregate  market value of the voting stock held by  non-affiliates
(which for purposes  hereof are all holders  other than  executive  officers and
directors) of the Registrant as of March 23, 2001 is $49,599,011 (based on $5.75
per share; the last sales price on the NASDAQ Stock Market on March 23, 2001).

         At March 23, 2001 there were issued and outstanding  12,003,570  shares
of Common Stock, par value $0.01 per share.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the  Registrant's  definitive  Proxy Statement for the 2001
Annual Meeting of Shareholders are incorporated by reference into Part III.


<PAGE>
                                     PART I

ITEM 1.  BUSINESS.


GENERAL

         Suburban Lodges of America, Inc. and its subsidiaries (collectively the
"Company")  was  incorporated  in Georgia in 1987. The Company  develops,  owns,
manages and  franchises  Suburban  Lodge(R)  hotels,  which are limited  service
extended stay hotels designed to appeal to value-conscious  guests. In addition,
the Company  franchises  GuestHouse  International(R)  Inns,  Hotels and Suites,
which are mid-market  traditional  nightly hotels.  The Suburban Lodge brand has
been ranked as the 19th largest  limited service hotel brand and the Company has
been ranked as the 34th largest  hotel  company in the world (based on number of
guest rooms and hotels, respectively).

         Suburban   Lodge  guest  rooms  are  fully   furnished  and  include  a
combination   living  room  and  bedroom,   a  bathroom  and  a   fully-equipped
kitchenette.  Weekly  maid and  linen  services,  access  to cable or  satellite
television and  coin-operated  laundromats  are also provided to allow guests to
stay  comfortably  for  extended  periods.  Suburban  Lodge  hotels offer clean,
comfortable and attractive accommodations to guests at substantially lower rates
than most  traditional and other extended stay hotels.  Although daily rates are
available,  a majority  of all  guests pay the  Company's  weekly  rates,  which
currently  range from  approximately  $149 to $339 for standard  guest rooms and
from $169 to $359 for larger guest rooms.

         Based upon the high  occupancy  rates of the Company's  Suburban  Lodge
hotels and its Suburban Lodge franchised hotels,  published  occupancy rates for
other participants in the extended stay market and industry sources, the Company
believes that demand for extended stay hotels compares favorably to the existing
supply of hotels in this  segment  of the  market.  The  Company  believes  that
Suburban Lodge hotels appeal to an underserved  and growing segment of guests in
the extended stay market. These guests include business travelers  (particularly
those with  limited or no  expense  accounts),  individuals  on  temporary  work
assignments,  persons  relocating  or  purchasing  a home,  tourists  and  other
value-conscious customers desiring low-cost, longer-term, quality accommodations
with fully equipped  kitchenettes.  The Company  believes that the extended stay
market  offers a number of  attractive  investment  characteristics  compared to
traditional  hotels,  including higher than industry average occupancy rates and
operating margins.

         The Company believes that several features  differentiate  its Suburban
Lodge hotels from, and provide a competitive  advantage  over,  traditional  and
other extended stay lodging hotels, such as: (i) franchising opportunities; (ii)
its low weekly  rates;  (iii) guest rooms include  fully-equipped  kitchenettes;
(iv) marketing and pricing to appeal to longer guest stays; (v) higher occupancy
rates; (vi) operating  efficiencies;  (vii) standard design and low construction
costs; and (viii) attractive unit economics.

         In June 1999, the Company added the GuestHouse  International  brand to
its portfolio,  thereby extending the Company's ability to attract  franchisees.
The  Company  now has a  nightly  stay  brand and a brand  that is not  targeted
primarily at the economy  segment of the market.  The  GuestHouse  International
brand  includes a diverse group of mid-market  inns,  hotels,  and suite hotels,
many of which are two and three diamond AAA rated hotels. Although approximately
20 percent of GuestHouse International hotels are new construction,  the brand's
focus is on the conversion of existing hotels.

         GuestHouse International hotels are as unique in feel as they are alike
in their commitment to quality, safety and customer service. With the variety of
property types and locations,  GuestHouse  International appeals to a broad base
of guests, most of whom stay for one to three nights.

                                      -1-
<PAGE>

         The   GuestHouse   International   concept  is  truly   different  from
traditionally  one-sided franchise  relationships.  The brand was founded on the
ideas and needs of hotel owners,  so it centers on providing  fair treatment and
real   value   to   franchisees.   GuestHouse   International   offers  a  truly
owner-friendly  license agreement featuring  remarkably low flat fees that allow
owners to keep their increases in profit. The franchise  agreements also feature
a short  five-year  term,  designated  areas  of  protection  and  lenient  exit
requirements.

         Although the Suburban Lodge and GuestHouse International brands operate
differently,  the Company is able to combine resources to create efficiencies in
support services such as quality assurance, training, information technology and
franchise sales.

BUSINESS STRATEGY

  Growth Strategy

         With 65 Company owned and 54 franchise  Suburban Lodge hotels operating
in 19 states as of December 31, 2000, Suburban Lodge has established itself as a
national  provider of economy  extended  stay  hotels.  With its new  GuestHouse
International  brand  operating  65 hotels in 20 states as of December 31, 2000,
the  Company  has also  established  itself  as a  leader  in  "owner  friendly"
franchising.  While the company  continues  to own and develop a select group of
Suburban  Lodge  properties  each year,  the  Company  is focused on  becoming a
multi-brand,  fee-based  franchisor rather than a capital-intensive  development
enterprise.

         Franchising,  Third Party Development and Management Activities. During
1999, the Company significantly  expanded its franchise sales force to emphasize
franchising  the  Suburban  Lodge  and  GuestHouse  International  systems  on a
nationwide  basis  to  independent  developers  and  operators  and  to  passive
investors who retain the Company to develop and manage their  Suburban Lodge and
GuestHouse  International hotels. The Company considers its franchisees to be an
integral  component of its continued growth and believes its  relationship  with
its franchisees is good. Through franchising,  the Company intends to accelerate
the growth of the Suburban Lodge and GuestHouse  International systems,  thereby
increasing  its market  presence  and brand  awareness  in both new and existing
markets, while generating incremental revenues at an attractive margin. Suburban
believes that its existing  infrastructure and experience in franchising will be
an important factor in executing its franchising strategy. At December 31, 2000,
54  franchised  Suburban  Lodge  hotels  were  operating  in 12  states  and  65
GuestHouse International hotels were operating in 20 states.

         The Company has formed the Suburban Lodge Franchise  Advisory Committee
("SLFAC")  with  the  following  purposes:   to  promote  communication  between
franchisees and franchisor; to encourage growth of the Suburban Lodge community;
to  develop  innovative  approaches  to  enhance  the  ownership,   quality  and
profitability of Suburban Lodge hotels;  and to advise  franchisor of matters of
interest to franchisees.

         SLFAC  has  formed  six  subcommittees  in the areas of  Marketing  and
Reservations,       Information       Technology,       Quality       Assurance,
Design/Construction/FF&E,  Operations  and  Training.  The  Board  of  SLFAC  is
compromised of six  franchisees and three Company  representatives.  SLFAC meets
four times per year,  with the fourth being the annual  meeting  that  coincides
with the annual Franchise Owners' Convention.

         The Company has also  announced  its  intentions  to form a  GuestHouse
International Marketing Advisory Council in 2001.



                                      -2-
<PAGE>

         Company Owned Development. As the Company continues to focus its growth
on fee-based franchise revenues, Company development is being limited to select,
geographically  diverse,  strategic  markets.  In 2000 the Company  opened three
hotels   in   Tampa-Brandon,   Florida;   Chicago-Villa   Park,   Illinois   and
Denver-Sheridan,  Colorado.  The Company is presently  developing  two hotels in
Pittsburgh and Philadelphia, Pennsylvania.

         Extel 2001.  The Company has  designed and  introduced a new  prototype
Suburban  Lodge hotel that allows owners to take advantage of both extended stay
and transient markets.  Extel 2001 has an expandable  interior corridor that can
accommodate  61 to 150  guestrooms.  The new  prototype  allows  franchisees  to
cost-effectively  modify  features to fit the needs of individual  markets.  The
lower  development  costs associated with the option of a lesser number of units
and the additional design flexibility to accommodate a broader range of markets,
provides a significant enhancement to the Company's franchising activities.

         Strategic Opportunities. During 2000, the Company announced a strategic
alliance  with  HotelTools  Inc.,  a private  company.  HotelTools  has  created
valuable,  web-based  Enterprise  software for the  hospitality  industry.  This
service  centralizes all aspects of multi-property  hotel operations,  including
property,  guest and rate management,  along with reservations.  The Company has
provided funding for HotelTool's operations in the form of secured loans. A more
thorough  discussion  of  this  topic  is  presented  in  item  7,  Management's
Discussion and Analysis of Financial Condition and Results of Operations.

   Operating Strategies at Company-Owned Hotels

         The Company's  principal  operating  strategies  are to (i) provide its
guests with clean,  comfortable  and attractive  accommodations  at weekly rates
substantially  lower than those offered by most  traditional  and other extended
stay hotels; (ii) control the operating costs at each of its hotels and maintain
above industry average operating  margins;  and (iii) ensure guest  satisfaction
through a commitment to customer service.

         The Company believes that its high average occupancy rate (as described
in  Management's  Discussion and Analysis of Financial  Condition and Results of
Operation) is primarily a result of the  combination of its  competitive  weekly
rates,  which  appeal to a broad base of  potential  guests,  and its  guestroom
amenities.  In addition,  the Company  seeks to minimize  costs  throughout  its
operations.  The  Company  is able to control  its  operating  costs  because it
operates  each  hotel  with a  staff  of  approximately  six to  nine  full-time
employees,  which  is  smaller  than  the  staffs  at most  traditional  hotels,
maintains   limited   office  hours  and  provides   weekly  rather  than  daily
housekeeping. In addition, because the average guest stay is approximately three
to  four  weeks,   longer  guest  stays  reduce  guest   check-in   traffic  and
administrative costs.

         Reservations  are  available  to both  Suburban  Lodge  and  GuestHouse
International  guests by voice,  online,  and  through  the Global  Distribution
System (GDS).  Live online  reservations  can be made at  suburbanlodge.com  and
guesthouseintl.com.  Voice reservations can be made at 800-951-STAY for Suburban
Lodge and 800-21-GUEST for GuestHouse International. Most hotels for both brands
are also  available  to travel  agents  worldwide  on the GDS through  Lexington
Services Worldwide.

         Each  brand  has  established  its own  national  marketing  fund  that
supports the marketing of its hotels to prospective  guests.  Suburban Lodge and
all participating GuestHouse International hotels contribute to their respective
funds. With the funds, the Company provides sales and telemarketing support.

OPERATING PRACTICES

         The Company  manages its own hotels.  Each  Suburban  Lodge hotel has a
general  manager,  who  resides  on-site  and is  responsible  for  the  overall
operation of the hotel,  and an assistant  manager.  Managers are trained in all
aspects  of hotel  operations,  with  particular  emphasis  placed  on  customer
service,  and are given broad authority to make day-to-day  operating decisions.
Managers are supervised


                                      -3-
<PAGE>

through the Company's management information systems and frequent on-site audits
by district managers. Incentive programs allow managers to earn bonuses based on
achievement of budgets. The Company provides on-going mandatory training for the
managers.

         On-site  transactions  are  processed  through  software  licensed from
HotelTools. The software provides on-site Suburban Lodge management with updated
information on items such as available guest rooms, guest rooms needing cleaning
or repairs,  room charges due and guest payment history. Each hotel is connected
by modem to the Company's corporate office in Atlanta, and operating results are
compiled  and  reviewed  on a regular  basis.  The  corporate  office  purchases
supplies,  pays virtually all property  expenses and prepares monthly  financial
statements for all properties managed by the Company.

         The  Company   maintains   customer   service  and  quality   assurance
departments.  The customer  service  function  provides  customers with property
information and resolves  satisfaction problems and billing  discrepancies.  The
Company's quality assurance  department  inspects all hotels, both corporate and
franchise,   to  ensure  compliance  with  quality  guidelines  and  operational
standards.

FRANCHISE, DEVELOPMENT AND MANAGEMENT AGREEMENTS

     Suburban Lodge Franchise Agreements

         The Company enters into single unit franchise agreements for an initial
term of ten years and three months,  with a ten-year  renewal  option subject to
certain  conditions,  such as a requirement  to modernize the hotel and to pay a
renewal fee. The initial franchise fee for a single hotel is $30,000 or $225 per
guest room, whichever is greater. A monthly royalty fee of four percent of gross
revenues  becomes  payable after three months of operations.  Agreements  signed
prior to August 1, 1997 are  subject  to an  initial  fee of $25,000 or $190 per
room,  whichever  is greater,  and a monthly  royalty of three  percent of gross
revenues.  Currently,  all  franchisees  are required to pay an advertising  and
marketing fee of one percent of gross revenues (not to exceed two percent during
the  initial  term) and a  reservations/referral  program  fee not to exceed one
percent of gross revenues, to cover the franchisee's share of the costs incurred
by  Suburban  in  providing  these  services.  As of March 1, 1999,  the Company
initiated charges for advertising,  and is collecting a relatively small monthly
referral fee to pay the costs of the 1-800 guest  information  line. The Company
may increase these fees under certain conditions.

         The Company  provides  materials and services to assist each franchisee
in developing and operating a Suburban Lodge hotel,  including  development  and
operating  manuals,   training,   proprietary   operating  software,   prototype
architectural  plans and  specifications,  the 1-800 guest  information line and
Website suburbanlodge.com, semi-annual inspections by Suburban's corporate staff
to ensure quality control and advertising materials and layouts.

         Each franchised  hotel's operating system is connected via modem to the
Company's  central system,  which allows the Company to download sales and other
operating information on a regular basis.

         If a franchisee desires to sell an interest in the franchise  agreement
or the hotel, the Company  generally has the first right to buy it. In addition,
the current  agreement  provides that upon termination of a franchise  agreement
for a breach by the  franchisee,  the  Company  may  purchase  the hotel at fair
market value less  liquidated  damages,  attorney's fees and other amounts which
the  franchisee  may owe the  Company.  The  franchisee  has a limited  right to
terminate  the  agreement.  Many state  franchise  laws  limit the  ability of a
franchisor to terminate or refuse to renew a franchise.



                                      -4-
<PAGE>

         The Company  does not  anticipate  that the  termination  of any single
franchise  agreement  would  have a  material  adverse  effect on its  financial
condition or results of operations.

       GuestHouse International Franchise Agreements

         The Company enters into single unit franchise agreements for an initial
term of five years with no renewal  options  following  the  initial  term.  The
initial franchise fee is $30,000 or $300 per guestroom,  whichever is greater. A
monthly  operating fee of $1.50 per room per day through years 1 and 2 and $1.75
per room per day for years 3 through 5 is payable  from the opening  date of the
franchise  hotel.  Agreements  signed  between June 4, 1998 and June 1, 1999 are
subject to an initial  fee of $15,000 and a monthly  operating  fee of $1.25 per
room per day.  Between  June 11, 1993 and June 4, 1998 no  GuestHouse  franchise
agreements  were  offered  or  signed,  however,  licenses  were  granted  under
Cooperative  Membership Agreements with initial fees ranging from $0-$10,000 and
monthly  operating fees ranging from $.72 per room per day to $1.00 per room per
day. All Cooperative  Membership Agreements and franchise agreements offered and
entered into prior to June 1, 1999 were entered into by Guesthouse International
LLC or its predecessors.  Suburban Lodges of America,  Inc. purchased the assets
of  GuestHouse  International  LLC on June 1, 1999 and took an assignment of all
previously executed Cooperative  Membership Agreements and franchise agreements.
Certain franchisees are also required to pay a marketing  contribution currently
set at $.50 per room per day.

         The Company  provides  materials and services to assist each franchisee
in  operating  a  GuestHouse  International  Inn,  Hotel,  or  Suites  including
operating  manuals,  training,   maintaining  or  subcontracting  a  reservation
service,  general marketing  services,  conferences and periodic  inspections by
corporate staff to ensure quality control.

         If a franchisee desires to sell an interest in the franchise  agreement
or the hotel,  the Company has the right to  disapprove  such a sale in its sole
discretion. In addition, the current agreement provides that upon termination of
a franchise agreement for breach by a franchisee; that franchisee will pay $1.75
per room per day for 18 months  if such  termination  occurs  prior to two years
after the  opening  date,  and after two  years,  the  franchisee  will pay fees
ranging  from  zero to $1.75  per day for 18  months  depending  on the  hotel's
occupancy rate for the 12 months prior to such termination.

         Many  states'  franchise  laws  limit the  ability of a  franchisor  to
terminate or refuse to renew a franchise.  The Company does not anticipate  that
the termination of any single franchise  agreement would have a material adverse
effect on its financial condition or results of operations.

     Management Agreements

         The Company sometimes manages franchised  Suburban Lodge hotels for its
franchisees.  The Company generally offers a five-year management agreement with
automatic   renewals.   Under  the  agreement,   the  Company  provides  certain
pre-opening services,  operates and manages the hotel and is responsible for all
personnel  decisions,  the  negotiation of operating  leases and contracts,  the
preparation  of  advertising  campaigns,  the  payment of taxes and the  general
maintenance  of the hotel.  Suburban  also  maintains the right to determine all
operating policies affecting the appearance of the hotel, the maintenance of the
hotel and its standards of operation,  the quality of services and other matters
affecting  customer  satisfaction.  In addition  to a fixed fee for  pre-opening
services, The Company charges a management fee ranging from four to five percent
of the hotel's  monthly  gross  revenues.  As of December 31, 2000,  the Company
managed 10 hotels for its franchisees.



                                      -5-
<PAGE>

TRADEMARKS

     Suburban Lodge

         The  service  marks  "Suburban  Lodge"  and  "Lodge  for  Less" and the
corporate  design logo are actively  used and are  significant  to the Company's
business.  All of these marks have been registered on the Principal  Register of
the United States Patent and Trademark Office.

         The term for the  registration  of the  "Suburban  Lodge"  service mark
extends to  November  2004 on the  Principal  Register,  at which time it may be
renewed for successive  ten-year  periods.  The term for the registration of the
corporate design logo extends to March 2009, at which time it may be renewed for
successive  ten-year periods.  The term for the registration of the service mark
"Lodge  for Less"  extends to July  2007,  at which  time it may be renewed  for
successive ten-year periods.

    GuestHouse International

         The following  service  marks and  corporate  design logos are actively
used and are  significant to the Company's  business:  "GH" and design logo; "GH
GuestHouse" and design logo; "GH GuestHouse  International" and design logo; "GH
GuestHouse"  and  design  logo with  stylized  "G";  "GuestHouse  International"
(Block); GH GuestHouse Inns, Hotels,  Suites" and design logo;  "GuestHouse.net"
(Block), "GH GuestHouse Friends Club".

         The "GH" service mark has been  registered on the  Principal  Registry,
the term of the registration  extends to January 30, 2006, and it may be renewed
for  successive  ten-year  periods.  The "GH  GuestHouse"  service mark has been
registered on the Principal  Registry,  the term of the registration  extends to
August 13, 2006, and it may be renewed for successive ten-year periods.  The "GH
International"  service mark has been registered on the Principal Registry,  the
term of the registration  extends to October 22, 2006, and it may be renewed for
successive ten-year periods.  The "GH GuestHouse" service mark with stylized "G"
design  logo has been  registered  on the  Principal  Registry,  the term of the
registration  extends to March 4, 2007,  and it may be  renewed  for  successive
ten-year periods.

         The   "GuestHouse   International"    (Block)  service  mark  has  been
registered on the Supplemental Registry, the term of the registration extends to
September 16, 2007, and it may be renewed for successive  ten-year periods.  The
"GuestHouse  Inns,  Hotels,  Suites"  service  mark has been  registered  on the
Principal Registry,  the term of the registration  extends to December 23, 2007,
and it may be renewed for  successive  ten-year  periods.  The  "GuestHouse.net"
(Block) service mark has been registered on the Supplemental  Registry, the term
of the  registration  extends  to March  24,  2008,  and it may be  renewed  for
successive  ten-year periods.  The "GH GuestHouse  Friends Club" servicemark has
been registered on the Principal Registry,  the term of the registration extends
to July 4, 2010, and it may be renewed for successive ten year periods.

SEASONALITY

         Following their initial  ramp-up,  the Company's  Suburban Lodge hotels
typically  experience  lower average  occupancy  rates and total revenues in the
first and fourth  calendar  quarters of each year.  Because  many of the Company
expenses do not fluctuate with  occupancy,  such declines in occupancy may cause
fluctuations or decreases in the Company's quarterly earnings.



                                      -6-
<PAGE>

COMPETITION

         The lodging industry is highly competitive.  Competitive factors within
the industry include room rates,  quality of  accommodations,  name recognition,
supply and  availability  of alternative  lodging,  including  short-term  lease
apartments,  service levels, reputation,  reservation systems and convenience of
location.  Each of the existing hotels and hotels under construction is located,
and each of the hotels under  development  will be located,  in a developed area
that includes competing hotels,  including both traditional nightly and extended
stay hotels.  The number of competitive hotels in a particular area could have a
material  adverse  effect on  occupancy,  average  weekly  rate and weekly  room
revenue per  available  guest room of the  existing  hotels and the hotels under
construction or properties developed or acquired in the future.

         The Company  anticipates that competition  within the extended stay and
traditional  nightly lodging markets will continue to increase  substantially in
the  foreseeable  future.  The  Company  will  compete  for  guests  with  other
established  hotel  companies  which have greater  financial  resources than the
Company, and more extensive relationships with lenders, developers and the hotel
franchise community.  These competitors may be able to accept more risk than the
Company can prudently manage.  Further, new or existing competitors might modify
their franchise fees or reduce rates and offer greater convenience,  services or
amenities or expand or improve hotels in markets in which the Company  competes,
thereby adversely affecting the Company's business and results of operations.

         At the present time,  the Company's  hotels are located  principally in
the Southeast,  Midwest and Southwest.  In these regions,  the Company  competes
with  both  traditional  hotels  and  other  extended  stay  hotels,   including
independent  extended  stay  hotels and those owned and  operated  by  competing
chains.  The Company competes with these hotels by offering  competitive  weekly
rates, good customer service and convenient locations.

ENVIRONMENTAL MATTERS

         Under various federal,  state and local laws and regulations,  an owner
or operator of real estate may be liable for the costs of removal or remediation
of certain  hazardous  or toxic  substances  on such  property.  Such laws often
impose liability without regard to whether the owner knew of, or was responsible
for,  the  presence of hazardous or toxic  substances.  In  connection  with the
ownership and operation of its properties, the Company may be potentially liable
for any such costs. Any potential  environmental  liability the Company may have
solely as a  franchisor  is less clear;  however,  the  Company's  business  and
results of  operations  could be  adversely  affected if a  franchisee  incurred
environmental liability. Suburban believes that the Company-owned Suburban Lodge
hotels are in  compliance in all material  respects with all federal,  state and
local  ordinances and regulations  regarding  hazardous or toxic  substances and
other  environmental  matters.  Neither the Company nor, to the knowledge of the
Company, any of the current owners of the franchised hotels has been notified by
any  governmental  authority of any material  noncompliance,  liability or claim
relating to  hazardous  or toxic  substances  or other  environmental  issues in
connection with any of its present or former properties. Moreover, no assurances
can be given that (i) future laws, ordinances or


                                      -7-
<PAGE>


regulations  will not impose any  material  environmental  liability or costs of
compliance or (ii) the current environmental condition of the Company's existing
and future  properties  will not be affected  by the  condition  of  neighboring
properties  (such as the presence of leaking  underground  storage  tanks) or by
third parties unrelated to the Company.

GOVERNMENTAL REGULATION

     The  lodging  industry  is subject  to  numerous  federal,  state and local
government   regulations   including  those  relating  to  building  and  zoning
requirements  and those  regulating  the  licensing  of  lodging  facilities  by
requiring  registration,  disclosure  statements  and  compliance  with specific
standards  of  conduct.  The  Company  believes  that each of its hotels has the
necessary  permits and  approvals to operate its  respective  business,  and the
Company  intends to continue to obtain such  permits and  approvals  for its new
hotels. Additionally,  the Company is subject to laws governing its relationship
with  employees,   including  minimum  wage  requirements,   overtime,   working
conditions and work permit requirements.

     Under the Americans With  Disabilities Act of 1990 (the "ADA"),  all public
accommodations  are required to meet  certain  federal  requirements  related to
access and use by disabled  persons.  While the Company  believes  its  existing
hotels and hotels under  construction are substantially in compliance with these
requirements,  a determination that the Company or one of its franchisees is not
in compliance  with the ADA could result in the  imposition of fines or an award
of damages to private litigants. In addition,  changes in governmental rules and
regulations  or  enforcement  policies  affecting  the use and  operation of the
hotels,  including changes to building codes and fire and life-safety codes, may
occur.

      If the Company  were  required to make  substantial  modifications  at its
hotels  to  comply  with the ADA or other  changes  in  governmental  rules  and
regulations, the Company's financial condition and ability to develop new hotels
could be materially adversely affected.

     Effective May 1, 2000, all new Company employees were required to be tested
for drugs as a condition of hire, and employees who received  medical  treatment
after a work  related  injury were also to be tested.  Several  States have drug
free  workplace  certification  programs  which will allow  employers to receive
significant  discounts on worker's  compensation  insurance policy premiums.  As
part of the requirements to become certified,  formal  supervisory  training and
employee  education must be provided on an annual basis. In 2000,  Suburban took
the initial  steps in this  certification  process by  implementing  a Drug Free
Workplace training program.

              As  a  franchisor,   the  Company  is  subject  to  Federal  Trade
Commission  ("FTC")  regulation and various state laws, which regulate the offer
and sale of  franchises.  State  laws that  regulate  the  franchisor-franchisee
relationship  presently exist or are being considered in a substantial number of
states,  and  from  time to time new  legislation  is  proposed  and  bills  are
introduced  in Congress  which would  provide for federal  regulation of certain
aspects  of the  franchisor-franchisee  relationship.  Many  state  laws  impose
substantive  requirements  on franchise  agreements,  including  limitations  on
non-competition  provisions and  termination or nonrenewal of a franchise.  Some
states  require that  certain  materials be approved  before  franchises  can be
offered or sold in that state. These current and proposed franchise relationship
laws may limit,  among other things,  the duration and scope of  non-competition
provisions,  the  ability  of a  franchisor  to  terminate  or refuse to renew a
franchise  and the ability of a franchisor to designate  sources of supply.  The
failure to obtain  approvals  to sell  franchises  or an increase in the minimum
wage rate, employee benefit costs or other costs associated with employees could
materially adversely affect the Company.


                                      -8-
<PAGE>


EMPLOYEES

     As of December 31, 2000, the Company employed 760 persons.  During the year
2000,  the  Company  streamlined  hotel  operations  by  eliminating  many  area
managers,  hotel assistant  managers and desk clerk  positions.  Sales positions
were added in cities with  multiple  Suburban  Lodge  hotels.  The Company  also
managed  fewer  franchisee  owned hotels at the end of the year.  As a result of
these   efficiencies   and  cost  savings,   the  Company  was  operating   with
approximately 90 fewer employees at the end of the year. The Company's employees
are not subject to any collective  bargaining  agreements.  Management  believes
that its relationship with its employees is good.

EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>

Name                           Age      Position
----                           ---      --------
<S>                            <C>      <C>
David E. Krischer              52       Chairman of the Board and Chief Executive Officer
Dan J. Berman                  36       Vice President - Franchising (Suburban Lodge Brand) and Director
Gregory C. Plank               54       President
Robert N. Wilson               49       Vice President - Franchising (GuestHouse International Brand)
Paul A. Criscillis, Jr.        51       Vice President and Chief Financial Officer
G. Hunter Hilliard             58       Vice President of Construction
Kevin R. Pfannes               46       Vice President, General Counsel and Secretary
Robert E. Schnelle             51       Vice President, Treasurer and Assistant Secretary
</TABLE>


     David E. Krischer.  Mr. Krischer formed Suburban Lodges of America, Inc. in
1987 to develop a national chain of economy  extended stay hotels and has served
as its CEO and Chairman  since  inception.  A leader in the extended  stay hotel
industry,  Mr.  Krischer  served as the founding  Chairman of the Extended  Stay
Lodging Council, a division of the American Hotel Motel Association. He has over
19 years  experience  in real estate  development  and has been  involved in the
hospitality  industry for thirteen  years.  From 1974 to 1986,  he was a partner
with two  Atlanta  law firms,  Arrington,  Rubin,  Winter,  Krischer & Goger and
Costanzo & Krischer,  where his practice  focused on general  business law, real
estate law and real estate  syndication.  Mr. Krischer has a Juris Doctor of Law
Degree,  with honors from Boston College Law School ('73) and a Bachelors degree
in Accounting from Brooklyn College.

     Dan J. Berman.  Mr. Berman joined the Company in September 1993 as its Vice
President -  Franchising  and has been a director  since  March  1996.  Prior to
joining the Company,  Mr. Berman practiced  commercial law in New York City with
the firm Young and Young from September  1990 to May 1993.  Mr. Berman  received
the  degrees of Juris  Doctor and Master of Business  Administration  from Emory
University Law and Business Schools in 1990.

     Robert N. Wilson.  Mr. Wilson joined the Company in April, 2000 as its Vice
President of Franchising (GuestHouse  International Brand). Prior to joining the
Company,  Mr.  Wilson held key  development  and  management  positions  at Best
Western  International and Ramada. He is a 25-year veteran of the hotel industry
who began his career operating  franchised  hotels.  Mr. Wilson is a graduate of
Oklahoma  City  University  with a  bachelor  of science  degree in biology  and
chemistry.   Mr.   Wilson  has  also   served  as   President   of  the  Arizona
Licensor/Franchisor Association and member of the Franchisee Relations Committee
of the International Franchise Association.



                                      -9-
<PAGE>



     Paul A. Criscillis, Jr. Mr. Criscillis joined the Company as Vice President
and Chief Financial  Officer in August 1998.  Prior to joining the Company,  Mr.
Criscillis had, since 1985, served as Vice President and Chief Financial Officer
for Atlanta-based Crown Crafts, Inc., a manufacturer of textile home furnishings
products.  Prior to joining Crown Crafts, Mr. Criscillis was associated with the
public  accounting  firm of  Deloitte & Touche  from 1971 to 1985,  the last two
years as a partner  in that  firm's New York  practice  office.  Mr.  Criscillis
graduated, with honors, from the University of Kentucky in 1971 with a Bachelors
degree in Accounting.

     G. Hunter  Hilliard.  Mr.  Hilliard joined the Company in April 1987 as its
Vice President -  Construction.  In addition,  since 1980, Mr. Hilliard has been
the sole  shareholder and Secretary of Acreage  Investment  Corporation,  a real
estate and  construction  consulting firm. He has over 27 years of experience in
the development  and  construction of single and  multi-family  housing,  retail
centers and office space.

     Kevin R. Pfannes.  Mr.  Pfannes  joined the Company in January 1996 and was
elected Vice President - Development  in February 1996.  Since May 11, 2000, Mr.
Pfannes  has served as Vice  President,  General  Counsel and  Secretary  of the
Company.  He has 22 years of legal and business  experience in the  development,
acquisition,  leasing and financing of a broad range of  commercial  real estate
transactions.  From  July 1992  through  January  1995,  Mr.  Pfannes  served as
Director  of  Operations  and Legal  Services of General  Innkeeping  Acceptance
Corporation,  a wholly-owned  subsidiary of Holiday Inns,  Inc.,  which provided
financing for Holiday Inn hotels.  From January 1986 to July 1992,  Mr.  Pfannes
was a  self-employed  attorney,  and his  practice  focused  on hotel  and other
commercial  real estate  matters.  Mr. Pfannes  served as  Development  and Real
Estate Counsel for Holiday Inns,  Inc. from 1984 to 1986. From 1979 to 1984, Mr.
Pfannes  worked for the  Chicago law firm of Rooks,  Pitts and Poust,  where his
practice focused on real estate and lending matters.

     Gregory C. Plank.  Mr. Plank attended  Cornell  University  School of Hotel
Administration,  where he received his Bachelor of Science  degree.  Mr. Plank's
varied background in the hotel industry  includes:  marketing  positions for the
advertising  agency of Needham & Grohmann in New York from 1968 through 1969 the
Sheraton  Corporation  from 1969 to 1975, and from 1978 to 1986,  Leonard,  Call
Developers  during 1975 and Ramada from 1989 to 1991.  Mr. Plank has also served
as General  Manger of a full-service  Sheraton Inn in Florida,  Vice President &
Regional Director of Operations for Sheraton Inns  Incorporated,  Executive Vice
President-Franchise for Forte Hotels from 1991 to 1996 overseeing Travelodge and
Thriftlodge  in North and South  America,  and President of Country  Hearth Inns
from June, 1996 to June,  1999. In June, 1999 Mr. Plank was appointed  President
of Suburban  Lodges of America,  Inc.  Mr.  Plank is a past  Chairmen of AH&MA's
Economy Lodging Council,  serves on the Governmental  Affairs Committee of AH&MA
and is a member of the Cornell Hotel Society.

     Robert E. Schnelle.  Mr. Schnelle joined the Company as Vice-President  and
Treasurer in April 1999. From August 1991 to August 1998, he served as Treasurer
and from August 1998 to March 1999 he served as Vice  President and Treasurer of
Crown Crafts, Inc., a manufacturer of textile home furnishings  products.  Prior
to that, Mr. Schnelle served as controller for the Memphis  Publishing  Company.
Mr. Schnelle graduated from Xavier University in 1972 with a Bachelors degree in
Accounting.

FORWARD LOOKING STATEMENTS

     This Annual Report  contains  statements  concerning  the Company's  plans,
beliefs and expectations for future periods. These "forward-looking  statements"
may be  identified  by the  use of  words  such  as  "intends,"  "contemplates,"
"believes,"  "anticipates,"  "expects,"  "should," "could," "would" and words of
similar import. These forward-looking statements involve known and unknown risks
and uncertainties  that could cause actual results to differ materially from the
expectations expressed or implied in such statements.



                                      -10-
<PAGE>

     These risks and uncertainties  include, but are not limited to: (i) changes
in economic conditions, (ii) reduced demand for and increased supply of extended
stay and other forms of lodging, and increased competition  at all levels in the
hotel  industry,  (iii) the ability of the Company to achieve  desired growth in
the number of franchised  Suburban  Lodge and GuestHouse  International  hotels,
(iv) various factors affecting the ability of the Company's  franchisees (and to
a limited extent the Company as it phases out of hotel  development) to build or
renovate  additional hotels including the availability of adequate  financing on
commercially  acceptable terms,  development risks and  inefficiencies,  weather
delays,  zoning and other  governmental  and  environmental  approvals,  (v) the
ability of the Company's  operating and financial  system to effectively  manage
growth, (vi) dependence on senior management,  and (vii) the Company's financial
condition  and the  uncertainties  set forth in the  Company's  filings with the
Securities  and  Exchange  Commission.   Forward-looking  statements  concerning
HotelTools  are  subject  to  the  foregoing  risks  and  uncertainties  and  to
additional  risks  and  uncertainties   including,   but  not  limited  to:  (i)
uncertainty as to the demand for its products and services,  (ii) the ability of
HotelTools  to complete  market ready and viable  products,  (iii) the risk that
competitors  will be able to  develop  and market  products  and  services  that
produce  results  similar to those  produced by HotelTools'  products,  (iv) its
ability to obtain sufficient capital to complete the development of its products
and services and to successfully market them to the hotel industry,  and (v) its
future profitability.

ITEM 2.  DESCRIPTION OF HOTELS.

      Suburban Lodge Hotels

         At December 31, 2000,  there were 119  existing  Suburban  Lodge hotels
located in 19 states.  These  hotels  contain an aggregate of 16,018 guest rooms
and have an average of 135 guest rooms. A newly  developed  Suburban Lodge hotel
is built using either a two-story or three-story  interior or exterior  corridor
design. The two designs have similar  architectural  styles and guest room floor
plans.  Each hotel includes guest rooms, a general manager's unit, an office and
a guest  laundry room.  Each guest room  includes a combination  living room and
bedroom,  a  fully-equipped   kitchenette  and  access  to  satellite  or  cable
television.  Each Suburban Lodge hotel also offers weekly housekeeping and linen
service.

         The following tables set forth certain  information (AS OF DECEMBER 31,
2000) with respect to both Company-owned and franchised existing hotels,  hotels
under construction and hotels under development.

<TABLE>
<CAPTION>
                                                                  Date                 Number of
             Existing Company Owned Hotels                        Opened               Rooms (1)
             -----------------------------                        ------               ---------
             <S>                                                  <C>                      <C>
             Atlanta (Forest Park), GA                            Mar-88                   125
             Atlanta (Fulton Industrial), GA                      Dec-88                   106
             Atlanta  (Norcross), GA                              Jun-89                   128
             Birmingham (Oxmoor), AL                              Jul-90                   151
             Atlanta (Mableton), GA(2)                            Jun-93                    78
             Greenville (Mauldin Road), SC                        Sep-93                   130
             Charlotte (Matthews), NC                             Aug-95                   139
             Atlanta (Lilburn/Highway 78), GA                     Nov-95                   132
             Atlanta (Roswell), GA                                Jun-96                   136
             Atlanta (Douglasville), GA                           Jun-96                   132
             Louisville (Preston Highway), KY                     Aug-96                   150
             Atlanta (Tara Blvd.), GA                             Sep-96                   138
             Greenville (Wade Hampton Blvd.), SC                  Oct-96                   126
             Atlanta (Indian Trail/I-85), GA                      Nov-96                   149
             Knoxville (Kingston Pike), TN                        Dec-96                   132
</TABLE>



                                      -11-
<PAGE>


<TABLE>
<CAPTION>

             Existing Company Owned Hotels (Cont.)
             -------------------------------------

             <S>                                                  <C>                      <C>
             Atlanta (Northside Drive), GA                        Jan-97                   150
             Chesapeake, VA                                       Feb-97                   132
             Atlanta (Gwinnett Place), GA                         Feb-97                   138
             Charlotte (Pressley I-77), NC                        Mar-97                   131
             Charlotte (University Area), NC                      Apr-97                   138
             Memphis (Hickory Ridge), TN                          Jun-97                   144
             Newport News, VA                                     Jul-97                   134
             Charleston (North Charleston), SC                    Aug-97                   138
             Virginia Beach, VA                                   Oct-97                   138
             Dayton-South, OH                                     Oct-97                   129
             Chattanooga, TN                                      Oct-97                   132
             Indianapolis-NW, IN                                  Nov-97                   135
             Mobile, AL                                           Nov-97                   132
             St. Louis (Hazelwood), MO                            Nov-97                   136
             Cincinnati (Fairfield), OH                           Nov-97                   131
             Columbus (Eastland), OH                              Dec-97                   139
             St. Louis (St. Charles), OH                          Dec-97                   130
             Columbia-Broad River, SC                             Dec-97                   132
             Dallas-North Central, TX                             Dec-97                   144
             San Antonio-North, TX                                Dec-97                   137
             Arlington-South, TX(4)                               Dec-97                   132
             Jackson, MS                                          Jan-98                   132
             Columbus-NW (Franklin), OH                           Jan-98                   127
             Columbus-Northland, OH                               Jan-98                   135
             Indianapolis-East, IN                                Jan-98                   135
             Arlington-North, TX(4)                               Mar-98                   132
             Chicago (Downers Grove), IL                          Apr-98                   133
             El Paso -Airport, TX                                 Jun-98                   138
             Houston- FM1960, TX                                  Jul-98                   138
             Houston -NASA, TX                                    Jul-98                   132
             Dallas (Carrollton), TX                              Aug-98                   138
             Chicago- O'Hare-Airport, IL                          Aug-98                   125
             San Antonio-NE, TX                                   Sep-98                   138
             Salt Lake City (Midvale), UT                         Oct-98                   140
             Minneapolis (Burnsville), MN                         Nov-98                   135
             Cincinnati (Colerain), OH                            Nov-98                   133
             Birmingham (Center Point), AL                        Nov-98                   136
             South Salt Lake, UT                                  Jan-99                   136
             Albuquerque, NM                                      Jan-99                   135
             Minneapolis, (Coon Rapids), MN                       Jan-99                   135
             Houston-NW 290, TX                                   Jan-99                   132
             Tampa (Largo), FL                                    Feb-99                   132
             Dallas-Market Center, TX                             Apr-99                   134
             San Antonio (Leon Valley), TX                        Apr-99                   132
</TABLE>


                                      -12-
<PAGE>


<TABLE>
<CAPTION>

             Existing Company Owned Hotels (Cont.)
             -------------------------------------
             <S>                                                  <C>                      <C>
             Atlanta (Sandy Springs) GA "Extra"(6)                May-99                    71
             Denver (Aurora), CO                                  May-99                   137
             Richmond-Midlothian, VA                              Dec-99                   137
             Denver (Sheridan), CO                                Jan-00                   135
             Tampa (Brandon), FL                                  May-00                   150
             Chicago (Villa Park), IL "Extra"                     Nov-00                    80
                                                                                         -----
             SUBTOTAL                                                                    8,597
                                                                                         -----
</TABLE>

<TABLE>
<CAPTION>
             Existing Franchised Hotels
             --------------------------
             <S>                                                  <C>                      <C>
             Birmingham (Riverchase/Pelham),AL                    Jun-92                   122
             Atlanta (Stone Mountain), GA                         Nov-92                   132
             Atlanta (Marietta), GA                               Aug-94                   132
             Birmingham (Inverness/Greystone), AL                 Sep-95                   130
             Savannah (Abercorn), GA                              Mar-96                   130
             Atlanta (Lawrenceville), GA                          Jun-96                   132
             Atlanta (Decatur), GA                                Oct-96                   133
             Louisville (Jeffersontown), KY                       Feb-97                   144
             Jacksonville (Bay Meadows), FL                       Apr-97                   138
             Atlanta (Woodstock), GA                              Jul-97                   138
             Cincinnati (Florence), KY                            Aug-97                   144
             Valdosta (Valdosta-Mall Area), GA                    Aug-97                   138
             Montgomery (Montgomery Mall), AL                     Sep-97                   141
             Nashville (Harding Place), TN                        Oct-97                   126
             Fayetteville (Bragg Blvd), NC                        Oct-97                   143
             Charlotte (Pineville), NC                            Oct-97                   137
             Raleigh-South, VA                                    Feb-98                   144
             Augusta-West (Bobby Jones), GA                       Feb-98                   138
             Savannah-North, GA                                   Apr-98                   138
             Eagle (Vail Valley, CO) "Extra"                      Jun-98                   118
             Atlanta (Stockbridge), GA                            Jun-98                   150
             Albany (Albany Mall), GA                             Jun-98                   138
             Jacksonville (Orange Park), FL                       Jun-98                   144
             Greensboro (Wendover I-40), NC                       Sep-98                   144
             Louisville-East (Westport Rd), KY                    Sep-98                   128
             Orlando (Central Park), FL                           Oct-98                   144
             Atlanta (Chamblee), GA                               Oct-98                   150
             Memphis (Bartlett), TN                               Nov-98                   138
             Phoenix (Gilbert), AZ                                Nov-98                   138
             Dothan (Ross Clark Circle), AL                       Dec-98                   138
             Richmond (Broad @ N. Parham), VA                     Jan-99                   143
             Daytona Beach, FL                                    Feb-99                   135
             Houston (Cy Fair-1960), TX                           Feb-99                   150
             Nashville (Hermitage), TN                            Feb-99                   127
             Atlanta (Conyers), GA (5)                            Feb-99                   138
</TABLE>



                                      -13-
<PAGE>
<TABLE>
<CAPTION>
             Existing Franchised Hotels (Continued)
             --------------------------------------
             <S>                                                  <C>                      <C>
             Atlanta (Thornton Rd.), GA                           Mar-99                   150
             Stuart, FL                                           Mar-99                   126
             Melbourne, FL "Extra"                                Apr-99                   132
             Macon (Eisenhower Pkwy), GA                          Apr-99                   150
             Gautier, MS                                          Apr-99                   126
             Athens (UGA), GA                                     Apr-99                   138
             Orlando (Casselberry), FL                            May-99                   144
             Orlando (Universal Studios Escape), FL               Sep-99                   150
             Pensacola-NAS, FL                                    Sep-99                   128
             Tampa-Airport West, FL                               Oct-99                   136
             Atlanta (Gainesville),GA                             Feb-00                   112
             Jacksonville (St. John's Bluff), FL                  Feb-00                   137
             Charlotte (W T Harris/I-77), NC "Extra"              Mar-00                   127
             Biloxi (D'Iberville), MS                             Mar-00                   132
             Sarasota, FL                                         Apr-00                   152
             Hampton, FL                                          May-00                   141
             Atlanta (Kennesaw), GA                               Jun-00                   149
             Hilton Head, SC                                      Dec-00                   150
             Lakeland, FL                                         Dec-00                   138
             SUBTOTAL
                                                                                         7,421
                                                                                        ------
             SYSTEM-WIDE TOTAL                                                          16,018
                                                                                        ======
</TABLE>

<TABLE>
<CAPTION>

                                                                  Estimated              Number of
             Hotels Under Construction (1)                        Opening(3)             Rooms(1)
             -----------------------------                        ----------             --------

             <S>                                                  <C>                    <C>
             COMPANY OWNED

             Pittsburgh-(North Hills) PA                          2nd Quarter, 2001        124
                                                                                        ------
             SUBTOTAL                                                                      124
                                                                                        ------
</TABLE>

<TABLE>
<CAPTION>
                                                                  Estimated              Number of
             Franchise                                            Opening(3)             Rooms(1)
             ---------                                            ----------             --------
             <S>                                                  <C>                      <C>
             Huntsville, AL                                       1st Quarter, 2001        134
             Myrtle Beach, SC                                     1st Quarter, 2001        132
             Houston (Intercontinental Airport), TX               1st Quarter, 2001        149
             Austin (South), TX                                   2nd Quarter, 2001        137
             Destin, FL                                           2nd Quarter, 2001        100
             Chesapeake (West), VA                                3rd Quarter, 2001         90
                                                                                        ------
             SUBTOTAL                                                                      742
                                                                                        ------
             Total Under Construction                                                      866
                                                                                        ======
</TABLE>


                                      -14-
<PAGE>


             Company Owned Site Inventory (7)
             --------------------------------

             Austin-North, TX
             Tampa-Dale Mabry, FL
             Houston-Medical Center, TX
             Kansas City (Lenexa), KS
             Ft. Lauderdale (Oakland Park), FL
             Phoenix (Tempe), AZ
             Philadelphia-Franklin Mills, PA
             Plano, TX
             Detroit (Fraser), MI
             Philadelphia (Valley Forge), PA
             Denver - Tech Center, CO

             Franchised Hotels Under Development
             -----------------------------------
<TABLE>
<CAPTION>

             <S>                                                  <C>                      <C>
             Fort Myers, FL                                       4th Quarter, 2001        120
             Chester, VA                                          4th Quarter, 2001        124
             Manassas, VA                                         4th Quarter, 2001        150
             Houston (Dixie Farms), TX                            4th Quarter, 2001        132
             Raleigh, NC                                          4th Quarter, 2002        130
</TABLE>


GuestHouse International Inns, Hotels and Suites.
-------------------------------------------------

         At December 31, 2000, there were 65 existing  GuestHouse  International
Inns,  Hotels and Suites  located in 20 states.  These  inns,  hotels and suites
contain an aggregate of 4,883  guestrooms  and have an average of 75 guestrooms.
GuestHouse  International  Inns,  Hotels and Suites  comprise a wide  variety of
facilities offering overnight stays in the upper economy to mid- market segment.
The amenities and facilities offered through the GuestHouse  International brand
are varied according to individual market needs with the underlying factor being
adherence to  high-quality  standards of  cleanliness,  safety and service.  The
following  tables set forth  certain  information  as of December  31, 2000 with
respect to inns, hotel and suites that are open or under construction.

<TABLE>
<CAPTION>
             Existing Inns, Hotels and Suites                     Date Opened       Number of Rooms
             --------------------------------                     -----------      ---------------
             <S>                                                  <C>                    <C>
             Little Rock, AR                                      Mar-96                 72
             Chattanooga, TN                                      Apr-96                 31
             St. Augustine, FL                                    Aug-96                 100
             Nashville, TN                                        Jan-97                 108
             Long Beach, CA                                       Mar-97                 143
             Camden, TN                                           Jul-97                 40
             Pageland, SC                                         Aug-97                 23
             Santa Clara, CA                                      Dec-97                 70
             Port Orchard, WA                                     Mar-98                 56
             Bloomington, IL                                      Mar-98                 100
             South Haven, MI                                      Apr-98                 54
             Commerce, GA                                         May-98                 74
</TABLE>



                                      -15-
<PAGE>
<TABLE>
<CAPTION>

             Existing Inns, Hotels and Suites (Continued)         Date Opened       Number of Rooms
             --------------------------------------------         -----------       ---------------

             <S>                                                  <C>                   <C>
             Keystone, SD                                         May-98                   35
             Warner Robins, GA                                    Sep-98                   50
             Compton, CA                                          Sep-98                   40
             Commerce, CA                                         Oct-98                   70
             Santa Ana, CA                                        Dec-98                   73
             Ft. Myers, FL                                        Feb-99                   34
             Beverly Hills, CA                                    Mar-99                   35
             Ft. Smith, AR                                        Mar-99                   63
             Tumwater, WA                                         Mar-99                   60
             Greenville, SC                                       Apr-99                   96
             Huntsville, AL                                       Apr-99                  112
             Opelika, AL                                          Apr-99                   56
             Tulsa, OK                                            Apr-99                  135
             Gulf Shores, AL                                      Apr-99                   90
             Santa Cruz, CA                                       Apr-99                   36
             Dillon, MT                                           May-99                   58
             Kelso, WA                                            May-99                   59
             Vicksburg, MS                                        May-99                   30
             Buena Park, CA                                       May-99                   40
             Mobile, AL                                           May-99                  112
             San Luis Obispo, CA                                  May-99                   39
             Savannah, GA                                         Jul-99                   56
             Hawthorne, CA                                        Aug-99                   38
             South Gate, CA                                       Sep-99                   49
             Waukesha, WI                                         Oct-99                   91
             Orlando, FL                                          Dec-99                  266
             Glendora, CA                                         Dec-99                   38
             Branson, MO                                          Dec-99                  180
             Hollywood, CA                                        Dec-99                   28
             Miles City, MT                                       Feb-00                   62
             Charlotte, NC                                        Feb-00                   91
             Los Angeles (Olympic Boulevard), CA                  Mar-00                   49
             Valdez, AK                                           Mar-00                   78
             Aberdeen, WA                                         May-00                   60
             Juneau, AK                                           May-00                   96
             Bakersfield, CA                                      Jun-00                   64
             Oceanside, CA                                        Sep-00                   80
             Inglewood, CA                                        Sep-00                   29
             Fullerton, CA                                        Sep-00                   43
             Norco, CA                                            Sep-00                   36
             Payson, AZ                                           Sep-00                   39
             Iron Mountain, MI                                    Sep-00                   63
             Perry, GA                                            Sep-00                   45
             Saugatuck, MI                                        Sep-00                   29
             Manning, SC                                          Sep-00                   58
             Hazel Park, MI                                       Oct-00                  148
             Montgomery, AL                                       Dec-00                  172
             Augusta, GA                                          Dec-00                  110
</TABLE>



                                      -16-
<PAGE>



<TABLE>
<CAPTION>
             Existing Inns, Hotels and Suites (Continued)         Date Opened       Number of Rooms
             --------------------------------------------         -----------       ---------------
             <S>                                                  <C>                    <C>
             Bismark, ND                                          Dec-00                   224
             Daly City, CA                                        Dec-00                    32
             Hemet, CA                                            Dec-00                    65
             Lake City, FL                                        Dec-00                   120
             Tuscaloosa, AL                                       Dec-00                   150
                                                                                         -----
             SYSTEM-WIDE TOTAL                                                           4,883
                                                                                         ======
</TABLE>

<TABLE>
<CAPTION>
             Hotels Under Construction (1)                    Estimated Opening (3)  Number of Rooms
             ---------------------------                      ---------------------  ---------------

             <S>                                                  <C>                     <C>
             Acworth, GA                                          Mar-01                   60
             Dupont, WA                                           Mar-01                   59
             Fairbanks, AK                                        May-01                  100
             Fontana, CA                                                                   50
             Harbor City, CA                                                               40
             Leeds, AL                                            Apr-01                   40
                                                                                         ----
             TOTAL UNDER CONSTRUCTION                                                     349
                                                                                         ====
</TABLE>

<TABLE>
<CAPTION>
             Executed Agreements
             -------------------
             <S>                                                                         <C>
             Anaheim, CA                                                                   66
             Balwin Park, CA                                                               70
             Ft. Wayne, IN                                                                 60
             Lavonia, GA                                                                   50
             Mobile, AL                                                                   210
             Omaha, NE                                                                    215
             Pasadena, CA                                                                  70
                                                                                         ----
             TOTAL EXECUTED AGREEMENTS                                                    741
                                                                                         ====
</TABLE>

(1)  The number of guestrooms does not include the general manager's unit.

(2)  The Mableton  hotel was acquired in June 1993 and converted into a Suburban
     Lodge hotel in October 1994.

(3)   The  Company  believes  that  each of the  hotels  under  construction  or
      development will open during the period  indicated.  However,  the Company
      and its  franchisees  may not be able to  complete  the  construction  and
      development  of all of these  hotels on  schedule.  See  "Forward  Looking
      Statements."

(4)  The Arlington-North, TX and Arlington-South, TX hotels were acquired from a
     franchisee in July, 1998.

(5)  The  Company  sold the  Atlanta  (Conyers)  GA,  Suburban  Lodge hotel to a
     franchisee on March 2, 1999.

(6)  The Company acquired the Atlanta (Sandy Springs) GA, Suburban Lodge "Extra"
     hotel effective January 1, 2000.

(7)  The Company may elect to sell or transfer  existing  company owned sites to
     other parties for development as Suburban Lodge or GuestHouse International
     hotels or other purposes.



                                      -17-
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS.

         Although the Company may be involved in certain  claims and  litigation
which are incidental to the ownership,  operation, management and franchising of
hotels,  such claims and litigation are not expected to have a material  adverse
impact on the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No  matters  were  submitted  to a  vote  of  security  holders  of the
Registrant during the fourth quarter of the fiscal year covered by this Report.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
         PRICE RANGE OF COMMON STOCK

         The  Company's  Common Stock is quoted on the Nasdaq Stock Market under
the symbol "SLAM".  Although the Company had only approximately 115 shareholders
of record on March 9, 2001, it believes,  based on  information  supplied by its
Transfer Agent,  that the Company had  approximately  1,400 beneficial owners of
its  common  stock on that  date.  The high and low  transaction  prices for the
common stock as reported on the Nasdaq Stock Market are set forth below.

                                              Price Range
                                              -----------
                                             High          Low
                                             ----          ---
Year Ending December 31, 2000
First Quarter  .......................   $   6.81     $   5.00
Second Quarter .......................       6.66         5.25
Third Quarter  .......................       7.75         5.50
Forth Quarter  .......................       7.00         5.00



Year Ending December 31, 1999
First  Quarter .......................   $   9.75     $   5.31
Second Quarter .......................       7.19         6.06
Third Quarter  .......................       6.88         5.50
Fourth Quarter .......................       6.19         4.75

     The  Company  has not paid cash  dividends  on its Common  Stock  since its
inception as a public company in May 1996.

ITEM 6. SELECTED FINANCIAL DATA

The  accompanying   selected  financial  and  operating  data  is  presented  in
thousands,  except for per share data,  operating  data and the number of hotels
open at the end of each period.



                                      -18-
<PAGE>
<TABLE>

<CAPTION>
                                      2000            1999            1998             1997            1996
                                   --------        --------        --------        --------        --------
<S>                                  <C>             <C>           <C>             <C>             <C>
FOR THE YEAR:
Hotel revenues                     $ 70,672        $ 62,466        $ 44,756        $ 21,822        $  8,349
Franchise and other revenue           4,611           3,446           1,702           1,373             917
                                   --------        --------        --------        --------        --------
Total revenue                        75,283          65,912          46,458          23,195           9,266

Hotel operating expenses             38,496          32,876          22,754          11,204           3,910

Income from operations               15,512          17,520          12,353           7,107           3,031

Net income (1)                        5,263           8,045           2,562           6,724           2,385

Earnings per share:
   Basic and diluted               $   0.41        $   0.53        $   0.17        $   0.53
   Pro forma (2)                                                                                   $   0.31

Operating Data (3) :
   Average Weekly Rate (4)         $ 195.78        $ 191.18        $ 174.85        $ 157.27        $ 155.84
   Weekly RevPAR (4)               $ 155.66        $ 150.00        $ 142.60        $ 134.13        $ 138.92

AT YEAR END:
Total assets                       $337,626        $321,082        $307,298        $242,854        $131,000

Long-term debt                      119,574          97,891          74,735          25,005          15,000

Cash dividends declared                None            None            None            None            None

Number of hotels open:
   Owned                                 65              61              53              39              14
   Franchised                           119              92              30              17              10
                                   --------        --------        --------        --------        --------
   System-wide                          184             153              83              56              24
</TABLE>


(1)  Prior  to the  company's  initial  public  offering  on May 29,  1996,  the
     Company's  hotels  were owned by  entities  that were not subject to income
     taxes.  Accordingly,  net income  for a portion of 1996 does not  reflect a
     provision  for income  taxes  with  respect to  earnings  generated  by the
     Company's hotels.

(2)  Prior to the Company's  initial public offering on May 29, 1996, the number
     of outstanding shares of the Company was substantially less than the number
     of such shares outstanding after the initial public offering.  Accordingly,
     the  Company  believes  that  the  presentation  of  historical  per  share
     information  for periods prior to 1997 is not  meaningful.  For comparative
     purposes,  pro forma  earnings  per share for the year ended  December  31,
     1996,  have been  calculated by dividing net income adjusted to provide for
     income  taxes  assuming a 37.5%  effective  income tax rate by the weighted
     number of shares of common stock deemed to have been outstanding during the
     period.

(3)  Data is for Company-owned hotels.

(4)  Data  is  calculated  starting  on the  first  day of  the  calendar  month
     following the month in which the hotel was opened.




                                      -19-
<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

COMPARISON  OF THE YEAR ENDED  DECEMBER 31, 2000 TO THE YEAR ENDED  DECEMBER 31,
1999

Hotel revenues increased by $8.2 million,  or 13%, from $62.5 million in 1999 to
$70.7 million in 2000.  The largest  portion ($4.0  million) of the increase was
attributed  to the nine hotels that opened  during 1999 and operated  throughout
2000.  Four  hotels that  opened or were  acquired  by the  Company  during 2000
accounted  for $3.0  million of the  increase.  Fifty-two  hotels that  operated
throughout  both 1999 and 2000  accounted  for $1.4  million of the  increase in
hotel revenues.  These 52 hotels  increased  their combined  Average Weekly Rate
(AWR) by 2%,  from  $189.83 to $193.05.  Occupancies  at these  hotels  declined
slightly from 79.8% to 79.4% while Weekly  Revenue per  Available  Room (RevPAR)
increased  1% from  $151.23  to  $153.31.  For  all  Company-owned  hotels,  AWR
increased to $195.78 in 2000 from $191.18 in 1999,  occupancy increased to 79.5%
in 2000 from 78.6% in 1999, and RevPAR increased to $155.66 in 2000 from $150.00
in 1999.

The increases  contributed by these three groups of hotels were offset by a $0.2
million decrease in hotel revenues in a hotel that was owned and operated by the
Company until sold to a franchisee in February 1999.

Franchise and other revenues increased by $1.2 million,  or 34%, to $4.6 million
in 2000.  The largest  portion ($0.9  million) of the increase was attributed to
franchise fees and royalties for the GuestHouse  International  brand, which was
acquired  on June 1, 1999.  Franchise  fees for the  Suburban  Lodge hotel brand
increased  $0.4 million due to the larger  number of franchised  locations  open
during 2000.  At December 31, 2000,  54  franchised  Suburban  Lodge hotels were
operating  as compared  with 46 at December  31,  1999.  At December  31,  2000,
independent  franchisees owned and operated 65 GuestHouse  International  hotels
compared to 46 at December  31,  1999.  Other  revenues  declined  $0.1  million
primarily  because the Company earned no development or construction  revenue in
2000  compared  to  $64,000  earned in 1999.  Management  fees were flat in 2000
compared to 1999  despite a decline in the number of hotels being  managed.  The
Company was managing ten Suburban  Lodge hotels for its  franchisees at December
31, 2000,  compared to twenty  hotels at December  31, 1999.  The decline in the
number of managed hotels was due to a decision by one franchise group to start a
management   company  to  manage  its  four  Suburban  Lodge  hotels  and  other
properties.  In addition, two franchisees moved the management of three Suburban
Lodge hotels to independent management companies and one franchise group elected
to manage their two Suburban Lodge hotels themselves.  One of the hotels managed
by the Company at  December  31, 1999, was  purchased  by the Company in January
2000.

The  increase  in the  number of hotels  open and  operated  by  franchisees  at
December 31, 2000, and the reduced number of hotels opened by the Company during
2000  are the  result  of the  Company  substantially  increasing  its  focus on
franchising activities in order to enable growth in a significantly less capital
intensive manner than had been the case in the past.

Hotel operating  expenses increased  approximately $5.6 million,  or 17.1%, from
$32.9 million in 1999 to $38.5  million in 2000.  The most  significant  portion
($2.4 million) of the increase was  attributable  to the 52 hotels that operated
the full year in both 1999 and 2000.  The nine hotels  that  opened  during 1999
accounted for $1.7 million of the increase in hotel operating expense, while the
four hotels that opened or were  acquired by the Company in 2000  accounted  for
$1.6 million of the increase.

The increases attributable to these three groups of hotels were offset by a $0.1
million  decrease  in hotel  operating  expenses in the hotel that was owned and
operated by the Company until sold to a franchisee in February 1999.



                                      -20-
<PAGE>

Corporate operating expenses increased $3.0 million, or 38.1%, from $8.0 million
in 1999 to $11.0 million in 2000. Of this increase,  approximately  $1.5 million
was  attributable  to the  inclusion  of a full year of  operating  expenses  of
GuestHouse  International.  Additionally,  the amount of corporate overhead that
was project-related,  and is therefore capitalized as  hotel-construction  cost,
was $0.9 million less in 2000 than in 1999.  Excluding the incremental impact on
reported operating expenses of GuestHouse International and lower capitalization
of project-related  expenses,  corporate operating expenses in 2000 increased by
8.0% over such  amounts for 1999.  The primary  reasons  for this  increase  are
additional  staffing  needed to support the growth of the Company's  franchising
business and increased rent for the corporate headquarters.

Depreciation and  amortization  increased by $1.1 million,  or 13.5%,  from $8.5
million in 1999 to $9.6  million in 2000.  Of this  increase,  $0.1  million was
attributable   to  leasehold   improvements   and  equipment  at  the  corporate
headquarters.  Hotel properties  accounted for $0.9 million of the increase.  In
addition,  $0.1 million was  attributable to amortization of certain  intangible
assets  (franchise  contract rights and goodwill)  recognized in connection with
the  GuestHouse  International  acquisition  in 1999 and the  acquisition  of an
additional 50% interest in a hotel at the beginning of 2000.

The four  hotels  that  opened  or were  acquired  by the  Company  during  2000
accounted for $0.4 million of the increase in depreciation  and amortization for
hotel  properties.  The nine  hotels  that were  opened by the  Company  in 1999
accounted  for $0.4  million of the  increase  and the 52 hotels  that  operated
throughout both 1999 and 2000 accounted for $0.1 million of the increase.

The impairment of long-lived  assets recorded in the current year represents the
write-down of an undeveloped site to market value.

During  1999,  the  Company  sold  a  hotel  resulting  in  a  pre-tax  gain  of
approximately  $1,145,000.  The hotel  continues to operate as a Suburban  Lodge
under  agreements  that  generate  franchise and  management  fee income for the
Company.

Interest  income  earned on excess funds  invested  during 2000 was $1.0 million
compared to $1.4 million for 1999.  The  decrease in interest  income was due to
lower invested cash balances during 2000.

Interest expense,  net of interest  capitalized of $0.7 million and $1.9 million
in 2000 and 1999  respectively,  was $8.9  million  in 2000 and $6.4  million in
1999. The increase in total interest  charges  incurred was due to higher levels
of debt  outstanding.  See the "Liquidity and Capital  Resources"  section for a
discussion of the Company's debt strategy.

The  proceeds  from legal  settlement  of $842,000  recorded  in 2000  represent
amounts  received in settlement of a claim for lost profits  associated  with an
abandoned  development  project. The Company also received $315,000 as a part of
this settlement representing reimbursement of certain costs and expenses.

The effective  income tax rate for 2000 was 38.0% compared to 36.9% in 1999. The
increase in 2000 was  primarily due to higher  effective  state income tax rates
and a reduction  in the amount of interest  income that was exempt from  federal
income tax.

COMPARISON  OF THE YEAR ENDED  DECEMBER 31, 1999 TO THE YEAR ENDED  DECEMBER 31,
1998

Hotel revenues increased by $17.7 million, or 40%, from $44.8 million in 1998 to
$62.5 million in 1999. The largest  portion ($10.4  million) of the increase was
attributed  to the fourteen  hotels that opened or were  acquired by the Company
during 1998 and operated  throughout  1999.  Nine hotels that opened during 1999
accounted  for $6.4 million of the increase.  Thirty-eight  hotels that operated
throughout  both 1998 and 1999  accounted  for $1.8  million of the  increase in



                                      -21-
<PAGE>

hotel revenues.  These  thirty-eight  hotels  increased  their combined  Average
Weekly Rate (AWR) by 8%, from  $172.05 to $185.35.  Occupancies  at these hotels
declined from 84.0% to 81.7%  percent,  while Weekly  Revenue per Available Room
(RevPAR) increased 5.0%, from $144.68 to $151.39. For all company-owned  hotels,
AWR  increased  to $191.18 in 1999 from $174.85 in 1998,  occupancy  declined to
78.6% in 1999 from 81.8% in 1998,  and RevPAR  increased to $150.00 in 1999 from
$142.60 in 1998.

The increases  contributed by these three groups of hotels were offset by a $1.0
million decrease in hotel revenues in a hotel that was owned and operated by the
Company throughout 1998 and was sold to a franchisee in February 1999.

Franchise and other revenues increased by $1.7 million, or 102%, to $3.4 million
in 1999.  The largest  portion ($0.7  million) of the increase was attributed to
the larger number of franchisees for the Suburban Lodge hotel brand. At December
31, 1999, 46 franchised Suburban Lodge hotels were operating as compared with 30
at December  31,  1998.  Another  $0.7 million of the increase was the result of
increased  management  fees. At December 31, 1999, the Company managed 20 hotels
for its  franchisees,  including one hotel that was in the process of conversion
to a Suburban Lodge hotel.  At December 31, 1998, the Company  managed 11 hotels
for its franchisees.  Revenues  attributable to franchise fees and royalties for
the GuestHouse  International  brand,  which was acquired on June 1, 1999,  were
approximately  $0.6 million.  Development  fees declined by  approximately  $0.2
million from 1998 to 1999.

Hotel operating expenses increased  approximately  $10.1 million, or 44.5%, from
$22.8 million in 1998 to $32.9  million in 1999.  The most  significant  portion
($5.4 million) of the increase was  attributable to the 14 hotels that opened or
were acquired by the Company  during 1998 and operated a full year in 1999.  The
nine hotels that opened  during 1999  accounted for $3.6 million of the increase
in hotel  operating  expense, while the 38 hotels that operated the full year in
both 1998 and 1999 accounted for $1.5 million of the increase.

The increases attributable to these three groups of hotels were offset by a $0.4
million  decrease  in hotel  operating  expenses in the hotel that was owned and
operated by the Company throughout 1998 and was sold to a franchisee in February
1999.

Corporate operating expenses increased to $8.0 million, approximately double the
amount of such expenses for 1998. Of this increase,  approximately  $0.9 million
was  attributable  to operating  expenses  incurred by GuestHouse  International
subsequent to its June 1, 1999,  acquisition by the Company.  Additionally,  the
amount  of  corporate  overhead  that  was  project-related,  and  is  therefore
capitalized as  land-acquisition  or  hotel-construction  cost, was $1.8 million
less  in 1999  than in  1998.  Excluding  the  incremental  impact  on  reported
operating  expenses of  GuestHouse  International  and lower  capitalization  of
project-related  expenses,  corporate  operating  expenses in 1999  increased by
17.2% over such amounts for 1998.  The primary  reason for this increase is $1.3
million for additional staffing needed to support the growth of the business.

Depreciation and  amortization  increased by $3.0 million,  or 54.2%,  from $5.5
million in 1998 to $8.5  million in 1999.  Of this  increase,  $0.3  million was
attributable   to  leasehold   improvements   and  equipment  at  the  corporate
headquarters.  Hotel properties  accounted for $2.5 million of the increase.  In
addition,  $0.2 million was  attributable to amortization of certain  intangible
assets  (franchise  contract rights and goodwill)  recognized in connection with
the GuestHouse International acquisition.

The  largest  portion  ($1.2  million)  of  the  increase  in  depreciation  and
amortization  for hotel properties was attributable to the 14 hotels that opened
or were acquired by the Company in 1998. The nine hotels that opened during 1999
accounted  for $1.0  million of the  increase, and the 38 hotels  that  operated
throughout both 1998 and 1999 accounted for $0.4 million of the increase.  These


                                      -22-
<PAGE>

increases were offset by a $0.1 million decrease in depreciation  expense on the
hotel that was sold to a franchisee in February 1999.

Interest  income  earned on excess funds  invested  during 1999 was $1.4 million
compared to $2.2 million for 1998.  The  decrease in interest  income was due to
lower invested cash balances during 1999.

Interest expense,  net of interest  capitalized of $1.9 million and $3.9 million
in 1999 and 1998, respectively,  was $6.4  million  in 1999 and $0.2  million in
1998. The increase in total interest  charges  incurred was due to higher levels
of debt  outstanding.  See the "Liquidity and Capital  Resources"  section for a
discussion of the Company's debt strategy.

The effective  income tax rate for 1999 was 36.9% compared to 31.8% in 1998. The
increase in 1999 was  primarily due to higher  effective  state income tax rates
and a reduction  in the amount of interest  income that was exempt from  federal
income tax.

SEASONALITY

Following their initial ramp-up, the Company's hotels typically experience lower
average  occupancy  rates and total  revenues  in the first and fourth  calendar
quarters of each year. The Company believes that this seasonal trend mirrors the
trend in the lodging industry as a whole.

LIQUIDITY AND CAPITAL RESOURCES

From May 29,  1996,  the date of the  Company's  initial  public  offering  (the
"IPO"),  through  December 31, 1998,  the Company  pursued a strategy of growing
principally through hotel development.  Accordingly, the number of Company-owned
hotels grew from eight at May 29,  1996,  to 53 at December  31,  1998.  Capital
spending during this period  exceeded $200 million and the principal  sources of
capital included the proceeds from the 1996 IPO and two subsequent public equity
offerings  during 1997,  borrowings  under a bank credit  facility and operating
cash flow.

During the latter portion of 1998, the Company revised its financing strategy to
emphasize  traditional  longer-term mortgages to fund the construction of hotels
rather than relying on bank lines of credit with shorter final  maturities.  The
Company plans to use its current bank revolving  credit facility to fund special
projects,  repurchase shares of its outstanding  common stock and meet operating
cash needs as necessary.

On March 28, 2000,  the Company  completed a $2,660,000  mortgage loan agreement
with Empire Financial Services, Inc. with an initial interest rate of 9.25%. The
interest  rate is  adjustable  at the end of each  twelve-month  period to rates
based on prime plus 50 basis points. During the initial twelve-month period, the
loan requires monthly payments of principal and interest  totaling $24,362 based
on a principal amortization period of 20 years with a final maturity of March 1,
2007. One Company-owned hotel is pledged as collateral on this loan.

Effective  September 27, 2000, the Company executed an amended and restated loan
agreement  with  SouthTrust  Bank which  replaced  the line of credit  agreement
executed on February 18, 2000. The agreement consists of a $10 million term loan
and a revolving line of credit  facility for amounts up to $15 million.  A total
of 10  Company-owned  hotels are pledged as collateral  on this loan  agreement.
Borrowings  under  the  line of  credit  facility  will  bear  interest,  at the
Company's  option,  at (i) the bank's  prime rate or (ii) the Euro Rate plus 200
basis  points.  The line of credit  facility  expires on September  30, 2003. At
December 31, 2000,  there were borrowings  outstanding of $3.0 million under the
line of credit.  The  interest  rate on the term loan was based on the Euro Rate
plus 175 basis points through December 31, 2000. Commencing January 1, 2001, the
interest  rate is based on the Euro Rate plus 200  basis  points.  The term loan


                                      -23-
<PAGE>

requires monthly payments of interest only through September 30, 2001. Beginning
October 1, 2001,  the term loan  requires  monthly  payments  of  principal  and
interest  based  on a 20  year  amortization  period  with a final  maturity  of
September 30, 2008. Among other covenants, the agreement requires the Company to
maintain certain financial ratios and a minimum level of tangible net worth. The
agreement  also  places  restrictions  on the amount of loans and  advances  the
Company can make to third  parties.  At December  31,  2000,  the Company was in
compliance with these requirements.

At December 31, 2000, the Company had approximately  $121.1 million  outstanding
under  long-term  mortgage  loan  arrangements,  including  the  amounts  due to
SouthTrust  under the  arrangements  described in the  preceding  paragraph  and
amounts  classified as current maturities of long-term debt at that date. In the
aggregate,  these loans  require  monthly  principal  and  interest  payments of
$1,019,000. The final maturity dates for these loans range from February 1, 2005
to July 1, 2009.

In the fall of 1999,  the Company  licensed to  HotelTools,  Inc. the use of its
proprietary  hotel  management  and  reservation   systems,  and  at  that  time
HotelTools  assumed the costs of the continued  maintenance  and  development of
these systems. HotelTools intends to market the fully developed systems to hotel
owners and operators, including Suburban Lodges. The Chief Executive Officer and
sole  shareholder  of  Hoteltools,  Inc.  is Seth  Christian,  the  former  Vice
President of Operations of Suburban Lodges of America, Inc.

To date, all funding for HotelTools'  operations has been provided,  in the form
of  secured  loans,  by the  Company  and  from  the  proceeds  of an  equipment
sale-lease back transaction. During 2000, the Company made loans of $8.7 million
to  HotelTools,  Inc., of which  approximately  $1.1 million was repaid from the
proceeds  of the  sale-leaseback.  As of  December  31,  2000,  the  Company had
outstanding loans to HotelTools, Inc. of approximately $8.0 million. The Company
anticipates that, in the absence of funding from third parties, it will continue
to make loans to HotelTools.  Based on HotelTools'  operating  forecasts,  which
have been reviewed  with the Company,  the total loans made during 2001 could be
as much as $7.0 million.  The loans are payable on demand,  and bear interest at
an annual rate of 7.0%. At the present time,  HotelTools  does not have the cash
available  to pay  interest  or repay any portion of the loans;  therefore,  the
loans are  accounted  for on a cost  recovery  basis and interest  income is not
recognized  on such loans.  In exchange for its financial  support,  the Company
received from  HotelTools, Inc., a stock  purchase  warrant to purchase up to 20
million  shares of the common stock of HotelTools  at a nominal  cost.  Although
such shares would  constitute in excess of 99% of the equity of HotelTools based
on its present capitalization,  HotelTools is actively seeking equity investors,
and it is expected that the Company's  potential  ownership through the exercise
of its warrant will be reduced if such additional equity funding can be secured.

The Company has been  authorized  by its Board of Directors to  repurchase up to
4,500,000  shares of its outstanding  common stock. As of December 31, 2000, the
Company had purchased a total of 3,735,398 shares at a cost of $22,715,000.

At December  31,  2000,  the Company had one hotel under  construction  which is
expected  to open  during the first  half of 2001.  The  Company  had also begun
development  of another  hotel which is  expected to break  ground in the second
quarter of 2001. The Company expects that the costs of constructing these hotels
will be substantially  provided by proceeds of the term loan described above and
by a construction loan.

In the future,  the Company  expects  its cash  requirements  to be met by funds
generated  from   operations,   occasional   sales  of  its  hotel   properties,
construction  loans  made to build  out  certain  of its  unimproved  sites  and
borrowings  under  its bank line of  credit.  The  Company's  net cash flow from
operating  activities  increased  from $7.1 million in 1998 to $15.2  million in
1999 and to $17.3 million in 2000.



                                      -24-
<PAGE>

CERTAIN RISK FACTORS

In evaluating the Company and its  prospects,  certain  risks,  including  those
described in this section and those listed under "Forward  Looking  Statements,"
should  be  considered.  Such  risks are not the only  ones the  Company  faces.
Additionally,  some  risks  that are not  currently  known and  others  that the
Company does not consider material could later turn out to be so.

During 1999, in the face of substantial tightening of public and private sources
of funding for hotel  construction,  the Company  determined that it would focus
its growth plans on franchising.  Prior to that time, the Company had focused on
developing and operating its own Suburban  Lodge  extended stay hotels.  Because
the  operating   characteristics  of  these  hotels  were  so  strong,   several
third-party  developers  and  operators  had also  opened a total of 30 Suburban
Lodge extended stay hotels through December 31, 1998.

In  order  to  enhance  its  franchising   strategy,   the  Company  acquired  a
nightly-stay  hotel brand  (GuestHouse  International)  and  increased its sales
force from one franchise  sales  director at May 31, 1999, to fifteen by the end
of 1999.  During 2001, the Company intends to increase its franchise sales staff
to 22 sales directors.

The franchise business is highly  competitive and,  particularly with respect to
the Suburban Lodge brand which  consists  almost  entirely of  newly-constructed
hotels, is subject to the availability of substantial bank credit in the form of
construction loans that convert to permanent financing.

During 2000,  nine Suburban  Lodge hotels were opened by  franchisees  and three
were opened by the Company.  Twenty-five  GuestHouse  International  hotels were
opened by franchisees in 2000.  This was the Company's best year with respect to
franchise  openings.  The Company  expects to open  approximately  51 franchised
hotels during 2001,  six Suburban  Lodge  extended stay hotels and 45 GuestHouse
International  hotels.  The  Company  also  expects  to open  one  Company-owned
Suburban  Lodge  extended stay hotel in 2001 and break ground on one other.  The
Company  can  provide  no  assurance  that all of these  hotels  will be  opened
by December 31, 2001.

The Company has determined  that, when its franchising  revenues have grown to a
more  significant  level,  it will become more aggressive in its efforts to sell
its own operating  hotels.  The Company's  ultimate  objective is to own no real
estate,  although  this  objective  may take several  years to  accomplish.  The
Company's  present  intent  is to  sell  its  hotels  only  to  parties  who are
interested in entering into a franchise agreement and operating the hotels under
the Suburban Lodge brand.  Thirty-two of the Company's  hotels have been grouped
into mortgage pools of five or six hotels each. The Company  believes that these
hotels may be difficult to sell since, essentially, the pools must remain intact
and the debt must remain in place until  December  31,  2008,  or June 30, 2009,
depending on the pool.  While the  geographic  dispersion  of the hotels in each
group  might  make the  pools  unattractive  to some  franchisees,  the  Company
believes that the debt terms would be attractive to such franchisees.

To  date,  one  sale of a  Company-developed  hotel  has  occurred.  This was in
February  1999 and it resulted in a gain of $1.1 million  dollars.  Many factors
influence the selling price of real estate  assets,  the most important of which
are operating results for the most recent  twelve-month period prior to the sale
and the current  interest rate  environment  for hotel loans.  Accordingly,  the
Company cannot predict its ability to sell its hotels nor can it be assured that
future hotel sales will result in gains.

From time to time, the Company studies  business and strategic  opportunities to
determine  if  specific  transactions  would  have the  potential  of  enhancing
shareholder  value.  These  activities  have  included  the  review of  possible


                                      -25-
<PAGE>

acquisitions  or other business  combinations,  some of which,  if  consummated,
could result in the discontinuance of the Company's loans to HotelTools. In such
event, unless other funding was available,  HotelTools could cease operating and
be unable to repay its loans from the Company. In the event HotelTools is unable
to repay its loans from the Company,  the Company  could  recognize a loss up to
the full amount of its loans;  however,  the Company  would seek to minimize any
such loss by  exercising  its  security  rights  against  HotelTools'  developed
software and its owned hardware.  The software is currently in beta test and has
been  installed in one  Suburban  Lodge  hotel.  There can be no assurance  that
HotelTools'  assets would have a substantial value to the Company if such events
were to transpire.

The Company is also a guarantor on the equipment financing lease for HotelTools.
The total amount of the lease obligation is $1.4 million.

RECENT ACCOUNTING PRONOUNCEMENTS

As of January 1, 2001, the Company adopted the Statement of Financial Accounting
Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities"  as  amended  in June  2000 by  Statement  of  Financial  Accounting
Standards No. 138  (SFAS 138),  "Accounting for Certain  Derivative  Instruments
and Certain  Hedging  Activities (an amendment of FASB Statement No. 133)." SFAS
133, as amended by SFAS 138, requires  companies to recognize all derivatives as
either assets or liabilities  in the balance sheet and measure such  instruments
at fair value.  The adoption of these  statements had no impact on the Company's
consolidated financial statements.

In  December  1999,  the SEC issued  Staff  Accounting  Bulletin  (SAB) No. 101,
"Revenue  Recognition in Financial  Statements." The adoption of SAB 101 has had
no impact on the Company's consolidated  financial statements.  The Company will
continue to analyze the possible  impact of SAB 101,  including any amendents or
further  interpretation,  based upon the relevant facts and circumstances at the
time of future transactions.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to changes in interest rates primarily as a result of its
borrowing activities.

At December 31, 2000, the Company had debt outstanding  totaling $121.1 million.
Approximately  $99.8  million  of this  amount  was  represented  by fixed  rate
mortgage  loans.  The  interest  rate on  approximately  $9.9  million  of these
mortgage  loans will adjust on April 1, 2002 and again on April 1, 2005 for $6.7
million of the loans. One loan of approximately $3.1 million matures on April 1,
2005. The interest rate on approximately $2.6 million of the loans is adjustable
every year on April 1.

Outstanding  borrowings  on three  construction  loans  totaled  $8.3 million at
December 31, 2000.  The Company  expects to draw an  additional  $4.1 million on
these loans by the end of the second  quarter of 2001.  One of the  construction
loans with a balance of $3.1 million at December 31, 2000,  has a fixed interest
rate that is  adjustable on October 1, 2002,  and again on October 1, 2005.  The
other two loans are at variable  interest rates.  The remaining $13.0 million of
debt outstanding at December 31, 2000 consisted of a $10.0 million variable rate
term loan with SouthTrust Bank and $3.0 million  borrowed under a line of credit
with SouthTrust Bank. The line of credit borrowings were repaid in January 2001.

The total amount of variable rate debt and fixed rate debt adjustable within one
year  outstanding at December 31, 2000, plus the additional draws expected to be
made  on  these  loans  through  the  end of the  second  quarter  of  2001,  is
approximately  $28.0  million.  Accordingly,  each one percent  change in market
interest  rates will change  interest  expense by  approximately  $280,000 on an
annual basis.



                                      -26-
<PAGE>

The  Company's  cash and  cash  equivalents  are  short-term  and  highly-liquid
investments  with original  maturities of three months or less.  Accordingly,  a
change in market interest rates has a nearly immediate effect on interest earned
by the Company on its invested cash.  For the  foreseeable  future,  the Company
reasonably  expects that its average  invested cash balance will  approximate $4
million.  Accordingly,  each one percent  change in market  interest  rates will
change interest income by approximately $40,000 on an annual basis.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  information  required  by this Item is  included  in Item 7,  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations" under
the caption "Quantitative and Qualitative Disclosures About Market Risk."

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The Independent  Auditors'  Report,  the Consolidated  Financial  Statements and
Notes to the Consolidated  Financial Statements that appear on pages F-1 through
F-16 herein are incorporated by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE.

None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The  information  contained  under the heading  "Information  about the
Nominees and the Continuing  Directors" in the definitive  Proxy Statement to be
used in  connection  with the  solicitation  of proxies for the  Company's  2001
Annual Meeting of Shareholders, to be filed with the Commission, is incorporated
herein by reference.  Pursuant to  instruction 3 to paragraph (b) of Item 401 of
Regulation S-K, information relating to the executive officers of the Company is
included in Item 1 of this Report.

ITEM 11.  EXECUTIVE COMPENSATION.

         The information contained under the heading "Executive Compensation" in
the definitive Proxy Statement to be used in connection with the solicitation of
proxies for the Company's 2001 Annual Meeting of Shareholders,  to be filed with
the  Commission,  is  incorporated  herein by  reference.  In no event shall the
information  contained  in the Proxy  Statement  under the heading  "Shareholder
Return Performance Graph" be deemed incorporated herein by such reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information  contained under the heading  "Beneficial  Ownership of
Securities and Voting  Rights-Voting  Securities  and Principal  Holders" in the
definitive  Proxy  Statement to be used in connection  with the  solicitation of
proxies for the Company's 2001 Annual Meeting of Shareholders,  to be filed with
the Commission, is incorporated herein by reference. For purposes of determining
the aggregate market value of the Company's voting stock held by  nonaffiliates,
shares held by all  directors  and  executive  officers of the Company have been
excluded.  The  exclusion  of such  shares is not  intended  to,  and shall not,


                                      -27-
<PAGE>

constitute a  determination  as to which persons or entities may be "affiliates"
of the Company as defined by the Commission.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information  contained under the heading "Certain  Transactions" in
the definitive Proxy Statement to be used in connection with the solicitation of
proxies for the Company's Annual Meeting of  Shareholders,  to be filed with the
Commission, is incorporated herein by reference.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)  The following  financial  statements and notes thereto are  incorporated by
 reference in Item 8 of this Report:


     1.   FINANCIAL STATEMENTS

          Description
          -----------

          Independent Auditors' Report

          Consolidated Balance Sheets at December 31, 2000 and 1999

          Consolidated Statements of Operations for the years ended December 31,
          2000, 1999 and 1998

          Consolidated  Statements  of Changes in  Shareholders'  Equity for the
          years ended December 31, 2000, 1999 and 1998

          Consolidated Statements of Cash Flows for the years ended December 31,
          2000, 1999 and 1998

          Notes to Consolidated Financial Statements

     2.   FINANCIAL STATEMENT SCHEDULES

         Schedule V - Valuation and Qualifying Accounts

         All other schedules have been omitted since such  information is either
included in the financial statements or notes or is not required.




<PAGE>

         3.       EXHIBITS

         The  exhibits set forth below are required to be filed with this Report
pursuant to Item 601 of Regulation S-K:
<TABLE>
<CAPTION>

                                                       INCORPORATED BY                                             EXHIBIT
                                                        REFERENCE TO                                               NUMBER IN
  EXHIBIT                                              REGISTRATION OR      FORM OF REPORT                           REPORT
    NO.                    DESCRIPTION                   FILE NUMBER                            DATE OF REPORT
------------- -------------------------------------- -------------------- ------------------- -------------------- -----------

   <S>                                                    <C>                      <C>           <C>                  <C>
   3.1          Amended and Restated Articles of the      333-2876                  S-1          March 28, 1996**     3.1
                Company

   3.2          Amended and Restated By-laws of the       000-28108                 10-K         March 28,1997        3.2
                Company, Amended as of March 17, 1997

   4.1          Form of Common Stock Certificate of       333-2876            Amendment No. 1    May 7, 1996          4.1
                the Company                                                        to S-1

  10.1          Form of Acquisition Agreement and         333-2876                  S-1          March 28, 1996       10.1
                Plan of Merger (with accompanying
                schedule)

  10.2          Purchase and Sale Agreement by and        333-2876                  S-1          March 28, 1996       10.2
                between Suburban Holdings, L.P. and
                Gulf Coast Associates, Ltd.

  10.3          Purchase and Sale Agreement by and       333-2876                  S-1          March 28, 1996       10.3
                between Suburban Holdings, L.P. and
                Omnicorp Resources, Inc.

  10.4          Form of Agreement and Consent of          333-2876                  S-1         March 28, 1996       10.4
                Partners of each of the Affiliated
                Entities and Third Party Sellers

  10.5          Suburban Lodges of America, Inc.          333-2876           Amendment No. 1    May 7, 1996          10.5
                Stock Option and Incentive Award Plan                          to S-1

  10.6          Suburban Lodges of America, Inc.          333-2876           Amendment No. 1    May 7, 1996          10.6
                Non-Employee Directors' Stock Option                            to S-1
                and Fee Plan

  10.7          Form of Indemnification Agreement         333-2876                 S-1          March 28, 1996       10.7
                between Suburban Lodges of America,
                Inc. and its directors and officers

  10.8          Registration Rights Agreement among       333-2876                 S-1          March 28, 1996       10.8
                Suburban Lodges of America, Inc. and
                Certain Shareholders

  10.9          Form of Franchise Agreement, as           333-35871          Amendment No. 2    October 9, 1997      10.9.a.
                amended                                                        to S-3

  10.10         Form of Development and                   333-2876                 S-1          March 28, 1996       10.10
                Design/Building Agreement

  10.11         Form of Management Agreement              333-2876                 S-1          March 28, 1996       10.11

  10.12         Management Agreement between              333-2876                 S-1          March 28, 1996       10.12
                Suburban Management, Inc. and Gulf
                Coast Associates, Ltd.

  10.13         Consulting Agreement with Legacy          333-2876                 S-1          March 28, 1996       10.13
                Securities Corp.
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
                                                       INCORPORATED BY                                             EXHIBIT
                                                        REFERENCE TO                                               NUMBER IN
  EXHIBIT                                              REGISTRATION OR      FORM OF REPORT                           REPORT
    NO.                    DESCRIPTION                   FILE NUMBER                            DATE OF REPORT
------------- -------------------------------------- -------------------- ------------------- -------------------- -----------
  <S>                                                    <C>                      <C>           <C>                  <C>
  10.14         Acknowledgment and Agreement between   333-2876                   S-1          March 28, 1996       10.14
                Suburban Lodges of America, Inc. and
                Young Consulting, Inc. re. Company's
                proprietary computer software

  10.15         Suburban Lodge 401(k) Savings Plan     333-2876                   S-1          May 20, 1996         10.15

  10.16         Rights Agreement                       333-2876            Amendment No. 1     May 7, 1996          10.16
                                                                              to S-1

  10.17         Commitment Letter for the Line of      333-2876            Amendment No. 1     May 7, 1996          10.17
                Credit                                                          to S-1


  10.18         Preliminary Agreement for a License    000-28108                  10-K         March 28, 1997       10.18
                to Develop a Suburban Lodge Unit
                between Suburban Franchise Systems,
                Inc. and E.E.B. Lodging Systems LLC

  10.19         Preliminary Agreement for a License    000-28108                  10-K         March 28, 1997       10.19
                to Develop a Suburban Lodge Unit
                between Suburban-Franchise Systems,
                Inc. and E.E.B. Lodging Systems LLC
                II

  10.20         Development and Design/Build           000-28108                  10-K         March 28, 1997       10.20
                Agreement for Suburban Lodge of
                Arlington South

  10.21         Development and Design/Build           000-28108                  10-K         March 28, 1997       10.21
                Agreement for Suburban Lodge of
                Lewisville, Texas

  10.22         Registration Rights Agreement among    000-28108                  8-K          March 17, 1997       10.19
                the Registrant and Certain
                Shareholders

  10.23         Office Lease between the Registrant    333-35871            Amendment No. 2    October 9, 1997      10.20
                and Massachusetts Mutual Life                                    to S-3
                Insurance Company

  10.24         Deed to Secure Debt and Security       000-28108                  10-K         March 31, 1999       10.24
                Agreement with Finova Realty Capital
                Inc. and schedule of omitted
                documents

  10.25         Promissory Note to Finova Realty       000-28108                  10-K         March 31, 1999       10.25
                Capital Inc. and schedule of omitted
                documents

  10.26         Security Agreement in favor of         000-28108                  10-K         March 31, 1999       10.26
                Finova Realty Capital Inc. and
                schedule of omitted documents
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                                                       INCORPORATED BY                                             EXHIBIT
                                                        REFERENCE TO                                               NUMBER IN
  EXHIBIT                                              REGISTRATION OR      FORM OF REPORT                           REPORT
    NO.                    DESCRIPTION                   FILE NUMBER                            DATE OF REPORT
------------- -------------------------------------- -------------------- ------------------- -------------------- -----------

  <S>                                                    <C>                      <C>           <C>                  <C>
  10.27         Assignment of Financial Agreements     000-28108                  10-K         March 31, 1999         10.27
                and Franchisor's Consent and
                Subordination of Franchise
                Agreements in favor of Finova Realty
                Capital Inc. and schedule of omitted
                documents

  10.28         Change of Control Agreement            000-28108                  10-K         March 31, 1999       10.28

  10.29         8.375% Adjustable Rate Note of         000-28108                  10-K         March 30, 2000       10.29
                Suburban Holdings, L.P. dated March
                31, 1999 in the amount of
                $4,000,000.00 in favor of Empire
                Financial Services, Inc., guaranteed
                by the Registrant, and schedule of
                omitted similar documents

  10.30         Unconditional Guaranty of Payment      000-28108                  10-K         March 30, 2000       10.30
                and Performance to Empire Financial
                Services, Inc. dated March 31, 1999
                and schedule of omitted similar
                documents

  10.31         Line of Credit Note dated February     000-28108                  10-K         March 30, 2000       10.31
                18, 2000 in the face amount of
                $15,000,000 in favor of Southtrust
                Bank, N.A.

  10.32         Additional schedule of omitted         000-28108                  10-K         March 30, 2000       10.32
                similar documents (filed herewith)
                to Deed to Secure Debt and Security
                Agreement with Finova Realty Capital
                Inc. incorporated by reference to
                Exhibit 10.24 to the Company's
                Annual Report on Form 10-K for the
                year ended December 31, 1998

  10.33         Additional schedule of omitted         000-28108                  10-K         March 30, 2000       10.33
                similar documents (filed herewith)
                to Promissory Note to Finova Realty
                Capital Inc. incorporated by
                reference to Exhibit 10.25 to the
                Company's Annual Report on Form 10-K
                for the year ended December 31, 1998
</TABLE>




<PAGE>
<TABLE>
<CAPTION>


                                                       INCORPORATED BY                                             EXHIBIT
                                                        REFERENCE TO                                               NUMBER IN
  EXHIBIT                                              REGISTRATION OR      FORM OF REPORT                           REPORT
    NO.                    DESCRIPTION                   FILE NUMBER                            DATE OF REPORT
------------- -------------------------------------- -------------------- ------------------- -------------------- -----------
  <S>                                                    <C>                      <C>           <C>                  <C>
  10.34         Additional schedule of omitted         000-28108                  10-K         March 30, 2000       10.34
                similar documents (filed herewith)
                to Security Agreement in favor of
                Finova Realty Capital Inc.
                incorporated by reference to Exhibit
                10.26 to the Company's Annual Report
                on Form 10-K for the year ended
                December 31, 1998

  10.35         Additional schedule of omitted         000-28108                   10-K         March 30, 2000       10.35
                similar documents (filed herewith)
                to Assignment of Franchise
                Agreements and Franchisor's Consent
                and Subordination of Franchise
                Agreements in favor of Finova Realty
                Capital Inc. incorporated by
                reference to Exhibit 10.27 to the
                Company's Annual Report on Form 10-K
                for the year ended December 31, 1998

  10.36         Area Development Agreement dated as    000-28108                   10-K         March 30, 2000       10.36
                of March 3, 1998 between GuestHouse
                International LLC and Western Steel,
                Inc., together with the First
                Amendment and the Montana Amendment
                thereto

  10.37         Amended and Restated Loan Agreement    *
                dated as of September 27, 2000
                between Southtrust Bank, N.A.,
                Suburban Lodges of America, Inc., et
                al.

  10.38         Non-Revolving Draw-Down Term Note,     *
                dated September 27, 2000

  10.39         Amended and Restated Line of Credit    *
                Note, dated September 27, 2000

  21.1          Subsidiaries of the Registrant         000028108                  10-K          March 31, 1999       21.1

  23.1          Consent of Deloitte & Touche, L.L.P.   *
</TABLE>

     *    Filed  herewith.

     **   Originally  filed on the date set forth above and refiled  pursuant to
          Regulation S-T on May 7, 1996.



(b) No reports on Form 8-K have been filed  during the last  quarter  covered by
this report.

<PAGE>




                        Suburban Lodges of America, Inc.

                        Index to Financial Statements and

                    Consolidated Financial Statement Schedule
<TABLE>
<CAPTION>
<S>                                                                                      <C>
Index To Financial Statements and Consolidated Financial Statement Schedule                      F-1

Independent Auditors' Report                                                                     F-2

Consolidated Balance Sheets at December 31, 2000 and 1999                                        F-3

Consolidated Statements of Operations for the Years Ended December 31, 2000, 1999
and 1998                                                                                         F-4

Consolidated  Statements of Changes in Shareholders'  Equity for the Years Ended
      December 31, 2000, 1999 and 1998                                                           F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999
and 1998                                                                                         F-6

Notes to Consolidated Financial Statements                                               F-7 to F-16

Schedule V- Valuation and Qualifying Accounts                                                   F-17
</TABLE>


                                                F-1
<PAGE>


                          Independent Auditors' Report


BOARD OF DIRECTORS
Suburban Lodges of America, Inc.


We have audited the accompanying  consolidated balance sheets of Suburban Lodges
of America,  Inc.  ("Suburban Lodges") as of December 31, 2000 and 1999, and the
related consolidated  statements of operations,  changes in shareholders' equity
and cash flows for each of the three  years in the  period  ended  December  31,
2000. Our audits also included the financial  statement  schedule  listed in the
Index to Consolidated  Financial Statements and Consolidated Financial Statement
Schedule. These consolidated financial statements and the consolidated financial
statement  schedule are the responsibility of Suburban Lodges'  management.  Our
responsibility  is to express an opinion on these  financial  statements and the
financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
the significant estimates made by management,  as well as evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Suburban Lodges as of December 31, 2000 and 1999, and the  consolidated  results
of its operations and cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United  States of America.  Also, in our opinion,  the  financial  statement
schedule, when considered in relation to the basic financial statements taken as
a whole,  presents fairly, in all material  respects,  the information set forth
therein.

/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP

Atlanta, Georgia
February 23, 2001


                                      F-2
<PAGE>

                                     Suburban Lodges of America, Inc.
                                        Consolidated Balance Sheets
                                              (in thousands)
<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                  -----------------------
                                                                                    2000             1999
                                                                                  --------        --------
<S>                                                                               <C>             <C>
Assets:
Current assets:
    Cash and cash equivalents                                                     $ 10,856        $  9,862
    Accounts receivable, net of reserves of $327 (2000) and $191 (1999)              1,520           1,852
    Hotel inventory and supplies                                                     2,538           2,290
    Prepaid and refundable income taxes                                                260           1,163
    Deferred income taxes                                                              469             448
    Prepaid expenses and other current assets                                        2,081           1,511
                                                                                  --------        --------
        Total current assets                                                        17,724          17,126
Property and equipment, net of accumulated depreciation
    and amortization of $27,863 (2000) and $18,600 (1999)                          299,392         291,269
Notes receivable from HotelTools, Inc.                                               7,997             344
Other notes receivable                                                               4,508           4,992
Acquired intangible assets                                                           3,515           3,617
Deferred loan costs                                                                  2,097           1,721
Other assets                                                                         2,393           2,013
                                                                                  --------        --------
TOTAL ASSETS                                                                      $337,626        $321,082
                                                                                  ========        ========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
    Current portion of long-term debt                                             $  1,547        $  1,228
    Construction accounts payable                                                    1,314           1,752
    Trade accounts payable                                                           3,161           3,207
    Accrued property taxes                                                             720           1,113
    Accrued wages and benefits                                                         703             507
    Other accrued liabilities                                                        1,504             615
    Other current liabilities                                                          648             591
                                                                                  --------        --------
        Total current                                                                9,597           9,013
liabilities
                                                                                  --------        --------
Long-term debt, excluding current portion                                          119,574          97,891
Deferred income taxes                                                                3,958           2,333
Other liabilities                                                                      167              84
                                                                                  --------        --------
        Total liabilities                                                          133,296         109,321
                                                                                  --------        --------
Shareholders' equity:
    Common stock, $0.01 par value per share, 100,000,000 shares authorized             157             157
    Additional paid-in capital                                                     202,280         202,250
    Retained earnings                                                               24,608          19,345
                                                                                  --------        --------
                                                                                   227,045         221,752
    Less treasury stock, at cost                                                    22,715           9,991
                                                                                  --------        --------
        Shareholders' equity - net                                                 204,330         211,761
                                                                                  --------        --------
Total liabilities and shareholders' equity                                        $337,626        $321,082
                                                                                  ========        ========
</TABLE>

See notes to consolidated financial statements.


                                                    F-3
<PAGE>


                                Suburban Lodges of America, Inc.
                              Consolidated Statements of Operations
                            (in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                                     -------------------------------------------
                                                        2000            1999             1998
                                                     --------         --------         --------
<S>                                                  <C>              <C>              <C>
REVENUE:
    Hotel revenues                                   $ 70,672         $  2,466         $ 44,756
    Franchise and other revenue                         4,611            3,446            1,702
                                                     --------         --------         --------
        Total revenue                                  75,283           65,912           46,458
                                                     --------         --------         --------

OPERATING COSTS AND EXPENSES:
    Hotel operating expenses                           38,496           32,876           22,754
    Corporate operating expenses                       10,998            7,961            3,975
    Lease termination costs                                                                 218
    Site acquisition cancellation expense                                  113            1,960
    Undeveloped site carrying costs                       177              119
    Depreciation and amortization                       9,615            8,468            5,492
    Impairment of long-lived assets                       545
    Gains realized on property sales                      (60)          (1,145)            (294)
                                                     --------         --------         --------
        Operating costs and expenses - net             59,771           48,392           34,105
                                                     --------         --------         --------

INCOME FROM OPERATIONS                                 15,512           17,520           12,353

OTHER INCOME (EXPENSE):

    Interest income                                       962            1,411            2,236
    Interest expense                                   (8,857)          (6,399)            (202)
    Public debt transaction abandonment costs                                           (10,633)
    Proceeds from legal settlement                        842
    Other                                                  24              208
Income before income taxes                              8,483           12,740            3,754
Provision for income taxes                              3,220            4,695            1,192
                                                     --------         --------         --------
NET INCOME                                           $  5,263         $  8,045         $  2,562
                                                     ========         ========         ========

EARNINGS PER COMMON SHARE:

    Basic                                            $   0.41         $   0.53         $   0.17
    Diluted                                          $   0.41         $   0.53         $   0.17


WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING:

    Basic                                             12,905           15,136            15,430
    Diluted                                           12,919           15,136            15,430
</TABLE>


See notes to consolidated financial statements.



                                              F-4
<PAGE>
<TABLE>
<CAPTION>
                                                 Suburban Lodges of America, Inc.
                                    Consolidated Statements of Changes in Shareholders' Equity
                                                      (dollars in thousands)


                                             Common Stock           Additional                             Treasury Stock
                                      -------------------------       Paid-in        Retained         ---------------------------
                                       Shares            Amount       Capital        Earnings           Shares            Cost
                                     ----------      ----------     ----------     ----------         ---------        ----------
<S>                                  <C>             <C>            <C>            <C>                <C>              <C>
BALANCES - DECEMBER 31, 1997         15,429,227      $      154     $  200,160     $    8,738

Issuance of common stock
    to non-employee directors             1,845                            30
Net income                                                                              2,562
                                     ----------      ----------     ----------     ----------
BALANCES - DECEMBER 31, 1998         15,431,072             154        200,190         11,300
Issuance of common stock
    in acquisition                      300,000               3         2,041
Issuance of common stock
    to non-employee directors             3,000                            19
Acquisition of treasury stock                                                                         1,781,400        $    9,991

Net income                                                                             8,045
BALANCES - DECEMBER 31, 1999         15,734,072             157        202,250         19,345         1,781,400             9,991
                                     ----------      ----------     ----------     ----------         ---------        ----------
Issuance of common stock
    to non-employee directors             4,896                            30
Acquisition of treasury stock                                                                         1,953,998            12,724

Net income                                                                             5,263
BALANCES - DECEMBER 31, 2000         15,738,968      $      157     $  202,280     $   24,608         3,735,398        $   22,715
                                     ==========      ==========     ==========     ==========         =========        ==========
</TABLE>




                                                                F-5
<PAGE>


                                           Suburban Lodges of America, Inc.
                                         Consolidated Statements of Cash Flows
                                                    (in thousands)
<TABLE>
<CAPTION>

                                                                                 Year Ended December 31,
                                                                        ---------------------------------------------
                                                                           2000              1999             1998
                                                                        ---------         ---------         ---------
OPERATING ACTIVITIES:
<S>                                                                     <C>               <C>               <C>
    Net income                                                          $   5,263         $   8,045         $   2,562
    Adjustments to reconcile net income to net
        cash provided by operating activities:
        Depreciation and amortization                                       9,615             8,468             5,492
        Reserves for site acquisition cancellation                                           (1,960)            1,960
        Net change in deferred income tax assets and liabilities            1,618             1,763              (368)
        Equity in loss of joint venture                                                         11
        Stock compensation                                                     30                19                30
        Gain on sale of property                                              (60)           (1,145)             (294)
        Impairment of long-lived assets                                       545
        Changes in operating assets and liabilities:
            Accounts receivable                                               379               180              (370)
            Other current assets                                              147               770            (2,973)
            Other assets                                                     (961)           (1,384)              117
            Trade accounts payable                                           (107)              167               994
            Other current liabilities                                         711               250               (87)
            Other liabilities                                                  83               (30)               33
                                                                        ---------         ---------         ---------
Net cash provided by operating activities                                  17,263            15,154             7,096
                                                                        ---------         ---------         ---------

INVESTING ACTIVITIES:

    Additions to property and equipment                                   (14,553)          (28,812)         (108,957)
    Proceeds from sale of property                                            230             4,405               885
    Increase (decrease) in construction accounts payable                     (438)           (5,095)            2,236
    Acquisitions, net of cash acquired                                       (641)           (1,481)           (2,279)
    Loans made to HotelTools, Inc.                                         (8,726)             (344)
    Payment received from HotelTools, Inc.                                  1,073
    Other loans made                                                                                           (2,660)
    Payments received on other loans                                          484               463                 5
    Other                                                                                      (365)             (431)
                                                                        ---------         ---------         ---------
Net cash used by investing activities                                     (22,571)          (31,229)         (111,201)
                                                                        ---------         ---------         ---------

FINANCING ACTIVITIES:

    Proceeds from issuances of long-term debt                              20,352            24,589            75,530
    Principal payments on long-term debt                                   (3,950)           (7,670)              (58)
    Amounts borrowed under line of credit                                  10,000                              40,000
    Repayment of line of credit borrowings                                 (7,000)                             (65,000)
    Purchase of treasury stock                                            (12,724)           (9,991)
    Decrease in restricted cash                                                                                11,000
    Net additions to deferred loan costs                                     (376)             (169)             (839)
                                                                        ---------         ---------         ---------
Net cash provided by financing activities                                   6,302             6,759            60,633
                                                                        ---------         ---------         ---------
Net increase (decrease) in cash and cash equivalents                          994            (9,316)          (43,472)
Cash and cash equivalents at beginning of period                            9,862            19,178            62,650
                                                                        ---------         ---------         ---------
Cash and cash equivalents at end of period                              $  10,856         $   9,862         $  19,178
                                                                        =========         =========         =========

Supplemental cash flow disclosures:

    Cash paid for income taxes, net of refunds                          $     887         $   1,658         $   3,163
                                                                        =========         =========         =========
    Cash paid for interest expense, net of amounts capitalized          $   8,493         $   6,128         $     195
                                                                        =========         =========         =========
</TABLE>


See notes to consolidated financial statements.

                                                                F-6
<PAGE>

                        Suburban Lodges of America, Inc.
                   Notes to Consolidated Financial Statements



1.  DESCRIPTION OF BUSINESS

Suburban  Lodges  of  America,  Inc.  and its  subsidiaries  (collectively,  the
"Company") own, operate,  grant franchise rights to and manage for third parties
extended-stay  hotels that operate under the Suburban  Lodge(R)  brand name. The
Company   also   franchises   hotels   that   operate   under   the   GuestHouse
International(R) brand name.

At December 31, 2000, 119 Suburban Lodge hotels were operating in 19 states. The
Company  owned and  operated  65 of these  hotels  and third  parties  owned the
remaining 54 hotels. The Company managed the operations of 10 of the third-party
hotels  on  behalf  of  the  franchisees.   At  December  31,  2000  independent
franchisees owned and operated 65 GuestHouse  International hotels located in 20
states.  At December  31,  2000,  an  additional  61 Suburban  Lodge hotels (two
Company-owned,  59 franchised)  were under  construction  or development  and an
additional   65   franchised   GuestHouse   International   hotels   were  under
construction, conversion or development.



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
---------------------

The  consolidated  financial  statements  include the accounts and operations of
Suburban  Lodges  of  America,  Inc.  and  its  wholly-owned  subsidiaries.  All
significant  intercompany  balances  and  transactions  are  eliminated  in  the
preparation of the consolidated financial statements.

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates and assumptions  that affect the amounts of assets and liabilities and
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Revenue Recognition
-------------------

Hotel revenues are recognized as earned.  Initial  franchise fees are recognized
in income when the associated hotel has commenced operations.  Development fees,
management  fees and  recurring  franchise  fees  are  recognized  when  earned.
Reserves are established for estimated unrecoverable amounts.

Pre-Opening Costs
-----------------

Non-capital  expenditures  incurred  prior to opening new hotels are expensed as
incurred.

Earnings per Common Share
-------------------------

Earnings per common share have been computed  under the  provisions of Statement
of Financial  Accounting  Standards No. 128, "Earnings Per Share." Identical net
income amounts are used in the  calculations  of basic and diluted  earnings per
common share.  Basic  earnings per common share were computed using the weighted
average number of common shares  outstanding.  Diluted earnings per common share
include the  dilutive  effect of stock  options.  At December  31,  2000,  stock
options under the  Company's  various  stock option plans  represented  the only
securities  that could  potentially  dilute  earnings per common share in future
periods.

Property and Equipment
----------------------

Property  and  equipment  is  stated  at  cost.  The cost of land  includes  the
contractual  purchase price of the site, other costs incurred in connection with
its acquisition,  such as engineering and environmental  reports, and associated
overhead.  The cost of hotels  includes  the direct costs of  construction  plus
capitalized  interest and  construction  overhead  through the date the hotel is
substantially complete and ready for its intended use.

Hotels are depreciated on a straight-line basis over an estimated useful life of
40  years.   Corporate  office   leasehold   improvements  are  amortized  on  a
straight-line basis over the life of the related lease. Furniture,  fixtures and
equipment are depreciated on a straight-line  basis over estimated  useful lives
ranging  from five to seven  years.  Maintenance  and  repairs  are  charged  to
operations as incurred, and major renewals and betterments are capitalized.



                                      F-7
<PAGE>

Acquired Intangible Assets
--------------------------

Acquired  intangible assets consist of franchise rights and goodwill.  Franchise
rights were recorded at their  estimated  fair value at the date of  acquisition
and are being amortized on a straight-line  basis over four years,  the expected
period to be benefited.  Goodwill  represents the excess of cost over fair value
of net assets acquired and is being  amortized on a straight-line  basis over an
estimated useful life of 20 years.


Impairment of Long-lived Assets
-------------------------------

The Company  reviews the net carrying  value of its hotels and other  long-lived
assets if any facts and circumstances suggest that their recoverability may have
been  impaired.  The  Company  recorded  a loss of  $545,000  in the year  ended
December 31, 2000, for impairment of an undeveloped site.

Deferred Loan Costs
-------------------

Costs  associated with obtaining and maintaining  debt financing are capitalized
as deferred  loan costs,  and are  amortized  over the life of the related  debt
instrument.

Stock-based Compensation
------------------------

The Company  accounts for stock  options  using the  intrinsic  value method and
issues stock options only to employees and directors at exercise prices that are
equal to or more  than the fair  value of the  underlying  shares on the date of
each grant. Accordingly, no compensation expense is recorded in the accompanying
statements   of  earnings   with   respect  to  the  grant  of  stock   options.


Reclassifications
-----------------

Certain  reclassifications  have been made to the  December  31,  1999 and 1998,
financial statements to conform them to the December 31, 2000, presentation.

Recent Accounting Pronouncements
--------------------------------

As of January 1, 2001, the Company adopted the Statement of Financial Accounting
Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities,"  as  amended  in June 2000 by  Statement  of  Financial  Accounting
Standards No. 138 (SFAS 138), "Accounting for Certain Derivative Instruments and
Certain Hedging  Activities (an amendment of FASB Statement No. 133)." SFAS 133,
as amended by SFAS 138,  requires  companies to  recognize  all  derivatives  as
either assets or liabilities  in the balance sheet and measure such  instruments
at fair value.  The adoption of these  statements had no impact on the Company's
consolidated financial statements.

In December  1999, the SEC issued Staff  Accounting  Bulletin No. 101 (SAB 101),
"Revenue Recognition in Financial  Statements".  The adoption of SAB 101 has had
no impact on the Company's consolidated  financial statements.  The Company will
continue to analyze the possible impact of SAB 101,  including any amendments or
further  interpretation,  based upon the relevant facts and circumstances at the
time of future transactions.

3.  ACQUISITIONS

On January 1, 2000,  the  Company  acquired  the  remaining  50%  interest  in a
Suburban  Lodge hotel in Atlanta,  Georgia (the "2000  Acquisition")  owned by a
joint  venture  in which  the  Company  held a 50%  equity  position.  The total
purchase price of $3,260,000,  including transaction related expenses, consisted
of cash of $660,000 and the  assumption of a $2,600,000  mortgage note. The note
assumed in the acquisition was repaid on February 18, 2000.

On June 1, 1999,  the Company  acquired the assets of GuestHouse  International,
LLC (the "1999 Acquisition"), a franchisor of mid-scale lodging facilities under
the names GuestHouse  International  Inns, Hotels and Suites. The total purchase
price of $3,525,000,  including  transaction-related expenses, consisted of cash
of $1,481,000  and 300,000  shares of the  Company's  common stock with a market
value of $2,044,000.

In addition to the price paid at closing,  the purchase  agreement  provided for
contingent  payments  of  $1,000,000  to be  made as of  each  of  three  annual
anniversary dates based on GuestHouse International
achieving  certain goals for the number of hotels open and the amount of revenue
collected.  The first  anniversary date was September 3, 2000, which passed with
no payment due.



                                      F-8
<PAGE>

Additionally,  the  purchase  agreement  requires  that the Company  maintain an
average of at least eight sales people actively  engaged on a full-time basis in
the  marketing  and  development  of  franchises  during  any  six-month  period
commencing  September  30, 1999  through  September  3, 2002,  the third  annual
anniversary  date.  The Company is currently and expects to remain in compliance
with this requirement.

On July 31, 1998, the Company acquired two companies (the "1998  Acquisitions"),
each of which operates a Suburban Lodge hotel in Arlington,  Texas,  for a total
purchase price of approximately  $2.5 million in cash and the assumption of $6.6
million in notes payable.  A director of the Company was a minority  shareholder
in these two companies. A second director had an indirect family interest in the
two  companies.  Prior to the  acquisitions,  the  Company's  Board of Directors
(excluding those members of the Board with a direct or indirect  interest in the
companies  acquired)  reviewed and  approved  the terms of the related  Purchase
Agreements.

The  acquisitions  described in the  preceding  two  paragraphs  were treated as
purchases; accordingly, operations of the acquired companies are included in the
consolidated statements of operations commencing on the date of acquisition. The
Company's  allocation  of  purchase  price to assets  acquired  and  liabilities
assumed, as adjusted, was as follows (in thousands):

                                  The 2000           The 1999       The 1998
                                 Acquisition        Acquisition    Acquisitions
                                 -----------        -----------    ------------
Property and equipment             $  3,550                         $  9,971
Acquired intangible assets              232         $  3,650
Other assets                            142               96             420
                                   --------         --------        --------
Total assets                          3,924            3,746          10,391
Notes payable                        (2,600)                          (6,597)
Other liabilities                       (83)            (221)         (1,289)
                                   --------         --------        --------
Net assets acquired                   1,241            3,525           2,505
Less:
     Prior equity investment           (581)
     Cash received                      (19)                           (226)
                                   --------         --------        --------
Purchase price, net of cash        $    641         $  3,525        $  2,279
                                   ========         ========        ========



Had the 1999  Acquisition  occurred on January 1, 1998,  the Company's  reported
operating results would have been as follows (in thousands,  except earnings per
share amounts):

                                               Year Ended December 31,
                                              ------------------------
                                                1999          1998
                                              -------        --------

Total revenue                                 $66,382        $47,144

Net earnings                                    7,818          1,868

Primary and diluted earnings per share        $  0.52        $  0.12


                                      F-9
<PAGE>

Results of operations for 1999 would not have differed  materially from reported
results  had the 2000  Acquisition  occurred  on  January  1,  1999.  Results of
operations for 1998 would not have differed materially from reported results had
the 1998 Acquisitions occurred on January 1, 1998.

4.   PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>

                                                                       December 31,
                                                               ------------------------
                                                                 2000            1999
                                                               --------        --------
<S>                                                            <C>             <C>
Land and improvements, including land under development        $ 62,805        $ 61,596
Buildings and improvements                                      233,809         214,293
Furniture, fixtures and equipment                                26,647          24,480
Construction in progress                                          3,994           9,500
                                                               --------        --------
Property and equipment, at cost                                $327,255        $309,869
                                                               ========        ========
</TABLE>


Additions  to hotels  for the years  ended  December  31,  2000,  1999 and 1998,
respectively,  included $726,000, $1,881,000 and $3,885,000 of interest incurred
on funds borrowed to finance construction.

5.  LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

                                                          December 31,
                                                 ------------------------
                                                   2000            1999
                                                 --------        --------
Term loan                                        $ 10,000
Line of credit                                      3,000
8.25% fixed rate mortgage loans, due
    January 1, 2009                                73,749        $ 74,680
8.8% fixed rate mortgage loans, due
    July 1, 2009                                   13,493          13,636
8.38% mortgage loans                                9,885          10,103
9.25% mortgage loan, due March 1, 2007              2,626
Construction loans                                  8,331             639
Capital leases                                         37              61
                                                 --------        --------
                                                  121,121          99,119
Less current portion                                1,547           1,228
                                                 --------        --------
Long-term debt, excluding current portion        $119,574        $ 97,891
                                                 ========        ========


Effective  September 27, 2000, the Company executed an amended and restated loan
agreement with SouthTrust  Bank.  This agreement  consists of a $10 million term
loan and a revolving  line of credit  facility for amounts up to $15 million.  A
total of 10  Company-owned  hotels  are  pledged  as  collateral  under the loan
agreement.  Borrowings under the line of credit facility will bear interest,  at
the  Company's  option,  at (i) the bank's prime rate or (ii) the Euro Rate plus
200 basis points. The line of credit facility expires on September 30, 2003. The
interest  rate on the term loan was based on the Euro Rate plus 175 basis points
through  December 31, 2000.  Commencing  January 1, 2001,  the interest  rate is
based on the Euro Rate plus 200 basis  points.  The term loan  requires  monthly
payments of interest only through September 2001.  Beginning October 1, 2001 the
term loan requires monthly payments of principal and interest based on a 20-year
amortization  period with a final  maturity of September  30, 2008.  Among other
covenants,  the  agreement  requires the Company to maintain  certain  financial
ratios and a minimum  level of tangible  net worth.  The  agreement  also places
restrictions  on the amount of loans and  advances the Company can make to third
parties.  At  December  31,  2000,  the  Company  was in  compliance  with these
requirements.

The 8.25% and 8.8%  mortgage  loans  require  monthly  payments of principal and
interest  totaling  approximately  $709,000  based  upon a 25-year  amortization
schedule.  A total of 32 Company-owned hotels are pledged as collateral on these
obligations.



                                      F-10
<PAGE>

The 8.38% mortgage loans consist of individual  loans against three hotels.  The
interest  rates are  adjustable  at the end of each  three-year  period to rates
based on prime plus an average margin of 62.5 basis points.  The loan repayments
aggregating $88,163 per month are based on a principal amortization period of 20
years with a final  maturity of March 1, 2005, for one of the loans and March 1,
2008, for the other two loans.

The 9.25% mortgage loan on one Company-owned  hotel bears interest at rates that
adjust at the end of each  twelve-month  period to rates  based on prime plus 50
basis points. During the initial twelve-month period, the interest rate is 9.25%
and the loan  requires  monthly  payments of  principal  and  interest  totaling
$24,362 based on a principal amortization period of 20 years.

As of  December  31,  2000,  the  Company had  outstanding  borrowings  on three
construction  loans. The initial interest rate on one of the construction  loans
is 8.75%.  This rate will  automatically  adjust to 0.50% over the prime rate on
October 1, 2002 and again on October 1, 2005. This loan will mature on September
1, 2006.  Interest on the second  construction loan is based on a variable daily
rate  equal to the prime  rate plus  0.75%.  On August 1,  2001,  this loan will
convert to a fixed rate loan at an interest  rate of 250 basis  points in excess
of the weekly average yield on U.S. Treasury  Securities  adjusted to a constant
maturity of three years as of August 1, 2001.  This loan will mature on February
1, 2005.  Interest on the third construction loan is at a variable daily rate of
prime.  On July 1, 2001,  at the  Company's  option,  the loan will convert to a
fixed rate loan based on The  Federal  Home Loan Bank rate on that date plus 250
basis points or a variable rate loan at the lender's prime rate.  This loan will
mature on July 1, 2006.

The  aggregate  maturities  of long-term  debt for the five years  subsequent to
December 31, 2000, are as follows (in thousands):


          Year ended December 31,

          2001                $ 1,514
          2002                  2,014
          2003                  2,193
          2004                  2,364
          2005                  5,298



6.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash equivalents,  accounts receivable, accounts payable,
and accrued liabilities reflected in the financial statements  approximates fair
value because of the short-term nature of these  instruments.  Based on interest
rates  currently  available  to the  Company  for  borrowings  similar  to those
reflected in the December 31, 2000,  balance sheet,  the Company  estimates that
the fair value of its long-term debt was approximately $112.6 million.


7.  INCOME TAXES

The provisions for income taxes are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                              -------------------------------------
                                                2000           1999           1998
                                              -------        -------        -------
<S>                                           <C>            <C>            <C>
Current income tax provision                  $ 1,602        $ 2,932        $ 1,560
Deferred income tax provision (credit)          1,618          1,763           (368)
                                              -------        -------        -------
Total provision for income taxes              $ 3,220        $ 4,695        $ 1,192
                                              =======        =======        =======
</TABLE>



                                      F-11
<PAGE>



The tax  effects  of  temporary  differences  that  comprise  the  deferred  tax
liabilities and assets are as follows (in thousands):

                                                         December 31,
                                                   --------------------
                                                    2000          1999
                                                   ------        ------
Gross deferred income tax liability:
Property and equipment                             $4,029        $2,453
Other                                                  80            82
                                                   ------        ------
Total gross deferred income tax liabilities         4,109         2,535
                                                   ------        ------
Gross deferred income tax assets:
Unearned franchise fees                               163           130
Unearned guest income                                 134           110
Bad debts reserve                                     119            70
Net operating loss carryforward                        20           253
Other                                                 184            87
                                                   ------        ------
Total gross deferred income tax assets                620           650
                                                   ------        ------
Net deferred income tax liability                  $3,489        $1,885
                                                   ======        ======


The following is a  reconciliation  of the statutory  federal income tax rate to
the Company's effective tax rates:


                                               Year Ended December 31,
                                         --------------------------------
                                           2000        1999        1998
                                         -------     -------     --------
Statutory federal income tax rate         34.0 %      34.0 %      34.0 %
State income taxes                         3.5         2.4         0.7
Income not subject to tax                             (0.5)       (4.4)
Other                                      0.5         1.0         1.5
                                         ------      -----       ------

Effective income tax rate                38.0 %      36.9 %      31.8 %
                                         ======      ======      ======


8.  SEGMENT AND RELATED INFORMATION

The Company operates in three reportable  business  segments:  hotel operations,
franchising  operations  and  corporate  and support  services.  The Company was
founded in 1987 as an owner-operator of economy  extended-stay hotels, the first
of which opened in 1988. Since that date, the majority of the Company's revenues
have been derived from its hotel  operations  segment,  primarily in the form of
room revenues.  Since 1992,  the Company has  franchised  the Suburban  Lodge(R)
brand to third parties. In 1999, the franchising operations segment was expanded
when the GuestHouse International(R) brand was added through an acquisition. The
corporate  and  support  services  segment  provides  hotel   management,   site
development  and  construction   management   services  to   Company-owned   and
independently franchised hotels. The corporate and support services segment also
provides general  management,  information  technology and other services to the
other  segments.   For  internal  reporting  purposes,   the  Company  allocates
management fees to Company-owned  hotels.  Commencing in 1999, the Company began
charging  franchise fees to Company-owned  hotels.  The management and franchise
fees appear as intersegment revenues under the appropriate segments in the table
below.

The accounting  policies of the segments are the same as those  described in the
summary of significant accounting policies.

The Company  evaluates the performance of its operating  segments based upon net
operating income,  which is defined as income before income taxes,  nonrecurring
items, interest income,  interest expense,  gains on sales of property and other
non-operating income.



                                      F-12
<PAGE>

Summarized financial information concerning the Company's reportable segments is
shown in the following table (in thousands):

<TABLE>
<CAPTION>
                                                                                          Corporate
                                                           Hotel        Franchising      and Support
                                                        Operations       Operations        Services           Total
                                                        ----------       ----------        --------           -----
<S>                                                       <C>              <C>              <C>             <C>
Year Ended December 31, 2000
Revenues from external customers                          $ 70,672         $ 3,525          $ 1,086         $ 75,283
Intersegment revenues                                                        2,819            3,864            6,683
Depreciation and amortization                                8,598             337              680            9,615
Net operating income (loss)                                 17,069             177           (1,249)          15,997
Total assets                                               307,265           4,440           25,921          337,626
Additions to property and equipment                         14,322              31              200           14,553

Year Ended December 31, 1999
Revenues from external customers                          $ 62,466         $ 2,243          $ 1,203         $ 65,912
Intersegment revenues                                                        2,493            3,117            5,610
Depreciation and amortization                                7,731             205              532            8,468
Net operating income (loss)                                 16,133           1,176             (821)          16,488
Total assets                                               300,704           4,439           15,939          321,082
Additions to property and equipment                         27,198              12            1,602           28,812

Year Ended December 31, 1998
Revenues from external customers                          $ 44,756         $ 1,079            $ 623         $ 46,458
Intersegment revenues                                                                         2,241            2,241
Depreciation and amortization                                5,209              10              273            5,492
Net operating income (loss)                                 14,552             193             (508)          14,237
Total assets                                               285,252             867           21,179          307,298
Additions to property and equipment                        107,721              17            1,219          108,957
</TABLE>



The following  table  provides a  reconciliation  of total segment net operating
income to the Company's reported income before income taxes (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31,                                            2000             1999             1998
                                                                 --------         --------         --------
<S>                                                              <C>              <C>              <C>
Total segment net operating income                               $ 15,997         $ 16,488         $ 14,237
Interest income                                                       962            1,411            2,236
Gains on sales of property and other non-operating income              84            1,353              294
Proceeds from legal settlement                                        842
Interest expense                                                   (8,857)          (6,399)            (202)
Impairment of long-lived assets                                      (545)
Public debt transaction abandonment costs                                                            (10,633)
Site acquisition cancellation costs                                                   (113)          (1,960)
Lease termination costs                                                                                (218)
                                                                 --------         --------         --------
Income before income taxes                                       $  8,483         $ 12,740         $  3,754
                                                                 ========         ========         ========
</TABLE>



All of the Company's  revenues are derived in the United  States of America.  No
single customer accounts for ten percent or more of the Company's total revenue.



                                      F-13
<PAGE>

9.  STOCK OPTION PLANS

The  Company has three stock  option  plans that  provide for the grant of stock
options to employees and non-employee directors.  The Company's Stock Option and
Incentive Award Plan (the "1996 Plan") provides for the grant of up to 1,000,000
shares  of the  Company's  common  stock  to  officers  and key  employees.  The
Company's  Nonemployee  Directors'  Stock  Option and Fee Plan (the  "Directors'
Plan")  provides  for  the  grant  of up to  100,000  shares  to  the  Company's
nonemployee  directors.  The  Company's  Employee  Stock  Option Plan (the "1997
Plan")  provides  for the  grant  of up to  1,000,000  shares  to all  full-time
employees  who are not  participants  in either the 1996 Plan or the  Directors'
Plan. At December 31, 2000,  125,000,  77,500 and 520,152 shares,  respectively,
were available for grant under the 1996 Plan,  the Directors'  Plan and the 1997
Plan.  Options  outstanding  under these Plans were  granted at prices that were
either  equal to or  greater  than  the  market  price of the  stock on the date
granted,  expire  either  five or ten years from the date  granted and vest over
service periods that range from one to four years.

The following  table  summarizes  stock option activity during each of the three
years ended December 31:

<TABLE>
<CAPTION>
                                                        Number           Exercise Price          Weighted Avg.
                                                      of Shares             per Share            Exercise Price
                                                    ---------------  ------------------------  -------------------
<S>                   <C> <C>                              <C>           <C>         <C>               <C>
Outstanding, December 31, 1997                             787,721       $13.00 -    $27.38            $18.88
Granted                                                    806,155        10.25 -     19.00             13.67
Canceled                                                  (428,486)       12.38 -     27.38             17.73
                                                        -----------
Outstanding, December 31, 1998                           1,165,390        10.25 -     18.70             13.92
Granted                                                    846,134         5.63 -     13.50             10.75
Canceled                                                  (483,711)       10.25 -     17.00             13.32
                                                        -----------
Outstanding, December 31, 1999                           1,527,813         5.63 -     18.70             12.35
Granted                                                    648,975         5.88 -     13.50              8.08
Canceled                                                  (799,440)        5.63 -     18.70             14.35
                                                        -----------
Outstanding, December 31, 2000                           1,377,348         5.63 -     17.38              9.18
                                                        ===========
</TABLE>


On December  14, 1998,  the  Company's  Board of Directors  adopted a resolution
reducing  to $13.50  per share the  exercise  price of stock  options  issued to
employees under the 1997 Plan with an original exercise price per share that was
greater than $13.50. As a result, 396,056 options with an average exercise price
of $18.75 per share were repriced.  No options held by the Company's officers or
directors were affected by this repricing.

The number of stock options  exercisable at December 31, 2000, 1999 and 1998 was
407,769,  438,573  and  232,963,   respectively.  A  summary  of  stock  options
outstanding and exercisable as of December 31, 2000, follows:
<TABLE>
<CAPTION>
                                          Options Outstanding                  Options Exercisable
                                 --------------------------------------   ---------------------------
                                                Average
Range of                           Number      Remaining     Average         Number        Average
Exercise                             of           Life       Exercise          of         Exercise
Prices                             Options      (Years)       Price          Options        Price
-------------------------------- ------------ ------------- -----------   -------------- ------------
<S>                                <C>             <C>       <C>              <C>          <C>
$  5.63 - $  6.50                  638,125         9.4       $ 5.84           79,504       $ 5.67
$10.25                             340,000         8.0        10.25          200,000        10.25
$12.56 - $13.50                    385,723         8.1        13.49          114,765        13.48
$16.25 - $17.38                     13,500         6.4        16.88           13,500        16.88
</TABLE>


                                      F-14
<PAGE>



Had the Company recorded compensation expense for its stock option plans instead
of following  the  intrinsic  value  method,  the Company's pro forma net income
would have been  $4,304,000  ($0.33 per share) for the year ended  December  31,
2000,  $6,804,000  ($0.45 per share) for the year ended  December 31, 1999,  and
$1,675,000  ($0.11 per share) for the year ended  December  31,  1998.  The fair
value of each stock  option grant used in the  determination  of these pro forma
amounts was  determined  using the  Black-Scholes  option pricing model with the
following weighted average assumptions:

<TABLE>
<CAPTION>
                                                        2000           1999           1998
                                                    -------------  -------------  -------------
<S>                                                        <C>           <C>            <C>
Risk-free interest rate                                     5.7%           5.0%           5.0%
Expected dividend yield                                     0.0%           0.0%           0.0%
Expected life (in years)                                     4.5            4.5            4.5
Expected volatility                                        51.7%          59.1%          58.3%
Average fair value of each option granted                  $2.53         $ 2.40         $ 7.16
</TABLE>


10.  LEASES

The Company has operating leases covering its corporate headquarters and certain
satellite television equipment utilized at its hotels. At December 31, 2000, the
Company's future minimum annual rental payments under  non-cancelable  operating
leases, reduced by income from subleases, were as follows (in thousands):

     Year ended December 31
     2001                                              $ 1,960
     2002                                                1,829
     2003                                                1,587
     2004                                                1,444
     2005                                                1,372
                                                      --------
     Next five years in total                            8,192
     Thereafter                                          3,460
                                                      --------
                                                      $ 11,652
                                                      ========


Total rent expense was approximately $2,227,000, $1,517,000 and $862,000 for the
years ended December 31, 2000, 1999 and 1998, respectively.

11.  RELATED PARTY TRANSACTIONS

HotelTools,  Inc. was  incorporated  in November 1999 as a software  development
company with the intent of developing  property  management system software that
utilizes  the  Internet to provide  hotel owners and  operators  with  immediate
access to  real-time  operating  information.  In the fall of 1999,  the Company
licensed to HotelTools, Inc. the use of its own proprietary hotel management and
reservation systems, and HotelTools,  Inc. concurrently assumed the costs of the
continued  maintenance and development of these systems.  HotelTools has sought,
and continues to seek,  funding from venture  capitalists.  Through December 31,
2000,  however,  all funding of HotelTools'  operations has been provided by the
Company in the form of  interest-bearing  loans.  As of December 31,  2000,  the
Company had notes receivable of $7,997,000 from HotelTools,  Inc. for loans made
to HotelTools to fund their operations. The loans are payable on demand and bear
interest  at a rate of 7% per  annum.  The loans are  accounted  for on the cost
recovery basis and interest  income is not recognized on such loans. In exchange
for its financial support,  the Company received from HotelTools,  Inc., a stock
purchase warrant to purchase up to 20 million shares of HotelTools,  Inc. common
stock at a nominal price.  HotelsTools  sole  shareholder,  CEO and President is
Seth  Christian,  who was an officer with the Company at the time HotelTools was
formed.  He  subsequently  resigned  his  position  with the Company in order to
devote his full  efforts  to  HotelTools'  operations.  David E.  Krischer,  the
Company's  Chief  Executive  Officer,  is a member of the Board of  Directors of
HotelTools, Inc.


                                      F-15
<PAGE>



The Company is a guarantor on an equipment financing lease for HotelTools,  Inc.
The total amount of the lease obligation is $1.4 million.

During  1998,  the Company  entered  into a venture to develop a Suburban  Lodge
hotel in Atlanta,  Georgia,  investing  $200,000  for a 25% equity  position.  A
non-employee  director of the Company owned another 25% equity  position in this
venture.  In  December  1998,  the Company  acquired  an option to purchase  the
director's  interest for a total  consideration of $300,000.  On August 1, 1999,
the Company exercised its option to purchase the director's interest.  The hotel
owned by the venture opened in May 1999. In January 2000, the Company  purchased
the remaining 50% interest in this hotel from the unaffiliated  owners. See Note
3 for more information regarding this purchase.

During certain periods in 1998, two franchise  locations were partially owned by
two of the  Company's  directors  or members of their  immediate  families.  The
Company  acquired both  locations on July 31, 1998.  Franchise and other revenue
recognized  during 1998 for such  locations  prior to their  acquisition  by the
Company was approximately $97,000.

All such revenue was realized under terms and conditions  that were  essentially
the same as terms and conditions under which franchise  revenues were recognized
under agreements with unrelated parties.

12.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly  financial  data for the years ended December 31, 2000 and 1999 are as
follows (in thousands, except earnings per share amounts):

<TABLE>
<CAPTION>

                                                       First        Second          Third        Fourth
                                                    ------------  ------------   ------------  ------------
<S>                                                    <C>           <C>            <C>           <C>
Year ended December 31, 2000
Total revenue                                          $ 17,095      $ 19,274       $ 20,200      $ 18,714
Operating income                                          2,679         4,422          4,870         3,541
Net income                                                  555         2,106          1,814           788
Basic and diluted earnings per share                       0.04          0.16           0.15          0.07
Weighted average shares outstanding:
     Basic                                               13,870        13,335         12,428        12,004
     Diluted                                             13,870        13,335         12,467        12,017

Year ended December 31, 1999
Total revenue                                          $ 13,939      $ 16,810       $ 18,683      $ 16,480
Operating income                                          4,283         5,109          5,259         2,869
Net income                                                2,097         2,565          2,289         1,094
Basic and diluted earnings per share                       0.14          0.17           0.15          0.08
Weighted average shares outstanding:
     Basic                                               15,429        15,398         15,388        14,339
     Diluted                                             15,429        15,398         15,388        14,339
</TABLE>

                                                  F-16
<PAGE>
Suburban Lodges of America, Inc.
Schedule V.  Valuation and Qualifying Accounts

<TABLE>
<CAPTION>
             Column A                   Column B          Column C                        Column D       Column E
------------------------------------ ----------------  -------------------------------  -------------  -------------
                                                         Additions
                                                       -------------------------------
                                       Balance at        Charged to      Charged to                      Balance
                                        Beginning        Costs and         Other                          at End
            Description                 of Period         Expenses        Accounts       Deductions     of Period
------------------------------------ ----------------  --------------- ---------------  -------------  -------------

                                          (amounts in thousands)
<S>                                        <C>                <C>            <C>              <C>          <C>
Reserve for Uncollectible
 Accounts Receivable

Year Ended December 31, 1998               $ 51               $138           $   --           $ 90         $ 99

Year Ended December 31, 1999                 99                197               --            105          191

Year Ended December 31, 2000                191                283               --            147          327
</TABLE>

                                                F-17
<PAGE>





                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(a) 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 in the City of Atlanta,
State of Georgia, on the 30th day of March, 2001.

                                   SUBURBAN LODGES OF AMERICA, INC.

                                   By:  /s/ David E. Krischer
                                       David E. Krischer
                                       Chairman of the Board, Chief Executive
                                       Officer and President


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  Report has been  signed  below by the  following  persons on behalf of the
Company in the capacities set forth and on the 30th day of March, 2001.

<TABLE>
<CAPTION>
Signature                                                    Position
---------                                                    --------
<S>                                                          <C>
/s/ David E. Kricher                                         Chairman of the Board, Chief Executive Officer, and
--------------------------------------------                 Director (Principal Executive Officer)
David E. Krischer

/s/ Dan J. Berman                                            Vice President  of Franchising (Suburban Lodge Brand)
--------------------------------------------                 and Director
Dan J. Berman

/s/ Paul A. Criscillis, Jr.                                  Vice President and Chief Financial Officer (Principal
--------------------------------------------                 Financial Officer)
Paul A. Criscillis, Jr.

/s/ Robert E. Schnells                                       Vice President and Chief Accounting Officer (Principal
--------------------------------------------                 Accounting Officer
Robert E. Schnelle

/s/ James R. Kuse                                            Director
--------------------------------------------
James R. Kuse

/s/ Michael McGovern                                         Director
--------------------------------------------
Michael McGovern

 /s/ John W. Spiegel                                         Director
--------------------------------------------
John W. Spiegel
</TABLE>


<PAGE>

                                  EXHIBIT INDEX

Exhibit No.     Decription
-----------     ----------

  10.37         Amended and Restated Loan Agreement
                dated as of September 27, 2000
                between Southtrust Bank, N.A.,
                Suburban Lodges of America, Inc., et
                al.
  10.38         Non-Revolving Draw-Down Term Note,
                dated September 27, 2000

  10.39         Amended and Restated Line of Credit
                Note, dated September 27, 2000


  23.1          Consent of Deloitte & Touche, L.L.P.