EFFICIENCY LODGE, INC. FORM 10-Q

                SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549
                           FORM 10-QSB


[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 1998

                                OR

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
     EXCHANGE ACT

For the transition period from _____________ to ____________

                 Commission File Number 000-02290

                       EFFICIENCY LODGE, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)

         Georgia                             58-0898219   
----------------------------             -------------------
(State or other jurisdiction               (I.R.S. Employer
of incorporation or                      Identification No.)
organization)

    5342 Old Floyd Road, P.O. Box 635, Mableton, Georgia 30059
    ----------------------------------------------------------
             (Address of principal executive offices)

                        (770) 819-0039
         ------------------------------------------------
         (Issuer's telephone number, including area code)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 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 /     /

Shares outstanding of each of the issuer's classes of common
equity at June 30, 1998: 1,043,683 shares of Common Stock,
$0.10 per value share.

Transitional Small Business Disclosure Format (check one)

Yes /     /    No /  X  /<PAGE>
                      Efficiency Lodge, Inc.

                    CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>


                              ASSETS


                                                  June 30, 1998    December 31, 1997
                                                  -------------    -----------------
                                                   (Unaudited)

<S>                                                 <C>               <C>
Property and equipment, net                         $10,428,343       $10,197,674
Cash                                                    561,114           169,246
Other assets                                          1,206,832         1,479,390
                                                    -----------       -----------

                                                    $12,196,289       $11,846,310
                                                    ===========       ===========


                  LIABILITIES AND STOCKHOLDERS' EQUITY


Mortgage notes payable                              $10,977,311       $11,222,325
Other liabilities                                       729,278           519,549
                                                    -----------       -----------

    Total liabilities                                11,706,589        11,741,874

Stockholders' equity
  Common stock                                          104,368           104,368
  Additional paid-in capital                             52,674            52,674
  Accumulated earnings                                  332,658           (52,606)
                                                    -----------       -----------

    Total stockholders' equity                          489,700           104,436
                                                    -----------       -----------

                                                    $12,196,289       $11,846,310 
                                                    ===========       ===========
/TABLE
<PAGE>
                      Efficiency Lodge, Inc.

          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                           (Unaudited)

                  Six months ended June 30, 1998
<TABLE>
<CAPTION>

                                                            Additional
                                            Common            paid-in       Accumulated
                                             stock            capital          earnings          Total
                                           --------         -----------     ------------       --------
<S>                                        <C>              <C>              <C>               <C>
Balance at January 1, 1998                 $104,368         $  52,674        $ (52,606)        $104,436

Net income for the six months                 --                 --            385,264          385,264 
                                           --------         ---------        ---------         --------
Balance at June 30, 1998                   $104,368         $  52,674        $ 332,658         $489,700 
</TABLE>
<PAGE>
                      Efficiency Lodge, Inc.

              CONSOLIDATED STATEMENTS OF OPERATIONS
                          (Unaudited)

           For the Quarter Ending June 30, 1998 and 1997
          For the Six Months Ended June 30 1998 and 1997
<TABLE>
<CAPTION>

                                                   Quarter Ended                    Six Months Ended
                                                       June 30,                           June 30,
                                                1998             1997             1998             1997
                                             ----------       ----------       -----------      ----------
<S>                                          <C>              <C>              <C>              <C>
Revenues                                     $1,214,586       $1,141,640       $2,408,784       $2,000,303
Operating expenses                              633,433          662,449        1,286,692        1,345,536
                                             ----------       ----------       ----------       ----------

    Operating income                            581,153          479,191        1,122,092          654,767

Other (income) expense, net                     280,712          336,361          577,140          606,378
                                             ----------       ----------       ----------       ----------
    Earning (loss) before income 
      taxes                                     300,441          142,830          544,952           48,389

Provision for income taxes                      107,571           45,161          159,688           10,161
                                             ----------       ----------       ----------       ----------

    Net earnings (loss)                      $  192,870       $   97,669       $  385,264       $   38,228
                                             ==========       ==========       ==========       ==========

Net earnings (loss) per common
    share                                    $      .18       $      .09       $      .37       $      .04
                                             ==========       ==========       ==========       ==========
Weighted average number of 
    common shares outstanding                 1,043,683        1,026,880        1,043,683        1,026,880
                                             ==========       ==========       ==========       ==========
</TABLE>

<PAGE>

                      Efficiency Lodge, Inc.

             CONSOLIDATED STATEMENTS OF OPERATIONS
                         (Unaudited)

                     Six months ended June 30,
<TABLE>
<CAPTION>
                                                                        1998                1997
                                                                     ----------          ----------
<S>                                                                  <C>                 <C>
Cash flows from operating activities:
  Net earnings (loss)                                                $  385,264          $   38,228 
  Adjustments to reconcile net earnings (loss) to
    to net cash provided by operating activities:
       Depreciation and amortization                                    213,626             198,509
     Changes in assets and liabilities:
       Loss on sale of asset                                              --                 46,953 
       Other assets                                                     (69,279)            (76,065)
       Other liabilities                                                209,727             135,388
                                                                     ----------          ----------

          Net cash provided by operating activities                     739,338             343,013

Cash flows from investing activities:
  Increase in advance to affiliate                                         --               (18,648)
  Proceeds from sale of building                                           --                84,448
  Capital expenditures                                                 (102,456)         (1,653,405)
                                                                     ----------          ----------

          Net cash used for investing activities                       (102,456)         (1,587,605)

Cash flows from financing activities:
  Payoff of note on building sold                                         --                (37,963)
  Principal payments on long-term debt                                 (245,014)           (208,613)
  Proceeds from issuance of debt                                          --              1,700,000 
                                                                     ----------          ----------

          Net cash provided (used) be financing activities             (245,014)          1,453,424 
                                                                     ----------          ----------

Increase (decrease) in cash and cash equivalents                        391,868             208,832

Cash and cash equivalents, beginning of period                          169,246             159,944 
                                                                     ----------          ----------

Cash and cash equivalents, end of period                             $  561,114          $  368,776 
                                                                     ----------          ----------

Cash paid during the period for interest                             $  605,831          $  596,569 
                                                                     ==========          ==========
/TABLE
<PAGE>
                      Efficiency Lodge, Inc.

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                  Six months ended June 30, 1998


NOTE A - BASIS OF PREPARATION

     The accompanying unaudited interim consolidated financial
     statements of Efficiency Lodge, Inc. (The "Company") have
     been prepared in accordance with generally accepted
     accounting principles for interim financial statements and
     with the rules and regulations of the Securities and
     Exchange Commission.  Accordingly, they do not include all
     of the information and footnotes required by generally
     accepted accounting principles for complete financial
     statements.  In the opinion of management, all adjustments
     (consisting of normal recurring accruals) considered
     necessary for a fair presentation have been included.

     The results of operations for the quarter ended June 30,
     1998 are not necessarily indicative of the results that may
     be expected for the full year.  The interim consolidated
     financial statements should be read in conjunction with the
     Company's 1997 consolidated financial statements and related
     notes.

NOTE B - NEW ACCOUNTING PRONOUNCEMENT

     The FASB has issued Statement of Financial Accounting
     Standards No. 128, Earnings Per Share,  which is effective
     for financial statements issued after December 15, 1997. 
     Early adoption of the new standard is not permitted.  The
     new standard eliminates primary and fully diluted earnings
     per share and requires presentation of basic and diluted
     earnings per share together with disclosures of how the per
     share amounts were computed.  The adoption of this new
     standard is not expected to have a material impact on the
     disclosure of earnings per share in the financial
     statements.

NOTE C - PRO FORMA RESULTS OF OPERATIONS

     The following pro forma results of operations for the six
     months ended June 30, 1998 are unaudited and were prepared
     under the assumption that the Company was a taxable entity.


          Net earnings             $   385,264
          Earnings per share       $       .37<PAGE>
ITEM 2.  MANAGEMENT DISCUSSION AND ANALYSIS


     Total assets increased during the second quarter from
$11,846,310 on December 31, 1997 to $12,196,289 on June 30, 1998. 
This increase is primarily the result of an increase in cash from
$169,246 to $561,114 during the same period.

     Revenue increased during the second quarter from $1,141,640
in the second quarter of 1997 to $1,214,586 in 1998.  This
increase can be attributed to two factors.  First, increased
occupancies in existing facilities and secondly, the addition of
a new lodge in DeKalb County, Georgia that has revenue only for
one month in the first quarter during 1997.  Operating expenses
decreased in the second quarter from $662,449 in 1997 to $633,433
in 1998.  This decrease is primarily attributable to the one time
start up expenses of DeKalb Lodge in 1997.  As a result of the
increased revenue and decreased expenses, operating income during
the second quarter of 1998 was $581,153 compared to $479,191 for
the same period in 1997.  Other expenses decreased from $336,361
in the second quarter of 1997 to $280,712 in 1998 which was
primarily attributable to the increased expense of the additional
loge.  Earnings before taxes were $300,441 compared to $142,830
during the same period in 1997.  Net earnings were $192,870 for
the second quarter of 1998 compared to $97,669 in the second
quarter of 1997.  Improved earnings were again the result of
increased revenue and decreased operating expenses.

     Occupancies continue to be strong after recovery during the
year 1997.  A new lodge in Columbus, Georgia was completed and
became operational in August 1998.  The costs incurred in the
construction of the Columbus lodge have been incurred by a
corporation owned by the two controlling shareholders of the
Company, except for $178,747 which has been loaned by the
Company.  Upon completion and a permanent financing, the
ownership of such corporation will be transferred to the Company
at no profit to the controlling shareholders.  A contract has
been entered into by the Company to purchase for cash an existing
lodge.  The closing date has been set for August 1998.  The
contract to purchase an additional lodge for cash and stock, as
previously reported, has expired and is not being considered at
this time.<PAGE>
Part II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

     (a) The following Exhibits are filed as part of this report:

     Exhibit
     Number         Description
     -------        -----------

       27           Financial Data Schedule - (for SEC use only)
<PAGE>
                            SIGNATURE


In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                      EFFICIENCY LODGE, INC.


DATE: 8/10/1998       By: /s/ W. Ray Barnes
                          W. Ray Barnes
                          President and Chief Executive Officer


DATE: 8/10/1998       By: /s/ Roy E. Barnes
                          Roy E. Barnes
                          Secretary/Treasurer
                          (Principal Financial and Accounting Officer)