SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549


                                       FORM 10-Q


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


                  For the quarterly period ended September 30, 1996.

                             Commission file number 0-7107


                             SOUTHERN SCOTTISH INNS, INC.



LOUISIANA                                     72-0711739
--------------------------------              ------------------------
(State or other jurisdiction of               (IRS Employer
 incorporation or organization)                Identification No.)

      1726 Montreal Circle, Tucker, Georgia          30084
-----------------------------------------------------------------
      (Address of principal executive offices)     (Zip Code)




Registrant's telephone number, including area code   770-938-5966
                                                     ------------


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 be subject to such filing
requirements for the past 90 days.

                           Yes ____________  No _____X _____


Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.


      Date                           Class                         Outstanding
----------------------------------------------------------------
  June 30, 1995                  Common Stock                   2,322,466 Shares

                      SOUTHERN SCOTTISH INNS, INC. & SUBSIDIARIES

                              CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                        ASSETS
                                        ------

                                             September 30          December 31
                                                 1996                 1995
                                              (unaudited)           (audited)
                                              ----------           ----------
<S>                                         <C>                   <C>        
CURRENT ASSETS:                                                         

Cash- Sav.& Time Deposits                   $   160,655           $   138,563
Accounts Receivable - Net                       813,122               543,823
Mortgages & Notes - Affiliates                  180,035               180,722
Mortgages & Notes - Receivable                  194,837               174,258
Inventory                                       130,662                12,368
Prepaid Expenses                                121,137               174,010
Interest Receivable                             413,233               323,399
                                            -----------           -----------
  Total Current Assets:                     $ 2,013,681           $ 1,547,161


PROPERTY, PLANT & EQUIPMENT:                                                
                                                                            
Land                                        $ 1,221,367           $ 1,221,369
Buildings & Building Improvements             2,807,397             2,591,209
Furn. Fixtures & Equip.                       1,224,764             1,172,517
Leasehold Improvements                           44,214                44,449
                                            -----------           -----------
  Total Prop. & Equipment:                    5,297,742             5,029,539
Less:  Accum. Depreciation                  (1,275,624)           (1,208,551)
                                            -----------           -----------
  Total Prop. & Equip. (net):               $ 4,022,118           $ 3,820,988


OTHER ASSETS:                                                                

Mortg. & Notes Receivable                   $ 6,332,707           $ 6,534,076
Mortg. & Notes - Affiliates                   1,191,745             1,141,160
Investments                                   1,168,030               579,832
Investments - Partnerships                    1,607,352             1,512,526
Trademarks & Tradename                        1,112,404             1,107,004
Other Assets                                     16,778                16,699
                                            -----------           -----------
  Total Other Assets:                       $11,429,016           $10,891,297

TOTAL ASSETS:                               $17,464,815           $16,259,446
                                            ===========           ===========
</TABLE>

                      SOUTHERN SCOTTISH INNS, INC. & SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                         LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
                                             September 30          December 31
                                                 1996                 1995
                                                -------            -----------
<S>                                         <C>                   <C>        
CURRENT LIABILITIES:
                                                                            
Accounts Payable                            $   136,374           $   135,951
Interest Payable                                 75,340                81,471
Taxes Payable                                   288,175               408,942
Other Taxes Payable                             496,149               293,822
Accrued Liabilities                             751,732               654,201
Mortgages & Notes Payable                       541,968               459,280
Mortgages & Notes - Affiliates                  286,518               319,140
Current Deferred Tax Liabilities                    -0-               301,927
                                            -----------           -----------
  Total Current Liabilities:                $ 2,576,255           $ 2,654,734
                                                                            
LONG TERM DEBT:                                                             
                                                                            
Mortgages & Notes Payable                   $ 2,435,744           $ 2,374,664
Mortgages & Notes - Affiliates                  332,247               335,933
                                            -----------           -----------
  Total Long Term Debt:                     $ 2,767,991           $ 2,710,577
                                                                            
DEFERRED CREDITS:                                                           
                                                                            
Deferred Income - Installment               $ 1,323,412           $ 1,323,412
Deferred Income Taxes                           280,054                17,655
                                            -----------           -----------
  Total Deferred Amounts:                   $ 1,603,466            $1,341,067
                                                                            
Total Liabilities &                                                         
  Deferred Credits:                         $ 6,947,712           $ 6,706,378
                                            -----------           -----------

MINORITY INTEREST                               956,627               788,261

STOCKHOLDER'S EQUITY:                                                        

Common Stock-No Par Value Auth.
5,000,000 Sh. Issued &
Outstanding 2,322,466                       $ 5,966,839           $ 5,963,039
Paid-In Capital                                  42,201                42,201
Retained Earnings                             2,759,567             27598,567
Current Year's Income                           791,868
                                            -----------           -----------
  Total Stockholder's Equity:               $ 9,560,476           $ 8,740,454
                                                                            
TOTAL LIABILITIES &                                                         
  STOCKHOLDER'S EQUITY:                     $17,464,815           $16,259,446
                                            ===========           ===========
</TABLE>

                      SOUTHERN SCOTTISH INNS, INC. & SUBSIDIARIES
                           CONSOLIDATED STATEMENT OF INCOME
                                      (UNAUDITED)

<TABLE>
<CAPTION>
                                                                FOR THE
                                                          THREE MONTHS ENDED
                                                               JUNE 30,

                                                                      

                                                   1996                  1995
                                                   ----                  ----
<S>                                        <C>                   <C>        
REVENUES:

Franchise Division                        $   1,814,251         $   1,449,324
Interest Income                                 513,146               418,817
Lease Income                                    587,867               450,266
Income From Investments                         850,167                   -0-
Income From Furniture Sales                     202,748                   -0-
Gain On Sale Of Properties                          -0-               541,274
Other Income                                     68,068               482,839
                                            -----------           -----------
  Total Revenues:                           $ 4,036,248           $ 3,342,520




COSTS AND EXPENSES:

Operating Expense                         $   2,686,865          $  2,206,522
Interest Expense                                167,739               142,306
Furniture Cost                                  100,769                   -0-
Depreciation & Amortization                      67,639                45,475
Other Non-Operating Exp.                        206,335                51,713
                                            -----------           -----------
  Total Costs & Expenses                  $   3,229,348          $  2,446,016
                                                                            
NET EARNINGS:                              $    806,900

Minority Interest in Income of
  Consolidated Subsidiaries                    (15,032)

NET INCOME (LOSS)                          $    751,044           $   896,504
                                            ===========            ==========
</TABLE>

                                   NOTE TO FORM 10 Q

A summary of the registrant's significant accounting policies is
set forth in Note 1 to the consolidated financial statements of
the registrant and its subsidiaries in the registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995,
filed with the Securities and Exchange Commission, which report
should be read in conjunction with this interim report.

In the opinion of management, the accompanying interim financial
statements reflect all adjustments which are necessary to a fair
statement of the results for the interim periods presented.

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

(a)  No exhibits are required to be furnished in accordance with
17 C.F.R. Section 229.601.



                                       SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.


                                       SOUTHERN SCOTTISH INNS, INC.


Date:  Novmeber 15, 1996                     By:    Jack M. Dubard
                                             ---------------------------
                                             Jack M. Dubard, President
                                             (Chief Financial Officer)


Date:  November 15, 1996                     By:    Mary R. Dubard
                                             ----------------------------
                                             Mary R. Dubard, Corp.
                                             Secretary