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



|{X} | QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|--- | ----------------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2001

OR

|{  } | TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | ----------------------------------------------------------------------------------------------

For the transition period from
__________  to_________.

Commission File 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 organization) | Identification
      No.)



|5342 Old Floyd
      Road, P. O. Box 635, Mableton, Georgia 30126
|-----------------------------------------------------------------
|(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 September 30, 2001: 216,970 shares of Common Stock, no par value.

Transitional Small Business disclosure Format (check one).

Yes
/_/          No     /X/

---



PART I. 
FINANCIAL INFORMATION

Item
1.          Financial
Statements.

Efficiency Lodge, Inc.

CONSOLIDATED BALANCE SHEETS

ASSETS

|                                                |   | September 30, |   | December 31,
|----------------------------------------------- | - | ------------- | - | ------------
|                                                |   | 2001          |   | 2000        
|                                                |   |               |   |             
|                                                |   | (Unaudited)   |   |             
|                                                |   |               |   |             
|Property and equipment, net                     | $ | 25,237,717    | $ | 26,169,246  
|Cash                                            |   | 735,841       |   | 658,427     
|Other assets                                    |   | 4,052,510     |   | 2,039,150   
|                                                |   |               |   |             
|                                                | $ | 30,026,068    | $ | 28,866,823  
|                                                |   |               |   |             
|LIABILITIES AND STOCKHOLDERS EQUITY            |   |               |   |             
|                                                |   |               |   |             
|Mortgage notes payable                          | $ | 27,119,189    | $ | 28,305,021  
|Other liabilities                               |   | 2,022,158     |   | 562,533     
|                                                |   |               |   |             
|                                                |   |               |   |             
|Total liabilities                               |   | 29,141,347    |   | 28,867,554  
|                                                |   |               |   |             
|Stockholders equity                            |   |               |   |             
|Common stock  no par value, 7,500,000          |   |               |   |             
|shares authorized; 297,900 and 347,900 shares   |   |               |   |             
|issued at September 30, 2001 and December 31,   |   |               |   |             
|2000, respectively                              |   | 240,215       |   | 280,534     
|Accumulated earnings                            |   | 1,339,581     |   | 1,088,613   
|Other comprehensive gain                        |   | 225,225       |   | 119,000     
|                                                |   |               |   |             
|                                                |   | 1,805,021     |   | 1,488,147   
|Less 80,930 and 130,930 shares of common        |   |               |   |             
|stock in treasury at cost at September 30, 2001 |   |               |   |             
|and December 31, 2000, respectively             |   | (920,300)     |   | (1,488,878) 
|                                                |   |               |   |             
|                                                |   | 884,721       |   | (731)       
|                                                |   |               |   |             
|                                                | $ | 30,026,068    | $ | 28,866,823  
|                                                |   |               |   |             



The accompanying notes are an integral part of these statements.

-2-

---



Efficiency Lodge, Inc.

CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)

For the quarters ended September 30, 2001 and 2000
For the nine months ended September 30, 2001 and 2000

|                                      |   | Quarter Ended
      September 30, |   | Nine Months Ended
      September 30,
|------------------------------------- | - | --------------------------------- | - | -------------------------------------
|                                      |   |                                   |   |                                      
|                                      |   | 2001                              |   | 2000                                 
|                                      |   |                                   |   |                                      
|Revenues                              | $ | 2,148,322                         | $ | 2,175,399                            
|Operating expenses                    |   | 1,278,603                         |   | 1,416,628                            
|                                      |   |                                   |   |                                      
|                                      |   |                                   |   |                                      
|Operating income                      |   | 869,719                           |   | 758,771                              
|                                      |   |                                   |   |                                      
|Other expense (income)                |   |                                   |   |                                      
|Interest expense                      |   | 617,264                           |   | 603,613                              
|(Gain)/Loss on sale of investments    |   | 2,781                             |   | -                                    
|Other, net                            |   | (91,503)                          |   | (106,471)                            
|                                      |   |                                   |   |                                      
|                                      |   |                                   |   |                                      
|                                      |   | 528,542                           |   | 497,142                              
|                                      |   |                                   |   |                                      
|                                      |   |                                   |   |                                      
|Earnings before income taxes          |   | 341,177                           |   | 261,629                              
|                                      |   |                                   |   |                                      
|Provision for income taxes            |   | 130,518                           |   | 110,309                              
|                                      |   |                                   |   |                                      
|                                      |   |                                   |   |                                      
|Net earnings                          | $ | 210,659                           | $ | 151,320                              
|                                      |   |                                   |   |                                      
|                                      |   |                                   |   |                                      
|Net earnings per common share  basic | $ | 0.97                              | $ | 0.70                                 
|                                      |   |                                   |   |                                      
|Weighted average number of common     |   |                                   |   |                                      
|shares outstanding                    |   | 216,970                           |   | 216,970                              
|                                      |   |                                   |   |                                      



The accompanying notes are an integral part of these statements.

-3-

---



Efficiency Lodge, Inc.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)

Nine months ended September 30, 2001

|                                                                             | Common
      Shares
      Outstanding | Common
      Stock | Accumulated
      Earnings | Accumulated
      Other
      Comprehensive
      Gain (Loss) | Treasury
      Stock | Total       
|---------------------------------------------------------------------------- | ------------------------------------- | ------------------ | -------------------------- | ------------------------------------------------------------- | -------------------- | ------------
|                                                                             |                                       |                    |                            |                                                               |                      |             
|                                                                             |                                       |                    |                            |                                                               |                      |             
|                                                                             |                                       |                    |                            |                                                               |                      |             
|Balance at December 31, 2000                                                 | 216,970                               | $   280,534        | $   1,088,613              | $       119,000                                               | $(1,488,878)         | $      (731)
|                                                                             |                                       |                    |                            |                                                               |                      |             
|Cancellation of 50,000 shares
           of common stock in treasury         | -                                     | (40,318)           | (528,260)                  | -                                                             | 568,578              | -           
|                                                                             |                                       |                    |                            |                                                               |                      |             
|Net earnings for the nine months                                             | -                                     | -                  | 779,227                    | -                                                             | -                    | 779,227     
|                                                                             |                                       |                    |                            |                                                               |                      |             
|Other comprehensive gain
          Unrealized gain
           on investments | -                                     | -                  | -                          | 106,225                                                       | -                    | 106,225     
|                                                                             |                                       |                    |                            |                                                               |                      |             
|Comprehensive earnings                                                       | -                                     | -                  | -                          | -                                                             | -                    | 885,452     
|                                                                             |                                       |                    |                            |                                                               |                      |             
|                                                                             |                                       |                    |                            |                                                               |                      |             
|Balance at September 30, 2001                                                | 216,970                               | $  240,216         | $     1,339,580            | $       225,225                                               | $   (920,300)        | $  884,721  
|                                                                             |                                       |                    |                            |                                                               |                      |             



The accompanying notes are an integral part of this statement.

-4-

---



Efficiency Lodge, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the nine months ended September 30, 2001 and 2000

|                                                    |   | 2001        |   | 2000       
|--------------------------------------------------- | - | ----------- | - | -----------
|                                                    |   |             |   |            
|Increase (decrease) in cash                         |   |             |   |            
|                                                    |   |             |   |            
|Cash flows from operating activities:               |   |             |   |            
|Net earnings                                        | $ | 779,227     | $ | 503,775    
|Adjustments to reconcile net earnings to net        |   |             |   |            
|cash provided by operating activities:              |   |             |   |            
|Depreciation and amortization                       |   | 878,778     |   | 865,862    
|Gain on sale of fixed assets                        |   | (165,638)   |   | (143,110)  
|Gain on sale of investments                         |   | (197,329)   |   | -          
|Changes in assets and liabilities:                  |   |             |   |            
|Other assets                                        |   | (155,123)   |   | 137,567    
|Other liabilities                                   |   | 522,860     |   | (133,274)  
|                                                    |   |             |   |            
|Net cash provided by operating activities           |   | 1,662,775   |   | 1,230,820  
|                                                    |   |             |   |            
|Cash flows from investing activities:               |   |             |   |            
|Payments received on notes receivable               |   | 19,458      |   | 3,050      
|Loan to others                                      |   | -           |   | (250,000)  
|Purchases of marketable securities                  |   | (1,111,457) |   | -          
|Proceeds from sale of investments                   |   | 428,291     |   | -          
|Capital expenditures                                |   | (215,857)   |   | (2,004,458)
|Proceeds from sale of fixed assets                  |   | 480,038     |   | 243,000    
|                                                    |   |             |   |            
|Net cash provided by (used in) investing activities |   | (399,527)   |   | (2,008,408)
|                                                    |   |             |   |            
|Cash flows from financing activities:               |   |             |   |            
|Payments for purchase of treasury stock             |   | -           |   | (45,548)   
|Principal payments on long-term debt                |   | (1,185,834) |   | (512,462)  
|Proceeds from issuance of debt                      |   | -           |   | 1,774,538  
|                                                    |   |             |   |            
|Net cash provided by (used in) financing activities |   | (1,185,834) |   | 1,216,528  
|                                                    |   |             |   |            
|Increase in cash and cash equivalents               |   | 77,414      |   | 438,940    
|                                                    |   |             |   |            
|Cash and cash equivalents, beginning of period      |   | 658,427     |   | 237,091    
|                                                    |   |             |   |            
|                                                    |   |             |   |            
|Cash and cash equivalents, end of period            | $ | 735,841     | $ | 676,031    
|                                                    |   |             |   |            
|                                                    |   |             |   |            
|Cash paid during the period for interest            | $ | 1,801,712   | $ | 1,827,682  
|                                                    |   |             |   |            
|                                                    |   |             |   |            
|Cash paid during the period for income taxes        | $ | 113,361     | $ | 287,397    
|                                                    |   |             |   |            

Supplemental Disclosure of Non-Cash Financing Activities:

The accompanying notes are an integral part of these statements.

-5-

---



Efficiency Lodge, Inc.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Nine months ended September 30, 2001 and 2000



NOTE A  BASIS OF PREPARATION

> The accompanying unaudited interim consolidated financial
>     statements of Efficiency Lodge, Inc. (the "Company") have been
>     prepared in accordance with accounting principles generally accepted in the
>     United States of America ("US GAAP") 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 US GAAP 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 September
>     30, 2001 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 2000 consolidated financial
>     statements and related notes.



NOTE B  BASIC EARNINGS PER SHARE

> Basic earnings per share is computed using the weighted
>     average number of shares of common stock outstanding. During 2000, the
>     Company completed a 10 for 1 stock split. All references to common stock
>     within the accompanying financial statements have been restated to reflect
>     the effect of this stock split.



-6-

---



Item 2. Managements Discussion and Analysis

Total assets increased $1,159,245 from $28,866,823 at December
31, 2000 to $30,026,068 at September 30, 2001. This increase was primarily due
to net purchases of approximately $1,750,000 of equity securities, which were
partially financed with a line of credit of approximately $870,000.

Revenue for the quarters ended September 30, 2001 and 2000
totaled $2,148,322 and $2,175,399, respectively. This $27,077 decrease was
primarily due to the slowing economy. Revenue for the nine month periods ended
September 30, 2001 and 2000 totaled $6,603,143 and $6,235,878, respectively.
This $367,265 increase was primarily due to the Austell Lodge, which opened
September 1, 2000.

Operating expenses for the quarters ended September 30, 2001 and
2000 totaled $1,278,603 and $1,416,628. This $138,026 decrease was primarily due
to a decrease in maintenance expenses. Operating expenses for the nine month
periods ended September 30, 2001 and 2000 totaled $3,896,102 and $3,758,831,
respectively. This $137,271 increase was due primarily to the new Austell Lodge,
net of decreased maintenance expenditures.

During the third quarter of 2001, the Company sold two houses
for a net gain of $71,289. During the third quarter of 2000, the Company sold
one house for a net gain of $99,357. During the nine month period ended
September 30, 2001, the Company sold four houses for a net gain of $165,638.
During the nine month period ended September 30, 2000, the Company sold two
houses for a net gain of $143,110.

The Companys cash flow from operations was sufficient to meet
its working capital needs. The Companys cash balance as of September 30, 2001
was $735,741 compared to $1,711,660 as of June 30, 2001. This decrease was
primarily due to the purchase of equity securities noted above.



-7-

---



SIGNATURES



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: November 6, 2001 | By:/s/
      W. Ray Barnes                 
|                       | W. Ray Barnes                              
|                       | President and Chief
      Executive Officer
|                       |                                            
|DATE: November 6, 2001 | By:/s/
      Bonnie Byers                  
|                       | Bonnie Byers                               
|                       | Secretary/Treasurer