UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

|/ X / | QUARTERLY REPORT UNDER 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: 0-28108

Suburban Lodges of America, Inc.

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|Georgia                  | 58-1781184         
|------------------------ | -------------------
|(State of incorporation) | (IRS Employer      
|                         | Identification No.)

300 Galleria Parkway
Suite 1200
Atlanta, Georgia 30339
(Address of principal executive office, including zip code)

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

Indicate by check mark whether the registrant has (1) filed all documents and reports required to be filed by Sections 12, 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     
/_ /

Number of shares of Common Stock, $.01 par value, outstanding as of
November 9, 2001:

11,975,127

Page 1

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# Part I, ITEM 1.  FINANCIAL
STATEMENTS

Suburban
        Lodges of America, Inc.Consolidated
        Balance Sheets(dollar
        amounts in thousands)(Unaudited)September
        30,
      
      December
        31,2001
      
      2000AssetsCurrent
        assets:Cash
        and cash equivalents
      $
      18,877
      $
      10,856Accounts
        receivable, net of reserves of$297
        (2001) and $327 (2000)
      
      1,529
      
      1,520Hotel
        inventory and supplies
      
      2,535
      
      2,538Prepaid
        and refundable income taxes
      
      4,068
      
      260Deferred
        income taxes
      
      710
      
      469Prepaid
        expenses and other current assets
      
      1,739
      
      2,081Total
        current assets
      
      29,458
      
      17,724Assets
        held for sale
      
      9,553Property
        and equipment, net of accumulated depreciation andamortization
        of $34,934 (2001) and $27,863 (2000)
      
      276,511
      
      299,392Notes
        receivable from HotelTools, Inc.
      
      
      
      7,997Other
        notes receivable
      
      387
      
      4,508Acquired
        intangible assets - net
      
      3,254
      
      3,515Deferred
        loan costs
      
      1,802
      
      2,097Other
        assets
      
      3,135
      
      2,393Total
        assets
      $
      324,100
      $
      337,626Liabilities
        and shareholders' equityCurrent
        liabilities:Current
        portion of long-term debt
      $
      2,145
      $
      1,547Construction
        accounts payable
      
      590
      
      1,314Trade
        accounts payable
      
      1,778
      
      3,161Accrued
        property taxes
      
      1,456
      
      720Accrued
        wages and benefits
      
      2,111
      
      703Other
        accrued liabilities
      
      2,399
      
      1,504Other
        current liabilities
      
      582
      
      648Total
        current liabilities
      
      11,061
      
      9,597Long-term
        debt, excluding current portion
      
      117,397
      
      119,574Deferred
        income taxes
      
      1,437
      
      3,958Other
        liabilities
      
      252
      
      167Total
        liabilities
      
      130,147
      
      133,296Shareholders'
        equity:Common
        stock
      
      120
      
      157Additional
        paid-in capital
      
      179,408
      
      202,280Retained
        earnings
      
      14,425
      
      24,608193,953
      
      227,045Less
        treasury stock, at cost
      
      
      
      22,715Shareholders'
        equity, net
      
      193,953
      
      204,330Total
        liabilities and shareholders' equity
      $
      324,100
      $
      337,626See
        accompanying notes to consolidated financial statements.


Page 2

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Suburban Lodges
        of America, Inc.Consolidated
        Statements of Operations(in
        thousands, except per share amounts)(Unaudited)
      
      (Unaudited)Three
        Months Ended
      
      Nine
        Months EndedSept.
        30, 2001
      
      Sept.
        30, 2000
      
      Sept.
        30, 2001
      
      Sept.
        30, 2000Revenue:Hotel
        revenue
      $
      18,486
      $
      19,094
      $
      54,698
      $
      53,125Franchising
        revenue
      
      1,180
      
      884
      
      3,167
      
      2,569Management
        and other revenue
      
      164
      
      222
      
      545
      
      875Total
        revenue
      
      19,830
      
      20,200
      
      58,410
      
      56,569Operating
        costs and expenses:Hotel
        operating expenses
      
      9,810
      
      10,294
      
      29,292
      
      28,514Corporate
        operating expenses
      
      2,916
      
      2,525
      
      8,943
      
      7,988Bad
        debt expense
      
      202
      
      30
      
      831
      
      247Proxy
        contest expenses
      
      
      
      
      
      663Expense
        incurred in connection withreview
        of strategic alternatives
      
      416
      
      
      
      897Undeveloped
        site carrying costs
      
      48
      
      44
      
      158
      
      132Depreciation
        and amortization
      
      2,582
      
      2,437
      
      7,662
      
      7,240Impairment
        of long lived assets
      
      
      
      
      
      6,687
      
      545Gains
        realized on property sales
      
      (139)
      
      
      
      (139)
      
      (68)Operating
        costs and expenses - net
      
      15,835
      
      15,330
      
      54,994
      
      44,598Income
        from operations
      
      3,995
      
      4,870
      
      3,416
      
      11,971Other
        income (expense):Interest
        income
      
      225
      
      193
      
      668
      
      627Interest
        expense
      
      (2,573)
      
      (2,216)
      
      (7,489)
      
      (6,350)Write-off
        of notes receivable fromHotelTools,
        Inc.
      
      
      
      
      
      (12,213)Proceeds
        from legal settlement
      
      
      
      
      
      
      
      842Loss on
        early redemption of othernotes
        receivable
      
      (844)
      
      
      
      (938)Other
      
      (3)
      
      9
      
      (1)
      
      24Income
        (loss) before income taxes
      
      800
      
      2,856
      
      (16,557)
      
      7,114Provision
        (credit) for income taxes
      
      135
      
      1,042
      
      (6,374)
      
      2,639Net
        income (loss)
      $
      665
      $
      1,814
      $
      (10,183)
      $
      4,475Earnings
        (loss) per common share:Basic
      $
      0.06
      $
      0.15
      $
      (0.85)
      $
      0.34Diluted
      $
      0.06
      $
      0.15
      $
      (0.85)
      $
      0.34Weighted
        average number ofcommon
        shares outstanding:Basic
      
      11,975
      
      12,428
      
      11,987
      
      13,208Diluted
      
      12,069
      
      12,467
      
      11,987
      
      13,221See accompanying
        notes to consolidated financial statements.


Page 3

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Suburban
        Lodges of America, Inc.Consolidated
        Statements of Cash Flows(in
        thousands)(Unaudited)Nine
        Months EndedSeptember
        30, 2001
      
      September
        30, 2000Operating
        activities:Net
        income (loss)
      $
      (10,183)
      $
      4,475Adjustments
        to reconcile net income (loss) tonet
        cash provided by operating activities:Depreciation
        and amortization
      
      7,662
      
      7,240Deferred
        income taxes
      
      (2,762)
      
      446Stock
        compensation
      
      10
      
      30Gains
        realized on property sales
      
      (139)
      
      (68)Impairment
        of long-lived assets
      
      6,687
      
      545Write-off of notes receivable from HotelTools, Inc.
      
      12,213Loss on
        early redemption  of other notes receivable
      
      938Changes
        in operating assets and liabilities - net of the effectsof
        acquisitions:Accounts
        receivable
      
      21
      
      433Other
        current assets
      
      (3,503)
      
      482Other
        assets
      
      (712)
      
      (642)Trade
        accounts payable
      
      (1,383)
      
      (1,143)Income
        taxes payable
      
      
      
      627Other
        current liabilities
      
      2,973
      
      2,783Other
        liabilities
      
      85
      
      113Net
        cash provided by operating activities
      
      11,907
      
      15,321Investing
        activities:Additions
        to property and equipment
      
      (5,788)
      
      (10,337)Proceeds
        from sale of hotel property
      
      5,207Proceeds
        from sale of undeveloped sites
      
      
      
      230Decrease
        in construction accounts payable
      
      (724)
      
      (293)Acquisitions,
        net of cash acquired
      
      
      
      (641)Loans
        made to HotelTools, Inc.
      
      (4,444)
      
      (5,781)Payments
        received on loans made to HotelTools, Inc.
      
      168Other
        loans made
      
      (55)Payments
        received on other loans
      
      3,238
      
      475Net
        cash used by investing activities
      
      (2,398)
      
      (16,347)Financing
        activities:Proceeds
        from issuance of long-term debt
      
      2,733
      
      17,768Principal
        payments on long-term debt
      
      (1,312)
      
      (3,609)Amounts
        borrowed under line of credit
      
      
      
      7,000Repayment
        of line of credit borrowings
      
      (3,000)
      
      (7,000)Purchase
        of treasury stock
      
      (206)
      
      (12,724)Exercise
        of employee stock options
      
      2Net
        decrease (increase) in deferred loan costs
      
      295
      
      (468)Net
        cash provided (used) by financing activities
      
      (1,488)
      
      967Net
        increase (decrease) in cash and cash equivalents
      
      8,021
      
      (59)Cash
        and cash equivalents at beginning of period
      
      10,856
      
      9,862Cash
        and cash equivalents at end of period
      $
      18,877
      $
      9,803Supplemental
        information:Interest
        paid, net of interest capitalized
      $
      7,316
      $
      6,425Income
        taxes paid, net of refunds received
      $
      355
      $
      592See
        accompanying notes to consolidated financial statements.


Page 4

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

1. BASIS OF PRESENTATION

> The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements have been omitted. In the opinion of management, all adjustments that are necessary for a fair presentation of financial position and results of operations have been made. These interim financial statements should be read in conjunction with the consolidated historical financial statements and notes thereto presented in the Companys Annual Report on Form 10-K for the year ended December 31, 2000.

1. ASSETS HELD FOR SALE
2. PROPERTY AND EQUIPMENT
3. LONG-TERM DEBT

Page 5

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1. ACQUISITION
2. WRITE-OFF OF NOTES RECEIVABLE FROM HOTELTOOLS, INC.

Page 6

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> warrants in HotelTools were cancelled and all stock options that have been issued by HotelTools were rendered valueless, (3) Radiant entered into a license agreement with the Company to provide software services to company-owned Suburban Lodge hotels and Suburban
>   Lodge franchisees for a period of two years, (4) the Company received net cash proceeds of $168,000, and (5) Radiant agreed to satisfy or assume HotelTools obligations under an equipment-financing lease. The Company has received a signed release of its guaranty of the lease obligations from the equipment
>   lessor. As of July 27, 2001, the net present value of the remaining payments under the HotelTools equipment-financing lease approximated $1.0 million.

1. EARNINGS PER COMMON SHARE
2. CONTINGENCIES
3. RECENT ACCOUNTING PRONOUNCEMENTS

Page 7

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1. SEGMENT AND RELATED INFORMATION



The Company operates in three reportable segments: hotel operations, franchising operations and corporate and support services. The Company evaluates the performance of its operating segments based on net operating income, which is defined as income before income taxes, nonrecurring items, interest income, interest expense and other nonoperating income.

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

Hotel
      Operations
    
    Franchising
      Operations
    
    Corporate
      and Support
      Services
    
    TotalQuarter
      ended September 30, 2001Revenues
      from external customers
    $
    18,486
    $
    1,180
    $
    164
    $
    19,830Intersegment
      revenues
    
    
    
    736
    
    921
    
    1,657Depreciation
      and amortization
    
    2,318
    
    85
    
    179
    
    2,582Net
      operating income (loss)
    
    4,651
    
    208
    
    (1,003)
    
    3,856Quarter
      ended September 30, 2000Revenues
      from external customers
    $
    19,094
    $
    884
    $
    222
    $
    20,200Intersegment
      revenues
    
    
    
    762
    
    1,035
    
    1,797Depreciation
      and amortization
    
    2,183
    
    88
    
    166
    
    2,437Net
      operating income (loss)
    
    4,932
    
    207
    
    (269)
    
    4,870Nine
      months ended September 30, 2001Revenues
      from external customers
    $
    54,698
    $
    3,167
    $
    545
    $
    58,410Intersegment
      revenues
    
    
    
    2,185
    
    2,731
    
    4,916Depreciation
      and amortization
    
    6,888
    
    254
    
    520
    
    7,662Net
      operating income (loss)
    
    13,414
    
    (241)
    
    (3,209)
    
    9,964Total assets
  295,030
    
    3,981
    
    25,089
    
    324,100Nine
      months ended September 30, 2000Revenues
      from external customers
    $
    53,125
    $
    2,569
    $
    875
    $
    56,569Intersegment
      revenues
    
    
    
    2,122
    
    2,736
    
    4,858Depreciation
      and amortization
    
    6,484
    
    258
    
    498
    
    7,240Net
      operating income (loss)
    
    13,203
    
    210
    
    (965)
    
    12,448Total assets
    
    305,451
    
    4,361
    
    22,380
    
    332,192






Page 8

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

Quarter ended
      September 30
    
    Nine months
      ended
      September 302001
    
    2000
    
    2001
    
    2000Total segment net operating income
    $
    3,856
    $
    4,870
    $
    9,964
    $
    12,448Interest income
    
    225
    
    193
    
    668
    
    627Gains realized on property sales
    
    139
    
    
    
    139
    
    68Proceeds from legal settlement
    
    
    
    
    
    
    
    842Other nonoperating income (expense)
    
    (3)
    
    9
    
    (1)
    
    24Interest expense
    
    (2,573)
    
    (2,216)
    
    (7,489)
    
    (6,350)Loss on early redemptionof other notes
      receivable
    
    (844)
    
    
    
    (938)Impairment of long-lived assets
    
    
    
    
    
    (6,687)
    
    (545)Write-off of notes receivable fromHotelTools, Inc.
    
    
    
    
    
    (12,213)Income (loss) before income taxes
    $
    800
    $
    2,856
    $
    (16,557)
    $
    7,114


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

1. RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current year presentation.







Page 9

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PART I, ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Comparison of the quarter ended September 30, 2001 to the quarter ended September 30, 2000

Hotel revenues decreased by $0.6 million or 3% from $19.1 million in 2000 to $18.5 million in 2001. Revenues at the sixty-three hotels that operated for the full quarter in both 2000 and 2001 declined by $0.8 million in the current year quarter compared to the prior year quarter. One hotel, sold to a franchise at the beginning of the current year quarter, accounted for $0.3 million of the decline. These declines were partially offset by current quarter revenues of $0.5 million from two hotels opened by the Company after the third quarter of 2000. AWR increased to $200.76 in 2001 from $196.53 in 2000, while occupancy declined from 84.4% in 2000 to 80.3% in 2001 and weekly RevPAR declined from $166.37 in 2000 to $161.01 in 2001.

Franchising revenue increased by $0.3 million or 33% from $0.9 million in 2000 to $1.2 million in 2001. The Suburban Lodge brand accounted for $0.2 million of the increase and the GuestHouse International brand accounted for $0.1 million of the increase. Recurring monthly franchise fees for the Suburban Lodge brand increased $0.1 million due to the increased number of franchised hotels open during the third quarter of 2001. Initial fees for the Suburban Lodge brand also accounted for $0.1 million of the increase as there were three new franchised hotels opened during the current year quarter and one Company-owned hotel sold to a franchisee during the quarter while there were no new Suburban Lodge openings during the prior year quarter. Recurring monthly franchise fees for the GuestHouse International brand increased $0.1 million in the third quarter of 2001 due to the increased number of franchised hotels open during the quarter. At September 30, 2001, 61 franchised Suburban Lodge hotels were operating as compared to 52 at September 30, 2000. There were 71 GuestHouse International franchised hotels operating at September 30, 2001 compared to 61 at September 30, 2000.

Management and other revenue declined slightly in the current year quarter due to a decrease in the number of hotels being managed. The Company managed eleven Suburban Lodge hotels for franchisees during the quarter ended September 30, 2001 compared to managing 13 hotels during the quarter ended September 30, 2000.

Hotel operating expenses declined approximately $0.5 million, or 5%, from $10.3 million in 2000 to $9.8 million in 2001. Operating expenses at the sixty-three hotels that operated for the full quarter in both 2000 and 2001 declined by $0.6 million. The hotel sold to a franchisee at the beginning of the current year quarter accounted for $0.2 million of the decline. These declines were partially offset by current quarter operating expenses of $0.3 million at the two hotels opened by the Company after the third quarter of 2000 and operated for the full quarter in the current year.

Corporate operating expenses increased $0.4 million, or 15%, from $2.5 million in 2000 to $2.9 million in 2001. The increase was due primarily to a decrease of $0.3 million in the amount of project related corporate overhead capitalized as hotel-construction cost. Also contributing to the increase was a higher level of ordinary course of business legal expenses. Corporate operating expenses attributable to the franchising business increased $0.1 million in the 2001 quarter while other corporate operating expenses were flat in the quarter.

The Company recorded bad debt expense of $202,000 in the quarter ended September 30, 2001 compared to $30,000 in the prior year quarter. The increase was mainly attributable to the Companys franchise
operations.

The Company incurred expenses of $416,000 during the current year third quarter in connection with its ongoing review of strategic alternatives to enhance shareholder value.

Depreciation and amortization increased by $0.1 million, or 6%, from $2.4 million in 2000 to $2.6 million in 2001. The two hotels opened by the Company after the third quarter of 2000 and operated for the full quarter ended September 30, 2001 accounted for the increase.

Page 10

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Interest expense was $2.6 million in 2001 compared to $2.2 million in 2000. Interest expense in 2000 is net of interest capitalized of $0.2 million. There was no interest capitalized in the third quarter of 2001. The increase in total interest charges incurred was due to higher levels of debt outstanding.

The Company incurred a loss of $0.8 million from the discounted early payoff of certain loans due from franchisees in the current year quarter.

The effective income tax rate for the current year quarter was 16.9% as a result of an adjustment of the overall estimated effective tax rate for the year.

Comparison of the nine months ended September 30, 2001 to the nine months ended September 30, 2000

Hotel revenues increased by $1.6 million, or 3%, from $53.1 million in 2000 to $54.7 million in 2001. Three hotels opened by the Company during 2000 and operated for the full nine months ended September 30, 2001 plus one hotel opened by the Company during the second quarter of 2001 accounted for $1.9 million of increased revenues. Partially offsetting this increase was a decline in hotel revenues of $0.1 million from the sixty-one hotels that operated for the full nine months in both 2000 and 2001, and a decline of $0.2 million from the hotel that was sold to a franchisee at the beginning of the third quarter of 2001. For all Company-owned hotels, AWR increased to $200.59 in 2001 from $196.56 in 2000, and weekly RevPAR increased to $159.66 in 2001 from $157.27 in 2000. Occupancy declined slightly from 80.0% in 2000 to 79.8% in 2001.

Franchising revenue increased by $0.6 million, or 23%, from $2.6 million in 2000 to $3.2 million in 2001. The GuestHouse International brand and the Suburban Lodge brand each contributed $0.3 million of the increase due to the larger number of franchised locations of each brand open during the first nine months of 2001. At September 30, 2001, 61 franchised Suburban Lodge hotels were operating as compared with 52 at September 30, 2000. There were 71 GuestHouse International franchised hotels operating at September 30, 2001 compared to 61 at September 30, 2000.

Management and other revenue declined by $0.3 million from $0.9 million in 2000 to $0.6 million in 2001 due to a decrease in the number of hotels being managed. The Company managed ten Suburban Lodge hotels for franchisees for the first six months of 2001 and 11 hotels during the third quarter of 2001, compared to managing 19 hotels during January and February 2000, 20 hotels during March, April and May of 2000 and 13 hotels in the period from June through September of 2000.

Hotel operating expenses increased approximately $0.8 million, or 3%, from $28.5 million in 2000 to $29.3 million in 2001. The three hotels opened by the Company during 2000 and operated for the full nine months ended September 30, 2001 plus the one hotel opened by the Company during the second quarter of 2001 accounted for $0.9 million of increased expenses. Partially offsetting this increase was a decline of $0.1 million from the hotel that was sold to a franchisee at the beginning of the third quarter of 2001. Operating expenses for the nine months ended September 30, 2001 at the sixty-one hotels that operated for the full nine months in both 2000 and 2001 were flat compared with the prior year nine-month period.

Corporate operating expenses increased $1.0 million, or 12%, from $8.0 million in 2000 to $8.9 million in 2001. The increase is attributable to a decrease of $0.6 million in the amount of project related corporate overhead capitalized as hotel-construction cost. Excluding the incremental impact on reported operating expenses of lower capitalization of project-related expenses, corporate operating expenses in the nine months ended September 30, 2001 increased $0.4 million due primarily to a higher level of ordinary course of business legal expenses. Corporate operating expenses attributable to the franchising business increased $0.5 million in the 2001 nine-month period while other corporate operating expenses declined by $0.1 million in the nine-month period.

The Company recorded bad debt expenses of $831,000 for the nine months ended September 30, 2001 compared to $247,000 in the prior year nine-month period. The increase was mainly attributable to the Companys franchise
operations.

Page 11

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The Company incurred expenses of $663,000 during the current year nine-month period in connection with a proxy contest, including reimbursement of the expenses incurred by its two new directors.

Expenses of $897,000 were incurred during the first nine months of 2001 in conjunction with the Companys review of strategic alternatives to enhance shareholder value. As a consequence of this review and the continued poor capital market environment for hotel development by public companies, the Company decided in March
2001 to dispose of eleven sites that it had been holding for future hotel development. As a result of this decision, the Company recorded an impairment reserve of $6.7 million before reduction for income tax savings in the first quarter of 2001. The majority of the impairment reserve represents amounts spent before the end of 1998 when the Company was actively developing its own Suburban Lodge hotels. Development expenditures such as architectural and engineering fees, interest and, in several cases, initial construction activities that were incurred at that time represent the largest portion of the write-down. The Company expects to realize approximately $10.0 million upon the ultimate sale of these sites. The impairment of long-lived assets of $545,000 recorded in the nine months ended September 30, 2000 represents the write-down of one of the eleven sites. There was no further write-down of this site in the current year.

Depreciation and amortization increased by $0.4 million, or 6.0%, from $7.2 million in 2000 to $7.7 million in 2001. The sixty-two hotels operated for the full nine months in both 2000 and 2001 accounted for $0.1 million of the increase and the three hotels opened by the Company during 2000 and operated for the full nine month period ended September 30, 2001 plus the one hotel opened by the Company during the second quarter of 2001 accounted for $0.3 million of the increase.

Interest expense, net of interest capitalized of $0.2 million and $0.6 million in 2001 and 2000 respectively, was $7.5 million in 2001 and $6.4 million in 2000. The increase in total interest charges incurred was due to higher levels of debt outstanding.

The Company recorded a charge of $12.2 million ($7.5 million after related income tax benefits) in the quarter ended June 30, 2001 for the write-off of notes receivable from HotelTools, Inc. On July 27, 2001, Radiant Systems, Inc. acquired certain assets of HotelTools, Inc. In connection with this transaction, (1) the Company released its security interest in the assets acquired from HotelTools by Radiant in exchange for a partial payment on its secured loans to HotelTools, (2) the Companys stock warrants in HotelTools were cancelled and all stock options that have been issued by HotelTools were rendered valueless, (3) Radiant entered into a license agreement with the Company to provide software services to company-owned Suburban Lodge hotels and Suburban
Lodge franchisees for a period of two years, (4) the Company received net cash proceeds of $168,000, and (5) Radiant agreed to satisfy or assume HotelTools obligations under an equipment-financing lease. The Company has received a signed release of its guaranty of the lease obligations from the equipment lessor. As of July 27, 2001, the net present value of the remaining payments under the HotelTools equipment-financing lease approximated $1.0 million.

The Company incurred a loss of $0.9 million from the discounted early payoff of certain loans due from franchisees during the current year nine-month period.

The effective income tax rate for the current year nine-month period was 38.5% compared to 37.0% in the prior year period. The increase in the current year period is due to a higher overall estimated tax rate for the year.





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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 seasonal trends experienced by 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. At September 30, 2001, the Company had approximately $119.5 million outstanding under long-term mortgage loan arrangements, including amounts classified as current maturities of long-term debt at that date. In the aggregate, these loans require monthly principal and interest payments of $1,005,000. The final maturity dates for these loans range from February 1, 2005 to July 1, 2009. The Company also has a revolving line of credit facility with SouthTrust Bank for amounts up to $15 million. 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 September 30, 2001, there were no borrowings outstanding under the line of credit facility.

At September 30, 2001, the Company was in violation of the required debt service coverage ratio of the
loan agreement.   SouthTrust granted the Company a one-time only waiver of this event of default. The Company expects that it will be in violation of this covenant for the next several reporting periods and has requested
that  SouthTrust amend the loan agreement to reduce the required debt service coverage ratio.

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 September 30, 2001, the Company had purchased a total of 3,765,398 shares at a cost of $22,921,000. The Company has not purchased any of its shares since April 27, 2001.

As discussed under "Comparison of the nine months ended September 30, 2001 to the nine months ended September 30,
2000," the Company has no current plans to build any more hotels and is actively trying to sell eleven sites it had been holding for future hotel development.

The Company is continuing to explore potential business and strategic opportunities to preserve or enhance shareholder value. The Company also is reviewing various aspects of its business in light of current economic conditions and the Companys recent performance. As part of this process, the Company decided in July 2001 to reduce its franchise sales staff by approximately one-half, to 11 sales persons. At the beginning of November 2001, the Company further reduced its sales staff to three sales persons. These steps were taken in response to the current economic slowdown and a corresponding reduction in franchise sales activity.

In the future, the Company expects its cash requirements to be met by funds generated from operations, sales of undeveloped sites, occasional sales of its hotel properties and borrowings under its bank line of credit. The Companys net cash flow from operating activities decreased from $15.3 million in the first nine months of 2000 to $11.9 million in the first nine months of 2001.

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Forward Looking Statements

This Quarterly Report on Form 10-Q contains statements concerning the Companys plans, beliefs and expectations for future periods. The statements include, without limitation, statements regarding the Companys expected sources of funding to meet future cash needs. 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.

These risks and uncertainties include, but are not limited to: (i) possible changes in economic conditions, which could adversely affect the Companys industry or cause the Company to realize less than it currently expects to realize on the sale of the undeveloped land it is currently holding for sale; (ii) the risk that the demand for extended stay lodging may be reduced and/or increased supply of competitive alternatives to the Companys hotels may increase as a consequence of additional terrorist attacks or other acts of violence affecting the travel and lodging industries; (iii) other factors which may result in reduced demand for, or an increase in the supply of , extended stay and other forms of lodging, and /or increased competition at all levels in the hotel industry; (iv) various factors affecting the ability of the Companys franchisees to acquire existing Suburban Lodge hotels which the Company may desire to sell or 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 systems to effectively manage growth; (vi) dependence on senior management, and (vii) the Companys financial condition.

Recent Accounting Pronouncements

As of January 1, 2001, the Company adopted the Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities" as amended in June 2000 by 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 July 2001, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 141
("SFAS 141"), "Business Combinations."  SFAS 141
requires the purchase method of accounting for business combinations initiated
after June 30, 2001 and eliminates the pooling-of-interests method.  The
Company does not believe that the adoption of SFAS 141 will have a significant
impact on its financial statements.

In July 2001, the FASB issued SFAS 142, "Accounting for Goodwill and Other Intangible Assets," effective for fiscal years beginning after December 15, 2001. SFAS 142 establishes new accounting standards for goodwill and continues to require the recognition of goodwill as an asset but does not permit amortization of goodwill as previously required by Accounting Principles Board Opinion No. ("APB") 17, "Intangible Assets." SFAS 142 also establishes a new method of testing goodwill for impairment. It requires goodwill to be separately tested for impairment at a reporting unit level. The amount of goodwill determined to be impaired would be expensed to current operations. The Company is currently evaluating the effect that the January 1, 2002 adoption of SFAS 142 will have on its financial position and results of operations.

ITEM 3. 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 September 30, 2001, the Company had debt outstanding totaling $119.5 million. Approximately $105.8 million of this amount was represented by fixed rate mortgage loans. The interest rate on approximately $9.7 million of these mortgage loans will adjust on April 1, 2002 and again on April 1, 2005 for $6.6 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. The interest rate on approximately $3.0 million of the loans will adjust on October 1, 2002 and again on October 1, 2005.

Total variable rate debt outstanding at September 30, 2001 was approximately $13.7 million. This consisted of a $9.9 million variable rate term loan with SouthTrust Bank and a variable rate mortgage of approximately $3.8 million.

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The total amount of variable rate debt and fixed rate debt adjustable within one year outstanding at September 30, 2001, is approximately $26.0 million. Accordingly, each one percent change in market interest rates will change interest expense by approximately $260,000 on an annual basis.

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 current invested cash balance will approximate $20.0 million. Accordingly, each one percent change in market interest rates will change interest income by approximately $200,000 on an annual basis.



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Part II. OTHER INFORMATION AND SIGNATURES





|Item 1. | Legal Proceedings               
|------- | --------------------------------
|        | None                            
|Item 6. | Exhibits and Reports on Form 8-K

| | (a) | Exhibits           
| | --- | -------------------
| |     | None               
| | (b) | Reports on Form 8-K
| |     | None               







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 thereunto duly authorized.





|                         | Suburban Lodges of America, Inc.                                                                                                   
|------------------------ | -----------------------------------------------------------------------------------------------------------------------------------
|                         |                                                                                                                                    
|Date: November  14, 2001 | By:     /s/ PAUL A. CRISCILLIS, JR.Paul A.
Criscillis, Jr. 
           Vice President and Chief Financial Officer                  
|                         |                                                                                                                                    
|Date: November 14, 2001  | By:        /s/ ROBERT E. SCHNELLE

Robert E. Schnelle
           Vice President and
Treasurer
           (Chief Accounting Officer)





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