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 June 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.

---



|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
August 10, 2001:

11,974,877



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)June 30,

December 31,2001

2000AssetsCurrent assets:Cash and cash equivalents
$
7,360
$
10,856Accounts receivable, net of reserves of$771 (2001) and $327 (2000)

1,442

1,520Notes receivable

608Hotel inventory and supplies

2,539

2,538Prepaid and refundable income taxes

4,296

260Deferred income taxes

710

469Prepaid expenses and other current assets

2,235

2,081Total current assets

19,190

17,724Assets held for sale

14,619Property and equipment, net of accumulated depreciation andamortization of $32,439 (2001) and $27,863 (2000)

278,485

299,392Notes receivable from
  HotelTools, Inc.



7,997Other notes receivable

3,588

4,508Acquired intangible assets - net

3,341

3,515Deferred loan costs

1,899

2,097Other assets

2,837

2,393Total assets
$

323,959
$
337,626Liabilities and shareholders' equityCurrent liabilities:Current portion of long-term debt
$
1,852
$
1,547Construction accounts payable

905

1,314Trade accounts payable

1,998

3,161Accrued property taxes

1,264

720Accrued wages and benefits

1,483

703Other accrued liabilities

2,508

1,504Other current liabilities

788

648Total current liabilities

10,798

9,597Long-term debt, excluding current portion

118,164

119,574Deferred income taxes

1,549

3,958Other liabilities

162

167Total liabilities

130,673

133,296Shareholders' equity:Common stock

120

157Additional paid-in capital

179,612

202,280Retained earnings

13,760

24,608193,492

227,045Less treasury stock, at cost

206

22,715Shareholders' equity, net

193,286

204,330Total liabilities and shareholders' equity
$
323,959
$
337,626




See 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

Six  Months EndedJune 30, 2001

June 30, 2000

June 30, 2001

June 30, 2000Revenue:Hotel revenue
$                   18,735

$                  18,072

$                  36,212

$
                   34,031Franchising revenue
964

904

1,987

1,685Management and other revenue
206

298

381

653Total revenue
19,905

19,274

38,580

36,369Operating costs and expenses:Hotel operating expenses
9,724

9,194

19,509

18,309Corporate operating expenses
3,164

2,664

6,027

5,465Bad debts expense
466

68

602

126Proxy contest expenses
663



663Expenses incurred in connection withreview of strategic alternatives
6



481Undeveloped site carrying costs
63

44

110

88Depreciation and amortization
2,554

2,405

5,080

4,803Impairment of long lived assets


545

6,687

545Gains realized on property sales


(68)



(68)Operating costs and expenses - net
16,640

14,852

39,159

29,268Income (loss) from operations
3,265

4,422

(579)

7,101Other income (expense):Interest income
209

189

443

434Interest expense
(2,486)

(2,088)

(4,916)

(4,134)Write-off of notes receivable fromHotelTools, Inc.
(12,213)



(12,213)Proceeds from legal settlement


842



842Other
(93)

5

(92)

15Income (loss) before income taxes
(11,318)

3,370

(17,357)

4,258Provision (credit) for income taxes
(4,326)

1,264

(6,509)

1,597Net income (loss)
$                    (6,992)

$                      2,106

$               (10,848)

$                      2,661Earnings (loss) per common share:Basic
$                        (0.58)

$                          0.16

$                       (0.90)

$                          0.20Diluted
$                        (0.58)

$                          0.16

$                       (0.90)

$                          0.20Weighted average number ofcommon shares outstanding:Basic
11,981

13,335

11,992

13,603Diluted
11,981

13,335

11,992

13,603




See 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)Six Months EndedJune 30, 2001

June 30, 2000Operating activities:Net income (loss)

$                 (10,848)

$                        2,661Adjustments to reconcile net income (loss) tonet cash provided by operating activities:Depreciation and amortization

5,080

4,803Deferred income taxes

(2,650)

1Stock compensation

10

30Gains realized on property sales



(68)Impairment of long-lived assets

6,687

545Write-off of notes receivable from
  HotelTools, Inc.

12,213Changes in operating assets and liabilities - net of the effectsof acquisitions:Accounts receivable

78

225Other current assets

(4,229)

471Other assets

(350)

(3,531)Trade accounts payable

(1,163)

(2,004)Other current liabilities

2,356

1,937Other liabilities

(5)

79Net cash provided by operating activities

7,179

5,149Investing activities:Additions to property and equipment

(5,267)

(5,903)Proceeds from sale of undeveloped site



230Decrease in construction accounts payable

(409)

(1,023)Acquisitions, net of cash acquired



(641)Loans made to
  HotelTools, Inc.

(4,104)Other loans made

(55)Payments received on other loans

273Net cash used by investing activities

(9,562)

(7,337)Financing activities:Proceeds from issuance of long-term debt

2,732

5,904Principal payments on long-term debt

(837)

(3,280)Amounts borrowed under line of credit



6,000Repayment of line of credit borrowings

(3,000)

(5,000)Purchase of treasury stock

(206)

(5,843)Net decrease (increase) in deferred loan costs

198

(440)Net cash used by financing activities

(1,113)

(2,659)Net decrease in cash and cash equivalents

(3,496)

(4,847)Cash and cash equivalents at beginning of period

10,856

9,862Cash and cash equivalents at end of period

$                        7,360

$                        5,015Supplemental information:Interest paid net of interest capitalized

$                        5,053

$                        4,219Income taxes paid

$                              333

$                              472




See 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
2. ASSETS HELD FOR SALE
3. PROPERTY AND EQUIPMENT



Page 5

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1. LONG-TERM DEBT
2. ACQUISITION

Page 6

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1. WRITE-OFF OF NOTES RECEIVABLE FROM HOTELTOOLS, INC.
2. EARNINGS PER COMMON SHARE
3. CONTINGENCIES
4. RECENT ACCOUNTING PRONOUNCEMENTS

Page 7

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1. SEGMENT AND RELATED INFORMATION

Page 8

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> Quarter
>         ended June 30
>       
>       Six months ended
>         June 302001
>       
>       2000
>       
>       2001
>       
>       2000Total
>         segment net operating income
>       $      3,265
>       
>       $     4,899
>       
>       $           6,108
>       
>       $
>                 7,578Interest
>         income
>       209
>       
>       189
>       
>       443
>       
>       434Gains
>         realized on property sales
>       -
>       
>       68
>       
>       -
>       
>       68Proceeds
>         from legal settlement
>       -
>       
>       842
>       
>       -
>       
>       842Other
>         nonoperating income (expense)
>       (93)
>       
>       5
>       
>       (92)
>       
>       15Interest
>         expense
>       (2,486)
>       
>       (2,088)
>       
>       (4,916)
>       
>       (4,134)Impairment
>         of long-lived assets
>       -
>       
>       (545)
>       
>       6,687
>       
>       (545)Write-off
>         of notes receivable from HotelTools, Inc.
>       (12,213)
>       
>       
>       
>       (12,213)Income
>         before income taxes
>       $ 
>         (11,318)
>       
>       $     3,370
>       
>       $      
>         (17,357)
>       
>       $     
>            4,258

1. RECLASSIFICATIONS



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

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

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

Hotel revenues increased by $0.6 million, or 4%, from $18.1
million in 2000 to $18.7 million in 2001. Three hotels opened by the Company
during 2000 and operated for the full quarter ended June 30, 2001 plus one hotel
opened by the Company during the second quarter of 2001 accounted for the entire
$0.6 million increase. Revenues at the sixty-two hotels that operated for the
full quarter in both 2000 and 2001 were flat in the current year quarter
compared to the prior year quarter. For all Company-owned hotels, AWR increased
to $201.67 in 2001 from $196.62 in 2000, weekly RevPAR increased to $163.37 in
2001 from $160.64 in 2000, while occupancy declined slightly from 81.7% in 2000
to 81.3% in 2001.

Franchising revenue increased by $0.1 million, or 7%, from $0.9
million in 2000 to $1.0 million in 2001. The increase was attributable to the
GuestHouse International brand due to the increased number of franchised hotels
open during the second quarter of 2001. Recurring monthly franchise fees for the
Suburban Lodge brand increased during the current year quarter but this increase
was offset by a decline in initial franchise fees as there were no new openings
of Suburban Lodge franchised hotels during the quarter ended June 30, 2001,
compared to three new openings in the prior year quarter. At June 30, 2001, 57
franchised Suburban Lodge hotels were operating as compared with 52 at June 30,
2000. There were 74 GuestHouse International franchised hotels operating at June
30, 2001 compared to 53 at June 30, 2000.

Management and other revenue declined by $0.1 million from $0.3
million in 2000 to $0.2 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 entire quarter ended June 30, 2001 compared to managing 20
hotels during April and May of 2000 and 13 in June 2000.

Hotel operating expenses increased approximately $0.5 million,
or 6%, from $9.2 million in 2000 to $9.7 million in 2001. The three hotels
opened by the Company during 2000 and operated for the full quarter ended June
30, 2001 plus the one hotel opened by the Company during the second quarter of
2001 accounted for $0.4 million of the increase. The sixty-two hotels that
operated the full quarter in both 2000 and 2001 accounted for $0.1 million of
the increase.



Page 9

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Corporate operating expenses increased $0.5 million, or 19%,
from $2.7 million in 2000 to $3.2 million in 2001. The increase was due in part
to a decrease of $0.2 million in the amount of project related corporate
overhead capitalized as land-acquisition or hotel-construction cost. Also
contributing to the increase was a higher volume of legal activity, all in the
ordinary course of business. Corporate operating expenses attributable to the
growing franchising business increased $0.3 million in the 2001 quarter while
other corporate operating expenses declined by $0.2 million in the quarter.

The Company recorded bad debt expense of $466,000 in the quarter
ended June 30, 2001 compared to $68,000 in the prior year quarter. The increase
was mainly attributable to the Companys franchise operations, primarily
because of the failure or inability of several GuestHouse International
franchisees to pay their fees. The current economic downturn has contributed to
these hotels inability to pay their franchise fees, and two of the hotels are
currently in receivership.

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

Depreciation and amortization increased by $0.2 million, or 6%,
from $2.4 million in 2000 to $2.6 million in 2001. The sixty-two hotels operated
for the full quarter in both 2000 and 2001 and the three hotels opened by the
Company during 2000 and operated for the full quarter ended June 30, 2001 each
accounted for $0.1 million of the increase.

Interest expense, net of interest capitalized of $0.1 million
and $0.2 million in 2001 and 2000 respectively, was $2.5 million in 2001 and
$2.1 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 ($7.6 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.

Comparison of the six months ended June 30, 2001 to the six
months ended June 30, 2000

Hotel revenues increased by $2.2 million, or 6%, from $34.0
million in 2000 to $36.2 million in 2001. Three hotels opened by the Company
during 2000 and operated for the full six months ended June 30, 2001 plus one
hotel opened by the Company during the second quarter of 2001 accounted for $1.3
million of the increase. The sixty-two hotels that operated for the full six
months in both 2000 and 2001 accounted for $0.9 million of the increase. For all
Company-owned hotels, AWR increased to $200.97 in 2001 from $196.62 in 2000,
occupancy increased to 79.5% in 2001 compared to 77.8% in 2000 and weekly RevPAR
increased to $158.98 in 2001 from $152.59 in 2000.

Franchising revenue increased by $0.3 million, or 18%, from $1.7
million in 2000 to $2.0 million in 2001. The GuestHouse International brand
contributed $0.2 million of the increase and the Suburban Lodge brand
contributed $0.1 million of the increase due to the large number of franchised
locations of each brand open during the first quarter of 2001. At June 30, 2001,
57 franchised Suburban Lodge hotels were operating as compared with 52 at June
30, 2000. There were 74 GuestHouse International franchised hotels operating at
June 30, 2001 compared to 53 at June 30, 2000.



Page 10

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Management and other revenue declined by $0.3 million from $0.7
million in 2000 to $0.4 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 entire six months ended June 30, 2001, compared to managing
19 hotels during January and February 2000, 20 hotels during March, April and
May of 2000 and 13 in June 2000.

Hotel operating expenses increased approximately $1.2 million,
or 7%, from $18.3 million in 2000 to $19.5 million in 2001. The three hotels
opened by the Company during 2000 and operated for the full six months ended
June 30, 2001 plus the one hotel opened by the Company during the second quarter
of 2001 accounted for $0.7 million of the increase. The sixty-two hotels that
operated the full six months in both 2000 and 2001 accounted for $0.5 million of
the increase.

Corporate operating expenses increased $0.6 million, or 10%,
from $5.5 million in 2000 to $6.0 million in 2001. The increase is attributable
to a decrease of $0.3 million in the amount of project related corporate
overhead capitalized as land-acquisition or hotel-construction cost. Excluding
the incremental impact on reported operating expenses of lower capitalization of
project-related expenses, corporate operating expenses in the six months ended
June 30, 2001 increased $0.3 million due primarily to a higher volume of legal
activity, all in the ordinary course of business. Corporate operating expenses
attributable to the growing franchising business increased $0.4 million in the
2001 six-month period while other corporate operating expenses declined by $0.4
million in the six-month period.

The Company recorded bad debt expenses of $602,000 for the six
months ended June 30, 2001 compared to $126,000 in the prior year six-month
period . The increase was mainly attributable to the Companys franchise
operations, primarily because of the failure or inability of several GuestHouse
International franchisees to pay their fees. The current economic downturn has
contributed to these hotels inability to pay their franchise fees, and two of
the hotels are currently in receivership.

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

Expenses of $481,000 were incurred during the first six months
of 2001 in conjunction with the Companys review of strategic alternatives to
enhance shareholder value. As a result of this review and the continued poor
capital market environment for hotel development by public companies, the
Company decided 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 six months ended June 30, 2000 represents the write-down of one
of the eleven sites made in the prior year. There was no further write-down of
this site in the current year.

Depreciation and amortization increased by $0.3 million, or 6.0%,
from $4.8 million in 2000 to $5.1 million in 2001. The sixty-two hotels operated
for the full six 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 six month period ended June 30, 2001 accounted for $0.2 million of the
increase.



Page 11

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Interest expense, net of interest capitalized of $0.2 million
and $0.4 million in 2001 and 2000 respectively, was $4.9 million in 2001 and
$4.1 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 ($7.6 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.

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 June 30, 2001, the Company had approximately $120.0 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
$1,019,000. 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 June 30, 2001, there were no
borrowings outstanding under the line of credit facility.



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 June
30, 2001, the Company had purchased a total of 3,765,398 shares at a cost of
$22,921,000.



Page 12

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As discussed under Comparison of the six months ended June
30, 2001 to the six months ended June 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, a step that was 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 increased from $5.1 million
in the first six months of 2000 to $7.2 million in the first six months of 2001.

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)
changes in economic conditions, (ii) reduced demand for and increased supply of
extended stay and other forms of lodging, and increased competition at all
levels in the hotel industry, (iii) 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, (iv) the ability of the Companys
operating and financial system to effectively manage growth, (v) dependence on
senior management, and (vi) 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 June 2001, the Financial Accounting Standards Board
(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.



Page 13

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|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 June 30, 2001, the Company had debt outstanding totaling
$120.0 million. Approximately $102.1 million of this amount was represented by
fixed rate mortgage loans. The interest rate on approximately $9.8 million of
these mortgage loans will adjust on April 1, 2002 and again on April 1, 2005 for
$6.7 million of the loans. One loan of approximately $3.1 million matures on
April 1, 2005. The interest rate on approximately $2.6 million of the loans is
adjustable every year on April 1. The interest rate on approximately $3.1
million of the loans will adjust on October 1, 2002 and again on October 1,
2005.

Outstanding borrowings on two variable rate construction loans
totaled $7.9 million at June 30, 2001. One of the loans with a balance of
approximately $4.2 million converted to a fixed rate loan on August 1, 2001 and
the other loan with a balance of approximately $3.7 million will convert on
September 1, 2001, at the Companys option, to a fixed rate loan or a variable
rate loan based on the lenders prime rate. The remaining $10.0 million of
debt outstanding at June 30, 2001 consisted of a variable rate term loan with
SouthTrust Bank.

The total amount of variable rate debt and fixed rate debt
adjustable within one year outstanding at June 30, 2001, is approximately
$30.3 million. Accordingly, each one percent change in market interest rates
will change interest expense by approximately $303,000 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 invested cash balance will
approximate $10.0 million. Accordingly, each one percent change in market
interest rates will change interest income by approximately $100,000 on an
annual basis.





Part II.            OTHER INFORMATION AND SIGNATURES



Item 1.               Legal Proceedings

None

Item 4.               Submission of Matters to a Vote of Security Holders

> On May 17, 2001, the Company held its annual meeting of
>     shareholders. The purpose of the meeting was to elect two directors to fill
>     the positions of two directors whose terms expired in 2001. At the meeting,
>     Messrs. Raymond A. D. French and Paul R. Coulson were each elected for a
>     three-year term, which expires in 2004. The Companys other directors are
>     Messrs. David E. Krischer and Dan J. Berman, whose terms expire in 2002 and
>     Mr. John W. Spiegel whose term expires in 2003.
> The following is a tabulation of votes cast for each nominee
> for director:



Page 14

---



|Nominee                    |  | For       |  | Withheld
|-------------------------- |  | --------- |  | --------
|                           |  |           |  |         
|                           |  |           |  |         
|Raymond
      A. D. French |  | 5,896,153 |  | 1,457   
|Paul R.
      Coulson      |  | 5,896,153 |  | 1,457   
|James R.
      Kuse        |  | 4,684,972 |  | 190,695 
|Michael
      McGovern     |  | 4,684,972 |  | 190,695 
|                           |  |           |  |         

> At the first meeting of the board of Directors following the Annual
>     Meeting of Shareholders, the Board unanimously approved the following
>     committees of the Board:
>     Executive
>           Committee:
>         Ray French,
>           Chairman and David KrischerCompensation
>           Committee:
>         Paul Coulson,
>           Chairman and John SpeigelAudit Committee:
>         John Speigel,
>           Chairman, Paul Coulson and Ray French



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

| | (a) | Exhibits                                                                                                                                                                                  
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | 3.2 Amended and Restated Bylaws of the Registrant, amended as of July 31, 2001.                                                                                                           
| | (b) | Reports on Form 8-K                                                                                                                                                                       
| |     | On May 4, 2001, the Registrant filed a current
report on Form 8-K to report certain amendments to its Rights Agreement between
the Registrant and American Stock Transfer & Trust Company.



Page 15

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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: August 14, 2001 | By:     /s/ PAUL A. CRISCILLIS, JR.Paul A.
Criscillis, Jr. 
           Vice President and Chief Financial Officer       
|                      |                                                                                                                         
|Date: August 14, 2001 | By:        /s/ ROBERT E. SCHNELLE

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









Page 16





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EXHIBIT INDEX



Exhibit               Description

.3.2