SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    ---------
                                    FORM 10-K


(Mark One)

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the fiscal year ended December 31, 1996

                                       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 0-18504


                    PARTICIPATING INCOME PROPERTIES II, L.P.
                                       and
                     FFCA INVESTOR SERVICES CORPORATION 88-C
                     ---------------------------------------
               (Exact Name of Co-Registrants as Specified in Their
                            Organizational Documents)

       Delaware                                                  86-0588505
---------------------                                    -----------------------
(Partnership State of                                     (Partnership I.R.S.
Organization)                                            Employer Identification
                                                         No.)

       Delaware                                                  86-0588507
---------------------                                    -----------------------
(Corporation State of                                     (Corporation I.R.S.
Incorporation)                                           Employer Identification
                                                         No.)

The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona                                               85255
---------------------                                        ---------------
(Address of Principal Executive Offices)                        (Zip Code)

Co-Registrants' telephone number, including area code:        (602) 585-4500

Securities Registered Pursuant to Section 12(b) of the Act:  None

Securities Registered Pursuant to Section 12(g) of the Act:

                          Limited Partnership Interests
                          -----------------------------
                                (Title of Class)

                      Limited Partnership Depositary Units
                      ------------------------------------
                                (Title of Class)

         Indicate by check mark  whether the  Co-Registrants  (1) have filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
Co-Registrants  were required to file such reports) and (2) have been subject to
such filing requirements for the past 90 days. Yes X No
                                                  ---  ---

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the Co-Registrants' knowledge, in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates of the Co-Registrants: Not applicable.

         The  Limited  Partnership   Depository  Units  (the  "Units")  are  not
currently traded in any market.  Therefore,  there is no market price or average
bid and asked  price for the Units  within the 60 days prior to the date of this
filing.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None
<PAGE>
                                     PART I

Item 1.  Business.

         Participating   Income   Properties   II,  L.P.,  a  Delaware   limited
partnership  (the  "Partnership"),  was  organized  on August 12, 1987 under the
Delaware Revised Uniform Limited  Partnership Act. The Partnership was organized
primarily  to purchase  new and  existing  "Flying J Travel  Plaza"  facilities,
including  land,  buildings  and  equipment,  to be  leased  on a net  basis  to
franchisees of Flying J Franchise Inc. and to Flying J Inc. The managing general
partner of the  Partnership  is Franchise  Finance  Corporation of America II, a
Delaware  corporation (the "Managing General Partner").  Morton H. Fleischer and
Paul  Bagley  are the  individual  general  partners  of the  Partnership.  (The
Managing  General  Partner,  Morton H.  Fleischer  and Paul Bagley are sometimes
referred to collectively herein as the "General Partners.")

         Morton H. Fleischer is the sole  stockholder of FFCA Investor  Services
Corporation 88-C, a Delaware  corporation,  which was incorporated on August 11,
1987, to serve as the initial  limited  partner of the Partnership and the owner
of record of the limited  partnership  interests in the Partnership,  the rights
and benefits of which are assigned by FFCA Investor Services Corporation 88-C to
investors in the Partnership.  FFCA Investor Services  Corporation 88-C conducts
no  other  business  activity.   The  Partnership  and  FFCA  Investor  Services
Corporation 88-C are referred to collectively as the "Co-Registrants."

         The  statements  contained  in  this  report,  if not  historical,  are
forward-looking  statements and involve risks and uncertainties that could cause
actual results to differ materially from the results, financial or otherwise, or
other  expectations   described  in  such  forward-looking   statements.   These
statements are identified with the words "anticipated" or "expected". Therefore,
forward-looking  statements  should not be relied upon as a prediction of actual
future results or occurrences.

         On December 12, 1988, the Co-Registrants commenced a public offering of
$100,000,000  of  limited  partnership  depository  units (the  "Units")  in the
Partnership  pursuant  to a  Registration  Statement  on  Form  S-11  under  the
Securities Act of 1933, as amended.  The  Co-Registrants  sold a total of 82,834
Units to investors at $1,000 per Unit for a total of $82,834,000.  Purchasers of
the Units  (the  "Holders")  acquired  the  following  number of Units from FFCA
Investor Services  Corporation 88-C on each of the following dates: 24,735 Units
on May 11,  1989;  16,700  Units on July 13,  1989;  24,806 Units on October 19,
1989; and 16,593 Units on December 11, 1989.  Subsequent to that date, no Holder
has made any additional capital contribution.  The Holders share in the benefits
of  ownership  of the  Partnership's  assets,  including  its real and  personal
property investments, according to the number of Units held in substantially the
same manner as limited partners in the Partnership.

         After deducting  organizational and offering expenses,  including sales
commissions,  the net proceeds of the offering of the Units,  $72,562,584,  were
fully invested by the  Partnership in
                                       2
<PAGE>
13 travel plazas  located in eleven states:  "Flying J Travel Plaza"  facilities
offer  a  full-service  operation,   generally  including  fuel  facilities,   a
restaurant,  convenience  store  and  other  amenities  for use by the  trucking
industry and traveling public in general.  One of the properties was acquired in
1988,  five were acquired  during 1989,  five were acquired during 1990, and two
were acquired  during 1991. As of February 24, 1997, all thirteen  travel plazas
which  are  owned  by  the  Partnership  were  leased  to CFJ  Properties  ("CFJ
Properties"),  a general  partnership formed pursuant to a joint venture between
Flying J Inc.,  through its  subsidiary  Big West Oil Company ("Big West"),  and
Douglas Oil Company of California,  a subsidiary of Conoco Inc. ("Douglas Oil").
The Partnership is not affiliated with CFJ Properties, Flying J Inc. or Flying J
Franchise  Inc., a subsidiary  of Flying J Inc. and the  franchisor  of Flying J
Travel Plazas.

         The Partnership's principal objectives are to (i) preserve, protect and
enhance  Partnership   capital,   (ii)  provide  partially   tax-sheltered  cash
distributions to investors, (iii) provide the potential for increased income and
protection  against  inflation  through  participation  in the gross revenues of
Flying J Travel Plaza facilities,  and (iv) to obtain long-term  appreciation in
the value of its properties through real estate ownership.

         Real estate owned by the Partnership is generally  leased for a term of
20 years.  Equipment  is generally  leased for a term of eight years.  Equipment
leases are scheduled to expire at various dates from November 1996 through 1999.
Lessees must generally pay the  Partnership  annual rental  payments (in monthly
installments)  equal to 10% of the Partnership's total investment in properties.
As additional rent under the terms of the lease,  the Partnership is entitled to
receive a portion of the operating  revenues of the lessees equal to (i) 3.5% of
annual gross  receipts  derived from the travel plaza  facility,  excluding fuel
sales,  (ii) 3/10 of $.01 per gallon of fuel sold, and (iii) 3.5% of all amounts
received by the lessee for any lease year pursuant to any sublease by the lessee
of any part of its leased  premises.  Reference is made to Note (3) of the Notes
to  Financial  Statements  filed with this  Report for a schedule of the minimum
future lease payments to be received by the Company on its properties.

         In  connection  with  entering  into a lease,  the General  Partner has
required each lessee to pay a rent  enhancement  fee to the  Partnership  at the
inception of the lease in an amount equal to  approximately  four percent of the
Partnership's  total cost of the land,  building and  equipment  comprising  the
property  leased  to  the  lessee,  including  certain  capitalized  acquisition
expenses. This amount is advanced by the Partnership and included in the cost of
the  property  leased to the lessee for the  purpose  of  determining  the lease
payments.  The  Partnership,  by including  this amount in the cost of property,
receives an  additional  amount of lease  payments with respect to the property.
The funds  representing the aggregate rent enhancement fees are used to maintain
cash  distributions  to the Holders in quarters when lease payments  received by
the  Partnership  are  reduced  due to the  failure of any of the  Partnership's
lessees to meet all of their payment  obligations.  In addition,  recognition of
the rent enhancement  fees provides  additional  income to the Partnership.  The
rent enhancement fee is amortized to rental income on a straight-line basis over
a ten-year period from the inception of the lease.

         The General Partner,  the Partnership and Flying J Inc. entered into an
operating  
                                       3
<PAGE>
agreement (the  "Operating  Agreement").  Pursuant to the terms of the Operating
Agreement,  in the event a lessee  defaults  in payment of any  minimum  rent or
other  monetary sum when due and payable  under the lease and fails to cure such
default  within  five days  after  receipt  of notice of such  default  from the
Partnership,  Flying J Inc. has agreed to operate such  lessee's  leased  travel
plaza for the maximum potential lease term as a full-service travel plaza and to
provide  adequate  working  capital  for  the  operations  of such  property.  A
defaulting  lessee and any  personal  guarantor of such  defaulting  lessee will
remain  liable  under  the  lease  and  guaranty,  respectively,  to the  extent
permitted by law.

         The  Partnership is also dependent upon CFJ  Properties,  its principal
lessee,  since an adverse change in their financial  condition could  materially
affect  its  ability  to  make  lease  payments.  During  1996,  CFJ  Properties
contributed 100% of the Company's total rental and participating  rental revenue
for the year and is expected to  contribute a similar  percentage  of revenue in
1997.

         On February 1, 1991,  Flying J Inc.,  through its  subsidiary Big West,
entered into a joint venture with Douglas Oil to form CFJ  Properties.  Flying J
Inc. (and subsidiaries) is a fully integrated oil and gas company and is engaged
in the production, refining, transportation, wholesaling and retail marketing of
petroleum  products and other  services  through its travel  plazas and gasoline
stations.  CFJ  Properties is the  franchisor  and operator of the Flying J Inc.
network of interstate travel plazas,  which included 66 properties as of January
31, 1996. The Partnership  owns eleven of these  properties.  Under the terms of
the joint  venture  agreement,  Big West sold to Douglas  Oil  certain  Flying J
Travel Plazas, which Douglas Oil contributed back to CFJ Properties. In addition
to this initial contribution,  Douglas Oil also made additional contributions to
CFJ  Properties.  As its  initial  contribution,  Big  West  transferred  to CFJ
Properties  certain  leasehold   interests  and  Flying  J  Travel  Plazas,  and
subsequently  contributed to CFJ Properties  various  assets  including  working
capital,  inventories and future development  sites.  Flying J Inc. assigned its
leasehold  interests  in the  travel  plazas  owned  by the  Partnership  to CFJ
Properties  and was released by the  Partnership  with respect to its obligation
under those leases.

         The Partnership's  leases with CFJ Properties are with full recourse to
the assets of CFJ Properties, but without recourse to Big West or Douglas Oil. A
default  on one  lease  constitutes  a default  on all other  leases to the same
lessee by the Partnership and two other partnerships  sponsored by affiliates of
the  Managing  General  Partner,  all of whose  travel  plazas are leased to CFJ
Properties.

         For the fiscal year ended  January 31, 1996,  CFJ  Properties  reported
earnings of $17.2  million on revenues of $937.4  million.  Revenues  rose 33.3%
from $703.4  million  the prior  year.  The higher  revenues  resulted  from the
opening of twelve new units and increases in average unit  volumes.  As a result
of higher revenues,  net income increased to $17.2 million from $16.1 million in
the fiscal year ended January 31, 1995.

         During the fiscal year ended January 31, 1996, CFJ Properties  reported
$35.8 million in 
                                       4
<PAGE>
net cash  provided  by  operating  activities.  This  cash,  along with the cash
provided by financing activities,  was used to make capital expenditures.  As of
January 31, 1996, CFJ Properties  reported cash balances of  approximately  $2.3
million,  with liquidity supported by net cash provided by operating  activities
and a $70 million  revolving line of credit with a bank. As of January 31, 1996,
CFJ Properties  reported partners' capital of $137.7 million and total assets of
$369.4 million.

         CFJ Properties leases travel plazas and equipment under  non-cancelable
operating  leases,  which expire at various  dates over the next 15 to 20 years.
Payments  under these  leases were $13.3  million in both 1996 and 1995.  Future
minimum  annual rent  obligations  under  non-cancelable  leases,  as  projected
through 2001, remains comparable to 1996 expense amounts.

         The eleven  travel  plaza  properties  operated by CFJ  Properties  and
Flying J Inc.  generated a combined  fuel and non-fuel  gross profit  (including
other  income) of  approximately  $31.7  million  during  the fiscal  year ended
January 31, 1996 as compared to $31.2 million in 1995.  This increase was due to
higher non-fuel gross profits during fiscal year 1996 as compared to fiscal year
1995,  which offset an overall  decrease in fuel gross  profits  during the same
period. Total travel plaza unit-level income for these eleven properties (before
depreciation  and  allocated  corporate  overhead)  totaled  approximately  $3.1
million  in  1996  with  seven  of  the  eleven  properties  reporting  positive
unit-level income.  The remaining four properties  reported losses primarily due
to intense fuel price  competition in their geographic area. The combined result
of the travel plaza  unit-level  net income  before  depreciation  and allocated
corporate overhead was down from $3.6 million in the prior year due to decreased
fuel gross profit margins at some units.  For CFJ Properties'  fiscal year ended
January  31,  1996,  the  average   unit-level  base  and  participating   rents
approximated 13.9% of the original cost of these properties.  None of the eleven
travel plaza  properties  operated by CFJ Properties  represents over 10% of the
Partnership's total assets in 1996.

         The travel plaza/truck stop industry,  although highly  fragmented,  is
highly competitive.  The Partnership's lessees are competing with, among others,
National  Auto/Truckstops,  Petro  and  Pilot  Corporation,  as  well  as  other
national,  regional  and  local  truckstop  operators,  some of  which  may have
substantially  greater financial  resources than the lessees.  The Partnership's
lessees also compete with other  entities  which provide  hospitality  goods and
services to the trucking  industry and  traveling  public in general.  The major
competitive  factors  include,  among others,  location,  ease of access,  brand
identification, pricing, product and service selections, customer service, store
appearance,  cleanliness and safety.  The Flying J Travel Plaza facilities owned
by the  Partnership  offer a full-service  operation,  generally  including fuel
facilities, a restaurant, a convenience store and other amenities for use by the
trucking  industry and traveling  public in general.  Flying J Inc. reports that
the Flying J Travel Plaza network  consists of more than 100  facilities  across
the U.S.  interstate  highway system.  The travel plaza sites have been selected
based on traffic patterns and volumes, and access to interstate highways,  among
other criteria.

         According to the American Trucking  Association,  the trucking industry
grosses  more 
                                       5
<PAGE>
than $340 billion  annually,  representing 78% of the nation's freight bill. The
20  million   commercial   trucks   registered  in  the  United  States  consume
approximately 39 billion gallons of fuel annually. The Partnership believes that
the trucking  industry is sensitive to certain  aspects of the general  economic
environment,  such as retail sales;  the level,  direction and rate of change in
inventories;  international trade; vendor performance; the cost and availability
of fuel; labor issues; and technology. The trucking industry is also affected by
various government policies,  including economic  regulations;  vehicle size and
weight regulations; and health, safety and environmental protection regulations.
These  factors  also  may  influence  the  competitive  posture  of one  mode of
transportation  compared to others; however, the trucking industry has presented
itself  as  an   affordable   and  timely   alternative   to  other  methods  of
transportation such as air freight and rail, particularly for short hauls.

         Through  ownership of the travel plazas,  the Partnership is subject to
the risks associated with the underground  storage of petroleum products such as
gasoline.  In this  regard,  the  Partnership's  lessees  are subject to various
federal,  state and local  regulations and  environmental  laws.  These laws and
regulations affect the storing,  dispensing and discharge of petroleum and other
wastes  and affect the  lessees  both in the  securing  of permits  for  fueling
operations and in the ongoing conduct of such operations.

         Federal,  state and local regulatory  agencies have adopted regulations
governing  underground  storage tanks  ("UST's") that require the  Partnership's
lessees to make certain  expenditures  for  compliance.  In  particular,  at the
federal  level,  the  Resource   Conservation  and  Recovery  Act  requires  the
Environmental  Protection Agency ("EPA") to establish a comprehensive regulatory
program for the detection,  prevention and cleanup of leaking UST's. Regulations
enacted  by the EPA in 1988  established  requirements  for (i)  installing  UST
systems; (ii) upgrading UST systems;  (iii) taking corrective action in response
to releases; (iv) closing UST systems; (v) keeping appropriate records; and (vi)
maintaining  evidence of financial  responsibility  for taking corrective action
and  compensating  third parties for bodily injury and property damage resulting
from  releases.  These  regulations  permit  states to develop,  administer  and
enforce their own regulatory programs,  incorporating  requirements which are at
least as  stringent  as the  federal  standards.  By  1998,  all  UST's  must be
corrosion  protected,  overfill/spill  protected and have leak detection.  These
environmental  laws impose  strict  liability for owners and operators of faulty
and  leaking  storage  tanks  resulting  in damage to the  environment  or third
parties.

         The  General  Partner  has taken  various  steps to (i) ensure that the
lessees  comply  with  applicable  rules  and  regulations;  (ii)  mitigate  any
potential  liabilities,  including the  establishment of storage tank monitoring
procedures;  and (iii) require that lessees  indemnify the  Partnership  for all
such liabilities and obtain liability insurance,  if reasonably  available.  The
General Partner  requires each lessee to obtain an annual  environmental  audit,
performed by an  environmental  consulting and engineering  firm, which includes
the following  procedures,  among other things:  month-end  cumulative inventory
variance  analysis;  tank  tightness  tests;  automatic  tank  gauging  and leak
detection   system   operation  and  calibration   tests;  UST  excavation  zone
groundwater and/or soil vapor monitoring well analysis;  piping system tightness
tests;  piping  excavation  zone 
                                       6
<PAGE>
ground water and/or soil vapor  monitoring  well  analysis;  pipe leak  detector
inspection and calibration  tests;  corrosion  protection system tests;  on-site
sanitary  sewer  treatment  plant  effluent  analysis;  and oil/water  separator
inspections. The consulting and engineering firm hired by the General Partner to
conduct such audits also reviews on-site environmental correspondence;  visually
inspects the UST system, tank and piping excavation zone monitoring wells, areas
adjacent to all petroleum  above-ground  tanks,  the  stonewater  and wastewater
control systems, and the travel plaza facility;  and discusses employee training
procedures,  recent  significant  environmental  events  (if  any),  repair  and
maintenance activities, and regulatory compliance with travel plaza personnel.

         The  Partnership  believes that its lessees are in compliance  with all
applicable  regulatory  requirements  and that its lessees have all governmental
licenses and permits required for their business operations. Management knows of
no pending or threatened  proceedings or investigations,  under federal or state
environmental  laws.  Management  cannot predict the impact on the Partnership's
lessees of new governmental  regulations and requirements.  Although the General
Partner has taken necessary steps to ensure lessee compliance with environmental
regulations,  there can be no assurance that  significant  cleanup or compliance
costs may not be incurred  which may affect the  lessees'  ability to make their
scheduled lease payments to the Partnership.

         The Partnership has invested in real estate located in eleven states in
the western, central and southeastern portions of the United States, and no real
estate  investments are located outside of the United States.  A presentation of
revenues  or assets by  geographic  region  is not  applicable  and would not be
material to an understanding of the Partnership's business taken as a whole.

         The  Partnership  does not believe  that any aspect of its  business is
significantly seasonal in nature.

         No portion of the Partnership's business is subject to renegotiation of
profits or  termination  of  contracts  or  subcontracts  at the election of the
United States Government.  The Partnership does not manufacture any products and
therefore does not require any raw materials in order to conduct its business.

         The Partnership  and FFCA Investor  Services  Corporation  88-C have no
employees.


Item 2.  Properties.

         As of December 31, 1996, the Partnership  had acquired  thirteen travel
plaza properties  located in eleven states.  The properties were acquired by the
Partnership  during 1988, 1989, 1990 and 1991 with the net proceeds  received by
the Partnership from the public offering of the Units.

         The Partnership's travel plazas, divided into sections which serve both
the commercial 
                                       7
<PAGE>
and non-commercial traveler, generally offer a multi-use, full service operation
including  fuel  facilities  for the storage and sale of  automotive  and diesel
fuels, a 24-hour  restaurant,  a convenience  store,  restroom  facilities  with
private showers,  and other amenities designed to meet the needs of the trucking
industry  and the  traveling  public in general.  No one property is a principal
property of the  Partnership  because each property  represents less than 10% of
the  Partnership's  total assets.  The following is a description of each of the
properties acquired by the Partnership.

         Pecos, Texas

         The Pecos travel plaza was acquired as a new full-service travel plaza,
built on a  parcel  consisting  of  approximately  14.11  acres  located  at the
interchange of Interstate 20 and US 285.

         Dillon, South Carolina

         The Dillon  travel  plaza was  acquired  as a new  full-service  travel
plaza, built on a parcel consisting of approximately 20.64 acres, located at the
interchange of Interstate 95 and State Route 38. Within an 85-mile radius of the
property are the markets of Columbia and Florence,  South Carolina and Lumberton
and Fayetteville, North Carolina.

         Graham, North Carolina

         The Graham  travel  plaza was  acquired  as a new  full-service  travel
plaza,  built on a parcel  consisting of approximately 20 acres,  located at the
interchange of Interstate 40/85 and State Route 1928.

         Knoxville, Tennessee

         The Knoxville  travel plaza was acquired as a new  full-service  travel
plaza,  built on a parcel  consisting  of  approximately  14.05  acres,  located
parallel to Interstate 40.

         Kingman, Arizona

         The Kingman  travel  plaza was built on the site of an  existing  Husky
truck stop which was razed and replaced  with a new  full-service  travel plaza.
The site consists of approximately 7.45 acres located 1/8 of a mile north of the
Interstate 40/US 90 interchange.

         Jackson, Georgia

         The Jackson  travel  plaza was  acquired as a new  full-service  travel
plaza,  built on a parcel  consisting  of  approximately  42.2 acres of which 27
acres are developed,  located at the interchange of Interstate 75 and Star Route
36.
                                       8
<PAGE>
         Texarkana, Arkansas

         The Texarkana  travel plaza was acquired as a new  full-service  travel
plaza, built on a parcel consisting of approximately 28 acres, located at Exit 7
of  Interstate  30. On March 7,  1993,  the  Texarkana  travel  plaza  sustained
substantial damage due to a fire. The property was insured and the lessee of the
travel plaza used the  insurance  proceeds to rebuild the travel  plaza.  During
1994, the Partnership made an additional investment of $595,000 in the Texarkana
travel plaza to enlarge the property to conform to the new Flying J travel plaza
prototype.  The lessee of the travel plaza continued to make monthly base rental
payments  during the  reconstruction  of the  travel  plaza.  The  travel  plaza
reopened in March 1994.

         Resaca, Georgia

         The Resaca  travel  plaza was  acquired  as a new  full-service  travel
plaza,  built on a parcel consisting of approximately  39.65 acres,  situated at
the southeast corner of Resaca Road and Interstate 75.

         Walton, Kentucky

         The Walton  travel  plaza was  acquired  as a new  full-service  travel
plaza,  built on a parcel consisting of approximately  19.63 acres,  situated at
the southwest corner of Stephenson Mill Road and Kentucky Highway 14 and 16 just
west of the Interstate 75 exit ramp with 1,200 feet of primary frontage.

         San Antonio, Texas

         The San Antonio travel plaza was acquired as a new full-service  travel
plaza, built on a parcel consisting of approximately 19.94 acres, located at the
northwest corner of Foster Road and Interstate 10.

         Rock Springs, Wyoming

         The Rock Springs travel plaza was acquired as a new full-service travel
plaza, built on a parcel consisting of approximately 9.57 acres, situated at the
northwest  corner of Elk Street and Stagecoach  Drive at the Elk Street exit off
Interstate 80.

         Troutdale, Oregon

         The Troutdale  travel plaza was acquired as a new,  full-service  (with
limited  restaurant  facilities)  travel plaza,  built on a parcel consisting of
approximately 7.45 acres,  located at the southwest corner of Northwest Frontage
Road at Interstate 84 and Graham Road.
                                       9
<PAGE>
         Winnemucca, Nevada

         The Winnemucca travel plaza was acquired as a new,  full-service  (with
limited  restaurant  facilities)  travel plaza,  built on a parcel consisting of
approximately  8.29  acres,  located on the  northwest  side of West  Winnemucca
Boulevard at the interchange of Interstate 80 and West Winnemucca Boulevard.

         Reference is made to the Annual Portfolio Valuation prepared by Cushman
& Wakefield  which is filed with this  Report as an exhibit  for the  properties
appraised value as of December 31, 1996.

         Independent of the Partnership, FFCA Investor Services Corporation 88-C
has no interest in any real or personal property.

Item 3.  Legal Proceedings.

         Neither  the  Co-Registrants  nor their  properties  are parties to, or
subject to, any material pending legal proceedings.

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

         No  matter  was  submitted  to  a  vote  of  the  Holders  through  the
solicitation  of proxies or otherwise  during the fourth  quarter of fiscal year
1996.

                                     PART II

Item 5.  Market for Registrant's Units and Related Security Holders Matters.

         Market  Information.  During  1996,  there  was no  established  public
trading  market for the Units,  and it is not  anticipated  that an  established
public trading market for the Units will develop.

         Holders.  As of March 14, 1997,  there were 6,910 record holders of the
Units.
                                       10
<PAGE>
         Distributions.  For the two most recent fiscal years,  the  Partnership
made the following cash distributions to the Holders:

                                      1996
<TABLE>
<CAPTION>
                                              Per Unit
                                             Distribution                     Total
                                         ----------------------       ------------------------
                                                                                                
       Date of             Number        Cash from                    Cash from                 
    Distribution          of Units       Operations     Capital       Operations       Capital  
    ------------          --------       ----------     -------       ----------       -------  
<S>                         <C>            <C>                <C>     <C>                    <C> 
March 31                    82,834         $25.51             -       $2,113,095             -
June 30                     82,834          26.05             -        2,157,826             -
September 30                82,834          25.53             -        2,114,752             -
December 31                 82,834          25.05             -        2,074,992             -
</TABLE>
                                      1995
<TABLE>
<CAPTION>
                                              Per Unit
                                             Distribution                     Total
                                         ----------------------       ------------------------
                                                                                                
       Date of             Number        Cash from                    Cash from                 
    Distribution          of Units       Operations     Capital       Operations       Capital  
    ------------          --------       ----------     -------       ----------       -------  
<S>                         <C>            <C>                <C>     <C>                    <C> 
March 31                    82,834         $25.36             -       $2,100,670             -
June 30                     82,834          26.03             -        2,156,169             -
September 30                82,834          26.31             -        2,179,363             -
December 31                 82,834          25.36             -        2,100,670             -
</TABLE>

         Cash from  operations,  defined as disbursable cash in the agreement of
limited  partnership  which  governs  the  Partnership,  is  distributed  to the
Holders.  Any variations in the amount of distributions  from quarter to quarter
are due to fluctuations in net cash provided by operating activities.  Reference
is made to Item 7 below for a discussion and analysis of such fluctuations. Cash
proceeds from the sale of property are distributed to the Holders as a return of
capital. The Adjusted Capital Contribution of a Holder is generally the Holder's
initial capital contribution reduced by the cash distributions to the Holders of
proceeds from the sale of  Partnership  properties and reduced by any other cash
distributions other than from operations.  The Adjusted Capital Contribution per
Unit of the Holders,  as defined in the agreement of limited  partnership  which
governs the Partnership, was $1,000 as of December 31, 1996.

         Any differences in the amounts of distributions  set forth in the above
tables from the  information  contained  in Item 6 below are due to rounding the
amount of  distributions  payable  per Unit down to the  nearest  whole cent and
carrying  any  fractional  cents  forward  from  one  period  to the  next.  The
Partnership  expects  to  continue  making  cash  distributions  to the  Holders
                                       11
<PAGE>
pursuant to the provisions of the agreement of limited partnership which governs
the  Partnership.  The General  Partner knows of no material  restrictions  that
would limit the Partnership's ability to pay distributions to the Holders in the
future.

Item 6.  Selected Financial Data.

         The following  selected  financial  data should be read in  conjunction
with the Financial  Statements  and the related Notes  attached as an exhibit to
this Report.

                             Year Ended December 31,
                             -----------------------
<TABLE>
<CAPTION>
                               1996          1995          1994          1993          1992
                               ----          ----          ----          ----          ----

<S>                          <C>           <C>           <C>           <C>           <C>        
Revenues                     $ 9,857,290   $ 9,985,844   $ 9,895,376   $ 9,364,420   $ 9,214,523

Net Income                     5,831,607     6,002,622     5,926,437     5,558,318     5,151,121

Net Income Per Unit                69.70         71.74         70.83         66.43         61.56

Total Assets                  55,827,780    58,932,231    61,749,194    65,255,222    68,004,053

Distributions of Cash from
 Operations to Holders         8,460,157     8,537,458     8,258,384     7,940,289     7,464,669

Distributions of Cash from
 Operations Per Unit              102.14        103.07         99.70         95.86         90.12

Return of Capital to                
 Holders                            --            --            --              --            --

Return of Capital Per Unit          --            --            --              --            --
</TABLE>

Item 7.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations.

Liquidity and Capital Resources

         The Partnership  received $82,834,000 in gross proceeds from its public
offering of the Units.  After deducting  organizational  and offering  expenses,
including sales commissions,  the Partnership invested the net offering proceeds
of $72,562,584 in thirteen  travel plazas.  The rental  payments from lessees of
the properties are the Partnership's primary source of income.

         As of  December  31,  1996,  the  Partnership  had cash and  marketable
securities  aggregating  $3,790,885,  of  which  $2,074,992  was paid out to the
Holders in January 1997 as their  fourth  quarter  distribution  for fiscal year
1996, and the remainder of which will be held by the  Partnership  for reserves.
The  Partnership  uses the rental  revenues from its properties to meet its cash
needs,  and it is  anticipated  that such rental  payments will be sufficient to
meet all of the Partnership's expenses and provide cash for distributions to the
Limited Partners.
                                       12
<PAGE>
         As of December 31, 1996, the balance sheet of the Partnership reflected
as a liability $868,470 in deferred income. This amount represents cash received
by the Partnership as rent enhancement fees. Each year  approximately 10% of the
original  amount is  recognized as income by the  Partnership  and the amount of
deferred income is decreased by a corresponding amount.

         The General Partner knows of no trends, demands, commitments, events or
uncertainties that will result in or that are reasonably likely to result in the
Partnership's liquidity increasing or decreasing in any material way.

         FFCA Investor  Services  Corporation 88-C has no capital  resources and
conducted no operations in 1996.

Results of Operations

         The  Partnership  purchased  its  properties  beginning  in 1988  until
becoming fully invested in June 1991. The  Partnership  received or accrued 100%
of the lease payments due it from its lessees in 1996, 1995 and 1994.

Fiscal Year Ended December 31, 1996 Compared to
  Fiscal Year Ended December 31, 1995

         The Partnership's total revenues for the fiscal year ended December 31,
1996 declined  slightly to $9,857,290  from $9,985,844 for the fiscal year ended
December 31, 1995. Revenues decreased between years as a result of a decrease in
participating  rentals  amounting to $116,838,  or 5%, which is  attributable to
decreased  overall  travel  plaza  sales.  In June 1996, a credit card issuer to
Flying J Travel Plaza  customers  terminated  its  relationship  with the travel
plazas. As a result, volumes and margins at many Flying J Travel Plaza locations
decreased  during the latter part of 1996. CFJ Properties  expects the situation
to stabilize and volumes to be restored by early 1997.  Base rental  revenue for
1996 includes the  recognition of  approximately  $274,000 of income  previously
deferred.

         Total  Partnership  expenses  for  fiscal  year 1996  were  $4,025,683,
representing  a nominal  increase  from  $3,983,222  in fiscal  year  1995.  The
increase was the result of an increase in  depreciation  expense from $2,895,293
in 1995 to  $2,988,226  in 1996,  partially  offset by a decrease  of $12,411 in
general  partner  and  affiliate  fees and a decrease  of  $38,061 in  operating
expenses.

         Net income for fiscal year 1996  amounted to  $5,831,607 as compared to
$6,002,622 for fiscal year 1995.
                                       13
<PAGE>
Fiscal Year Ended December 31, 1995 Compared to
  Fiscal Year Ended December 31, 1994

         The Partnership's total revenues for the fiscal year ended December 31,
1995 rose  slightly  to  $9,985,844  from  $9,895,376  for the fiscal year ended
December 31, 1994.  Revenues  increased between years as a result of an increase
in participating  rentals amounting to $203,369, or 9%, which is attributable to
increased  sales from the Texarkana  travel plaza of  approximately  $64,000 and
overall travel plaza sales  increases.  As discussed above, the Texarkana travel
plaza  operated  for a full year in 1995  compared to  approximately  ten months
during 1994. This revenue  increase was partially  offset by a gain on insurance
settlement  of  approximately  $164,000  in 1994  whereas  there  were no  gains
reported in 1995.  Base rental  revenue for 1995  includes  the  recognition  of
approximately $274,000 of income previously deferred.

         Total  Partnership  expenses  for  fiscal  year 1995  were  $3,983,222,
representing  a nominal  increase  from  $3,968,939  in fiscal  year  1994.  The
increase was the result of an increase in  depreciation  expense from $2,853,374
in 1994 to $2,895,293 in 1995,  related to the expansion of the Texarkana travel
plaza and an increase in general  partner and affiliate fees of $28,187 over the
1994 amount.  These  increases were partially  offset by a decrease in operating
expenses of $55,823 in 1995.

         Net income for fiscal year 1995 rose slightly to $6,002,622 as compared
to $5,926,437 for fiscal year 1994.

Inflation

         Inflation may cause an increase in each travel  plaza's gross  revenues
due to price  increases.  This may cause an increase in rental income  because a
portion of the lessees'  lease  payments  are  computed as a  percentage  of the
lessees' gross  revenues.  Thus, as gross sales increase the lease payments will
also  increase.  Inflation  may  also  tend to  increase  the  rate  of  capital
appreciation  of the  Partnership's  properties  over a period  of time as gross
rental income from the properties continues to increase. Inflation may, however,
have an adverse impact on the  profitability of the lessees because of increases
in  operating  expenses.  Inflation  has no  impact  on FFCA  Investor  Services
Corporation 88-C's activities.

Item 8.  Financial Statements and Supplementary Data.

         The financial  statements of the Co-Registrants  required by Regulation
S-X are attached to this Report. Reference is made to Item 14 below for an index
to the financial statements and financial statement schedules.

Item 9.  Changes in and Disagreements With Accountants
                  on Accounting and Financial Disclosure.

         None.
                                       14
<PAGE>
                                    PART III

Item 10. Directors and Executive Officers.

         The  Partnership  has no  directors or  executive  officers.  Franchise
Finance  Corporation of America II ("FFCA II"), as the Managing General Partner,
has  responsibility  for  all  of  the  Partnership's  operations.  FFCA  II was
organized in Delaware in October of 1988 for the purpose of  sponsoring  limited
partnerships  such as the Partnership.  The directors and executive  officers of
FFCA II and FFCA  Investor  Services  Corporation  88-C,  and the year they were
elected or appointed to their respective offices, are as follows:

FFCA II

                                    Directors
                Name                                         Position Held Since
                ----                                         -------------------

Paul Bagley                                                         1988
Morton H. Fleischer, Chairman                                       1988
John R. Barravecchia                                                1993
Christopher H. Volk                                                 1993

                                    Officers
<TABLE>
<CAPTION>
                                                                                      Associated
                                                                                         With   
                                                                                        FFCA II  
       Name                                        Positions Held                        Since   
       ----                                        --------------                        -----   
<S>                                  <C>                                                 <C> 
Morton H. Fleischer                  Chairman of the Board, President and Chief          1988
                                     Executive Officer                         
John R. Barravecchia                 Executive Vice President, Chief Financial           1989
                                     Officer, Treasurer and Assistant Secretary
Christopher H. Volk                  Executive Vice President, Chief Operating           1989
                                     Officer, Secretary and Assistant Treasurer
Dennis L. Ruben                      Executive Vice President, General Counsel and       1993
                                     Assistant Secretary                          
Stephen G. Schmitz                   Executive Vice President, Chief Investment          1995
                                     Officer and Assistant Secretary           
Catherine F. Long                    Senior Vice President-Finance, Principal            1990
                                     Accounting Officer, Assistant Secretary and
                                     Assistant Treasurer                        
</TABLE>
                                       15
<PAGE>
FFCA Investor Services Corporation 88-C

                                      Director

                                                    Associated with the
                                                        Corporation
          Name                                              Since
          ----                                       -----------------

Morton H. Fleischer                                         1987

                                      Officers
<TABLE>
<CAPTION>
                                                                                    Associated with the
          Name                                  Positions Held                      Corporation Since
          ----                                  --------------                      -----------------
<S>                                      <C>                                                 <C> 
Morton H. Fleischer                      Chairman of the Board                               1987
John R. Barravecchia                     President, Secretary and                            1990
                                         Treasurer
Christopher H. Volk                      Vice President, Assistant                           1994
                                         Secretary and Assistant 
                                         Treasurer
</TABLE>
         All of the foregoing  directors and officers have been elected to serve
a one year term and until their successors are elected and qualified.  There are
no  arrangements  or  understandings  between  or among any of the  officers  or
directors  and any other  person  pursuant to which any officer or director  was
selected as such.  There are no family  relationships  among any  directors  and
officers.

Business Experience

         The business experience during the past five years of each of the above
directors and executive officers is as follows:

         Paul  Bagley,  age 54, has served as a director  of FFCA II since 1988.
Mr.  Bagley is a founding  partner  of Stone Pine  Capital  LLC  (1994),  and is
chairman of FCM Fiduciary  Management  Co. LLC (1989 to date),  the advisor to a
mezzanine and private equity fund. For more than twenty years prior to 1988, Mr.
Bagley was engaged in investment  banking activities with Shearson Lehman Hutton
Inc. and its  predecessor,  E.F. Hutton & Company Inc., where he was responsible
for the  creation  and  management  of  over $5  billion  of  direct  investment
activities.  Mr.  Bagley  has  served on the  boards  of a number of public  and
private  companies.  Currently  he is on the boards of America  First  Financial
Fund,  Fiduciary  Capital,  EurekaBank,  Hollis-Eden  Pharmaceuticals,   Lithium
Technology,  Consolidated  Capital,  Logan Machinery Corp. and Pacific  Consumer
Funding.
                                       16
<PAGE>
         Morton H. Fleischer, age 60, has served as the Chairman of the Board of
FFCA Investor Services  Corporation 88-C since 1987 and has served as President,
Chief  Executive  Officer and a Director of FFCA II since its formation in 1988.
Mr. Fleischer was appointed Chairman of the Board of FFCA II in February of 1994
and currently serves as President,  Chief Executive  Officer and Chairman of the
Board of  Franchise  Finance  Corporation  of  America,  a Delaware  corporation
("FFCA").  He served as  President,  Chief  Executive  Officer and a Director of
Franchise  Finance  Corporation  of America I ("FFCA I"), a predecessor of FFCA,
from 1980 to 1994. Mr.  Fleischer is also an individual  general  partner of the
Partnership and is a general  partner (or general partner of a general  partner)
of the following public limited  partnerships:  Participating  Income Properties
1986,  L.P.;  Participating  Income  Properties  III  Limited  Partnership;  and
Scottsdale Land Trust Limited Partnership.

         John R.  Barravecchia,  age 41, has served as President,  Secretary and
Treasurer of FFCA Investor  Services  Corporation 88-C since 1990. He has served
as Senior Vice President and Chief Financial  Officer of FFCA II since 1989, was
named Treasurer in December 1993 and was named  Assistant  Secretary in 1994. In
1995,  Mr.  Barravecchia  was named  Executive  Vice  President  of FFCA II. Mr.
Barravecchia  currently  serves as Executive  Vice  President,  Chief  Financial
Officer,  Treasurer  and  Assistant  Secretary  of FFCA and  served  in  various
capacities  for FFCA I from 1984 to 1994.  He was appointed  Vice  President and
Chief Financial Officer of FFCA I in December 1986, and Senior Vice President in
October 1989. Mr. Barravecchia was elected as a Director of FFCA I in March 1993
and Treasurer in December 1993.  Prior to joining FFCA I, Mr.  Barravecchia  was
associated with the international public accounting firm of Arthur Andersen LLP.

         Christopher  H. Volk, age 40, has served as Vice  President,  Assistant
Secretary and Assistant  Treasurer of FFCA Investor  Services  Corporation  88-C
since 1994 and served as Vice  President-Research  of FFCA II from 1989 to 1993.
Mr. Volk was named Senior Vice President-Underwriting and Research and Secretary
of FFCA II in December 1993. In 1995, he was named Chief  Operating  Officer and
Executive  Vice  President  of FFCA II. He currently  serves as  Executive  Vice
President,  Chief Operating Officer,  Secretary and Assistant Treasurer of FFCA.
He  joined  FFCA I in 1986 and has  served  in  various  capacities  in FFCA I's
capital   preservation  and  underwriting   areas  prior  to  being  named  Vice
PresidentAResearch in October 1989. In December 1993, he was appointed Secretary
and  Senior  Vice  President-Underwriting  and  Research  of FFCA I,  and he was
elected as a Director of FFCA I in March 1993. Prior to joining FFCA I, Mr. Volk
was  employed for six years with the  National  Bank of Georgia,  where his last
position was Assistant  Vice President and Senior  Correspondent  Banking Credit
Officer.  Mr. Volk is a member of the Association for Investment  Management and
Research and the Phoenix Society of Financial Analysts.

         Dennis L. Ruben,  age 43,  served as Senior Vice  President and General
counsel of FFCA II from December 1994 and was named  Executive  Vice  President,
General  Counsel  and  Assistant  Secretary  of FFCA  II in  February  1997.  He
currently  serves in the same  capacity for FFCA.  In 1991,  he joined FFCA I as
attorney and counsel.  In December 1993, he was appointed  Senior Vice President
and General Counsel of FFCA I. Prior to joining FFCA I, Mr. Ruben was 
                                       17
<PAGE>
associated with the law firm of Kutak Rock from 1980 until March 1991. Mr. Ruben
became a partner of Kutak Rock in 1984. Mr. Ruben has been admitted to the Iowa,
Nebraska and Colorado bars.

         Stephen G. Schmitz, age 42, served as Senior Vice President - Corporate
Finance of FFCA II from January  1996 and was named  Executive  Vice  President,
Chief Investment Officer and Assistant Secretary of FFCA II in February 1997. He
currently  serves in the same capacity for FFCA.  Mr.  Schmitz served in various
positions  as an officer  of FFCA I from 1986 to June 1, 1994.  Prior to joining
FFCA I, Mr.  Schmitz was a  commercial  lender  with Mellon Bank in  Pittsburgh,
where his last position was Vice-President and Section Manager.

         Catherine F. Long, age 40, was named Senior Vice  President-Finance  of
FFCA in February 1997, was named Principal  Accounting  Officer in December 1993
and was named Assistant Secretary and Assistant Treasurer in 1994. She currently
serves in the same  capacities for FFCA. In June 1990, she joined FFCA I as Vice
President-Finance.  In December  1993,  she was appointed  Principal  Accounting
Officer of FFCA I. From December 1978 to May 1990, Ms. Long was associated  with
the international  public accounting firm of Arthur Andersen LLP, where her last
position was senior audit manager. Ms. Long is a certified public accountant and
is a member of the Arizona Society of Certified Public Accountants.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Based  solely  upon a review  of Forms 3 and 4 and  amendments  thereto
furnished  to the  Co-Registrants  during  fiscal  year  1996  and  Forms  5 and
amendments thereto furnished to the  Co-Registrants  with respect to fiscal year
ended December 31, 1995 (the "Forms"),  and any written  representations  by the
directors and executive officers of FFCA Investor Services  Corporation 88-C and
the Managing General Partner,  the Co-Registrants have not identified herein any
such person that failed to file on a timely basis the Forms  required by Section
16(a) of the Securities Exchange Act of 1934 for fiscal year 1996.

Item 11. Executive Compensation.

         The   Partnership  is  required  to  pay  an  acquisition   fee  and  a
subordinated  real estate  disposition fee to the Managing General Partner,  and
the General Partners are entitled to receive a share of cash distributions, when
and as made to the  Holders,  a share of profits  and losses and a  subordinated
share of any sale  proceeds.  Reference  is made to Note (1) and Note (5) of the
Notes to Financial Statements which are filed with this Report for a description
of the fees and distributions paid in 1996.

         FFCA Investor Services  Corporation 88-C serves as assignor and initial
limited partner without compensation from the Partnership. It is not entitled to
any share of the profits,  losses or cash distributions of the Partnership.  The
director and officers of FFCA Investor  Services  Corporation 88-C serve without
compensation from FFCA Investor Services Corporation 88-C or the Partnership.
                                       18
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.

         As of March 14, 1997,  no person or group was known by the  Partnership
to own directly or  beneficially  more than 5% of the  outstanding  Units of the
Partnership.

         None of the General  Partners of the Partnership  owned any Units as of
March 14, 1997.  The  directors  and officers of the Managing  General  Partner,
individually  and as a group,  owned  less  than 1% of the Units as of March 14,
1997. The Managing  General  Partner is owned 51% by Morton H. Fleischer and 49%
by Paul Bagley.

         FFCA  Investor  Services  Corporation  88-C  has  an  interest  in  the
Partnership as a limited  partner and it serves as the owner of record of all of
the limited partnership  interests assigned by it to the Holders.  However, FFCA
Investor  Services  Corporation  88-C has no right to vote its  interest  on any
matter and it must vote the assigned interests as directed by the Holders.  FFCA
Investor Services Corporation 88-C is a wholly-owned  subsidiary of the Managing
General Partner.

Item 13. Certain Relationships and Related Transactions.

         Since  the   beginning   of  the  last  fiscal  year  of  both  of  the
Co-Registrants,   there  have  been  no  significant  transactions  or  business
relationships among the Co-Registrants, the General Partners or their affiliates
or their management, other than as described in Items 10 and 11 above.

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

         (a)      The following documents are filed as part of this Report:

         1.       Financial Statements.  The following financial statements are 
         filed as part of this Report:

                  The Partnership

                  Report of independent public accountants  
                  Balance Sheets as of December 31, 1996 and 1995  
                  Statements of Income for the years ended
                   December 31, 1996, 1995 and 1994
                  Statements of Changes In Partners' Capital for
                   the years ended December 31, 1996, 1995 and 1994
                  Statements of Cash Flows for the years ended
                   December 31, 1996, 1995 and 1994
                                       19
<PAGE>
                  Notes to Financial Statements

                  FFCA Investor Services Corporation 88-C

                  Report of independent public  accountants  
                  Balance Sheet as of December 31, 1996 
                  Notes to Balance Sheet

         2.       Financial Statement Schedules.

                  Schedule III-Schedule of Real Estate and Accumulated
                    Depreciation as of December 31, 1996

                  All other schedules are omitted since they are not
                    required, are inapplicable, or the required
                    information is included in the financial statements or notes
                    thereto.


         3.       Exhibits.

                  99.      Annual Portfolio Valuation of Cushman & Wakefield as 
                           of December 31, 1996

                           Pursuant to Rule 12b-32 under the Securities Exchange
                  Act of 1934, as amended,  the following  document,  filed with
                  the  Securities  and Exchange  Commission  as Exhibit 4 to the
                  Co-Registrants'  Form 10-K for the  fiscal  year  ended  1989,
                  Commssion File No.  0-18504,  is  incorporated  herein by this
                  reference.

                           Fifth Amended and Restated  Certificate and Agreement
                           of Limited Partnership which governs the Partnership,
                           as filed with the  Secretary  of State of Delaware on
                           December 11, 1989.

                           Pursuant to Rule 12b-32 under the Securities Exchange
                  Act of 1934, as amended, the following  documents,  filed with
                  the  Securities  and  Exchange  Commission  as exhibits to the
                  Co-Registrants'   Registration   Statement   on   Form   S-11,
                  Registration  No. 33-16849,  are  incorporated  herein by this
                  reference.


                           Form of Depository Agreement.                    4(d)

                           The Certificate of  Incorporation  which         4(b)
                           governs    FFCA     Investor     Services
                           Corporation   88-C,  as  filed  with  the
                                       20
<PAGE>
                           Secretary  of State of Delaware on
                           August 11, 1987.

                           Bylaws   of   FFCA   Investor    Services        4(c)
                           Corporation 88-C. 

                           Operating  Agreement,  dated November 14,       10(c)
                           1988, by and among  Participating  Income
                           Properties  II,  L.P.  Franchise  Finance
                           Corporation  of America II, Flying J Inc.
                           and Flying J Franchise Inc.

         (b)      Reports on Form 8-K.

                           The  Co-Registrants  did not file any reports on Form
                           8-K during the fourth quarter of fiscal year 1996.
                                       21
<PAGE>
                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Partnership has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                        PARTICIPATING INCOME PROPERTIES II, L.P.

                                        By     FRANCHISE   FINANCE   CORPORATION
                                               OF  AMERICA   II, Managing 
                                               General Partner


Date:  March 19, 1997                          By /s/ Morton H. Fleischer
                                                  ------------------------------
                                                  Morton H. Fleischer, President
                                                  and Chief Executive Officer


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Partnership and in the capacities and on the dates indicated.

         SIGNATURES  OF REQUIRED  OFFICERS AND  DIRECTORS  OF FRANCHISE  FINANCE
         CORPORATION OF AMERICA II, MANAGING  GENERAL  PARTNER OF  PARTICIPATING
         INCOME PROPERTIES II, L.P.



Date:  March 10, 1997                   By /s/ Paul Bagley
                                           -------------------------------------
                                           Paul Bagley, Director


Date:  March 19, 1997                   By /s/ Morton H. Fleischer
                                           -------------------------------------
                                           Morton H. Fleischer, President, Chief
                                           Executive Officer and Director


Date:  March 19, 1997                   By /s/ John R. Barravecchia
                                           -------------------------------------
                                           John R. Barravecchia, Executive  Vice
                                           President, Chief Financial   Officer,
                                           Treasurer, Assistant Secretary and 
                                           Director
<PAGE>
Date:  March 19, 1997                   By /s/ Christopher H. Volk
                                           -------------------------------------
                                           Christopher H. Volk, Executive Vice 
                                           President, Chief Operating Officer,
                                           Secretary, Assistant Treasurer and 
                                           Director

Date:  March 19, 1997                   By /s/ Catherine F. Long
                                           -------------------------------------
                                           Catherine F. Long, Senior Vice 
                                           President-Finance, Principal 
                                           Accounting Officer, Assistant 
                                           Secretary and Assistant Treasurer


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Co-Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                        FFCA INVESTOR SERVICES CORPORATION 88-C


Date:  March 19, 1997                   By /s/ Morton H. Fleischer
                                           -------------------------------------
                                           Morton H. Fleischer, Sole Director


Date:  March 19, 1997                   By /s/ John R. Barravecchia
                                           -------------------------------------
                                           John R. Barravecchia, President,
                                           Secretary, Treasurer, Principal 
                                           Financial Officer and Principal 
                                           Accounting Officer
<PAGE>
Report of Independent Public Accountants



To Participating Income Properties II, L.P.:

         We have audited the accompanying balance sheets of PARTICIPATING INCOME
PROPERTIES II, L.P. (a Delaware limited partnership) as of December 31, 1996 and
1995,  and the related  statements of income,  changes in partners'  capital and
cash flows for each of the three years in the period  ended  December  31, 1996.
These  financial   statements  and  the  schedule  referred  to  below  are  the
responsibility of the partnership's managing general partner. Our responsibility
is to express an opinion on these financial statements and schedule based on our
audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the financial position of Participating Income
Properties  II, L.P. as of  December  31, 1996 and 1995,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1996 in conformity with generally accepted accounting principles.

         Our audits were made for the purpose of forming an opinion on the basic
financial  statements  taken  as a  whole.  The  schedule  of  Real  Estate  and
Accumulated  Depreciation  is  presented  for  purposes  of  complying  with the
Securities  and Exchange  Commission's  rules and is not a required  part of the
basic  financial  statements.  This schedule has been  subjected to the auditing
procedures  applied in our audits of the basic financial  statements and, in our
opinion,  fairly states in all material  respects the financial data required to
be set forth therein in relation to the basic  financial  statements  taken as a
whole.

/s/ Arthur Andersen LLP

Phoenix, Arizona,

     January 3, 1997.
<PAGE>
              PARTICIPATING INCOME PROPERTIES II, L.P.
              ----------------------------------------

             BALANCE SHEETS - DECEMBER 31, 1996 AND 1995
             -------------------------------------------
<TABLE>
<CAPTION>
                                                                                       1996                  1995
                                                                                    -----------           -----------
<S>                                                                                <C>                   <C>         

                                                        ASSETS
                                                        ------
CASH AND CASH EQUIVALENTS                                                          $  3,790,885          $  3,818,927

RECEIVABLES FROM LESSEES                                                                173,000               181,433

PROPERTY SUBJECT TO OPERATING LEASES (Note 3)                                        51,863,895            54,931,871
                                                                                    -----------           -----------

                     Total assets                                                   $55,827,780           $58,932,231
                                                                                    ===========           ===========


                                           LIABILITIES AND PARTNERS' CAPITAL
                                           ---------------------------------

DISTRIBUTION PAYABLE TO LIMITED PARTNERS                                            $ 2,075,158           $ 2,101,344

PAYABLE TO GENERAL PARTNERS                                                              18,239                  -

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                                                 72,787                62,696

DEFERRED INCOME (Note 2)                                                                868,470             1,261,059
                                                                                    -----------           -----------

                     Total liabilities                                                3,034,654             3,425,099
                                                                                    -----------           -----------

PARTNERS' CAPITAL (DEFICIT):
      General partners                                                                 (190,647)             (163,507)
      Limited partners                                                               52,983,773            55,670,639
                                                                                    -----------           -----------

                     Total partners' capital                                         52,793,126            55,507,132
                                                                                    -----------           -----------

                     Total liabilities and partners' capital                        $55,827,780           $58,932,231
                                                                                    ===========           ===========
</TABLE>

 The accompanying notes are an integral part of these balance sheets.
<PAGE>
              PARTICIPATING INCOME PROPERTIES II, L.P.
              ----------------------------------------

                        STATEMENTS OF INCOME
                        --------------------

        FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
        ----------------------------------------------------
<TABLE>
<CAPTION>
                                                                1996                   1995                    1994
                                                             ----------             ----------              ----------
<S>                                                          <C>                    <C>                     <C>       
REVENUES:
      Rental                                                 $7,463,620             $7,463,620              $7,433,870
      Participating rentals                                   2,237,456              2,354,294               2,150,925
      Interest and other                                        156,214                167,930                 146,792
      Gain on insurance settlement                                -                      -                     163,789
                                                             ----------             ----------              ----------

                                                              9,857,290              9,985,844               9,895,376
                                                             ----------             ----------              ----------

EXPENSES:
      General partner and affiliate fees  (Note 5)              849,864                862,275                 834,088
      Depreciation                                            2,988,226              2,895,293               2,853,374
      Operating                                                 187,593                225,654                 281,477
                                                             ----------             ----------              ----------

                                                              4,025,683              3,983,222               3,968,939
                                                             ----------             ----------              ----------

NET INCOME                                                   $5,831,607             $6,002,622              $5,926,437
                                                             ==========             ==========              ==========

NET INCOME ALLOCATED TO  (Note 1):
      General partners                                       $   58,316             $   60,026              $   59,264
      Limited partners                                        5,773,291              5,942,596               5,867,173
                                                             ----------             ----------              ----------

                                                             $5,831,607             $6,002,622              $5,926,437
                                                             ==========             ==========              ==========

NET INCOME PER LIMITED PARTNERSHIP
      UNIT (based on 82,834 units held by
      limited partners)                                          $69.70                 $71.74                  $70.83
                                                                 ======                 ======                  ======
</TABLE>

  The accompanying notes are an integral part of these statements.
<PAGE>
              PARTICIPATING INCOME PROPERTIES II, L.P.
              ----------------------------------------

             STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
             ------------------------------------------

        FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
        ----------------------------------------------------
<TABLE>
<CAPTION>
                                                                General              Limited
                                                               Partners              Partners                 Total
                                                              ---------            -----------             -----------
<S>                                                           <C>                  <C>                     <C>        
BALANCE,  December 31, 1993                                   $(113,142)           $60,656,712             $60,543,570

      Net income                                                 59,264              5,867,173               5,926,437

      Distributions to partners                                 (83,418)            (8,258,384)             (8,341,802)
                                                              ---------            -----------             -----------

BALANCE,  December 31, 1994                                    (137,296)            58,265,501              58,128,205

      Net income                                                 60,026              5,942,596               6,002,622

      Distributions to partners                                 (86,237)            (8,537,458)             (8,623,695)
                                                              ---------            -----------             -----------

BALANCE,  December 31, 1995                                    (163,507)            55,670,639              55,507,132

      Net income                                                 58,316              5,773,291               5,831,607

      Distributions to partners                                 (85,456)            (8,460,157)             (8,545,613)
                                                              ---------            -----------             -----------

BALANCE,  December 31, 1996                                   $(190,647)           $52,983,773             $52,793,126
                                                              =========            ===========             ===========
</TABLE>

  The accompanying notes are an integral part of these statements.
<PAGE>
              PARTICIPATING INCOME PROPERTIES II, L.P.
              ----------------------------------------

                      STATEMENTS OF CASH FLOWS
                      ------------------------

        FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
        ----------------------------------------------------
<TABLE>
<CAPTION>
                                                                              1996            1995             1994
                                                                         -----------      -----------      -----------
<S>                                                                      <C>              <C>              <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                           $ 5,831,607      $ 6,002,622      $ 5,926,437
    Adjustments to net income:
       Depreciation                                                        2,988,226        2,895,293        2,853,374
       Gain on insurance settlement                                             -                -            (163,789)
       Change in assets and liabilities:
          Decrease (increase) in receivables from lessees                      8,433           (1,433)         (30,000)
          Increase in payable to general partners                             18,239             -                -
          Increase (decrease) in accounts payable
              and accrued liabilities                                         10,091          (70,444)          45,917
          Decrease in deferred income                                       (392,589)        (155,852)        (274,220)
          Decrease in rental deposits                                           -                -            (952,483)
                                                                         -----------      -----------      -----------

              Net cash provided by operating activities                    8,464,007        8,670,186        7,405,236
                                                                         -----------      -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of property                                            79,750             -                -
    Additions to property                                                       -                -            (595,000)
                                                                         -----------      -----------      -----------

              Net cash provided by (used in) investing activities             79,750             -            (595,000)
                                                                         -----------      -----------      -----------

CASH FLOWS FOR FINANCING ACTIVITIES:
    Partner distributions declared (Note 1)                               (8,545,613)      (8,623,695)      (8,341,802)
    Increase (decrease) in distribution payable
       to limited partners                                                   (26,186)          30,406           90,123
                                                                         -----------      -----------      -----------

              Net cash used in financing activities                       (8,571,799)      (8,593,289)      (8,251,679)
                                                                         -----------      -----------      -----------

NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS                                                     (28,042)          76,897       (1,441,443)

CASH AND CASH EQUIVALENTS, beginning of year                               3,818,927        3,742,030        5,183,473
                                                                         -----------      -----------      -----------

CASH AND CASH EQUIVALENTS, end of year                                   $ 3,790,885      $ 3,818,927      $ 3,742,030
                                                                         ===========      ===========      ===========
</TABLE>

  The accompanying notes are an integral part of these statements.
<PAGE>
              PARTICIPATING INCOME PROPERTIES II, L.P.
              ----------------------------------------

                    Notes to Financial Statements
                    -----------------------------

                     December 31, 1996 and 1995
                     --------------------------

1)  ORGANIZATION:
    -------------

         Participating  Income  Properties II, L.P. (the Partnership) was formed
on August 12, 1987 under the Delaware Revised Uniform Limited Partnership Act to
purchase new and existing  "Flying J Travel Plaza"  facilities,  including land,
buildings  and equipment to be leased on a net basis to certain  franchisees  of
Flying J  Franchise  Inc.  and to Flying J Inc.  As of December  31,  1996,  all
thirteen  travel plazas owned by the  Partnership  were leased to CFJ Properties
(CFJ), an affiliate of Flying J Inc. "Flying J Travel Plaza"  facilities offer a
full-service  operation,  generally  including  fuel  facilities,  a restaurant,
convenience  store and other  amenities  for use by the  trucking  industry  and
traveling public in general.  Franchise Finance  Corporation of America II (FFCA
II), a Delaware corporation, is the managing general partner of the Partnership.
The Partnership will expire December 31, 2047, or sooner, in accordance with the
terms of the Partnership agreement.

         Investors acquired units of assigned limited partnership  interest (the
limited  partnership  units)  in the  Partnership  from FFCA  Investor  Services
Corporation  88-C  (the  Initial  Limited  Partner),   a  Delaware   corporation
wholly-owned  by an affiliate  of FFCA II.  Holders of the units have all of the
economic  benefits  and  substantially  the same  rights  and  powers of limited
partners; therefore, they are referred to herein as "limited partners."

         The Partnership agreement provides for allocation of profits and losses
and cash distributions among its partners as follows:

         Profits and Losses: Allocated 99% to the limited partners and 1% to the
         general partners.

         Cash Distributions: All cash from operations, as defined, after payment
         of fees to the managing general partner is allocated 99% to the limited
         partners and 1% to the general partners. Cash proceeds from the sale of
         property are not considered cash from operations but, when distributed,
         represent a partial return of the limited  partners' initial $1,000 per
         unit  capital  contribution.  There  have  been no such  distributions,
         therefore,  the  limited  partner  Adjusted  Capital  Contribution,  as
         defined in the  Partnership  agreement,  at December 31, 1996 is $1,000
         per unit.

         The following is a reconciliation  of net income to cash  distributions
from operations as defined in the Partnership agreement:
<TABLE>
<CAPTION>
                                                                      1996                1995                1994
                                                                   ----------          ----------          ----------
          <S>                                                      <C>                 <C>                 <C>       
          Net income                                               $5,831,607          $6,002,622          $5,926,437
          Adjustments to reconcile net income to
              cash distributions declared:
              Depreciation                                          2,988,226           2,895,293           2,853,374
              Gain on insurance settlement                               -                   -               (163,789)
              Rental enhancement accretion                           (274,220)           (274,220)           (274,220)
                                                                   ----------          ----------          ----------

          Cash distributions declared from operations              $8,545,613          $8,623,695          $8,341,802
                                                                   ==========          ==========          ==========
</TABLE>
2)  SIGNIFICANT ACCOUNTING POLICIES:
    --------------------------------

         Financial  Statements - The financial statements of the Partnership are
prepared on the accrual basis of  accounting.  The  preparation of the financial
statements in conformity with generally accepted accounting  principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial  statements and the reported
amounts  of  revenues  and  expenses  during  the  
<PAGE>
reporting  period.  Although  management  believes its estimates are reasonable,
actual results could differ from those estimates.

         Cash and Cash  Equivalents  -  Investment  securities  that are  highly
liquid and have  maturities  of three months or less at the date of purchase are
classified as cash equivalents.  Cash equivalents include United States Treasury
securities  of  $3,496,028  and  $3,427,905  at  December  31,  1996  and  1995,
respectively, and bank repurchase agreements (which are collateralized by United
States Treasury and Government obligations) of $175,139 and $175,103 at December
31, 1996 and 1995,  respectively.  Short-term  investments  are recorded at cost
plus accrued interest, which approximates market value.

         Leases - The Partnership leases its property under long-term net leases
which are classified as operating  leases.  Rental revenue from operating leases
is recognized as it is earned.

         Deferred  Income - The Partnership  required  certain lessees to pay to
the  Partnership,  at the  inception of the lease,  an amount equal to 4% of the
property's cost (rental  enhancements).  This amount is deferred and accreted to
revenue  on  a  straight-line  basis  over  ten  years.  The  cash  from  rental
enhancements  and  interest  accrued  thereon  was  used to  supplement  limited
partners' cash distributions during 1992 and prior years.

         Depreciation  -  Depreciation   on  buildings  is  provided  using  the
straight-line method based upon an estimated useful life of 24 years.  Equipment
is  depreciated  over an estimated  useful life of eight  years,  assuming a 10%
salvage  value at the end of its useful life.  The cost of  properties  includes
miscellaneous acquisition and closing costs.

3)  PROPERTY SUBJECT TO OPERATING LEASES:
    -------------------------------------

         The following is an analysis of the Partnership's  investment, at cost,
in property  subject to operating leases by major class at December 31, 1996 and
1995:
                                                     1996              1995
                                                 -----------       -----------
         Land                                    $11,709,570       $11,709,570
         Buildings                                54,004,577        54,004,577
         Equipment                                 5,268,921         5,906,921
                                                  -----------       -----------
                                                  70,983,068        71,621,068
         Less - Accumulated depreciation          19,119,173        16,689,197
                                                  -----------       -----------

                                                  $51,863,895       $54,931,871
                                                  ===========       ===========

         Lease agreements provide for monthly base rentals equal to a percentage
of the property's cost. As additional  rent, the Partnership  receives a portion
of the operating  revenues of the lessee equal to a percentage of gross receipts
(participating rentals) from travel plaza facilities and fuel sales. The term of
the leases is eight  years for  equipment  and 20 years for land and  buildings.
Generally,  the lessee  has the option to  purchase  equipment  (at fair  market
value) at the end of the lease term and land and  buildings  (at the  greater of
fair  market  value or cost) at any time after the first ten years of the lease.
The equipment leases are scheduled to expire in 1997, 1998 and 1999.  During the
year  ended  December  31,  1996,  all  thirteen  travel  plazas  owned  by  the
Partnership  were leased to CFJ. The  Partnership is the beneficiary of a letter
of credit from CFJ in the amount of  $952,483  to be used as security  for CFJ's
lease payments.
<PAGE>
         Minimum  future  rentals   (excluding   participating   rentals)  under
noncancellable operating leases as of December 31, 1996, are as follows:

         Year Ending December 31,
         ------------------------
         1997                                               $ 7,189,000
         1998                                                 7,189,000
         1999                                                 7,189,000
         2000                                                 7,189,000
         2001                                                 7,189,000
         Thereafter                                          58,068,000
                                                            -----------

         Total minimum future rentals                       $94,013,000
                                                            ===========

4)  INCOME TAXES:
    -------------

         The Partnership is not directly subject to income taxes;  rather,  each
partner is subject to income taxes on his distributable share of taxable income.
The Partnership tax returns and the amount of distributable  partnership profits
or losses are subject to examination by Federal and state taxing authorities. If
examinations  by  taxing   authorities   result  in  changes  to   distributable
partnership  profits or losses,  the tax  liabilities  of the partners  could be
changed accordingly.

         The following is a reconciliation of net income for financial reporting
purposes to income  reported for Federal income tax purposes for the years ended
December 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
                                                                      1996                1995                1994
                                                                   ----------          ----------          ----------
       <S>                                                         <C>                 <C>                 <C>       
       Net income for financial reporting purposes                 $5,831,607          $6,002,622          $5,926,437
       Differences for tax purposes in:
          Depreciation                                              1,382,631           1,092,026             983,539
          Adjustment to deferred rental revenue                      (274,220)           (274,220)           (274,220)
          Organization cost amortization                                 -                   -                (40,210)
          Deferred income                                            (118,368)            118,368                -
          Gain on sale                                                (35,758)               -                   -
          Gain on insurance settlement                                   -                   -               (163,789)
                                                                   ----------          ----------          ----------

       Taxable income to partners                                  $6,785,892          $6,938,796          $6,431,757
                                                                   ==========          ==========          ==========
</TABLE>
For  Federal  income tax  reporting  purposes,  taxable  income to  partners  is
reported  on the  accrual  basis of  accounting  and is  classified  as ordinary
income.

         At December 31,  1996,  the tax bases of the  Partnership's  assets and
liabilities  exceed the amounts  recorded for  financial  reporting  purposes by
$6,773,322.  This difference  results primarily from differences in depreciation
methods and the  treatment  of deferred  rental  revenue for tax  reporting  and
financial reporting purposes.
<PAGE>
5)  TRANSACTIONS WITH RELATED PARTIES:
    ----------------------------------

         Under the terms of the  Partnership  agreement,  FFCA II is entitled to
compensation  for certain  services  performed in  connection  with managing the
affairs of the Partnership. Additionally, an affiliate of FFCA II is entitled to
a fee for investment banking and asset management  services  (investment banking
fee). During 1996, 1995 and 1994, fees paid to FFCA II and the affiliate were as
follows:
<TABLE>
<CAPTION>
                                                                       1996                1995                1994
                                                                     --------            --------            --------
         <S>                                                         <C>                 <C>                 <C>     
         FFCA II - disbursable cash fee                              $845,593            $853,738            $825,830
         Affiliate - investment banking fee                             4,271               8,537               8,258
                                                                     --------            --------            --------

                                                                     $849,864            $862,275            $834,088
                                                                     ========            ========            ========
</TABLE>
         FFCA II is entitled to a  disbursable  cash fee equal to 9% of all cash
received by the Partnership less  Partnership  operating  expenses,  only to the
extent the limited  partners have  received an annual  return of 9%  (calculated
quarterly) on their Adjusted Capital  Contribution,  as defined.  The investment
banking fee payable to the  affiliate  is equal to .09% of  disbursable  cash as
described  in  the  Partnership  agreement  and  is  limited  in  total  by  the
Partnership agreement.  This limit was reached during 1996. FFCA II will also be
entitled to a subordinated real estate disposition fee and an incentive share of
sale proceeds, as defined in the Partnership agreement.

         An  affiliate of FFCA II incurs  expenses on behalf of the  Partnership
for  maintenance  of the books and records and for computer,  investor and legal
services  performed for the  Partnership.  These  expenses are  reimbursable  in
accordance with the Partnership agreement and are less than the amount which the
Partnership would have paid to independent parties for comparable services.  The
Partnership  reimbursed  the  affiliate  $28,364  in 1996,  $27,414  in 1995 and
$40,590 in 1994 for such expenses.
<PAGE>
                                                                    SCHEDULE III
                                                                     Page 1 of 2

                    PARTICIPATING INCOME PROPERTIES II, L.P.
                    ----------------------------------------

              SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION
              ----------------------------------------------------

                            AS OF DECEMBER 31, 1996
                            -----------------------
<TABLE>
<CAPTION>
                                      Initial Cost to Partnership and
                                     Gross Amount at December 13, 1996                 Accumulated Depreciation
                            ---------------------------------------------------  --------------------------------------
                                                                                                                            Date
Restaurant Location             Land        Buildings    Equipment      Total       Buildings    Equipment      Total      Acquired
-------------------         ------------  ------------  ----------  -----------  ------------  ----------  ------------  -----------
<S>                         <C>           <C>           <C>         <C>           <C>           <C>         <C>           <C> 
KINGMAN,      ARIZONA       $    843,681  $  3,731,319  $  384,000  $  4,959,000  $  1,140,125  $  316,800  $  1,456,925  Sept. 1989
TEXARKANA,    ARKANSAS            63,243     4,866,904     765,921     5,696,068       986,089     329,107     1,315,196  Jan.  1990
RESACA,       GEORGIA          1,145,422     4,555,578     600,000     6,301,000     1,328,710     472,535     1,801,245  Jan.  1990
JACKSON,      GEORGIA            284,661     5,523,339     492,000     6,300,000     1,649,331     396,675     2,046,006  Nov.  1989
WALTON,       KENTUCKY         1,216,623     4,529,377     454,000     6,200,000     1,273,887     344,756     1,618,643  April 1990
WINNEMUCCA,   NEVADA           1,489,004     3,098,996     287,000     4,875,000       720,947     180,272       901,219  June  1991
GRAHAM,       NORTH CAROLINA   1,153,847     5,566,153     410,000     7,130,000     1,758,750     349,781     2,108,531  June  1989
TROUTDALE,    OREGON             738,474     3,647,526     267,000     4,653,000       886,552     175,219     1,061,771  Mar.  1991
DILLON,       SOUTH CAROLINA   1,052,840     5,625,160     342,000     7,020,000     1,796,926     294,975     2,091,901  Feb.  1989
KNOXVILLE,    TENNESSEE        1,058,958     4,241,042     300,000     5,600,000     1,310,600     250,313     1,560,913  Aug.  1989
PECOS,        TEXAS              170,990     1,999,010        -        2,170,000       638,573        -          638,573  Nov.  1988
SAN ANTONIO,  TEXAS            1,566,238     3,612,762     600,000     5,779,000       991,001     444,375     1,435,376  June  1990
ROCK SPRINGS, WYOMING            925,589     3,007,411     367,000     4,300,000       814,505     268,369     1,082,874  July  1990
                            ------------  ------------  ----------  ------------  ------------  ----------  ------------

                     Total  $ 11,709,570  $ 54,004,577  $5,268,921  $ 70,983,068  $ 15,295,996  $3,823,177  $ 19,119,173
                            ============  ============  ==========  ============  ============  ==========  ============
</TABLE>
<PAGE>
                                                                    SCHEDULE III
                                                                     Page 2 of 2

                    PARTICIPATING INCOME PROPERTIES II, L.P.
                    ----------------------------------------

              SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION
              ----------------------------------------------------

                             AS OF DECEMBER 31, 1996
                             -----------------------

NOTES:

(1)      There are no encumbrances on properties.

(2)      Cost for Federal  income tax purposes is the same as cost for financial
         reporting purposes.

(3)      All buildings and equipment are depreciated over estimated useful lives
         of 24 and eight years, respectively. Substantially all of the buildings
         and equipment were purchased as new properties.

(4)      Transactions  in real estate,  equipment and  accumulated  depreciation
         during 1996, 1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
                                                                                                          Accumulated
                                                                                       Cost               Depreciation
                                                                                   -----------            ------------
         <S>                                                                       <C>                     <C>     
         Balance, December 31, 1993                                                $70,921,766            $11,000,017
                Building damaged in fire                                              (661,619)               (59,487)
                Building improvements due to
                   reconstruction                                                      595,000                   -
                Purchase of equipment                                                  765,921                   -
                Depreciation expense                                                     -                  2,853,374
                                                                                   -----------            -----------

         Balance, December 31, 1994                                                 71,621,068             13,793,904
                Depreciation expense                                                     -                  2,895,293
                                                                                   -----------            -----------

         Balance, December 31, 1995                                                 71,621,068             16,689,197
                Cost of equipment sold                                                (638,000)              (558,250)
                Depreciation expense                                                     -                  2,988,226
                                                                                   -----------            -----------

         Balance, December 31, 1996                                                $70,983,068            $19,119,173
                                                                                   ===========            ===========
</TABLE>
<PAGE>
Report of Independent Public Accountants



To FFCA Investor Services Corporation 88-C:

              We have audited the  accompanying  balance  sheet of FFCA INVESTOR
SERVICES CORPORATION 88-C (a Delaware corporation) as of December 31, 1996. This
financial  statement is the  responsibility  of the  Company's  management.  Our
responsibility is to express an opinion on this financial statement based on our
audit.

              We  conducted  our audit in  accordance  with  generally  accepted
auditing  standards.  Those standards require that we plan and perform the audit
to obtain  reasonable  assurance  about  whether  the  balance  sheet is free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures  in the  balance  sheet.  An audit also
includes assessing the accounting principles used and significant estimates made
by  management,   as  well  as  evaluating  the  overall   financial   statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

              In our  opinion,  the balance  sheet  referred  to above  presents
fairly,  in all  material  respects,  the  financial  position of FFCA  Investor
Services  Corporation 88-C as of December 31, 1996, in conformity with generally
accepted accounting principles.




/s/ Arthur Andersen LLP

Phoenix, Arizona,
     January 3, 1997.
<PAGE>
                     FFCA INVESTOR SERVICES CORPORATION 88-C
                     ---------------------------------------


                        BALANCE SHEET - DECEMBER 31, 1996
                        ---------------------------------


                                     ASSETS


Cash                                                                        $100
Investment in Participating Income Properties II, L.P.,
     at cost                                                                 100
                                                                             ---

                    Total Assets                                            $200
                                                                            ====


                                    LIABILITY

Payable to Parent (Note 2)                                                  $100
                                                                            ----


                              STOCKHOLDER'S EQUITY


Common Stock; $l par value; 100 shares authorized,
     issued and outstanding                                                  100
                                                                             ---

                    Liability and Stockholder's Equity                      $200
                                                                            ====

       The accompanying notes are an integral part of this balance sheet.
<PAGE>
                     FFCA INVESTOR SERVICES CORPORATION 88-C
                     ---------------------------------------


                             NOTES TO BALANCE SHEET
                             ----------------------

                                DECEMBER 3l, l996
                                -----------------


(l) Operations:

           FFCA  Investor  Services  Corporation  88-C (a Delaware  corporation)
(88-C) was organized on August 11, l987 to act as the assignor  limited  partner
in Participating Income Properties II, L.P. (PIP-II).

           The  assignor  limited  partner is the owner of record of the limited
partnership units of PIP-II. All rights and powers of 88-C have been assigned to
the holders,  who are the registered and beneficial  owners of the units.  Other
than to serve as assignor  limited  partner,  88-C has no other business purpose
and will not engage in any other activity or incur any debt.

(2) Related Parties:

           Morton H. Fleischer is the sole stockholder of 88-C. Mr. Fleischer is
also a general partner of PIP-II.
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.
                                       and
                     FFCA INVESTOR SERVICES CORPORATION 88-C



                                  Exhibit Index
<TABLE>
                                            <S>                                                       <C>
                                                                                                       Sequentially
                                            Exhibit                                                   Numbered Page
                                            -------                                                   -------------
</TABLE>
                  99.      Annual Portfolio  Valuation of Cushman & Wakefield as
                           of December 31, 1996.

                  Pursuant to Rule 12b-32 under the  Securities  Exchange Act of
         1934, as amended, the following document, filed with the Securities and
         Exchange Commission as Exhibit 4 to the  Co-Registrants'  Form 10-K for
         the  fiscal  year  ended  1989,   Commission  File  No.   0-18504,   is
         incorporated herein by this reference.

                           Fifth  Amended and  Restated  Certificate  of Limited
                           Partnership  which governs the Partnership,  as filed
                           with the  Secretary  of State of Delaware on December
                           11, 1989.

                  Pursuant to Rule 12b-32 under the  Securities  Exchange Act of
         1934, as amended,  the following  documents,  filed with the Securities
         and Exchange Commission as exhibits to the Co-Registrants' Registration
         Statement on Form S-11,  Registration  No.  33-16849,  are incorporated
         herein by this reference.
<TABLE>
<CAPTION>
                                                                                Pre-Effective  Amendment
                                                                                     No. 3 Exhibit No.
                                                                                ------------------------

                           <S>                                                              <C> 
                           Form of Depository Agreement.                                    4(d)

                           The Certificate of  Incorporation  which                         4(b)
                           governs    FFCA     Investor     Services
                           Corporation   88-C,  as  filed  with  the
                           Secretary  of State of Delaware on August
                           11, 1987.

                           Bylaws   of   FFCA   Investor    Services
                           Corporation 88-C.                                                4(c)

                           Operating  Agreement,  dated  as of 10(c)
                           November   14,   1988,   by   and   among                       10(c)
                           Participating Income Properties II, L.P.,
                           Franchise Finance  Corporation of America
                           II,  Flying J Inc. and Flying J Franchise
                           Inc.
</TABLE>