UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

For the quarterly period ended                September 30, 1997
                               -------------------------------------------------

[_]     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
                         Commission file number 0-18512

                    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 Organization)                 (Partnership I.R.S. Employer
                                                       Identification Number)

          Delaware                                           86-0588507
--------------------------------------------------------------------------------
(Corporation State of Incorporation)                (Corporation I.R.S. Employer
                                                       Identification Number)

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
                                                     ---------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                   Yes   X    No
                                       -----     -----
<PAGE>
PART 1 - FINANCIAL INFORMATION

     Item l.  Financial Statements.
     -------  ---------------------


                    PARTICIPATING INCOME PROPERTIES II, L.P.

                                 BALANCE SHEETS
                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           September 30,    December 31,
                                                                1997           1996
                                                           -------------    ------------

                                         ASSETS
                                         ------

<S>                                                         <C>             <C>         
CASH AND CASH EQUIVALENTS                                   $  4,016,352    $  3,790,885

RECEIVABLES FROM LESSEES                                         202,172         173,000

PROPERTY SUBJECT TO OPERATING LEASES, at cost
      Land                                                    11,709,570      11,709,570
      Buildings                                               54,004,577      54,004,577
      Equipment                                                3,832,921       5,268,921
                                                            ------------    ------------
              Total                                           69,547,068      70,983,068
      Less-Accumulated depreciation                           20,094,953      19,119,173
                                                            ------------    ------------

                                                              49,452,115      51,863,895
                                                            ------------    ------------

              Total assets                                  $ 53,670,639    $ 55,827,780
                                                            ============    ============


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

DISTRIBUTION PAYABLE TO LIMITED PARTNERS                    $  2,166,724    $  2,075,158

PAYABLE TO GENERAL PARTNERS                                         --            18,239

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                          74,599          72,787

DEFERRED INCOME                                                  662,805         868,470
                                                            ------------    ------------

              Total liabilities                                2,904,128       3,034,654
                                                            ------------    ------------

PARTNERS' CAPITAL (DEFICIT):
      General partners                                          (210,914)       (190,647)
      Limited partners                                        50,977,425      52,983,773
                                                            ------------    ------------

              Total partners' capital                         50,766,511      52,793,126
                                                            ------------    ------------

              Total liabilities and partners' capital       $ 53,670,639    $ 55,827,780
                                                            ============    ============
</TABLE>
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

                              STATEMENTS OF INCOME
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                   (Unaudited)
<TABLE>
<CAPTION>

                                              Three Months    Three Months    Nine Months     Nine Months
                                                  Ended           Ended           Ended           Ended
                                                 9/30/97         9/30/96         9/30/97         9/30/96
                                              ------------    ------------    -----------     -----------
<S>                                            <C>             <C>             <C>             <C>       
REVENUES:
      Rental                                   $1,865,905      $1,865,905      $5,597,715      $5,597,715
      Participating rentals                       610,885         553,874       1,761,110       1,726,072
      Interest and other                           43,892          39,023         142,650         116,803
      Gain on sale of equipment                    27,350            --            29,488            --
                                               ----------      ----------      ----------      ----------

                                                2,548,032       2,458,802       7,530,963       7,440,590
                                               ----------      ----------      ----------      ----------

EXPENSES:
      General partner and
         affiliate fees                           216,424         211,229         642,774         642,583
      Depreciation                                739,229         745,063       2,261,768       2,192,703
      Operating                                    47,421          43,254         153,879         142,564
                                               ----------      ----------      ----------      ----------

                                                1,003,074         999,546       3,058,421       2,977,850
                                               ----------      ----------      ----------      ----------

NET INCOME                                     $1,544,958      $1,459,256      $4,472,542      $4,462,740
                                               ==========      ==========      ==========      ==========


NET INCOME ALLOCATED TO:
      General partners                         $   15,450      $   14,593      $   44,725      $   44,627
      Limited partners                          1,529,508       1,444,663       4,427,817       4,418,113
                                               ----------      ----------      ----------      ----------

                                               $1,544,958      $1,459,256      $4,472,542      $4,462,740
                                               ==========      ==========      ==========      ==========

NET INCOME PER LIMITED
   PARTNERSHIP UNIT (based on
   82,834 units held by limited partners)      $    18.46      $    17.44      $    53.45      $    53.34
                                               ==========      ==========      ==========      ==========
</TABLE>
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                Limited Partners
                                       General          ------------------------------
                                       Partners            Number                               Total
                                        Amount            of Units           Amount             Amount
                                     ------------       ------------      ------------       ------------

<S>                                  <C>                <C>               <C>                <C>         
BALANCE, December 31, 1996           $   (190,647)            82,834      $ 52,983,773       $ 52,793,126

      Net income                           44,725               --           4,427,817          4,472,542

      Distributions to partners           (64,992)              --          (6,434,165)        (6,499,157)
                                     ------------       ------------      ------------       ------------

BALANCE, September 30, 1997          $   (210,914)            82,834      $ 50,977,425       $ 50,766,511
                                     ============       ============      ============       ============
</TABLE>
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

                            STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                  1997              1996
                                                              -----------       -----------
<S>                                                           <C>               <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                               $ 4,472,542       $ 4,462,740
     Adjustments to net income:
        Depreciation                                            2,261,768         2,192,703
        Gain on sale of equipment                                 (29,488)             --
        Change in assets and liabilities:
           Increase in receivables from lessees                   (29,172)           (5,567)
           Decrease in payable to general partners                (18,239)             --
           Increase in accounts payable and
               accrued liabilities                                  1,812             1,540
           Decrease in deferred income                           (205,665)         (324,033)
                                                              -----------       -----------

               Net cash provided by operating activities        6,453,558         6,327,383
                                                              -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sale of equipment                              179,500              --
                                                              -----------       -----------

CASH FLOWS FOR FINANCING ACTIVITIES:
     Distributions to partners                                 (6,407,591)       (6,436,089)
                                                              -----------       -----------

NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                             225,467          (108,706)

CASH AND CASH EQUIVALENTS, beginning of period                  3,790,885         3,818,927
                                                              -----------       -----------

CASH AND CASH EQUIVALENTS, end of period                      $ 4,016,352       $ 3,710,221
                                                              ===========       ===========
</TABLE>
<PAGE>
PART I.- FINANCIAL INFORMATION
------------------------------

Item 2.    Management's Discussion and Analysis of
-------    Financial Condition and Results of Operations
           ---------------------------------------------

      As of September  30, 1997,  Participating  Income  Properties  II, L.P., a
      Delaware limited partnership,  (the Registrant),  had received $82,834,000
      in gross  proceeds  from its offering of Units.  Net funds  available  for
      investment,  after payment of sales commissions,  organizational costs and
      acquisition costs,  amounted to $71,956,541.  The offering of Units is the
      Registrant's  sole  source of  capital,  and since  the final  closing  of
      limited  partnership  units was held on December 11, 1989,  the Registrant
      will not receive  additional  funds from the offering.  The Registrant was
      fully invested in thirteen travel plaza properties by June 1991.

      The Registrant  declared a cash  distribution  to the limited  partners of
      $2,166,399  for the quarter ended  September 30, 1997 (the period),  which
      combined with the first and second  quarterly  distributions of $4,267,766
      amounts to $6,434,165  year to date.  During the period,  all net proceeds
      not invested in real estate were  invested in Government  Agency  discount
      notes and bank repurchase  agreements  (which are secured by United States
      Treasury and Government obligations).

      During the period, the Registrant received base rental revenue pursuant to
      its lease  arrangements  in the amount of  $1,865,905,  unchanged from the
      comparable period of the prior year (year-to-date base rental revenues are
      similarly  unchanged).  Base rental  revenue for the period  includes  the
      recognition of approximately  $69,000 of income  previously  deferred.  In
      addition,  the  Registrant  received or accrued  participating  rentals of
      $610,885  for the  period  representing  an  increase  over  participating
      rentals of $553,874 for the  comparable  period in 1996.  On June 1, 1996,
      CFJ Properties (the  Registrant's  only lessee) curtailed its relationship
      with a large third party billing  company for the trucking  industry.  The
      billing company  requested  changes to its contract that were unacceptable
      to  CFJ   Properties'   management  due  to  the   significant   long-term
      ramifications  of the proposed change on CFJ Properties'  future business.
      This  resulted in reduced  volume and margins,  which  contributed  to low
      participating  rental  revenues in the quarter ended September 30, 1996 as
      compared to the quarter ended  September 30, 1997.  Participating  rentals
      for  the  corresponding  year-to-date  periods  were  similarly  affected,
      although to a lesser extent. During the quarter, the Registrant sold three
      equipment packages for an aggregate gain of $27,350.

      The  decrease in total  assets  reflected  in the  Registrant's  financial
      statements   filed  with  this  report  is  mainly   attributable  to  the
      depreciation allowance, which is deducted for accounting purposes from the
      cost of the assets on the Registrant's books.

      In the opinion of management,  the financial  information included in this
      report reflects all adjustments necessary for fair presentation.  All such
      adjustments are of a normal recurring nature.
<PAGE>
                     FFCA INVESTOR SERVICES CORPORATION 88-C
                     ---------------------------------------


                       BALANCE SHEET - SEPTEMBER 30, 1997
                       ----------------------------------


                                     ASSETS

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

                  Total Assets                                              $200
                                                                            ====


                                    LIABILITY

Payable to Parent                                                           $100


                              STOCKHOLDER'S EQUITY

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

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


Note: FFCA Investor Services Corporation 88-C (88-C) was organized on August 11,
1987 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.
<PAGE>
                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrants  have duly caused  this  report to be signed on their  behalf by the
undersigned thereunto duly authorized.

                            PARTICIPATING INCOME PROPERTIES II, L.P.

                            By FRANCHISE FINANCE CORPORATION OF AMERICA II
                            Corporate General Partner



Date: October 22, 1997             By /s/ John Barravecchia
                                ------------------------------------------------
                                John Barravecchia, Chief Financial Officer
<PAGE>
                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  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: October 22, 1997             By /s/ John Barravecchia
                                ------------------------------------------------
                                John Barravecchia, President