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               June 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

                    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
                       JUNE 30, 1997 AND DECEMBER 31, 1996
                                   (Unaudited)


                                                     June 30,      December 31,
                                                       1997            1996
                                                   ------------    ------------
                                     ASSETS
                                     ------

CASH AND CASH EQUIVALENTS                          $  3,882,738    $  3,790,885

RECEIVABLES FROM LESSEES                                200,218         173,000

PROPERTY SUBJECT TO OPERATING LEASES, at cost
      Land                                           11,709,570      11,709,570
      Buildings                                      54,004,577      54,004,577
      Equipment                                       4,926,921       5,268,921
                                                   ------------    ------------
          Total                                      70,641,068      70,983,068
      Less-Accumulated depreciation                  20,340,324      19,119,173
                                                   ------------    ------------

                                                     50,300,744      51,863,895
                                                   ------------    ------------

          Total assets                             $ 54,383,700    $ 55,827,780
                                                   ============    ============


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

DISTRIBUTION PAYABLE TO LIMITED PARTNERS           $  2,174,717    $  2,075,158

PAYABLE TO GENERAL PARTNERS                                --            18,239

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                 67,787          72,787

DEFERRED INCOME                                         731,361         868,470
                                                   ------------    ------------

          Total liabilities                           2,973,865       3,034,654
                                                   ------------    ------------

PARTNERS' CAPITAL (DEFICIT):
      General partners                                 (204,480)       (190,647)
      Limited partners                               51,614,315      52,983,773
                                                   ------------    ------------

          Total partners' capital                    51,409,835      52,793,126
                                                   ------------    ------------

          Total liabilities and partners' capital  $ 54,383,700    $ 55,827,780
                                                   ============    ============
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

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


                                          Three Months   Three Months    Six Months     Six Months
                                             Ended          Ended          Ended           Ended
                                            6/30/97        6/30/96        6/30/97        6/30/96
                                           ----------     ----------     ----------     ----------
<S>                                        <C>            <C>            <C>            <C>       
REVENUES:
      Rental                               $1,865,905     $1,865,905     $3,731,810     $3,731,810
      Participating rentals                   618,708        606,613      1,150,225      1,172,198
      Interest and other                       43,061         38,987         98,758         77,780
      Gain on sale of equipment                  --             --            2,138           --
                                           ----------     ----------     ----------     ----------
                                            2,527,674      2,511,505      4,982,931      4,981,788
                                           ----------     ----------     ----------     ----------

EXPENSES:
      General partner and
         affiliate fees                       217,249        217,960        426,350        431,354
      Depreciation                            756,141        723,820      1,522,539      1,447,640
      Operating                                45,246         45,151        106,458         99,310
                                           ----------     ----------     ----------     ----------

                                            1,018,636        986,931      2,055,347      1,978,304
                                           ----------     ----------     ----------     ----------

NET INCOME                                 $1,509,038     $1,524,574     $2,927,584     $3,003,484
                                           ==========     ==========     ==========     ==========


NET INCOME ALLOCATED TO:
      General partners                     $   15,090     $   15,246     $   29,276     $   30,035
      Limited partners                      1,493,948      1,509,328      2,898,308      2,973,449
                                           ----------     ----------     ----------     ----------

                                           $1,509,038     $1,524,574     $2,927,584     $3,003,484
                                           ==========     ==========     ==========     ==========

NET INCOME PER LIMITED
   PARTNERSHIP UNIT (based on
   82,834 units held by limited partners)  $    18.04     $    18.22     $    34.99     $    35.90
                                           ==========     ==========     ==========     ==========
</TABLE>
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                             Limited Partners
                                       General         -----------------------------
                                       Partner            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                           29,276               --         2,898,308         2,927,584

      Distributions to partners           (43,109)              --        (4,267,766)       (4,310,875)
                                     ------------      ------------     ------------      ------------

BALANCE, June 30, 1997               $   (204,480)           82,834     $ 51,614,315      $ 51,409,835
                                     ============      ============     ============      ============
</TABLE>
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

                            STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                  1997             1996
                                                              -----------      -----------
<S>                                                           <C>              <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                               $ 2,927,584      $ 3,003,484
     Adjustments to net income:
        Depreciation                                            1,522,539        1,447,640
        Gain on sale of equipment                                  (2,138)            --
        Change in assets and liabilities:
           Increase in receivables from lessees                   (27,218)         (18,567)
           Decrease in payable to general partner                 (18,239)            --
           Increase (decrease) in accounts payable
               and accrued expenses                                (5,000)           1,375
           Decrease in deferred income                           (137,109)        (255,478)
                                                              -----------      -----------

               Net cash provided by operating activities        4,260,419        4,178,454
                                                              -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment                                    42,750             --
                                                              -----------      -----------

CASH FLOWS FOR FINANCING ACTIVITIES:
     Partner distributions declared                            (4,310,875)      (4,256,905)
     Increase in distribution payable to limited partners          99,559             --
                                                              -----------      -----------
              Net cash used in financing activities            (4,211,316)      (4,256,905)
                                                              -----------      -----------

NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                              91,853          (78,451)

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

CASH AND CASH EQUIVALENTS, end of period                      $ 3,882,738      $ 3,740,476
                                                              ===========      ===========
</TABLE>
<PAGE>
PART I.- FINANCIAL INFORMATION
------------------------------


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


      As of June 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
      $2,174,658  for the  quarter  ended  June 30,  1997  (the  period),  which
      combined with the first  quarter  distribution  of  $2,093,108  amounts to
      $4,267,766 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
      same period of the prior year. 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
      $618,708,  for the period as  compared  to  $606,613 in the same period in
      1996. The $12,095 increase in  participating  rentals was due to increased
      travel plaza sales.  Total expenses increased 3.2% as compared to the same
      period in 1996, due to an increase in depreciation expense.

      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 - JUNE 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: July 10, 1997               By /s/ John R. Barravecchia
                                   ---------------------------------------------
                                   John R. 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: July 10, 1997               By /s/ John R. Barravecchia
                                   ---------------------------------------------
                                   John R. Barravecchia, President