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, 1998
                               -------------------------------------------------

[ ]     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 1.  FINANCIAL STATEMENTS.

                    PARTICIPATING INCOME PROPERTIES II, L.P.

                                 BALANCE SHEETS
                    SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               September 30,   December 31,
                                                                   1998            1997      
                                                               ------------    ------------
                                          ASSETS

<S>                                                            <C>             <C>         
CASH AND CASH EQUIVALENTS                                      $  3,844,492    $  3,984,265

RECEIVABLES FROM LESSEES                                            215,000         197,300

DEFERRED COSTS                                                      169,880            --

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       3,832,921
                                                               ------------    ------------
                                                                 69,547,068      69,547,068
         Less - Accumulated depreciation                         22,596,287      20,814,945
                                                               ------------    ------------

                                                                 46,950,781      48,732,123
                                                               ------------    ------------

                     Total assets                              $ 51,180,153    $ 52,913,688
                                                               ============    ============

                             LIABILITIES AND PARTNERS' CAPITAL

DISTRIBUTION PAYABLE TO LIMITED PARTNERS                       $  2,215,092    $  2,132,357

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                             37,078          72,006

DEFERRED INCOME                                                     388,586         594,251
                                                               ------------    ------------

                     Total liabilities                            2,640,756       2,798,614
                                                               ------------    ------------

PARTNERS' CAPITAL (DEFICIT):

      General partners                                             (233,184)       (217,427)
      Limited partners                                           48,772,581      50,332,501
                                                               ------------    ------------

                     Total partners' capital                     48,539,397      50,115,074
                                                               ------------    ------------

                     Total liabilities and partners' capital   $ 51,180,153    $ 52,913,688
                                                               ============    ============
</TABLE>
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

                              STATEMENTS OF INCOME
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                            Three Months   Three Months   Nine Months   Nine Months
                                                Ended          Ended          Ended         Ended
                                               9/30/98        9/30/97        9/30/98       9/30/97    
                                            ------------   ------------   -----------   -----------
<S>                                         <C>            <C>            <C>           <C>        
REVENUES:
      Rental                                $  1,865,905   $  1,865,905   $ 5,597,715   $ 5,597,715
      Participating rentals                      663,497        610,885     1,867,999     1,761,110
      Interest and other                          44,400         43,892       133,885       142,650
      Gain on sale of equipment                     --           27,350          --          29,488
                                            ------------   ------------   -----------   -----------

                                               2,573,802      2,548,032     7,599,599     7,530,963
                                            ------------   ------------   -----------   -----------
EXPENSES:
      General partner and
         affiliate fees                          221,223        216,424       650,829       642,774
      Depreciation                               573,268        739,229     1,781,342     2,261,768
      Operating                                   47,214         47,421       162,504       153,879
                                            ------------   ------------   -----------   -----------

                                                 841,705      1,003,074     2,594,675     3,058,421
                                            ------------   ------------   -----------   -----------

NET INCOME                                  $  1,732,097   $  1,544,958   $ 5,004,924   $ 4,472,542
                                            ============   ============   ===========   ===========

NET INCOME ALLOCATED TO:
      General partners                      $     17,321   $     15,450   $    50,049   $    44,725
      Limited partners                         1,714,776      1,529,508     4,954,875     4,427,817
                                            ------------   ------------   -----------   -----------

                                            $  1,732,097   $  1,544,958   $ 5,004,924   $ 4,472,542
                                            ============   ============   ===========   ===========
NET INCOME PER LIMITED
   PARTNERSHIP UNIT (based on
   82,834 units held by limited partners)   $      20.70   $      18.46   $     59.82   $     53.45
                                            ============   ============   ===========   ===========
</TABLE>
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                       Limited Partners
                                     General      ---------------------------
                                     Partners        Number                         Total
                                      Amount        of Units        Amount          Amount   
                                  ------------    ------------   ------------    ------------

<S>                               <C>             <C>            <C>             <C>         
BALANCE, December 31, 1997        $   (217,427)         82,834   $ 50,332,501    $ 50,115,074

      Net income                        50,049            --        4,954,875       5,004,924

      Distributions to partners        (65,806)           --       (6,514,795)     (6,580,601)
                                  ------------    ------------   ------------    ------------

BALANCE, September 30, 1998       $   (233,184)         82,834   $ 48,772,581    $ 48,539,397
                                  ============    ============   ============    ============
</TABLE>
<PAGE>
                    PARTICIPATING INCOME PROPERTIES II, L.P.

                            STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               1998           1997
                                                           -----------    -----------
<S>                                                        <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:

     Net income                                            $ 5,004,924    $ 4,472,542
     Adjustments to net income:
        Depreciation                                         1,781,342      2,261,768
        Gain on sale of equipment                                 --          (29,488)
        Change in assets and liabilities:
           Increase in receivables from lessees                (17,700)       (29,172)
           Increase in deferred costs                         (169,880)          --
           Decrease in payable to general partners                --          (18,239)
           Increase (decrease) in accounts payable and
               accrued liabilities                             (34,928)         1,812
           Decrease in deferred income                        (205,665)      (205,665)
                                                           -----------    -----------

               Net cash provided by operating activities     6,358,093      6,453,558

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

CASH FLOWS FOR FINANCING ACTIVITIES:
     Distributions to partners                              (6,497,866)    (6,407,591)
                                                           -----------    -----------

NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                         (139,773)       225,467

CASH AND CASH EQUIVALENTS, beginning of period               3,984,265      3,790,885
                                                           -----------    -----------

CASH AND CASH EQUIVALENTS, end of period                   $ 3,844,492    $ 4,016,352
                                                           ===========    ===========
</TABLE>
<PAGE>
PART I.- FINANCIAL INFORMATION

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS
           ---------------------------------------------

      On February 2, 1998,  Participating Income Properties II, L.P., a Delaware
      limited  partnership,  (the  Registrant),  entered into a letter of intent
      with Flying J. Inc. to sell  substantially all of the Registrant's  assets
      for  cash of  approximately  $80  million.  Subsequently,  the  Registrant
      entered into  purchase  agreements  with  respect  thereto on September 4,
      1998. In accordance with the partnership agreement,  sale of substantially
      all of the assets  would  result in  dissolution  of the  partnership  and
      liquidation of the Registrant's remaining assets, net of liabilities.  The
      limited  partners have received a proxy statement  describing the proposed
      transaction  and were  asked to  consent to the  proposed  transaction  by
      October 26, 1998. The following is a summary of the results of the voting:
      46,619 units For, 4,679 units Against, 1,942 units Abstain. An affirmative
      vote of limited partners  holding a majority of the partnership  units was
      achieved.  In addition to the majority vote,  certain other conditions and
      contingencies  must now be satisfied prior to the consummation of the sale
      transaction  as set forth in the letter of intent  between the  Registrant
      and  Flying  J.  Inc.  Among  these  conditions  are the  finalization  of
      financing  arrangements  by Flying J. Inc. in order for it to complete the
      purchase  of the  assets  of  the  Registrant.  The  sale  and  subsequent
      liquidation of the  Registrant  will occur as soon as practical if, and to
      the extent that, all conditions and  contingencies  have been satisfied or
      waived.  There can be no assurance  as to whether or when the  transaction
      will be consummated.

      The Registrant  declared a cash  distribution  to the limited  partners of
      $2,214,442  for the quarter ended  September 30, 1998 (the period)  which,
      combined with the first and second  quarter  distributions  of $4,300,353,
      amounts to $6,514,795  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
      $663,497  for the  period  representing  an  increase  over  participating
      rentals of $610,885 for the  comparable  period in 1997.  The increase was
      due to  increased  volumes at the travel plaza  properties.  Participating
      rentals  for  the  corresponding   year-to-date   periods  were  similarly
      affected. Total expenses decreased by $161,369 during the period ($463,746
      year-to-date)  as  compared  to the prior  periods  due to a  decrease  in
      depreciation  expense related to the sale of travel plaza equipment in the
      last twelve months.

      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, 1998



                                     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  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 30, 1998                      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  caused  this  report  to be  signed  on  its  behalf  by the
undersigned thereunto duly authorized.

                                     FFCA INVESTOR SERVICES CORPORATION 88-C

Date:    October 30, 1998                      By /s/ John Barravecchia
                                     ------------------------------------------
                                     John Barravecchia, President