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

                                    FORM 10-K

|X|    Annual report pursuant to Section 13 or 15(d) of the Securities  Exchange
       Act of 1934

                 For the fiscal year ended December 31, 1999, 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 No. 1-9510

                               FFP PARTNERS, L.P.
             (Exact name of registrant as specified in its charter)

                               Delaware 75-2147570
                (State or other jurisdiction of (I.R.S. employer
              incorporation or organization) identification number)

                2801 Glenda Avenue; Fort Worth, Texas 76117-4391
           (Address of principal executive office, including zip code)

                                  817/838-4700
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act

       Title of Each Class            Name of Each Exchange on Which Registered
        Class A Units of                      American Stock Exchange
      Limited Partnership
         Interests

           Securities registered pursuant to Section 12(g) of the Act
                                      None


   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

   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 registrant's  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. [ ]

   The  aggregate  market value of Class A Units held by  non-affiliates  of the
registrant at March 31, 2000, was $2,222,000.  For purposes of this computation,
all officers,  directors,  and  beneficial  owners of 10% or more of the Class A
Units of the registrant are deemed to be affiliates.  Such determination  should
not be deemed an admission that such officers,  directors, and beneficial owners
are affiliates.


                             Class A Units 2,234,262
               (Number of units outstanding as of March 31, 2000)
<PAGE>


                                     PART I

ITEM 1.  BUSINESS.

General Background

   FFP Partners,  L.P. (the  "Partnership")  is a Delaware  limited  partnership
whose sole  general  partner is FFP Real Estate Trust and whose Class A Units of
limited partnership interest ("Limited Partner Units") are listed for trading on
the American Stock Exchange  (trading  symbol "FFP").  The Partnership no longer
has any type of limited  partnership  interests  other than the Limited  Partner
Units.  {See Item 5.  Market for the  Registrant's  Units and  Related  Security
Holder Matters.}

   FFP Real Estate Trust, a Texas real estate  investment  trust,  has served as
the Partnership's  sole general partner since a restructuring of the Partnership
was completed on December 28, 1997. FFP Real Estate Trust is wholly owned by FFP
Partners  Management Company,  Inc. ("FFPMC"),  which served as the sole general
partner of the  Partnership  from the  inception  of the  Partnership  until the
December 1997 restructuring.

   The  Partnership  was formed in December  1986  pursuant to the  Agreement of
Limited  Partnership  of  FFP  Partners,  L.P.  (as  amended,  the  "Partnership
Agreement").  In May 1987, the Partnership  purchased  convenience stores, truck
stops, other retail motor fuel outlets, and ancillary businesses from affiliates
of its senior  executives.  The  purchase  of these  outlets  was  completed  in
conjunction  with the  Partnership's  initial public offering of Limited Partner
Units.  The senior  executives  of the  Partnership  had owned and managed these
operations  prior  to  their   acquisition  by  the  Partnership.   Through  its
subsidiaries,  the  Partnership  owned and operated these  businesses  until the
December 1997 restructuring.

   In the December 1997  restructuring,  the  Partnership  (a) retained the real
estate  (land  and  buildings)  previously  used  in its  retail  and  wholesale
operations,  and (b)  transferred  its convenience  stores,  truck stops,  other
retail motor fuel outlets,  and other businesses to FFP Marketing Company,  Inc.
("FFP  Marketing")  in exchange for all the common stock of FFP  Marketing.  The
common stock of FFP Marketing was then distributed to its partners such that the
Partnership's  limited  partners  received  one share of  common  stock for each
Limited Partner Unit and the Partnership's general partner received common stock
in a percentage equal to its former ownership  percentage.  Since that time, FFP
Marketing's  common  stock has been  listed for  trading on the  American  Stock
Exchange (trading symbol "FMM").

   The  real  estate   retained  by  the   Partnership   in  the  December  1997
restructuring  was then  contributed at that time to FFP Properties,  L.P. ("FFP
Properties"),  a newly formed  Texas  limited  partnership,  in exchange for the
general partnership interest in FFP Properties. As a result, the Partnership now
serves as the general  partner,  and owns 60%, of FFP Properties,  which in turn
owns  the  land  and  buildings.   The  limited  partnership  interests  in  the
Partnership  that were  previously  held by John H.  Harvison,  the Chairman and
Chief Executive  Officer of the  Partnership's  general partner,  members of his
family,  and  corporations,  partnerships,  trusts,  and other business entities
affiliated with him or his family members (collectively,  the "Harvison Family")
were exchanged for economically  equivalent limited partnership interests in FFP
Properties.  As a result,  the  Harvison  Family owns a 40% limited  partnership
interest in FFP Properties.

   In the 1997 restructuring, all of the Partnership's non-real estate operating
activities  were  transferred  to  FFP  Marketing,   and  the  business  of  the
Partnership  now solely  consists  of the  ownership  and rental of real  estate
through its general partnership interest in FFP Properties.

   Unless the context requires  otherwise,  references herein to the Partnership
include its subsidiary, FFP Properties, and its general partner, FFP Real Estate
Trust. References herein to FFP Marketing include its subsidiaries.

   The  Partnership  maintains  its principal  executive  offices at 2801 Glenda
Avenue,  Fort Worth,  Texas 76117-4391.  Its telephone number is (817) 838-4700.
The Partnership's Internet web site address is http://www.ffplp.com.

Business Strategy

   The Partnership intends to pursue the following business strategy:
      1. own its current portfolio of improved real properties,

      2. collect rental income from those properties,

      3. build   equity  in  the   properties   through  debt   retirement   and
         appreciation, and

      4. where  acceptable  deal terms,  occupancy and financing are  available,
         expand its real estate  holdings  through the acquisition of other real
         estate properties.

   Such  additional  properties  will most likely include retail sites leased to
FFP Marketing for convenience stores, truck stops,  fast-food  restaurants,  and
other retail outlets. Any additional real estate acquired by the Partnership may
be used for other  purposes  and may be leased to other  tenants.  Although  the
Partnership  will  consider  investments  in any  type  of  real  estate,  it is
anticipated that most initial investments will be in convenience store locations
since  most  of  the  Partnership's  contacts  are in  that  industry,  and  the
Partnership  believes it has  considerable  knowledge of the  economics of those
operations.  In addition, the Partnership expects that most real estate acquired
will be in smaller  communities and towns.  The Partnership  believes that large
real estate owners and developers are primarily  interested in metropolitan area
properties.  Consequently,  the Partnership believes it can obtain better yields
on investments in smaller towns since there is less competition.

   The  Partnership  may  or may  not  pursue  a  conversion  to a  real  estate
investment  trust.  If the  Partnership  decides to convert  into a real  estate
investment  trust,  two scenarios  are possible.  One would be with a conversion
through a "merger" and the other would be undertaken  through an "exchange".  In
either case, if undertaken,  the Partnership's  unitholders would receive shares
of FFP Real  Estate  Trust in place of their  limited  partnership  units of the
Partnership,  and  the FFP  Real  Estate  Trust  shares  would  be  listed  on a
securities exchange.

   The  Partnership  has not yet decided to seek a tax ruling from the  Internal
Revenue Service ("IRS") regarding a conversion.  If one is sought,  there can be
no assurance whether or when the IRS would respond favorably to the request.  If
the  Partnership  decides to pursue a  conversion  and obtains a  favorable  tax
ruling from the IRS that a merger of the  Partnership  and its general  partner,
FFP Real Estate Trust, would be tax-free to the Partnership's unitholders,  then
the merger alternative would most likely be used. Under the merger  alternative,
the Partnership would be merged into its general partner, FFP Real Estate Trust,
with the Partnership's  unitholders receiving shares or units of FFP Real Estate
Trust in exchange for their units of the Partnership.

   If the  Partnership  decides to pursue a conversion but is unable to obtain a
favorable ruling from the IRS on the merger  alternative,  then it could convert
to a real estate  investment  trust under the  exchange  alternative.  Under the
exchange  alternative,  the  Partnership's  unitholders would be prohibited from
transferring  their  units to a third  party  but would be able to  require  the
Partnership's  general  partner to redeem  their units  either for shares of FFP
Real Estate  Trust or for cash.  FFP Real Estate  Trust,  not the  Partnership's
unitholders,  would  determine  whether  to redeem the  Partnership's  units for
shares or cash.  Management  expects that any such  redemption  would be made in
exchange for shares or units of FFP Real Estate Trust.

Competition

   Numerous  parties  with  greater  financial  resources  than the  Partnership
compete with the  Partnership in acquiring real estate for  convenience  stores,
truck stops,  and other retail  activities.  These parties may be able to accept
more or less risk than the Partnership is willing to undertake. Competition will
affect the  bargaining  power of  property  owners who sell,  buy or lease their
properties, may reduce the number of suitable investment opportunities available
to the  Partnership,  and may decrease the yield  achievable  on any real estate
owned or purchased by the Partnership.
Employees

   Throughout 1999 and at March 31, 2000, FFP Real Estate Trust, general partner
of the  Partnership,  had  two  executive  officers  not  paid  directly  by the
Partnership.  Both of those hold similar positions with FFP Marketing.  FFP Real
Estate  Trust has entered  into a  reimbursement  agreement  with FFP  Marketing
pursuant  to which the  Partnership  pays FFP  Marketing  an annual  lump sum of
$200,000 for administrative and other indirect costs provided to the Partnership
and reimburses FFP Marketing for all of direct costs of the Partnership. Neither
FFP Real Estate Trust nor the Partnership have any other employees.

Government Regulation -- Environmental Regulation

   Substantially  all the properties  leased by the Partnership to FFP Marketing
contain underground  storage tanks used for motor fuel storage.  The underground
storage tanks are owned and operated by FFP Marketing,  which is responsible for
compliance with all  environmental  laws,  rules and regulations  regarding such
tanks.  If for any  reason  FFP  Marketing  is unable or  unwilling  to take all
actions that may be required under current or future  environmental  laws, rules
or regulations  regarding  underground  storage tanks or other  activities,  the
Partnership  could be  required  to take such  actions  and be  responsible  for
violations of such environmental laws, rules or regulations.

   The Partnership may acquire  additional  properties that will also be subject
to environmental regulations,  either because they will also contain underground
storage tanks or for other reasons. The Partnership intends to structure similar
leases  with  the  operators  of such  properties  so that the  lessees  will be
responsible for compliance with such environmental regulations.

Federal Income Tax Law

   As a partnership,  the Partnership  pays no federal income tax.  Rather,  the
income or loss of the Partnership is allocated to its partners to be included in
their  respective  tax returns,  subject to special  rules for  publicly  traded
partnerships.  Investors  should  note that (i) the  passive  loss  rules of the
Internal Revenue Code are applied  separately with respect to items attributable
to each publicly traded partnership,  and (ii) net income from a publicly traded
partnership is not treated as passive income.

   If in the future the Partnership  becomes a real estate  investment trust for
federal income tax purpose {see Business Strategy},  its earnings will no longer
be  allocated  to its  partners,  but it will not,  as an entity,  generally  be
subject to federal  income  tax.  However,  it will be  required  to comply with
various complex requirements which limit the nature of its assets and sources of
its income.  In  addition,  it will be required  to  distribute  annually to its
shareholders  at least 95% of its real estate  investment  trust taxable income.
Differences in timing  between the actual receipt of income,  the actual payment
of deductible  expenses in arriving at taxable income, the creation of reserves,
and required debt amortization  payments could require the Partnership to borrow
funds to meet the 95% distribution  requirement even if management believed that
the then prevailing  market conditions were not favorable for such borrowings or
that  the   borrowings   were  not   advisable   in  the  absence  of  such  tax
considerations.

Forward-Looking Statements

   This annual report on Form 10-K contains certain "forward-looking" statements
as such term is defined in the U.S. Private Securities  Litigation Reform Act of
1995, and  information  relating to the  Partnership  and its subsidiary that is
based on the  beliefs of  management  and  assumptions  made by and  information
currently  available to  management.  The  Partnership is relying upon the "safe
harbor"  contained  in Section  27A of such act in making  such  forward-looking
statements.  Certain of the statements  made in this report are  forward-looking
statements  that involve a number of risks and  uncertainties.  Statements  that
should generally be considered  forward-looking include, but are not limited to,
those  that  contain  the words  "estimate,"  "anticipate,"  "in the  opinion of
management," "believes," and similar phrases.  Although the Partnership believes
that the  expectations  reflected in such  forward-looking  statements are based
upon  reasonable  assumptions,  the  Partnership's  actual  results could differ
materially  from those set forth in the  forward-looking  statements.  Among the
factors  that  could  cause  actual  results  to  differ   materially  from  the
forward-looking  statements  made include the following:  changes in real estate
conditions,  including  rental rates and the  construction  or  availability  of
competing  properties;  the financial strength,  cash flow,  liquidity and other
relevant  business  aspects  of  FFP  Marketing,   the  primary  tenant  of  the
Partnership's  properties;  changes  in the  industries  in which FFP  Marketing
competes;  changes in general economic conditions;  the ability of management to
identify  acquisition  and investment  opportunities  meeting the  Partnership's
investment  objectives;  the timely  leasing of  unoccupied  properties;  timely
re-leasing  of currently  occupied  properties  upon  expiration  of the current
leases or the  default  of the  current  tenant;  the  Partnership's  ability to
generate funds  sufficient to meet its debt service payments and other operating
expenses;  the  inability  of the  Partnership  to control  the  management  and
operation  of its  tenant  and the  businesses  conducted  on the  Partnership's
properties;  financing risks,  including the availability of funds to service or
refinance existing debt and to finance acquisitions of additional property,  the
existence of complex tax regulations  relating to the Partnership's  status as a
publicly  traded  partnership  and, if achieved,  to its status as a real estate
investment trust and the adverse consequences of the failure to qualify as such;
and other risks detailed from time to time in the Partnership's filings with the
Securities  and  Exchange  Commission.  Given these  uncertainties,  readers are
cautioned not to place undue  reliance on the  forward-looking  statements.  The
Partnership  undertakes  no  obligation  to publicly  release the results of any
revisions to these  forward-looking  statements  that may be made to reflect any
future events or circumstances.

   Should one or more of these risks or uncertainties materialize, or should any
underlying  assumptions  prove  incorrect,  actual  results or outcomes may vary
materially from those  described  herein as  anticipated,  believed,  estimated,
expected, or intended.


ITEM 2. PROPERTIES.

   The Partnership owns approximately 200 parcels of improved real estate. Those
properties include the ownership of approximately 84 parcels of Partnership land
with  buildings,  106 parcels with  Partnership  buildings only on land owned by
affiliates  of  FFP  Marketing  or the  Harvison  Family,  and 10  miscellaneous
Partnership  properties such as vacant lots,  small houses or other minor types.
The  Partnership's  real properties are principally  located in small cities and
towns in the states  shown in the table  below.  The table  below also shows the
uses of Partnership properties at year end 1999:

                                                   Vacant
                                                     or
                Convenience   Gasoline    Truck    Other
                   Stores      Outlets    Stops     Uses    Total

Texas                  75        62         6        9       152
Oklahoma                0         4         0        0         4
Louisiana              14         1         0        0        15
Missouri                9         1         0        5        15
Illinois                0         0         0        1         1
Mississippi             5         0         0        1         6
Kentucky                1         0         1        0         2
New Mexico              0         0         2        1         3
Tennessee               1         1         0        0         2

Totals                105        69         9       17       200

   All but one of the  Partnership's  properties  under  lease are leased to FFP
Marketing  under  long-term  leases for the operation of  convenience  stores or
truck stops at those locations. These leases contain two important provisions:

   1.  "Triple  Net" Leases.  Under these  "triple net" leases,  the tenant (FFP
Marketing), and not the landlord (the Partnership),  pays all real estate taxes,
insurance, operating costs, and capital costs for the properties. A "triple net"
lease is generally favored by a landlord because properties leased under "triple
net"  provisions  have  considerably  less  operating  expenses  and  risk  than
properties leased without this provision.

   2.  Escalating  Rent. Each of the leases provide that the rental income to be
received by the Partnership  will increase every five years to the extent of any
increase in the consumer price index.

   In February 1999, the  Partnership  purchased 14 properties  located in Texas
from a third party and promptly leased them to FFP Marketing pursuant to 15-year
leases.  The Partnership's  scheduled rent income on these properties equals its
debt obligations on these properties  during its initial five years of ownership
and should exceed its debt  obligations to the extent that the rent escalates as
a result of an increase in the  consumer  price  index.  The land portion of the
rental income from these 14  properties  is accounted  for as operating  leases;
therefore,  the  land  at  these  locations  is  reflected  as an  asset  on the
Partnership's  balance  sheet  and the  rental  income  is  shown as such on the
Partnership's  statement of income.  On the other hand, the building  portion of
the rent income from these 14 properties is accounted for as a direct  financing
lease; as a result, the Partnership's  financial statements do not include these
buildings,  or the depreciation  thereon,  but instead reflect the Partnership's
receivable  from  these  direct  financing  leases as an asset and the  interest
income earned each month therefrom. Nevertheless, the Partnership does own legal
title to both the land and the buildings at these 14 locations.

   The Partnership's  leases to FFP Marketing  approximately 78 properties where
the Partnership  owns both the land and building.  These leases generally expire
in December  2002 plus two five-year  renewal  periods at the sole option of FFP
Marketing.  Assuming  that these  leases are renewed in 2002 and 2007,  which is
expected,  the rent payable to the Partnership will be adjusted by the change in
the consumer price index from January 1, 1998, to the date of each such renewal.
The  Partnership's  ownership in the 106  buildings  leased to FFP  Marketing is
subject to a pre-existing ground lease between FFP Marketing, as lessee, and the
Harvison  Family,  as lessor.  The  Partnership's  ownership  interest  in these
buildings  terminates  concurrently  with the end of the underlying ground lease
(generally,  May  2007) and will  continue  beyond  that date if the  underlying
ground lease is renewed. The lessors under those ground leases have indicated to
the Partnership that they do not intend to extend the ground leases past 2007.

   The Partnership refinanced all of its long-term indebtedness in October 1999.
The new debt is secured by liens against 63  Partnership  properties and will be
fully amortized with fixed monthly  payments over a 20-year term. As a condition
to that loan, FFP Marketing  exercised its option to extend the term of the real
estate leases for 28 of those 63 properties to a 20-year term, and FFP Marketing
and the  Partnership  executed a new master lease  covering the  remaining 35 of
those 63 properties  for a 20-year term. The  Partnership's  leases for these 63
properties contain "triple net" provisions and rent escalation  provisions every
five years.

   The  Partnership's  rental  rates  for all of the real  estate  leased to FFP
Marketing  were  determined  by the  Partnership  based on its  knowledge of the
properties and the general  experience of its management in acting as lessor and
lessee for similar  properties.  The Partnership  believes that the rental rates
paid by FFP Marketing to the  Partnership  are a fair rental value.  Neither the
Partnership  nor FFP Marketing have engaged a third party advisor or referred to
any  third  party   surveys  or   analyses  of  rental   rates  in  making  this
determination.


ITEM 3.  LEGAL PROCEEDINGS.

   The  Partnership  is not subject to any material  pending legal  proceedings,
other  than  routine  litigation  incidental  to  its  business,  to  which  the
Partnership or its subsidiary is a party or of which any of their properties are
subject.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

   No matter was submitted to a vote of the holders of the Limited Partner Units
during the fourth quarter of 1999.


<PAGE>
                                     PART II


ITEM 5.  MARKET FOR THE REGISTRANT'S UNITS AND RELATED SECURITY HOLDER MATTERS.

   The  Limited  Partner  Units are listed for  trading  on the  American  Stock
Exchange  under  the  trading  symbol  "FFP".  At March  31,  2000,  there  were
approximately  224  holders of record and 627  beneficial  owners of the Limited
Partner Units. The closing sales price of these Units was $1.00 per Unit on that
date.  {See  Item 12.  Security  Ownership  of  Certain  Beneficial  Owners  and
Management.}

   The following table sets forth the range of high and low sales prices for the
Limited Partner Units as reported on the American Stock Exchange for the periods
indicated:

                                      High         Low
                                       (In dollars)

1999
First Quarter                        1.2500      0.6250
Second Quarter                       1.5000      0.8125
Third Quarter                        1.1250      0.6875
Fourth Quarter                       1.1250      0.6250

1998
First Quarter                        4.0000      1.0000
Second Quarter                       1.6250      1.1250
Third Quarter                        1.5000      0.7500
Fourth Quarter                       1.0000      0.3750

   No distributions were made to partners in 1999 or 1998. The Board of Trustees
of FFP Real  Estate  Trust,  the  general  partner of the  Partnership,  has not
established a distribution  policy. Any future distributions may only be made in
compliance with the terms of the Partnership's new long-term debt.  Accordingly,
no  assurance  can be  given  that  the  Partnership  will be  able to make  any
distributions  to its  unitholders.  The  ability  of the  Partnership  to  make
distributions  in the future will be dependent upon the  Partnership's  earnings
and cash flow, anticipated capital expenditures,  and debt service requirements.
{See Item 7.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations, Liquidity and Capital Resources.}

   In  August  1989,  the  Partnership  entered  into  a  Rights  Agreement  and
distributed  Rights to the then holders of its Limited Partner Units to purchase
Limited  Partner  Units under  certain  circumstances.  The Rights,  which later
became  exercisable  in October 1994,  gave each holder of a Right the option to
purchase  a Limited  Partner  Unit at a price of $20 per Unit.  The Rights had a
10-year term and expired in August 1999.

   The Partnership's partnership agreement prohibits any person from owning more
than 4.9% of the Limited Partner Units. The agreement provides that any purchase
or transfer  that would result in a person  owning more than 4.9% of the Limited
Partner  Units  will be null  and  void,  and  that the  units  that  were to be
transferred  will become  "Excess  Units." Any such "Excess  Units" will have no
voting or distribution rights and will be held in escrow by the Partnership.


ITEM 6.  SELECTED FINANCIAL AND OPERATING DATA.



                                                     1999      1998 [1]
                                                  (In thousands, except
                                                      per unit data)

Rental income                                      $2,975      $2,660
Interest and other income                             822          70
    Total revenues                                 $3,797      $2,730

Real property, net                                $18,273     $16,684
Investment in direct financing leases, net         $3,897          $0
Total assets                                      $23,979     $16,804

Long-term debt                                    $20,812     $13,355
Minority interest in subsidiary                       945         857
Partners' equity                                    1,394       1,262
    Total capitalization                          $23,151     $15,474

Net income (loss)                                    $132       $(179)
Net income (loss) per unit-
     Basic                                          $0.06      $(0.08)
     Diluted                                        $0.06      $(0.08)

Adjusted EBITDA [2]                                $2,008      $1,354
FFO [3]                                              $884        $519

____________________
[1] Although the Partnership was began  operations in May 1987, no balance sheet
items or operating  results prior to its  restructuring on December 28, 1997 are
shown  above for the  Partnership.  The  Partnership's  balance  sheet items and
operating  results  after the  restructuring  are not  comparable  to any period
before then. In order to avoid potential misunderstandings,  balance sheet items
and operating  results of the  Partnership  for years prior to 1998 are included
with reports filed with the Securities and Exchange Commission by FFP Marketing.

[2] Adjusted EBITDA is defined as net income (loss) from  continuing  operations
before interest expense,  income taxes,  depreciation and amortization  expense,
and reduced by the 40% minority  interest.  Adjusted EBITDA provides  additional
information  for  evaluating  financial  results  and is  presented  solely as a
supplemental measure. Adjusted EBITDA is not intended to represent cash flow and
should not be construed as an alternative to cash flow, net income, or any other
measure of financial performance presented in accordance with generally accepted
accounting principles.

[3] For a definition and discussion of FFO, see Item 7 - Management's Discussion
and Analysis of Financial  Condition  and Results of  Operations,  Liquidity and
Capital Resources - Comparison to REIT's.


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

General

   This discussion should be read in conjunction with the selected financial and
operating data, the description of the Partnership's  business  operations,  and
the financial  statements and related notes and schedules  included elsewhere in
this  Annual  Report on Form  10-K.  {See  Item 1.  Business  -  Forward-Looking
Statements.}

   The primary tenant of the Partnership's  properties is FFP Marketing, and the
business  and  affairs of the  Partnership  are managed by  individuals  who are
employed by FFP Marketing.  This discussion  should be read in conjunction  with
the  Annual  Report on Form 10-K of FFP  Marketing  for its  fiscal  year  ended
December  26, 1999.  The failure for any reason by FFP  Marketing to pay rent to
the Partnership is a material risk factor regarding an investment in the Limited
Partner Units.

   As previously  discussed,  the Partnership and its assets and businesses were
restructured  at the close of its fiscal year 1997, as follows:  the Partnership
retained  all of the real  property  used in its former  retail  operations  and
entered  into  long-term,  triple-net  leases  of that  real  property  with FFP
Marketing,  and all of its other assets and businesses  were  transferred to FFP
Marketing.  In addition to  retaining  the real  estate  referred to above,  the
Partnership retained certain  liabilities,  principally bank debt and other debt
secured by the real  estate  retained  by it. All other  liabilities  (including
trade accounts payable, accrued expenses, money orders payable,  deferred income
taxes, and obligations under capital leases) were transferred to FFP Marketing.

   Accordingly, the Partnership's business since the December 1997 restructuring
consists of the leasing and  management of its current real estate  holdings and
the possible acquisition,  leasing and management of additional real properties.
All operations,  assets, and businesses of the Partnership prior to 1998 are not
comparable to the operations,  assets,  and businesses of the Partnership  after
the December 1997 restructuring.

1999 Operations compared to 1998 Operations

   The Partnership  earned $132,000 in 1999, its second year of operations after
the  December  1997  restructuring,  which  compared  favorably to a net loss of
$179,000 in 1998. Total revenues in 1999 were $3,797,000, a $1,067,000 increase,
or 39%, over 1998 total revenues of $2,730,000. Total revenues increased in 1999
because of the 14 properties  purchased in February 1999 by the  Partnership and
then leased to FFP Marketing.

   Interest  expense in 1999 was  $1,893,000,  a 42% increase over 1998 interest
expense of $1,336,000. This increase resulted primarily from the additional debt
incurred  in  purchasing  the 14  properties  in  February  1999,  and a  higher
percentage  of interest  expense and a higher  interest  rate in a new long-term
loan obtained in October 1999 to refinance a prior loan.

   In addition,  the Partnership  increased its equity in real estate properties
by making principal payments on its long-term debts in the amounts of $1,191,000
in 1999 and $1,292,000 in 1998.

   Depreciation  and  amortization  expense was $1,253,000 in 1999,  compared to
$1,203,000  in 1998.  This 4% increase  resulted  from  additional  amortization
expense related to loan fees incurred in 1999.

   General and administrative  expenses were $451,000 in 1999, representing a 5%
decrease from general and administrative  expenses in 1998 of $473,000.  In each
year, these amounts include the overhead  reimbursement  fee of $200,000 paid to
FFP Marketing,  as well as auditing fees, tax return software  processing  fees,
tax return  review fees,  and  miscellaneous  expenses in  maintaining  unleased
properties.

   Cash flows provided by operating activities were $77,000 in 1999, compared to
$1,024,000 in 1998, a 92% decrease.  Cash flows from financing  activities  were
$6,731,000 in 1999,  compared to a usage of $1,292,000 in 1998,  resulting  from
acquisition  debt in purchasing the 14 properties in February  1999.  Cash flows
used in investing activities were $6,808,000 in 1999, compared to a provision of
$268,000 in 1998.

Comparison to REITs

   The  Partnership  is not a real estate  investment  trust  ("REIT"),  but its
activities  are much like those of a REIT. One  performance  measure used within
the REIT  industry  is funds from  operations  ("FFO").  FFO,  as defined by the
National  Association of Real Estate  Investment  Trusts  ("NAREIT"),  means net
income (loss) as determined in accordance  with  generally  accepted  accounting
principles   (or   "GAAP"),   but   excluding   gains  (or  losses)   from  debt
restructurings,  similar activities, and sales of properties,  plus depreciation
and amortization of real estate assets,  and with adjustments for unconsolidated
partnerships  and joint  ventures.  FFO was  developed  by NAREIT as a  relative
measure of  performance  and  liquidity  of an equity REIT in order to recognize
that  income-producing real estate historically has not depreciated on the basis
determined under GAAP. While FFO is one appropriate measure of performance of an
equity REIT, it (i) does not represent cash generated from operating  activities
determined in accordance with GAAP (which,  unlike FFO,  generally  reflects all
cash effects of transactions and other events that enter into the  determination
of net income),  (ii) is not  necessarily  indicative of cash flow  available to
fund cash needs,  and (iii) should not be  considered as an  alternative  to net
income  determined in accordance with GAAP as an indication of the Partnership's
operating  performance,  or to cash flow from operating activities determined in
accordance  with GAAP as a  measure  of either  liquidity  or the  Partnership's
ability to make  distributions  or to fund its other  operations.  The following
table presents the  determination  of FFO for the  Partnership  for the 1999 and
1998:

                                                      1999     1998
                                         (In thousands, except per unit data)

Net income/(loss) before minority interests           $220    $(282)
    (Gains) from sales of properties                     0      (56)
    Depreciation and amortization                    1,253    1,203
Funds from operations before minority                1,473      865
  interests
Less - 40% of FFO attributable to minority
    interests in subsidiary                           (589)    (346)

Funds from operations (FFO)  for  the                 $884     $519
  Partnership
FFO per unit (based on units outstanding
  for diluted net income (loss) per unit
  calculations)                                      $0.39    $0.23

   Although  the  Partnership  has  generated  positive  FFO,  it has  not  made
distributions to unitholders  because  substantially all cash generated from the
Partnership's  operations  has been  required for debt  payments.  Thus far, the
Trust  Managers  have  determined  to utilize  such funds to build equity in its
properties.

   The refinancing of Partnership  long-term debt in October 1999 is expected to
improve the Partnership's  future net cash flow. The terms of such new long-term
financing provide that the Partnership shall limit distributions to its partners
such that,  after making any  distribution,  (a) the Fixed Charge Coverage Ratio
for each of the 63 pledged  properties  secured by that loan (summarized  below)
shall not be less than 1.30 to 1.00, and (b) the Fixed Charge Coverage Ratio for
the Partnership  (summarized below) shall be less than 1.35 to 1.00. In general,
the Fixed Charge Coverage Ratio during any period for a pledged store equals the
cash flow (pre-tax  income  before  minority  interest,  plus  depreciation  and
interest  expense) of that store for that period,  divided by the amount of debt
payments for that store for that period,  and the Fixed  Charge  Coverage  Ratio
during a period equals the cash flow (pre-tax income before  minority  interest,
plus  depreciation  and interest  expense) of the  Partnership  for that period,
divided by the amount of debt payments of the Partnership for that period.  Each
Fixed Charge  Coverage Ratio is calculated  for the 12-month  period ending each
December 31. Management has not yet determined if or how much of any Partnership
distributions will be made to the Partnership's unitholders.

Inflation

   The  Partnership's  real property leases with FFP Marketing  provide that the
Partnership's  rent income will increase  every five years,  assuming that those
leases are renewed at that time, as a result of increases in the consumer  price
index during the prior five-year  period.  The  Partnership's  long-term debt is
subject to  interest  expense  which  accrues at a fixed  rate.  Otherwise,  the
Partnership  believes  inflation  will not have a material  effect on  operating
results.

Liquidity and Capital Resources

   The  Partnership  has  contracted  with FFP  Marketing  to  provide  all cash
management  services  on  behalf  of  the  Partnership.  For  that  reason,  the
Partnership  does not maintain a bank  account.  All of the  Partnership's  cash
receipts are received,  and all of its  disbursements are made, by FFP Marketing
on behalf of the Partnership, with the appropriate records being made to account
for  amounts  owed by the  Partnership  to FFP  Marketing,  or visa  versa.  FFP
Marketing  owed the  Partnership  $892,000 on  December  31,  1999;  whereas the
Partnership  owed FFP  Marketing  the amount of $21,000 on  December  31,  1998,
exclusive of long-term secured debt.

   Assuming no additional  properties are acquired or sold,  based upon executed
real estate  leases,  in 2000 the  Partnership  is projected to receive from FFP
Marketing  $252,000  per month for rent plus  $71,000  per month for the  direct
financing leases,  and the Partnership's  debt service  requirements in 2000 are
fixed at $222,000 per month.  Such amounts are before reduction for the minority
interest  of  the  Harvison  Family  in  the  subsidiary.  In  prior  years  the
Partnership was obligated to pay debt service obligations at a variable interest
rate and with a balloon  payment of remaining  principal  due in November  2000.
That prior debt was refinanced in October 1999 with long-term  fully-amortizing,
fixed  rate  financing.  As a result of its  forecast  of  positive  cash  flow,
management  believes that the  Partnership  will be able to meet its obligations
for general and administrative expenses from operations.

   All  of the  Partnership's  real  estate  leases  are  "triple  net"  leases,
providing   for  the  tenant  (FFP   Marketing),   and  not  the  landlord  (the
Partnership),  to pay all real estate  taxes,  insurance,  operating and capital
costs for the properties.  Therefore, the Partnership does not have any material
commitments for capital expenditures on those properties.

   In February  1999,  the  Partnership  purchased 14  additional  improved real
properties from a third party on which 12 convenience stores and two truck stops
are operational.  The Partnership immediately leased the 14 purchased properties
to FFP Marketing under real estate leases,  which are accounted for as operating
leases for the land  portion  and as direct  financing  leases for the  building
portion.  These real  estate  leases  provide for  monthly  rentals  aggregating
$99,000 for a 15-year term, which equal the Partnership's  monthly principal and
interest  payments owed under its acquisition  debt. Such amount was established
by related parties,  but management believes that such amount is consistent with
market rates;  however,  no assurance can be given to that effect. The operating
leases for the land portion  have been  allocated a monthly  rental  aggregating
$28,000,  and the direct  financing  leases for the buildings  portion have been
allocated a monthly rental  aggregating  $71,000.  These leases are "triple net"
leases,  under which the Partnership  pays no taxes,  insurance,  operating,  or
capital costs, and provide for an increase in rent payments after each five-year
period  during the term of the leases  based upon any  increase in the  consumer
price index.

   The Partnership incurred long-term acquisition debt in the original principal
amount of $9,550,000 in connection with its February 1999 acquisition. That debt
is fully amortizable over 15 years with equal, monthly payments of principal and
interest. FFP Marketing was required to guarantee the Partnership's  acquisition
indebtedness.

   In October 1999, the Partnership closed new long-term  financing from a third
party  lender  and at that  time  repaid  in  full  its  long-term  indebtedness
previously payable to FFP Marketing.  The Partnership executed a promissory note
payable to the new lender in the amount of $12,000,000  plus a potential  credit
enhancement amount of up to $1,043,000.  This note is fully amortizable over its
20-year  term with equal,  monthly  payments of  principal,  interest and credit
enhancement charges in the amount of $123,000.  This note bears interest at 9.9%
per annum.  The debt that the new loan  refinanced  required  monthly  principal
payments of $95,000 plus accrued interest, and required a balloon payment of all
unpaid  principal  in  November  2000.  If  none of the  loans  with  which  the
Partnership's  new loan is pooled incurs a default during the term of the loans,
the Partnership's  credit enhancement  payments,  if any, will be applied by the
lender to reduce the principal balance of the note and result in a retirement of
such debt in  approximately  19 years.  The payment of this note is secured by a
deed of trust  lien  against  63  properties  of the  Partnership.  All of those
properties are leased to FFP Marketing with a 20-year term.

   When the  Partnership  repaid its debt to FFP Marketing in October 1999,  FFP
Marketing also repaid all of its debt payable to the  Partnership  that had been
incurred when the  Partnership  sold inventory and equipment to FFP Marketing in
February 1999.

"Year 2000" Computer Issues

   Over the past several years,  the  Partnership  has prepared for the possible
disruptions  that  might have  resulted  from the date  change to year 2000.  No
significant year 2000 problems were  experienced,  and the Partnership  believes
that no material  exposure to year 2000 issues exist. The Partnership  relies on
FFP Marketing for its  information  technology and  computerization  and obtains
those, in part, in exchange for the payment of an annual overhead  reimbursement
fee. As a result, the Partnership did not incur any capital expenditures related
to  modifications  of existing  software and conversions to new software for the
year 2000 issue.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

   The Partnership is not subject to a market risk related to variable  interest
rates  because all of its  long-term  financing  is subject to a fixed  interest
rate.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

   The financial statements begin on page F-1.


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

   Reference  is made to the  Partnership's  Current  Report  on Form 8-K  dated
December 29, 1999, which report is hereby incorporated herein by reference.

<PAGE>

                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

General Partner

   FFP Real  Estate  Trust is a Texas real  estate  investment  trust  formed in
December  1997.  To  date,  its  only  activities  have  been  to  serve  as the
Partnership's  sole general partner and to manage its affairs and business.  FFP
Real Estate  Trust  succeeded  FFP Partners  Management  Company,  Inc.,  as the
Partnership's sole general partner,  effective December 28, 1997. The holders of
Limited  Partner  Units  have no power,  as  limited  partners,  to  direct,  or
participate in the control of, the business of the Partnership.

Management of the General Partner

   The names, ages, positions, and business experience of the executive officers
and trust  managers  of FFP Real  Estate  Trust on December  31,  1999,  were as
follows:

          Name             Age              Position

John H. Harvison           66              Chairman of the Board of Trust
                                           Managers, President, and
                                           Chief Executive Officer
Craig T. Scott             53              Vice President - Finance,
                                           General Counsel, Secretary,
                                           Treasurer and Chief Financial
                                           Officer
Joseph F. Leonardo [1]     53              Trust Manager
J. D. St. Clair            65              Trust Manager
Randall W. Harvison        42              Trust Manager

------------------------------
[1] Member of Audit Committee
[2] Robert E.  Garrison  III resigned  from the Board on February  23, 1999.  No
replacement was made.

   John H. Harvison has been Chairman of the Board of Trust Managers of FFP Real
Estate  Trust  since  December  1997.  He  was  Chairman  of  the  Board  of the
Partnership's former general partner since the commencement of the Partnership's
operations in May 1987. Mr. Harvison is also the Chairman of the Board and Chief
Executive Officer of FFP Marketing,  which leases all of the real property owned
by the Partnership.  Mr. Harvison is a founder and an executive  officer of each
of the  companies  from  which the  Partnership  initially  acquired  the retail
outlets  that  were   transferred   to  FFP   Marketing  in  the  December  1997
restructuring  of the  Partnership.  He has been  active in the retail  gasoline
business  since  1958 and in the  convenience  store  business  since  1973.  In
addition,  he has  been  involved  in  real  estate  development,  oil  and  gas
exploration and production,  the ownership and management of an oil refinery and
other personal investments. In January 1995, Mr. Harvison consented to the entry
of a cease and desist order by the United  States  Office of Thrift  Supervision
that, among other things,  prohibits him from participating in any manner in the
conduct of the affairs of federally insured depository institutions.  This Order
was issued in connection with Mr. Harvison's ownership in a federal savings bank
and  transactions  between  him (and  companies  in  which  he had an  ownership
interest) and that institution.  In consenting to the issuance of the Order, Mr.
Harvison did not admit any of the  allegations  against him and consented to the
issuance  of the Order  solely to avoid the cost and  distraction  that would be
caused by prolonged  litigation to contest the positions  taken by the Office of
Thrift  Supervision.  Mr. Harvison is the father of Randall W. Harvison,  who is
also a Trust Manager of the General Partner.

   Craig T. Scott has been Vice President-Finance,  General Counsel,  Secretary,
Treasurer  and Chief  Financial  Officer of FFP Real Estate Trust since  October
1998. He is employed with similar titles by FFP Marketing and its  subsidiaries.
From October  1996 until  September  1998,  Mr. Scott was engaged in the private
practice of law in Dallas and McKinney,  Texas. From December 1991 until October
1996,  he was  employed  by Box Energy  Corporation  as an  attorney  and as its
Executive Vice President.  Mr. Scott  previously  engaged in the practice of law
for seven  years  with  large  law  firms in  Dallas,  Texas;  practiced  law in
McKinney, Texas for four years; and was the president and co-owner of an oil and
gas exploration  company for two years. He was previously employed for six years
by Arthur Andersen & Co., an  international  public  accounting  firm. Mr. Scott
obtained a BBA degree from the University of Texas in 1968, a JD degree from the
University  of Texas  School  of Law in 1972,  and a LLM  degree  from  Southern
Methodist  University  School  of Law in 1980.  He is a member  of the  American
Institute of Certified  Public  Accountants,  the Texas Society of CPAs, and the
State Bar of Texas.

   Joseph F.  Leonardo  has been a Trust  Manager of FFP Real Estate Trust since
December  1997.  Since August 1992,  Mr.  Leonardo has been  President and Chief
Executive Officer of Leonardo  Management  Corporation,  which provide strategic
planning, market positioning, and other sales and marketing consulting services.
Mr.  Leonardo  also  operates   Convenience   Directions  which  publishes  Info
Marketing,  a convenience store industry  newsletter.  Prior to forming Leonardo
Management,  Mr.  Leonardo  served in various  executive  positions with several
convenience store operators.

   J. D. St. Clair was a director of the  Partnership's  former general  partner
from May 1987 until the December  1997  restructuring.  He has served as a Trust
Manager of FFP Real Estate Trust since  December  1997.  Mr. St. Clair is also a
director  of  FFP  Marketing  and  has  been  Vice  President-Fuel   Supply  and
Distribution  of FFP  Marketing,  and its  predecessor,  since May 1987. Mr. St.
Clair is a founder and an  executive  officer of several of the  companies  from
which  the  Partnership   initially   acquired  the  retail  outlets  that  were
transferred  to FFP  Marketing in the December 1997  restructuring.  He has been
involved in the retail gasoline  marketing and convenience  store business since
1971.  Prior to 1971,  Mr.  St. Clair performed  operations  research and system
analysis  for  Bell  Helicopter,  Inc.,  from  1967 to  1971;  for the  National
Aeronautics  and Space  Administration  from 1962 to 1967; and Western  Electric
Company from 1957 to 1962.

   Randall W.  Harvison  has served as a Trust  Manager of FFP Real Estate Trust
since  December  1997. He is an attorney and has been engaged in a solo practice
in Fort Worth,  Texas, since 1994. Since 1987, Mr. Harvison was also employed by
a  subsidiary  of FFP  Marketing  and of  various  companies  controlled  by the
Harvison  Family that are engaged in real estate  investment  and management and
other investment activities. Randall W. Harvison is the son of John H. Harvison,
the Chairman of the Board of Trust Managers.

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

   Regulations issued under the Securities  Exchange Act of 1934 require certain
officers,  directors of the general  partner,  and other persons to report their
holdings of the Limited Partner Units to the Securities and Exchange  Commission
and to the Partnership.  To the best of the Partnership's knowledge,  based upon
copies of reports and other  representations  provided to the  Partnership,  all
1999 reports  required under Section 16 of the  Securities  Exchange Act of 1934
were filed in a timely manner.


ITEM 11.  EXECUTIVE COMPENSATION.

   Each Trust  Manager of FFP Real  Estate who is not an officer or  employee of
the FFP Real Estate  receives an annual  retainer of $4,000 plus $1,000 for each
Board  meeting,  or  committee  meeting  not  held in  conjunction  with a Board
meeting,  which he  attends  and $500 for  each  telephone  meeting  in which he
participates.  Each Trust  Manager is also  reimbursed  for expenses  related to
attendance at Board meetings.

   In the past,  non-employee  Trust  Managers  were granted  options to acquire
25,000 Limited Partner Units at the fair market value of the underlying units on
the date of grant.  The options become  exercisable with respect to one-third of
the units covered thereby on each of the  anniversary  dates following the grant
and  expire 10 years  after  grant.  In the event of a change in  control of the
Partnership,  any unexercisable  portion of the options will become  immediately
exercisable.  Upon exercise,  the option price may be paid, in whole or in part,
in Limited Partner Units owned by the Trust Manager.

   Trust Managers who are officers or employees of FFP Real Estate Trust receive
no additional compensation for attendance at Board or committee meetings.
   Neither the Partnership nor FFP Real Estate Trust, the general partner of the
Partnership,  paid any salary or bonus (cash or non-cash) to any person in 1999.
Accordingly,  there were no "Named  Executive  Officers" of the  Partnership  in
1999.

   The Partnership  and FFP Marketing are parties to a  reimbursement  agreement
pursuant to which the Partnership  reimburses FFP Marketing for all direct costs
of  the  Partnership  (such  as  costs  to  prepare  the  Partnership's   annual
partnership  tax returns,  annual audit fees,  etc.) and an agreed upon lump sum
amount  for  indirect   overhead  costs  allocable  to  the   Partnership.   The
reimbursement  for  officers'  compensation  costs  incurred by FFP Marketing in
connection with the Partnership's activities is determined by the amount of time
management and other personnel  spend on activities of the Partnership  compared
to the amount of time they spend on activities of FFP Marketing.  Since FFP Real
Estate  Trust's  only  activity  is to  serve  as  the  general  partner  of the
Partnership, all of its costs and expenses will be borne by the Partnership. The
indirect cost  reimbursement  paid by the  Partnership to FFP Marketing for 1999
was $200,000.

   Options Exercised During 1999 and Year End Option Values. All options held by
directors,  officers,  and  employees to acquire  Limited  Partner  Units of the
Partnership  that  were  outstanding  at the  completion  of the  December  1997
restructuring  of the Partnership were divided into separate options to purchase
Limited  Partner  Units of the  Partnership  and a like number of FFP  Marketing
common  shares.  The  exercise  price  for the  then  existing  options  for the
Partnership's units was divided between the two new options in proportion to the
average  closing  price on the  American  Stock  Exchange  of the  Partnership's
Limited  Partner  Units and shares of FFP  Marketing's  common  stock during the
first month of trading following completion of the restructuring.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Limited Partner Units

   The following table sets forth as of March 31, 2000, information with respect
to the  Limited  Partner  Units  beneficially  owned by all Trust  Managers  and
executive  officers  of FFP Real  Estate  Trust  (such  information  is based on
ownership reported to the Partnership by such persons):

                                     Amount and Nature of       Percent
                                     Beneficial Ownership      of Class
  Name of Beneficial Owner                     [1]                [1]

John H. Harvison, Chairman of
  the Board of Trust Managers
  and President                              40,000 [2]           1.7%


Craig T. Scott, Vice President               10,000 [3]           0.4%
Joseph F. Leonardo, Trust Manager             8,334 [4]           0.4%
J. D. St. Clair, Trust Manager               42,400 [5]           1.8%
Randall W. Harvison, Trust Manager            8,334 [6]           0.4%
All directors and executive
  officers as a group (5 persons)            12,400               0.6%

-------------------------------------------------------
[1] Based on 2,234,262 Limited Partner Units outstanding at March 31, 2000, plus
any Limited  Partner Units that an individual has the right to acquire within 60
days pursuant to the exercise of options. Options exercisable within 60 days are
deemed to be outstanding  for the purpose of computing the percentage  ownership
of such  individual  but are not  deemed to be  outstanding  for the  purpose of
computing  the  percentage  ownership  of any other person or group shown in the
table.

[2] Consists of options to acquire 40,000 units exercisable within 60 days.

[3] Consists of options to acquire 10,000 units  exercisable  within 60 days but
excludes options to acquire 20,000 units not exercisable within 60 days.

[4] Consists of options to acquire  8,334 units  exercisable  within 60 days but
excludes options to acquire 16,666 units not exercisable within 60 days.

[5] Consists of 12,400 units held  directly and options to acquire  30,000 units
exercisable within 60 days.

[6] Consists of options to acquire  8,334 units  exercisable  within 60 days but
excludes options to acquire 16,666 units not exercisable within 60 days.

General Partner

   FFP Real Estate Trust is the sole general  partner of the Partnership and has
served as such since  December  1997. As sole general  partner,  FFP Real Estate
Trust makes all decisions  relating to the  management of the  Partnership.  FFP
Partners Management Company,  Inc., a Delaware  corporation  indirectly owned by
entities owned by John H. Harvison and members of his immediate  family,  is the
sole shareholder of FFP Real Estate Trust.

Subsidiary

   FFP  Properties,  L.P.,  a Texas  limited  partnership,  is owned  60% by the
Partnership,  as general  partner.  The  limited  partnership  interests  of FFP
Properties,  L.P. are owned 1% by FFP Partners Management Company,  Inc. and 39%
indirectly  by entities  owned by John H.  Harvison and members of his immediate
family.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Related Transactions

   As  previously  stated,  the  Partnership  and FFP Marketing are parties to a
reimbursement  agreement  pursuant  to  which  the  Partnership  reimburses  FFP
Marketing for all direct costs of the Partnership  (such as costs to prepare the
Partnership's  annual  partnership tax returns,  annual audit fees, etc.) and an
agreed upon lump sum of $200,000 for indirect  overhead  costs  allocable to the
Partnership.  The agreed upon amount for indirect overhead costs incurred by FFP
Marketing in connection with the Partnership's  activities was determined by the
amount  of time  management  and  other  personnel  spend on  activities  of the
Partnership  compared  to the  amount of time they  spend on  activities  of FFP
Marketing.  Since  FFP Real  Estate  Trust's  only  activity  is to serve as the
general  partner of the  Partnership,  all of its costs and  expenses  have been
borne by the  Partnership.  For  each of 1999 and  1998,  the  Partnership  paid
$200,000 to FFP Marketing as its indirect overhead cost reimbursement.

   From December  1997 and until June 1998,  the  Partnership  and FFP Marketing
were jointly liable on  substantially  all the debt that was  transferred to the
Partnership  in the December  1997  restructuring.  In June 1998,  that debt was
restructured  such  that the  Partnership's  liability  to the bank  lender  was
substituted  with a liability  payable to FFP Marketing.  The  Partnership  paid
interest expense to FFP Marketing on that indebtedness in the amount of $893,000
and  $693,000  in 1999 and  1998,  respectively.  Such  debt was  repaid  by the
Partnership  in October  1999.  The  amount  owed by the  Partnership  under its
promissory note payable to FFP Marketing was $14,201,000 at December 31, 1998.

   John H. Harvison,  Chairman and Chief Executive Officer of FFP Marketing, and
Craig T. Scott,  Vice President - Finance,  General  Counsel and Chief Financial
Officer of FFP  Marketing,  hold  similar  positions  with the  Partnership.  In
addition,  companies owned directly or indirectly by Mr. Harvison and members of
his  immediate  family  and/or  other  members of the senior  management  of FFP
Marketing  own 100% of the  general  partner of the  Partnership  and 40% of the
subsidiary of the Partnership.

   The  Partnership  leases almost all of its properties to FFP  Marketing.  The
leases  were  initially  entered  into in  conjunction  with the  December  1997
restructuring of the Partnership, when the non-real estate assets and businesses
of the Partnership  were transferred to FFP Marketing while the real estate used
in the retail  operations was retained by the  Partnership.  The lease rates for
the  properties  were  based  upon  knowledge  of the  properties  by  the  then
management of the Partnership and FFP Marketing and their general  experience in
acting  as  lessor  and  lessee  for  similar  properties.   Management  of  the
Partnership  and FFP Marketing  believes that the lease rates are  comparable to
lease rates that could be entered into with unrelated  third  parties.  However,
third party advisors were not engaged, and reference was not made to third party
surveys or analyses of rental rates, in making this determination. FFP Marketing
paid  $2,952,000 and $2,628,000 in lease payments to the  Partnership  for these
properties  during  1999 and 1998,  respectively.  FFP  Marketing  also paid the
Partnership $710,000 in 1999 as payments on direct financing leases.

   Prior to the December 1997 restructuring of the Partnership,  the Partnership
was  managed by its former  general  partner,  which  made  determinations  with
respect to costs  incurred by it (whether  directly  or  indirectly  through its
affiliates) that were reimbursed by the Partnership.  The Partnership reimbursed
the former  general  partner and any of its  affiliates  for direct and indirect
general  and  administrative  costs,   principally  officers'  compensation  and
associated   expenses,   related  to  the  business  of  the  Partnership.   The
reimbursement  was based on the time devoted by  employees to the  Partnership's
business or upon such other  reasonable  basis as was  determined  by the former
general partner.

<PAGE>
                                     PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K.

   (a) The  following  documents are filed as part of this Annual Report on Form
10-K:

   (1)  Financial  Statements.  See Index to  Financial  Statements  on page F-1
hereof.

   (2)  Financial  Statement  Schedules.  No Financial  Statement  Schedules are
included because they are either not required,  not applicable,  or the required
information  is  included  in the  consolidated  financial  statements  or notes
thereto.

   (3) Exhibits.

             3.1 Amended and Restated Certificate of Limited Partnership  of FFP
                      Partners, L.P. {1 - Ex. 3.7}
             4.1 Amended  and  Restated  Agreement  of  Limited  Partnership  of
                      FFP  Partners,  L.P.,  dated  May 21, 1987, as amended  by
                      the  First Amendment to Amended and Restated  Agreement of
                      Limited  Partnership  dated  August 14, 1989,  and  by the
                      Second  Amendment  to  Amended  and  Restated Agreement of
                      Limited Partnership dated July 12, 1991. {2 - Ex 4.1}
             4.2 Third Amendment to Amended and Restated  Agreement  of  Limited
                      Partnership  of FFP Partners,  L.P.,  dated as of December
                      28, 1997.  {4}
            10.1 Nonqualified  Unit Option Plan of FFP Partners,  L.P.
                      {1-Ex. 10.2}
            10.2 Form of Lease Agreement  between FFP Properties,  L.P., and FFP
                      Operating Partners, L.P. {4}
            10.3 Form of Building  Lease Agreement between FFP Properties, L.P.,
                      and FFP Operating Partners, L.P. {4}
            10.4 Master  Lease   Agreement  dated  September  29, 1999,  between
                      FFP Properties, L.P., and FFP Operating Partners, L.P. {5}
            10.5 Form  of Pledge and  Security  Agreement  dated  September  22,
                      1999  between FFP Properties, L.P. and AMRESCO  Commercial
                      Finance, Inc. {5}
            21.1 Subsidiary of the Registrant.  {5}
            23.1 Independent Auditors' Consent. {5}
            23.2 Independent Auditors' Consent. {5}
            27   Financial data schedule. {5}
            99.1 Current  Report on Form 8-K regarding a change in the  Partner-
                      ship's  certifying  accountant, dated December  29,  1999,
                      which report is hereby incorporated by reference.

---------------------------------------------------------------
            {1} Included   as  the   indicated   exhibit in  the   Partnership's
                Registration  Statement on Form S-1 (Registration  No. 33-12882)
                dated May 14, 1987, and incorporated herein by reference.

            {2} Included as the indicated  exhibit in the  Partnership's  Annual
                Report on Form 10-K for the fiscal year ended December 27, 1992,
                and incorporated herein by reference.

            {3} Included   as  the  indicated   exhibit  in  the   Partnership's
                registration  statement on Form 8-A dated as of August 29, 1989,
                and incorporated herein by reference.

            {4} Included as the  indicated  exhibit in the  Partnership's Annual
                Report on Form 10-K for the fiscal year ended December 28, 1997,
                and incorporated herein by reference. {5} Included herewith.

      (b)  Current  Report on Form 8-K  regarding a change in the  Partnership's
           certifying accountant, dated December 29, 1999.
<PAGE>
                                   SIGNATURES

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

Dated:  April 12, 2000                   FFP PARTNERS, L.P.
                                         (Registrant)

                                         By:  FFP Real Estate Trust
                                              General Partner

                                         By: /s/ John H. Harvison
                                             John H. Harvison
                                             President

   Pursuant to the  requirements  of the Securities  Exchange Act of 1934,  this
Annual  Report has been signed below by the  following  persons on behalf of the
Registrant in the capacities indicated as of April 12, 2000.


/s/ John H. Harvison
John H. Harvison                President and Chief Executive
                                  Officer  and Trust Manager of FFP
                                 Real Estate Trust (Principal executive officer)

/s/ Craig T. Scott
Craig T. Scott                  Vice President - Finance,
                                  Secretary, Treasurer, General
                                  Counsel and Chief Financial
                                  Officer of FFP Real Estate Trust
                                  (Principal financial and accounting officer)

Joseph F. Leonardo             Trust Manager of FFP Real Estate Trust

/s/ J. D. St. Clair
J. D. St. Clair                Trust Manager of FFP Real Estate Trust

/s/ Randall W. Harvison
Randall W. Harvison            Trust Manager of FFP Real Estate Trust

<PAGE>





ITEM 8.  INDEX TO FINANCIAL STATEMENTS


                                                                 Page
                                                                Number

Report of Independent Certified Public Accountants               F-2

Independent Auditors' Report                                     F-3

Consolidated Balance Sheets as of December 31, 1999 and 1998     F-4

Consolidated Statements of Operations for the Periods Ended
     December 31, 1999 and 1998                                  F-5

Consolidated  Statement of Partners'  Capital for the Periods
  Ended December 31, 1999 and 1998                               F-6

Consolidated  Statements  of Cash Flows for the Periods
  Ended December 31, 1999 and 1998                               F-7

Notes to Consolidated Financial Statements                       F-8


<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



The Partners of
FFP Partners, L.P.:

   We have audited the accompanying  consolidated balance sheet of FFP Partners,
L.P. (a Delaware limited partnership) and its subsidiary, FFP Properties,  L.P.,
as of December 31, 1999,  and the related  statements of  operations,  partners'
capital and cash flows for the year then  ended.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

   We  conducted  our audit in  accordance  with  auditing  standards  generally
accepted in the United States.  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 audit provides a reasonable  basis
for our opinion.

   In our  opinion,  the  consolidated  financial  statements  referred to above
present  fairly,  in  all  material  respects,  the  financial  position  of FFP
Partners,  L.P. and its subsidiary as of December 31, 1999, and the consolidated
results of their operations and their consolidated cash flows for the year ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.

                                      Grant Thornton  LLP


Dallas, Texas
March 31, 2000
<PAGE>

                          INDEPENDENT AUDITORS' REPORT



The Partners of
FFP Partners, L.P.:

   We have audited the accompanying  consolidated balance sheet of FFP Partners,
L.P. (a Delaware limited partnership) and its subsidiary, FFP Properties,  L.P.,
as of December 31, 1998, and the related consolidated  statements of operations,
partners'  capital  and cash flows for the year then ended.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements 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 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 audit provides a reasonable basis for our opinion.

   In our  opinion,  the  consolidated  financial  statements  referred to above
present  fairly,  in  all  material  respects,  the  financial  position  of FFP
Partners,  L.P. and its  subsidiary as of December 31, 1998,  and the results of
their operations and their cash flows for the period ended December 31, 1998, in
conformity with generally accepted accounting principles.



                                      KPMG  LLP


Fort Worth, Texas
March 30, 1999


<PAGE>
                        FFP PARTNERS, L.P. AND SUBSIDIARY
                           Consolidated Balance Sheets
                           December 31, 1999 and 1998
                                 (In thousands)

                                                           1999        1998
                       ASSETS

Current assets
   Prepaid expenses                                         $31         $26
   Net investment in direct financing leases with
      affiliate, current portion                             53           0
   Due from affiliate                                       892           0
        Total current assets                                976          26
Real property
    Land and improvements                                 8,685       5,929
    Buildings                                            21,413      21,329
                                                         30,098      27,258
    Accumulated depreciation                           (11,825)    (10,574)
                                                         18,273      16,684
Notes receivable                                            114          44
Net investment in direct financing leases with
  affiliate                                               3,844           0

Other assets, net                                           772          50

      Total assets                                      $23,979     $16,804


         LIABILITIES AND PARTNERS' CAPITAL

Current liabilities
   Current installments of long-term debt                  $565        $148
   Current installments of notes payable to affiliate         0       1,143
   Accrued expenses                                         263          39
        Total current liabilities                           828       1,330
Long-term debt, excluding current installments           20,812         297
Notes payable to affiliate, excluding current
  installments                                                0      13,058
        Total liabilities                                21,640      14,685
Minority interest in subsidiary                             945         857
Commitments and contingencies
Partners' capital
    Limited partners' capital                             1,372       1,242
    General partner's capital                                22          20
         Total partners' capital                          1,394       1,262

      Total liabilities and partners' capital           $23,979     $16,804

          See accompanying Notes to Consolidated Financial Statements.

<PAGE>
                       FFP PARTNERS, L.P. AND SUBSIDIARY
                      Consolidated Statements of Operations
                    Periods Ended December 31, 1999 and 1998
                         (In thousands, except per unit)


                                                            1999        1998
Revenues
   Rental income                                          $2,975      $2,660
   Gain on sale of property                                    0          56
   Interest and other income                                 822          14
       Total revenues                                      3,797       2,730

Expenses
   General and administrative expenses                       451         473
   Depreciation and amortization                           1,253       1,203
   Interest expense                                        1,873       1,336
        Total expenses                                     3,577       3,012

Income (loss) before minority interest in subsidiary           220        (282)

    Minority interest in subsidiary                          (88)        103

 Net income (loss)                                          $132       $(179)


Net income (loss) per unit
   Basic                                                   $0.06      $(0.08)
   Diluted                                                 $0.06       (0.08)

Weighted average number of units outstanding
   Basic                                                   2,272       2,272
   Diluted                                                 2,277       2,272


          See accompanying Notes to Consolidated Financial Statements.

<PAGE>

                        FFP PARTNERS, L.P. AND SUBSIDIARY
                  Consolidated Statements of Partners' Capital
                    Periods Ended December 31, 1999 and 1998
                                 (In thousands)



                               Limited      General
                               Partners     Partner      Total

Balance, December 28, 1997      $1,418         $23      1,441
   Net (loss)                    (176)         (3)      (179)
Balance, December 31, 1998       1,242          20      1,262
   Net income                      130           2        132
Balance, December 31, 1999      $1,372         $22     $1,394


          See accompanying Notes to Consolidated Financial Statements.

<PAGE>

                       FFP PARTNERS, L.P. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                    Periods Ended December 31, 1999 and 1998
                                 (In thousands)

                                                            1999       1998
Cash flows from operating activities
   Net income (loss)                                        $132      $(179)
   Adjustments to reconcile net income (loss) to
       net cash provided by operating activities -
          Depreciation and amortization                    1,253      1,203
          Gain on sales of real property                       0        (56)
          Minority interest in subsidiary                     88       (103)
          Changes in operating assets and liabilities  -
            (Increase) decrease in prepaid expenses           (5)       170
            (Increase) in due from affiliate                (892)         0
             Increase in other assets                       (723)       (50)
             Increase in accrued expenses                    224         39
   Net cash provided by operating activities                  77      1,024

Cash flows from investing activities
   Purchases of land and building                         (2,846)       (96)
   Proceeds from the sale of real property                     5        408
   Investment in direct financing lease with affiliate    (3,897)         0
   Increase in notes receivable                              (70)       (44)
   Net cash provided by (used in) investing activities    (6,808)       268

Cash flows from financing activities
   Payments on long-term debt                               (417)   (15,493)
   Proceeds from long-term debt                           21,349          0
   Proceeds from long-term debt to affiliate                   0     14,773
   Payments on long-term debt to affiliate               (14,201)      (572)
   Net cash used by financing activities                   6,731     (1,292)

Net increase/(decrease) in cash                                0          0

Cash at beginning of year                                      0          0

Cash at end of year                                           $0         $0

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for interest during 1999 and 1998 was approximately $1,737 and $1,300,
respectively.

          See accompanying Notes to Consolidated Financial Statements.

<PAGE>
                        FFP PARTNERS, L.P. AND SUBSIDIARY
                   Notes to Consolidated Financial Statements

1.  BASIS OF PRESENTATION

(a)  Organization of Company

   These Consolidated Financial Statements include the accounts of FFP Partners,
L.P. (the "Company"), and its 60%-owned subsidiary,  FFP Properties,  L.P. ("FFP
Properties").

   The  Company  is a  Delaware  limited  partnership  formed in  December  1986
pursuant to the  Agreement of Limited  Partnership  of FFP  Partners,  L.P. (the
"Partnership  Agreement"),  with FFP Partners Management Company, Inc. ("FFPMC")
as its initial general partner.  In May 1987, the Company purchased  convenience
stores,  truck stops, other retail motor fuel outlets,  and ancillary businesses
from  affiliates  of its general  partner.  The  purchase  of those  outlets was
completed in conjunction  with the Company's  initial public offering of Class A
Units of limited  partnership  interest.  Through its subsidiaries,  the Company
owned and operated these outlets, and other businesses, until December 1997.

   In December 1997, the Company  completed an  organizational  restructuring by
which the real estate used in the aforementioned  retail operations was retained
by the Company while the convenience  store, truck stop, other retail motor fuel
outlets,  and other  businesses it conducted  were  transferred to FFP Marketing
Company,  Inc., a Texas corporation ("FFP  Marketing"),  in exchange for all the
common  stock of FFP  Marketing.  The  common  stock of FFP  Marketing  was then
distributed on a one-for-one  basis to the general partner and limited  partners
of the Company.  The assets and  liabilities  in the  accompanying  consolidated
balance  sheet of the Company  have been  reflected at the  historical  carrying
values of the predecessor  entity prior to the  restructuring.  Accordingly,  no
gain  or  loss  was   recognized   as  a  result  of  the  1997   organizational
restructuring.

   Also in that December 1997  restructuring,  the Company  distributed the real
estate it retained to FFP Properties,  a newly formed Texas limited partnership,
in exchange for the general partnership interest in FFP Properties.  The limited
partnership interests in the Company held by John H. Harvison,  the Chairman and
Chief  Executive  Officer of FFPMC,  members of his  family,  and  corporations,
partnerships,  trusts,  and other business  entities  affiliated with him or his
family  members  (collectively,   the  "Harvison  Family")  were  exchanged  for
economically  equivalent  limited  partnership  interests in FFP Properties.  In
addition,  FFP Real Estate  Trust,  a newly formed Texas real estate  investment
trust that is wholly owned by FFPMC, then became the sole general partner of the
Company.  John H.  Harvison is the Chairman and Chief  Executive  Officer of FFP
Real Estate Trust. FFPMC is wholly owned by the Harvison Family.

   By virtue  of this  restructuring,  all of the  operating  activities  of the
Company were  transferred to FFP Marketing,  and there is no comparative  income
data for the Company for 1997.

   The Company owns the real estate and conducts its rental  activities  through
FFP  Properties,  its operating  subsidiary.  The Company owns a 60% partnership
interest  in FFP  Properties  and  serves as its sole  general  partner.  In the
consolidated  financial  statements  of the Company,  the  minority  interest in
subsidiary  represents the Harvison Family's 40% limited partnership interest in
FFP Properties.

(b)  Consolidation

   The consolidated financial statements include the accounts of the Company and
its  majority  owned  subsidiary.  All  significant  intercompany  accounts  and
transactions are eliminated in the consolidated financial statements.

(c)  Change in Fiscal Year

   Prior to the  restructuring  of the Company on December 28, 1997, the Company
prepared its  financial  statements on the basis of a fiscal year which ended on
the last Sunday in December. However, in connection with the restructuring,  the
Company changed its fiscal year to coincide with the calendar year. Accordingly,
the accompanying  consolidated  financial statements for the year ended December
31,  1998,  include  the 12 months  then ended plus the  three-day  period  from
December 29, 1997 through December 31, 1997. The effect of including these three
additional  days in the  consolidated  financial  statements  for the year ended
December 31, 1998, is immaterial.


2.  SIGNIFICANT ACCOUNTING POLICES

(a)  Real Property

   Real  property is stated at cost,  which may differ  from fair market  value.
Depreciation is provided on the  straight-line  method over the estimated useful
lives of the respective assets, which may range from five to 30 years.

(b)  Fair Value of Financial Instruments

   The carrying value of notes receivable approximates fair value because of the
short  maturity of the  instruments.  The  carrying  amount of notes  payable to
affiliate  at December 31, 1998,  approximated  fair value  because the interest
rate on such  obligations  varied with the prime  rate.  The  carrying  value of
long-term debt at December 31, 1999, amounted to $21,377,000.  The fair value of
such  debt is  approximately  $21,269,000  based  on  interest  rates  currently
available to the Company.

(c)  Notes Receivable

   The Company  evaluates the  collectibility  of notes receivable in accordance
with the provisions of Statement of Financial Accounting Standards, ("SFAS") No.
114,  "Accounting by Creditors for Impairment of Loans",  as amended by SFAS No.
118,  "Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures."  At year end 1999 and 1998, no notes receivable were determined to
be impaired.



(d)  Units Issued and Outstanding

   The equity interests in the Company are comprised of Class A Units of limited
partnership  interest and units representing the general  partnership  interest.
These units issued and outstanding at year end 1999 and 1998 were as follows:

                                     1999        1998

       Limited partners           2,234,262   2,234,262
       General partner               37,416      37,416

               Totals             2,271,678   2,271,678

   The Company's limited partner units are traded on the American Stock Exchange
under the "FFP" trading symbol.  The general partner units are owned by its sole
general partner, FFP Real Estate Trust.

(e)  Use of Estimates

   The use of  estimates  is  required  to prepare  the  Company's  consolidated
financial statements in conformity with accounting principles generally accepted
in the United  States.  Although  management  believes  that such  estimates are
reasonable, actual results could differ from the estimates.

(f)  Impairment of Long-Lived Assets

   The Company  reviews  long-lived  assets for  impairment  whenever  events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be  recoverable.  Recoverability  of assets to be held and used is measured by a
comparison  of the  carrying  amount of such  assets to  future  net cash  flows
expected to be  generated  by the assets.  If such assets are  considered  to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets.

(g)  Rental Revenue

   The Company recognizes rental revenues when earned.

(h)  Unit Option Plan

   The  Company  accounts  for its  unit  option  plan in  accordance  with  the
provisions of Accounting Principles Board ("APB") Option No. 25, "Accounting for
Stock Issued to Employees," and related  interpretations.  As such, compensation
expense  would be recorded  only if the current  market price of the  underlying
unit on the date of the grant of the option  exceeded the exercise  price of the
option.   The  Company  adopted  SFAS  No.  123,   "Accounting  for  Stock-Based
Compensation,"  which permits  entities  either to (i) recognize as expense over
the  vesting  period  the fair  value of all  stock-based  awards on the date of
grant,  or (ii)  continue  to apply the  provisions  of APB  Opinion  No. 25 and
provide  proforma  net income and earnings  per share  disclosures  for employee
option  grants  made in 1995 and  subsequent  years as if the  fair-value  based
method defined in SFAS No. 123 had been applied.  The Company elected the second
alternative (See Note 5).

(i)  Income Taxes

   As a partnership,  the Company pays no federal income tax. Rather, the income
or loss of the  Company is  allocated  to its  partners  to be included in their
respective  tax  returns,  subject  to  special  tax rules for  publicly  traded
partnership The net difference between the tax bases and the reported amounts of
assets and liabilities at year end 1999 is approximately $3,343,000.

(j)  Segment Information

   The Company operates in a single operating segment,  the ownership and rental
of real estate. The Company earns  substantially all of its rental income from a
single entity, FFP Marketing.


3.  NOTES PAYABLE AND LONG-TERM DEBT

   In  February  1999,  the  Company  purchased  14  additional   improved  real
properties from a third party on which 12 convenience stores and two truck stops
are  operational.   To  fund  that  purchase,  the  Company  incurred  long-term
acquisition  debt with a third party lender in the original  principal amount of
$9,550,000.  This note is fully  amortizable  over 15 years with equal,  monthly
payments  of  principal  and  interest.  This note bears  interest at 9.275% per
annum. The payment of this note is secured by deed of trust liens against the 14
properties acquired, and FFP Marketing guaranteed the Partnership's  acquisition
indebtedness.  The  amount of FFP  Marketing's  monthly  lease  payments  to the
Company equals the Company's monthly debt payments.

   The Company  immediately leased the 14 purchased  properties to FFP Marketing
under real estate leases  accounted for as operating leases for the land portion
and direct  financing  leases for the building  portion (see Note 7). These real
estate  leases  provide for monthly  rentals  aggregating  $99,000 for a 15-year
term, which the Company uses to pay its monthly debt obligation.

   The Company also  purchased  inventory  and equipment at the 14 locations for
approximately  $942,000 and $1,750,000,  respectively.  The Company  immediately
sold this  inventory  and  equipment  to FFP  Marketing  in exchange  for a note
receivable.  Prior to its repayment in October  1999,  the note bore interest at
the prime rate and was payable in monthly installments over 8 years.

   In October  1999,  the Company  closed new long-term  financing  from a third
party  lender  and at that  time  repaid  in  full  its  long-term  indebtedness
previously  payable to FFP  Marketing.  The Company  executed a promissory  note
payable to the new lender in the amount of $12,000,000 plus a credit enhancement
amount of up to $1,043,000.  This note is fully  amortizable  over 20 years with
equal, monthly payments of principal, interest and credit enhancement charges in
the amount of $123,000.  This note bears interest at 9.7% per annum.  If none of
the loans with which the Company's  loan is pooled  incurs a default  during the
term of the loans, the Company's credit  enhancement  payments,  if any, will be
applied by the lender to reduce the principal  balance of the note and result in
a retirement of such debt in approximately 19 years. The payment of this note is
secured by a deed of trust lien against 63  properties  of the  Company.  All of
those properties are leased to FFP Marketing with a 20-year term.

   When the  Company  repaid  its debt to FFP  Marketing  in October  1999,  FFP
Marketing  also  repaid  all of its debt  payable to the  Company  that had been
incurred  when the Company sold  inventory  and  equipment  to FFP  Marketing in
February 1999.

   Effective June 1998, the Company,  FFP Marketing and FFP Marketing's  primary
bank lender  restructured the revolving credit facility and term loan due to the
lender.  In connection with the  restructuring  of the Company in December 1997,
both the Company and FFP Marketing  retained the liability for this debt as both
entities were primary obligors on the loans.  Under the June 1998  restructuring
agreement, the lender made a loan to FFP Marketing, FFP Marketing made a loan to
the Company,  and the Company repaid the balance of its debt to the lender,  all
of which was done  effective on June 28,  1998.  This  transaction  included the
execution of a promissory  note by the Company  payable to FFP  Marketing in the
original  principal  amount of $14,773,000 (the then current balance on the debt
due to the  lender),  which was  recorded  by the  Company  as notes  payable to
affiliate,  and the Company was released by the lender from all obligations.  At
December  31, 1998,  the Company was indebted to FFP  Marketing in the amount of
$14,201,000.  This debt payable to FFP  Marketing  was repaid in full in October
1999.

   Prior to the Company's  repayment of all  indebtedness in October 1999 to FFP
Marketing,  the interest rate and repayment  terms of the Company's note payable
to FFP Marketing had mirrored the terms of FFP  Marketing's  debt to its lender,
including a maturity  date in November  2000.  The  revised  agreement  with the
lender had required that FFP Marketing's  loan to the Company be secured by real
estate owned by the Company,  which was pledged to FFP  Marketing  and then,  in
turn,  also pledged by FFP Marketing to its lender as  additional  collateral on
its debt to the  lender.  The Company  made  monthly  principal  payments to FFP
Marketing of $95,000 plus accrued interest on the unpaid balance at a rate equal
to the bank's prime rate. As stated above, this loan was repaid in October 1999.

   The Company is obligated under other notes payable which bear interest at per
annum rates ranging from 6% to 10% and are due in monthly or annual installments
through 2012. Such notes are secured by real property and had aggregate balances
of $68,000 and $445,000 at year end 1999 and 1998, respectively.

   The aggregate  fixed  maturities of all of the Company's  long-term  debt for
each of the five years subsequent to 1999 are as follows:

                                    (In thousands)
     2000                                 $565
     2001                                  610
     2002                                  670
     2003                                  739
     2004                                  810
     Thereafter                         17,983

         Total                         $21,377

4.  INCOME (LOSS) PER UNIT

   The following  table  reconciles the  denominator  in the  calculation of the
basic and diluted  income  (loss) per unit for limited  partnership  and general
partnership units in 1999 and 1998:

                                                   1999        1998
                                                     (In thousands)

Weighted average number of units outstanding       2,272       2,272
Effect of dilutive options                             5           0
Weighted average number of units outstanding,
    assuming dilution                              2,277       2,272

   Options to purchase 292,999 units were included in the computation of diluted
income per for 1999.  Options to purchase 295,999 units were not included in the
computation  of  diluted  loss  per unit for 1998  because  it would  have  been
antidilutive. Such options could potentially dilute basic income per unit in the
future.


5.  NONQUALIFIED UNIT OPTION PLAN

   The Company has  previously  granted,  and had  outstanding at year end 1999,
nonqualified options to acquire 292,999 Class A Units. Such options were granted
under its Nonqualified  Unit Option Plan and a Nonqualified Unit Option Plan for
Nonexecutive  Employees.  The Nonqualified Unit Option plan has terminated,  but
another plan with the same terms was adopted by the Company.  Options for 37,998
units are  available  for grant  under the  Nonqualified  Unit  Option  Plan for
Nonexecutive  Employees.  A summary  of  activity  under the unit  option  plans
follows:

                                                                        Weighted
                                                           Exercise      Average
                                               Class A       Price      Exercise
                                                Units        Range       Price

Options outstanding, December 28, 1997         241,999   $1.211-$2.2610  $1.410
    Options granted during year                 80,000   $0.750-$1.0625   0.946
    Options expired or terminated during year  (26,000)     $1.2110      $1.211
    Options exercised during year                    0            0           0
Options outstanding, December 31, 1998         295,999   $0.7500-$2.261  $1.302
    Options granted during year                      0            0           0
    Options expired or terminated during year   (3,000)     $1.2110      $1.211
    Options exercised during year                    0            0           0
Options outstanding, December 31, 1999         292,999   $0.7500-$2.2610 $1.304

Options exercisable, December 31, 1999         233,000   $0.7500-$2.2610 $1.639
Options exercisable, December 31, 1998         202,665   $1.2110-$2.2610 $1.438

   All options to acquire Class A Units of the Company that were  outstanding at
the  completion of the December 1997  restructuring  of the Company were divided
into separate options to purchase Class A Units of the Company and a like number
of FFP Marketing common shares. The exercise price for the then existing options
for Company  units was divided  between the two new options in proportion to the
closing price on the American Stock Exchange of the Company's  Class A Units and
FFP Marketing's  common shares. The adjusted exercise prices of the unit options
outstanding at December 31, 1999, and December 31, 1998, are as follows:

                ----------1999----------    -----------1998-----------
   Exercise       Options        Options        Options       Options
     Price     Outstanding    Exercisable    Outstanding  Exercisable

    $0.7500       30,000         10,000         30,000             0
     1.0625       50,000         16,668         50,000             0
     1.2110      136,333        136,333        139,333       139,333
     1.2516        6,666          6,666          6,666         6,666
     1.3929       20,000         13,333         20,000         6,666
     1.9380       25,000         25,000         25,000        25,000
     2.2610       25,000         25,000         25,000        25,000
                 ---------------------------------------------------
                 292,999        233,000        295,999       202,665

   The weighted average exercise price of outstanding options under the plans at
year end was $1.304 unit with a remaining contractual life of 5.0 years.

   No  unit  options  were  granted  by the  Company  in  1999.  The  per  share
weighted-average  fair value of options granted in 1998 were estimated using the
Black Scholes option-pricing model, and the underlying assumptions used were:

                                    Underlying Assumptions
                         -------------------------------------------------
                                     Risk-Free                   Expected
  Year     Estimated     Dividend    Interest      Expected       Option
Granted   Fair Value      Yield        Rate        Volatility      Life

  1998      $0.73          0.0%        6.00%          53%         7 years

   The Company  applies APB Opinion No. 25 in  accounting  for its option plans.
Accordingly,  no  compensation  cost related to the plans has been recognized in
the consolidated financial statements.  Had the Company determined  compensation
under SFAS No. 123, the  Company's  net income (loss) would have been reduced to
the pro forma amounts indicated below:

                                           1999        1998
                                       (In thousands, except
                                         for per unit data)

Net income (loss)
   As reported                             $132      $(179)
   Pro forma                                 98       (213)
Net income (loss) per unit
   As reported
      Basic                               $0.06     $(0.08)
      Diluted                              0.06      (0.08)
   Pro forma
      Basic                               $0.04     $(0.10)
      Diluted                              0.04      (0.10)

   Pro forma net income (loss) reflects only options granted subsequent to 1994.
Therefore,  the full impact of calculating  compensation  cost for stock options
under SFAS No. 123 is not reflected in the pro forma net loss amounts  presented
above  because  compensation  cost  for  options  granted  prior  to 1995 is not
considered.


6.  UNIT PURCHASE RIGHTS AND TRANSFER RESTRICTIONS

   In August 1989, the Company  entered into a Rights  Agreement and distributed
the right to its unitholders (the "Rights") to purchase Rights Units, which were
substantially  equivalent to Class A Units of the Company,  at a price of $20.00
per Unit. By its terms, all of the Rights expired in August 1999.

   In the December 1997  restructuring,  the Partnership's  limited  partnership
agreement  was amended to prohibit  any person from owning more than 4.9% of the
Class A Units.  The amended  agreement  provides  that any  transfer  that would
result in a person  owning more than this amount will be null and void,  and the
units that were to be transferred will become "Excess Units," which will have no
voting or dividend rights and will be held in escrow by the Company.


7.  LEASES

   In connection with the new financing in October 1999, FFP Marketing  executed
a new lease or extended existing leases for 63 properties providing security for
that debt.  The term of those leases is 20 years.  The Company's  current rental
income from FFP Marketing under those leases equals $154,000 per month.  The new
or extended  leases  provide for "triple net" leases,  under which FFP Marketing
pays all taxes, insurance,  operating, and capital costs, and for increased rent
payments every five years based upon increases in the consumer price index.

   In  February  1999,  the  Company  purchased  14  additional   improved  real
properties from a third party on which 12 convenience stores and two truck stops
are operational.  The Company immediately leased the properties to FFP Marketing
under 15-year  leases.  The Company's  current  rental income from FFP Marketing
under those leases equals $99,000 per month. Rental income allocated to the land
portion  of these  leases  in a monthly  amount  of  $28,000  is  classified  as
operating leases, while rental income allocated to the building portion of these
leases in a monthly amount of $71,000 is classified as direct financing  leases.
The leases are "triple net" leases,  under which FFP  Marketing  pays all taxes,
insurance,  operating,  and capital  costs,  and provide for an increase in rent
payments  after each  five-year  period during the term of the leases based upon
any increase in the consumer price index.

   The following  table lists the  components of the Company's net investment in
direct financing leases at year end 1999:

                                                     Minimum
                                                      Lease
                                                     Payments
                                                  (In thousands)

     2000                                              $853
     2001                                               853
     2002                                               853
     2003                                               853
     2004                                               853
     Thereafter                                       7,819

     Total minimum lease payments                    12,084
     Amount representing interest                    (8,187)

     Net investment in direct financing leases        3,897
     Current portion                                    (53)
     Net investment in direct financing lease,
        excluding current installments               $3,844

   Other  than the  20-year  leases  and the  15-year  leases  described  above,
substantially  all of the remaining real properties of the Company are leased to
FFP Marketing  under operating  leases which  generally  expire in 2002 and 2007
plus two  five-year  renewal  periods at the sole option of FFP  Marketing.  The
Company's  current  rental income from FFP  Marketing  under those leases equals
$98,000 per month.  These leases are also  "triple net" leases,  under which FFP
Marketing pays all taxes, insurance,  operating,  and capital costs, and provide
for an increase in rent  payments  upon each  renewal  date,  in the event of an
increase in the consumer price index.

   Those  remaining  properties  leased to FFP  Marketing  are  comprised of two
types: parcels where the land and building are owned by the Company, and parcels
where only the  building is owned by the  Company  and leased to FFP  Marketing,
subject to a superior  ground lease which extends until 2007 (the "Building Only
Properties").  Under the terms of the deeds by which the  Company  acquired  the
Building  Only  Properties,   the  Company's  ownership  of  the  Building  Only
Properties  will  terminate  upon the  expiration of the ground  leases,  unless
extended.  The lessors under those ground  leases have  indicated to the Company
that they do not  currently  intend to extend the ground  leases past 2007.  The
Company's  rental income from the Building  Only  Properties in each of 1999 and
1998 was $795,000.


8.  RELATED PARTY TRANSACTIONS

   The chief executive officer, vice  president-finance,  secretary,  treasurer,
general  counsel  and chief  financial  officer of the  Company's  sole  general
partner,  FFP Real Estate Trust, hold similar  positions with FFP Marketing.  In
addition, entities owned directly or indirectly by the Company's chief executive
officer,  members  of his  immediate  family,  and other  members  of the senior
management  of the Company have in the past,  and intend to do so in the future,
engaged in transactions with the Company.

   The  Company  leases all but one of its real  properties  principally  to FFP
Marketing.  Since the earliest of the leases became effective  concurrently with
the close of 1997, no lease payments were received by the Company prior to 1998.
In 1999 and 1998, the Company  received lease payments from FFP Marketing in the
amount of $2,952,000  and  $2,628,000,  respectively.  The Company also paid FFP
Marketing  $710,000 in 1999 as direct financing lease payments for the buildings
purchased by the Company and leased in February  1999. In addition,  the Company
paid  interest  of $892,000  and  $693,000  to FFP  Marketing  in 1999 and 1998,
respectively, under its note payable to FFP Marketing.

   The  Company  and FFP  Marketing  are  parties to a  reimbursement  agreement
pursuant to which the Company  reimburses  FFP Marketing for all direct costs of
the Company (such as costs to prepare its annual partnership tax returns, annual
audit fees,  et al.) plus $200,000 for indirect  overhead  costs of the Company.
For each of 1999 and 1998,  the Company  paid  $200,000 to FFP  Marketing as the
indirect overhead cost reimbursement.