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, 2000, 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 1, 2001, was $1,866,000.  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.

                       DOCUMENTS INCORPORATED BY REFERENCE
     Form 8-K filed by the Company on December  29,  1999,  is  incorporated  by
reference in Part II, Item 9 of this Form 10-K.


                             Class A Units 2,234,262
                (Number of units outstanding as of March 1, 2001)


<PAGE>
                                      INDEX

                                                                        Page

Part I

    Item 1.  Business .................................................   1
    Item 2.  Properties ...............................................   5
    Item 3.  Legal Proceedings ........................................   7
    Item 4.  Submission of Matters to a Vote of Security Holders ......   7

Part II

    Item 5.  Market for the Registrant's Units and Related Security
                Holder Matters ........................................   8
    Item 6.  Selected Financial and Operating Data ....................   9
    Item 7.  Management's Discussion and Analysis of Financial
                Condition and Results of Operations ...................  10
    Item 7A. Quantitative and Qualitative Disclosures About Market Risk  15
    Item 8.  Financial Statements and Supplementary Data...............  15
    Item 9.  Changes in and Disagreements with Accountants on
                Accounting and Financial Disclosure ...................  15

Part III

    Item 10. Directors and Executive Officers of the Registrant .......  16
    Item 11. Executive Compensation ...................................  18
    Item 12. Security Ownership of Certain Beneficial Owners and
                Management ............................................  19
    Item 13. Certain Relationships and Related Transactions ...........  20

Part IV

    Item 14. Exhibits, Financial Statements, Schedules and Reports on
                Form 8-K ..............................................  22

Signature .............................................................  24


<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  has no
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 (the "December 1997 restructuring"). 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 (land and  buildings)  retained by the  Partnership  in the
December 1997 restructuring was then contributed at that time to FFP Properties,
L.P. ("FFP  Properties"),  a Texas limited  partnership  formed at that time, in
exchange for the general  partnership  interest in FFP Properties.  As a result,
the Partnership 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  December  1997  restructuring,  all of the  Partnership's  non-real
estate operating activities were transferred to FFP Marketing.  Since that time,
the business of the Partnership has been 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.  The  Partnership's  telephone number is
(817) 838-4700, and its Internet web site address is www.ffplp.com.

     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 holders of the Limited  Partnership Units 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  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  holders  of the  Limited
Partnership  Units, 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  holders of the Limited  Partnership
Units  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  holders of the Limited  Partnership  Units 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,  and not the
holders of the Limited  Partnership Units, 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  2000 and at March 1,  2001,  FFP  Real  Estate  Trust,  general
partner of the Partnership,  had two executive officers.  Those persons have not
been paid any compensation directly by the Partnership, other than unit options.
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 has 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 that 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.
<PAGE>

Item 2. PROPERTIES.

     The  Partnership  owned 197  parcels  of  improved  real  estate on each of
December 31, 2000, and December 31, 1999. At December 31, 2000, those properties
included  82 parcels  where the  Partnership  owns land and a  building  located
thereon,  105 parcels where the Partnership only owns a building located 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 December 31, 2000:

                            Convenience  Gasoline     Truck    Vacant or
                                Stores    Outlets     Stops   Other Uses  Total
                               --------   -------     -----   ----------  -----
Texas ...................         75         62          6          9       152
Oklahoma ................          0          4          0          0         4
Louisiana ...............         14          1          0          0        15
Missouri ................          6          1          0          5        12
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 ..................        102         69          9         17       197

     All 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.   Landlords  generally  favor  a  "triple  net"  lease  because
     properties leased under "triple net" provisions  require  considerably less
     operating costs and entail  substantially  less risk than properties leased
     without this provision.

          2. Escalating Rent. Each of the leases provides 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 from those direct financing leases.  Nevertheless,  the
Partnership  does own legal title to both the land and the buildings at these 14
locations.

     The  Partnership  has leased  approximately  78 properties to FFP Marketing
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.  This 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 2000.




<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  1,  2001,  there  were
approximately  132  holders of record and 668  beneficial  owners of the Limited
Partner Units. The closing sales price of these Units on that date was $0.84 per
Unit.  {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 ..............................   1.250         0.625
     Second Quarter .............................   1.500         0.813
     Third Quarter ..............................   1.125         0.688
     Fourth Quarter .............................   1.125         0.625

       2000
       ----
     First Quarter ..............................   1.188         0.813
     Second Quarter .............................   1.250         0.813
     Third Quarter ..............................   1.063         0.750
     Fourth Quarter .............................   1.063         0.750

     The  Partnership has not made any  distributions  to its partners since the
December 1997 restructuring. 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  long-term debt.  Accordingly,  no assurance can be given that the
Partnership  will be able to make any  distributions  to holders of the  Limited
Partnership  Units. 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.

<PAGE>

Item 6.  SELECTED FINANCIAL AND OPERATING DATA.

                                                  2000        1999      1998 [1]
                                                -------     --------    --------
                                            (in thousands, except per unit data)

Rental income .......................           $ 2,992     $ 2,975     $ 2,660
Gain on sale of property ............               478           0          56
Stock and bond losses ...............              (240)          0           0
Interest and other income ...........             1,158         822          14
                                                -------      -------    -------
   Total revenues ...................           $ 4,388     $ 3,797     $ 2,730
                                                =======     =======     =======

Real property, net .........................    $16,888     $18,273     $16,684
Investment in direct financing leases ......      3,845       3,897           0
Total assets ...............................     23,574      23,979      16,804

Long-term debt .............................    $20,191     $20,812     $13,355
Minority interest in subsidiary ............      1,151         945         857
Partners' equity ...........................      1,422       1,394       1,262
                                                -------     -------     -------
   Total capitalization ....................    $22,764     $23,151     $15,177
                                                =======     =======     =======

Net income (loss) .........................       $ 310       $ 132       $(179)
                                                  =====       =====     ========
Net income (loss) per unit -
     Basic ................................      $ 0.14       $0.06      $(0.08)
     Diluted ..............................      $ 0.14       $0.06      $(0.08)

Adjusted   EBITDA  [2].....................      $2,296      $2,008      $1,354
FFO  [3] ..................................        $807        $884        $519

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

[1]  Although the  Partnership  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.

<PAGE>

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 only  tenant of the  Partnership's  properties  is FFP  Marketing,  and
individuals  employed by FFP  Marketing  also manage the business and affairs of
the Partnership.  This discussion  should be read in conjunction with the Annual
Report on Form 10-K of FFP  Marketing  for its fiscal  year ended  December  31,
2000. 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.

2000 Operations compared to 1999 Operations
-------------------------------------------

     The Partnership earned $310,000 in 2000, a $178,000 improvement (135%) over
net  income of  $132,000  in 1999.  The major  reasons  for this  increase  were
additional   interest   income  of  $336,000  from   investments  in  marketable
securities,  reduced by unrealized and realized losses of $240,000 on marketable
securities, and net gains of $478,000 on the sale of properties.

     The Company earned  comprehensive net income in 2000 of $28,000,  comprised
of its net income of $310,000  minus a net loss  arising  from a net  unrealized
loss on  available-for-sale  securities of $282,000.  In 1999, the Company's net
income  equaled  its  comprehensive  net  income  because  it did  not  own  any
available-for-sale securities in 1999.

     Total  revenues in 2000 were  $4,388,000,  a 16%  increase  over 1999 total
revenues of $3,797,000.  Total revenues  increased in 1999 primarily because the
14 properties  purchased in February 1999 by the Partnership  were leased to FFP
Marketing for 12 months in 2000 instead of only 10 months as in 1999.

     Interest and other income  increased to $918,000 in 2000, a 12% improvement
over interest income of $822,000 in the prior year. Principal components of this
increase  were  interest  income for an  additional  two months under the direct
financing  leases in 2000 than in 1999,  interest income on bond investments and
bond discount  income.  The following  table reflects the components of interest
and other income in 2000 and 1999:

                                                                2000       1999
                                                               -----      -----
                                                                (in thousands)

Interest income from direct financing leases ..............     $ 802     $ 675
Interest income from affiliate ............................       108       140
Interest income from bond investments .....................       127         0
Bond discount income ......................................       109         0
Interest income on notes receivable .......................        12         7
Unrealized and realized losses on trading securities ......      (240)        0
                                                                -----     -----
     Total interest income ................................     $ 918     $ 822
                                                                =====     =====

     Interest  expense in 2000 was  $2,038,000,  an 8%  increase  over  interest
expense in 1999 of $1,893,000.  This increase  resulted  primarily from payments
for 12  months  in 2000,  instead  of only 10  months  as in  1999,  on the debt
incurred  in  purchasing  the 14  properties  in  February  1999,  and a  higher
percentage of interest  expense and a higher  interest rate on a 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 $565,000
in 2000 and $1,191,000 in 1999.

     Depreciation   and  amortization   expense  remained   relatively  flat  at
$1,246,000 in 2000,  compared to $1,253,000 in 1999.  General and administrative
expenses  were  $588,000 in 2000,  representing  a 30% increase from general and
administrative expenses in 1999 of $451,000. 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 preparation fees,
and miscellaneous expenses in maintaining properties not under lease.

     Cash flows provided by operating activities were $573,000 in 2000, compared
to $969,000 in 1999. The principal  reason for this decrease was the purchase of
trading securities, which was offset in part by an improvement in cash flow from
rental properties.  Cash flows provided by investing  activities were $78,000 in
2000, compared to cash flows used in investing activities of $7,700,000 in 1999.
The  principal  source of these funds in 2000 was proceeds from the sale of real
property,   and  the   principal   investing   activity   for  these  funds  was
interest-bearing  advances  to FFP  Marketing.  Cash  flows  used  in  financing
activities were $651,000 in 2000, compared to cash flows provided from financing
activities of $6,731,000 in 1999.  Cash flows from financing  activities in 2000
were used  principally  in  repaying  long-term  debt,  compared  to cash  flows
provided  by  financing  activities  in 1999  incurred in  connection  with debt
incurred to purchase 14 properties in February 1999.

1999 Operations compared to 1998 Operations
-------------------------------------------

     The  Partnership  earned  $132,000  in  1999,  a  considerable  improvement
compared  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  immediately  leased to FFP
Marketing.

     Interest  expense in 1999 was  $1,893,000,  a 42%  increase  over  interest
expense  in 1998 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 $969,000 in 1999, compared
to $1,024,000 in 1998, a 5% decrease.  Cash flows from financing activities were
$7,700,000 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 usage of
$268,000 in 1998.

Comparison to REIT's
--------------------

     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 last three
years:

                                                      2000      1999      1998
                                                     -----     -----    -------
                                          (in thousands, except per units data)

Net income (loss) before minority interests ....   $   310    $   220   $  (282)
    (Gains) from sales of properties ...........      (478)         0       (56)
    Losses on marketable securities ............       240          0         0
    Depreciation and amortization ..............     1,273      1,253     1,203
                                                    ------     ------    ------
Funds from operations before minority interests      1,345      1,473       865
Less - 40% of FFO attributable to minority
    interests in subsidiary ...................       (538)      (589)     (346)
                                                    ------     ------    ------
Funds from operations (FFO) for the Partnership     $  807     $  884   $   519
                                                    ======     ======    ======
FFO per unit (based on units outstanding for
   diluted net income (loss) per unit
   calculations) ..............................     $ 0.35     $ 0.39   $  0.23
                                                    ======     ======   =======

     Although  the  Partnership  has  generated  positive  FFO,  it has not made
distributions to holders of the Limited Partnership Units 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 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 holders of the Limited Partnership Units.

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  that  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  $1,407,000 and $892,000 at December 31, 2000 and
1999,  respectively.  These  obligations  of FFP  Marketing  to the  Partnership
accrued  interest  income to the  Partnership  at an interest  rate equal to the
prime rate of interest.

     Assuming no additional properties are acquired or sold, based upon executed
real estate leases, management projects that the Partnership will receive rental
income in 2001 from FFP Marketing  $252,000 per month plus $71,000 per month for
the direct financing leases, and the Partnership's debt service  requirements in
2001 will be constant  at  $222,000  per month.  Such  amounts are shown  before
reduction for the minority interest of the Harvison Family in the subsidiary. 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 that 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 equals the Partnership's monthly principal and
interest  payments owed under its  acquisition  debt.  Although  related parties
established  such  rental  amounts,  management  believes  that such  amounts is
consistent with market rates; however, no assurance can be given to that effect.
Operating  leases for the land portion of those  payments have been  allocated a
monthly  rental  aggregating  $28,000,  and  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 consumers' 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.  Amounts owed on such  indebtedness at
December 31, 2000 and 1999 were $9,000,000 and $9,327,000, respectively.

     In October 1999, the Partnership  closed  long-term  financing from a third
party lender and 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.  The 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 lender  will apply
Partnership's  credit  enhancement  payments,  if any,  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. Amounts owed on such indebtedness at December 31,
2000 and 1999 were $11,756,000 and $11,982,000, respectively.

     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.

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 fixed
interest rates.

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, 2000,  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 ...........     54     Vice President - Finance, General
                                      Counsel, Secretary, Treasurer and
                                      Chief Financial Officer
Joseph F. Leonardo [1] ...     54     Trust Manager
J. D. St. Clair ..........     65     Trust Manager
Randall W. Harvison ......     43     Trust Manager

-----------------------------
[1] Member of Audit Committee

     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.  Mr.  Scott 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 2000  reports  required  under  Section  16 of the  Securities
Exchange Act of 1934 were filed in a timely manner.
<PAGE>

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, the  Partnership  granted options to each  non-employee  Trust
Manager to acquire 25,000 Limited  Partner Units at the fair market value of the
underlying  units on the date of grant. The options are 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 portion of the options not then exercised 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
2000 or 1999.  Accordingly,  there  were no "Named  Executive  Officers"  of the
Partnership in 2000 or 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
Partnership  paid FFP Marketing an indirect cost  reimbursement  in each of 2000
and 1999 in the amount of $200,000.

     Options Exercised During 2000 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.

     The following table shows options to purchase Limited Partner Units held by
each of the officers of the general partner of the Partnership and the potential
realized  values for the options at the end of 2000.  No officer  exercised  any
options in 2000, and no stock  appreciation  rights have ever been issued by the
Partnership.

                              Number of Units               Value of Unexercised
                           Underlying Unexercised           In-the-Money Options
                            Options at Year End                 At Year End

Name                   Exercisable/Unexercisable       Exercisable/Unexercisable
-------------------    -------------------------       ------------------------
John H. Harvison...            40,000 / 0                          $0 / $0
Craig T. Scott.....            10,000 / 20,000                 $7,500 / $15,000

---------
[1]  "Exercisable"  reflects  options that were both vested and  exercisable  at
     year end 2000, and "Unexercisable"  reflects options that had not vested at
     that date.

[2]  Value is determined by  subtracting  the person's  exercise  price from the
     fair market value of the Limited  Partner Units at year end 2000  ($0.875),
     based on the  closing  sales  price  of the  Limited  Partner  Units on the
     American Stock Exchange on such date.


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

Limited Partner Units
---------------------

     The  following  table  sets  forth as of March 1,  2001,  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 of
 Name of Beneficial Owner                  Beneficial Ownership [1]   Class [1]
-------------------------                  ------------------------  ----------

John H. Harvison, Chairman of the
  Board of Trust Managers and President..            40,000  [2]         1.7%
Craig T. Scott, Vice President...........            20,000  [3]         0.8%
Joseph F. Leonardo, Trust Manager........            16,667  [4]         0.8%
J. D. St. Clair, Trust Manager...........            42,400  [5]         1.8%
Randall W. Harvison, Trust Manager.......            16,667  [6]         0.8%
All directors and executive officers as
  a group (5 persons)....................            12,400  [7]         0.6%

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

[1]  Based on 2,234,262 Limited Partner Units outstanding at March 1, 2001, 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 20,000 units exercisable  within 60 days but
     excludes options to acquire 10,000 units not exercisable within 60 days.

[4]  Consists of options to acquire 16,667 units exercisable  within 60 days but
     excludes options to acquire 8,333 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 16,667 units exercisable  within 60 days but
     excludes options to acquire 8,333 units not exercisable within 60 days.

[7]  Excludes units that may be acquired by exercising options.

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.
<PAGE>

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 annual 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 2000, 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 $0,
$893,000 and $693,000 in 2000, 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 $0, $0, and $14,201,000 at December
31, 2000, 1999, and 1998, respectively.

     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 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  $2,968,000,
$2,952,000  and  $2,628,000  in lease  payments  to the  Partnership  for  these
properties during 2000, 1999 and 1998, respectively. FFP Marketing also paid the
Partnership $853,000 and $710,000 in 2000 and 1999, respectively, 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. {6}

     23.1 Consent of Independent Certified Public Accountants. {6}

     23.2 Independent Auditors' Consent. {6}


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

{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 as the  indicated  exhibit in the  Partnership's  Annual Report on
     Form 10-K for the fiscal year ended  December  31, 1999,  and  incorporated
     herein by reference.

{6}  Included herewith.


     (b) The Company did not file a Form 8-K during 2000.


<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 2, 2001                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, the
following persons have signed this Annual Report as of April 2, 2001, on behalf
of the Registrant in the capacities indicated below.

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


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

/s/ Joseph F. Leonardo                Trust Manager of FFP Real Estate Trust
------------------------------------
Joseph F. Leonardo

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

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





<PAGE>


Item 8. INDEX TO FINANCIAL STATEMENTS


                                                                      Page
                                                                     Number
                                                                     ------

Report of Independent Certified Public Accountants .................   F-2

Independent Auditor's Report .......................................   F-3

Consolidated Balance Sheets as of December 31, 2000 and 1999 .......   F-4

Consolidated Statements of Operations for the Years Ended
   December 31, 2000, 1999 and 1998 ................................   F-5

Consolidated Statements of Partners' Capital for the Years Ended
   December 31, 2000, 1999 and 1998 ................................   F-6

Consolidated Statements of Cash Flows for the Years Ended
   December 31, 2000, 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  sheets  of FFP
Partners,  L.P.  (a  Delaware  limited  partnership)  and  its  subsidiary,  FFP
Properties,  L.P., as of December 31, 2000 and 1999, and the related  statements
of operations,  partners' capital and cash flows for the years then ended. These
consolidated  financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

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

     In our opinion,  the 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, 2000 and 1999,  and the
consolidated  results of their operations and their  consolidated cash flows for
the years  then  ended,  in  conformity  with  accounting  principles  generally
accepted in the United States of America.



                                        Grant Thornton LLP



Dallas, Texas
March 23, 2001

<PAGE>


                          INDEPENDENT AUDITORS' REPORT



The Partners of FFP Partners, L.P.:

     We have audited the  accompanying  consolidated  statements of  operations,
partners'  capital and cash flows of FFP  Partners,  L.P.  (a  Delaware  limited
partnership)  and its  subsidiary,  FFP  Properties,  L.P.,  for the year  ended
December  31,   1998.   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 results of operations and cash
flows of FFP Partners,  L.P. and its  subsidiary for the year 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, 2000 AND 1999
                                 (in thousands)


                                                              2000         1999
                                                            ------       ------
                             ASSETS
Current assets -
  Marketable securities ..............................    $    506     $      0
  Due from affiliate .................................       1,407          892
  Net investment in direct financing leases
       with affiliate, current portion ...............          53           53
  Prepaid expenses ...................................          13           31
                                                          --------     --------
          Total current assets .......................       1,979          976
Real property -
  Land and improvements ..............................       8,656        8,685
  Buildings ..........................................      20,992       21,413
                                                          --------     --------
      Real property ..................................      29,648       30,098
  Accumulated depreciation ...........................     (12,760)     (11,825)
                                                          --------     --------
     Real property, net of depreciation ..............      16,888       18,273
Notes receivable .....................................         100          114
Net investment in direct financing leases with
      affiliate, excluding current portion ...........       3,792        3,844
Other assets, net ....................................         815          772
                                                          --------     --------
       Total assets ..................................    $ 23,574     $ 23,979
                                                          ========     ========

               LIABILITIES AND PARTNERS' CAPITAL

Current liabilities -
    Current portion of long-term debt ................    $    621     $    565
    Accrued expenses .................................         189          263
                                                          --------     --------
        Total current liabilities ....................         810          828
Long-term debt, excluding current portion ............      20,191       20,812
                                                          --------     --------
        Total liabilities ............................      21,001       21,640
Minority interest in subsidiary ......................       1,151          945
Commitments and contingencies ........................        --           --
Partners' capital -
    Limited partners' capital ........................       1,679        1,372
    General partner's capital ........................          25           22
    Accumulated other comprehensive loss .............        (282)           0
                                                          --------     --------
       Total partners' capital .......................       1,422        1,394
                                                          --------     --------
       Total liabilities and partners' capital .......    $ 23,574     $ 23,979
                                                          ========     ========

          See accompanying Notes to Consolidated Financial Statements.


<PAGE>

                        FFP PARTNERS, L.P. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 PERIODS ENDED DECEMBER 31, 2000, 1999 AND 1998
                         (in thousands, except per unit)


                                                   2000       1999        1998
                                                  -----     -------     -------
Revenues -
  Rental income ............................    $ 2,992     $ 2,975     $ 2,660
  Gain on sale of property .................        478           0          56
  Interest and other income ................        918         822          14
                                                -------     -------     -------
    Total revenues .........................      4,388       3,797       2,730

Expenses -
  General and administrative expenses ......        588         451         473
  Depreciation and amortization ............      1,246       1,253       1,203
  Interest expense .........................      2,038       1,873       1,336
    Total expenses .........................      3,872       3,577       3,012
                                                -------     -------     -------

Income (loss) before minority
     interest in subsidiary ................        516         220        (282)

  Minority interest in subsidiary ..........       (206)        (88)        103
                                                -------     -------     -------
 Net income (loss) .........................    $   310     $   132     $  (179)
                                                =======     =======     =======

Net income (loss) per unit -
  Basic ....................................      $0.14       $0.06     $ (0.08)
  Diluted ..................................      $0.14       $0.06       (0.08)

Weighted average number of units outstanding -
  Basic ....................................      2,272       2,272       2,272
  Diluted ..................................      2,277       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, 2000, 1999 AND 1998
                                 (in thousands)

                                                             Accumulated
                                                               Other
                                       Limited     General  Comprehensive
                                      Partners     Partner      Loss      Total
                                      --------     -------  ------------- -----

Balance, December 28, 1997 .........   $ 1,418    $    23    $     0    $ 1,441
      Net income ...................      (176)        (3)         0       (179)
                                       -------    -------    -------    -------
Balance, December 31, 1998 .........     1,242         20          0      1,262
      Net income ...................       130          2          0        132
                                       -------    -------    -------    -------
Balance, December 31, 1999 .........     1,372         22          0      1,394
      Net income ...................       307          3          0        310
      Unrealized loss on marketable
          securities ...............         0          0       (282)      (282)
                                       -------    -------    -------    -------
      Comprehensive net income .....       307          3       (282)        28
                                       -------    -------    -------    -------
Balance, December 31, 2000 .........   $ 1,679    $    25    $  (282)   $ 1,422
                                       =======    =======    =======    =======




     See accompanying Notes to Consolidated Financial Statements.



<PAGE>
                        FFP PARTNERS, L.P. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 PERIODS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                 (in thousands)

                                                       2000      1999      1998
                                                      -----     -----     -----

Cash flows from operating activities -
Net income (loss) .................................    $310      $132     $(179)
Adjustments to reconcile net income (loss) to net cash
Provided by operating activities -
   Depreciation and amortization ..................   1,246     1,253     1,203
   Gain on sale of real property ..................    (399)        0       (56)
   Minority interest in subsidiary ................     206        88      (103)
   Accretion of discount on marketable securities..    (109)        0         0
   Net unrealized losses on trading securities.....     205         0         0
   Net realized losses on trading securities ......      35         0         0
   Changes in operating assets and liabilities -
       Purchase of trading securities .............    (865)        0         0
       (Increase) decrease in prepaid expenses ....      18        (5)      170
       (Increase) decrease in other assets ........       0      (723)      (50)
       Increase (decrease) in accrued expenses ....     (74)      224        39
                                                       ----      -----    -----
Net cash provided by operating activities .........     573       969     1,024

Cash flows from investing activities -
   Capital expenditures for real property .........    (287)   (2,846)      (96)
   Proceeds from sale of real property ............     868         5       408
   Advances to affiliate ..........................    (515)     (892)        0
   (Increase) decrease in direct financing
        leases with affiliate .....................      52    (3,897)        0
   Purchase of available-for-sale securities.......     (54)        0         0
   (Increase) decrease in notes receivable, net....      14       (70)      (44)
                                                      ------   ------    ------

Net cash provided by (used in) investing activities      78    (7,700)      268

Cash flows from financing activities -
    Proceeds from long-term debt ..................       0    21,349         0
    Payments on long-term debt ....................    (565)     (417)  (15,493)
    Proceeds from long-term debt from affiliate....       0         0    14,773
    Payments on long-term debt to affiliate .......       0   (14,201)     (572)
    Additional collateral provided on long-term debt    (86)        0         0
                                                      ------   ------    ------
Net cash provided by (used in) financing activities    (651)    6,731    (1,292)
                                                      ------   ------    ------
Net increase (decrease) in cash ...................       0         0         0

Cash at beginning of year .........................       0         0         0
Cash at end of year ...............................      $0        $0        $0


Supplemental Disclosure of Cash Flow Information:
------------------------------------------------

Cash paid for interest ...........................   $2,038     1,737    $1,300




          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 Partnership and Nature of Operations

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

     The Partnership is a Delaware limited  partnership  formed in December 1986
pursuant to the  Agreement of Limited  Partnership  of FFP  Partners,  L.P. (the
"Partnership  Agreement").  The sole general  partner of the  Partnership is FFP
Real Estate Trust, a Texas real estate investment trust. FFP Partners Management
Company,  Inc.  ("FFPMC")  previously  served  as sole  general  partner  of the
Partnership  from the inception of the Partnership in 1987 until a December 1997
restructuring.  In May 1987, the Partnership 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  Partnership's  initial public offering of Class A Units of
limited  partnership  interest  ("Limited   Partnership  Units").   Through  its
subsidiaries,  the  Partnership  owned and  operated  these  outlets,  and other
businesses until December 1997.

     In December 1997, the Partnership completed an organizational restructuring
by which  the real  estate  used in the  aforementioned  retail  operations  was
retained by the  Partnership  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  Partnership.  The assets and  liabilities  in the  accompanying
consolidated  balance  sheet  of the  Partnership  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 Partnership  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 Partnership 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
Partnership. John H. Harvison is the Chairman and Chief Executive Officer of FFP
Real Estate Trust.  The Harvison Family owns all of outstanding  common stock of
the FFPMC.

     The  Partnership  owns the real estate and conducts  its rental  activities
through FFP Properties,  its operating  subsidiary.  The Partnership  owns a 60%
partnership  interest in FFP Properties and serves as its sole general  partner.
In the  consolidated  financial  statements  of the  Partnership,  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
Partnership and its  majority-owned  subsidiary.  All significant  inter-company
accounts  and  transactions   are  eliminated  in  the  consolidated   financial
statements.

       (c) Change in Fiscal Year

     Prior to the  restructuring  of the  Partnership  on December 28, 1997, the
Company  prepared its  financial  statements  on the basis of a fiscal year that
ended on the last Sunday in December. In connection with the restructuring,  the
Partnership  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 value of long-term debt at
December 31, 2000 and 1999 was $20,812,000 and  $21,377,000,  respectively.  The
fair  value  of  such  debt  is   approximately   $22,142,000  and  $21,269,000,
respectively, based on interest rates currently available to the Partnership.

       (c) Notes Receivable

     The Partnership  evaluates the likelihood of collecting amounts owed to the
Partnership  under its 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
December 31, 2000 and 1999, no notes receivable were determined to be impaired.

       (d) Units Issued and Outstanding

     The equity  interests  in the  Partnership  are  comprised  of the  Limited
Partnership Units and units representing the general partnership interest. These
units issued and outstanding at December 31, 2000 and 1999 were as follows:

                                                      2000              1999
                                                   ---------         ---------

Limited partners .......................           2,234,262         2,234,262
General partner ........................              37,416            37,416
                                                   ---------         ---------
Totals .................................           2,271,678         2,271,678
                                                   =========         =========

     The  Partnership's  Limited  Partnership  Units are traded on the  American
Stock  Exchange  under the "FFP"  trading  symbol.  FFP Real Estate  Trust,  the
Partnership's sole general partner, owns all of the general partner units of the
Partnership.

       (e) Use of Estimates

     The use of estimates is required to prepare the Partnership'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 Partnership 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 estimated  future net cash
flows  from 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 Partnership recognizes rental revenues when earned.

       (h) Unit Option Plan

     The  Partnership  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  Partnership  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 pro forma net income and  earnings  per share  disclosures  for employee
option grants as if the fair-value based method defined in SFAS No. 123 had been
applied. The Partnership elected the second alternative (See Note 5).

       (i) Income Taxes

     The  Partnership  pays no federal  income tax because it is a  partnership.
Rather,  the  taxable  income or loss of the  Partnership  is  allocated  to its
partners to be included in their respective tax returns,  subject to special tax
rules for publicly traded partnerships.

       (j) Segment Information

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

       (k) Investments in Marketable Securities

     Through  September  30,  2000,  the  Partnership   classified  all  of  its
investments in marketable securities as "trading securities". Trading securities
are securities that are bought and held  principally for the purpose of a resale
in the near term.  Effective  October  1,  2000,  the  Partnership  changed  its
intention  in  holding  its  marketable  securities  to a longer  term  outlook.
Accordingly,  beginning  October 1, 2000, the Partnership  classified all of its
marketable  securities  as  "available-for-sale"   securities.   FASB  No.  115,
"Accounting  for Certain  Investments in Debt and Equity  Securities",  provides
that net unrealized  and realized  gains and losses from trading  securities are
included   in   earnings,   while  net   unrealized   gains  and   losses   from
available-for-sale  securities are included in the calculation of "comprehensive
net  income"  in the equity  accounts  of a  company,  instead  of in  earnings.
Dividend and interest income from both trading securities and available-for-sale
securities,  including the  amortization of any premium and discount  arising at
acquisition, are also included in earnings.

     Interest  income  from  trading  securities  and  from   available-for-sale
securities,  including  the  amortization  of premium or  accretion  of discount
arising at acquisition and net of margin interest expense,  unrealized gains and
losses from  trading  securities,  and  realized  gains and losses from  trading
securities and available-for-sale securities were included in net income in 2000
and 1999 in the following amounts:

                                                        2000      1999     1998
                                                       -----     -----   ------
                                                            (in thousands)

Interest income from marketable securities .........   $ 218     $   0     $  0
Net unrealized losses from trading securities ......    (205)        0        0
Net realized losses from trading securities ........     (35)        0        0
                                                       -----     -----    -----
 Totals ............................................   $ (22)    $   0    $   0
                                                       =====     =====    =====

3. NOTES PAYABLE AND LONG-TERM DEBT

     In February 1999,  the  Partnership  purchased 14 improved real  properties
from a third  party on which 12  convenience  stores  and two  truck  stops  are
operational.   To  fund  that  purchase,   the  Partnership  incurred  long-term
acquisition  debt with a third party lender in the original  principal amount of
$9,550,000. That debt is fully amortizable over 15 years with 180 equal, monthly
payments of principal and interest in the amount of $99,000. Interest is payable
on that debt 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  Partnership  equals  the  Partnership's  monthly  debt
payments.

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

     Also in February 1999, the Partnership purchased inventory and equipment at
the 14 locations  for $942,000 and  $1,750,000,  respectively.  The  Partnership
immediately sold this inventory and equipment to FFP Marketing in exchange for a
note receivable.  The note provided for interest to be accrued at the prime rate
and monthly installments over 8 years. The Partnership received full payment for
this note in October 1999.

     In October 1999, the Partnership  closed  long-term  financing from a third
party lender and at that time repaid in full its previous long-term indebtedness
payable to FFP Marketing.  The Partnership 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 debt is fully  amortizable over 20 years with 240 equal,
monthly payments of principal,  interest and credit  enhancement  charges in the
amount of $123,000.  Interest is payable on that debt at 9.7% per annum. If none
of the loans with which the Partnership's loan is pooled incurs a default during
the  term  of  the  loans,  the  lender  will  apply  the  Partnership's  credit
enhancement payments, if any, to reduce the principal balance of the note, which
would 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.

     The  Partnership  is obligated  under one other note  payable,  which bears
interest at 9% per annum and  payable in monthly  installments  of $1,000  until
September 2004. Such note is secured by real property and had aggregate balances
of $56,000 and $68,000 at December 31, 2000 and 1999, respectively.

     The monthly payments and the outstanding principal balances at December 31,
2000 and 1999  under the  Partnership's  notes  payable  are  summarized  in the
following table:

                                                     Monthly
  Type of Loan        Purpose of Loan               Payments    2000       1999
  -----------------  -------------------------      --------   ------     -----
                                                           (in thousands)

7-year financing   1996 purchase of store ........     $1        $56        $68
15-year financing  1999 purchase of 14 stores ....     99      9,000      9,327
20-year financing  1999 refinancing of debt ......    123     11,756     11,982
                                                     ----     ------     ------
Total notes payable ..............................   $223     20,812     21,377
                                                     ====
Less: current portion ............................               621        565
                                                              ------     ------
Long-term notes payable ..........................           $20,191    $20,812
                                                             =======    =======

     The aggregate fixed maturities of all of the  Partnership's  long-term debt
for each of the five years subsequent to 2000 are as follows:

                                                (in thousands)

          2001 .........................              $621
          2002 .........................               682
          2003 .........................               750
          2004 .........................               821
          2005 .........................               888
          Thereafter ...................            16,429
                                                   -------
                                                   $20,191
                                                   =======

4. NET INCOME (LOSS) PER UNIT

     The following  table  reconciles the  denominator in the calculation of the
basic and diluted net income (loss) per unit for limited partnership and general
partnership units in 2000, 1999, and 1998:

                                                      2000       1999      1998
                                                      -----     -----     -----
                                                           (in thousands)

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

The  computation  of diluted  net  income per unit for 2000 and 1999  considered
options to purchase 292,999 Limited  Partnership  Units  outstanding at December
31, 2000 and 1999,  respectively.  The  computation of diluted net loss per unit
for 1998 did not consider options to purchase 295,999 Limited  Partnership Units
outstanding at December 31, 1998, because it would have been antidilutive.


5. NONQUALIFIED UNIT OPTION PLAN

     The Partnership previously granted nonqualified options to purchase 292,999
Limited  Partnership  Units that were  outstanding  at December 31,  2000.  Such
options  were  granted  under its  Nonqualified  Unit  Option Plan and its prior
Nonqualified Unit Option Plan for Nonexecutive Employees.  The Nonqualified Unit
Option plan has terminated in a prior year, but another plan with the same terms
was then  adopted by the  Partnership.  Options  to  purchase  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
                                               No. of      Exercise      Average
                                               Class A      Price       Exercise
                                                Units       Range         Price
                                              -------  ---------------  --------

Options outstanding, December 28, 1997 ....   241,999  $1.211 - $2.261   $1.410
Options granted in 1998 ...................    80,000    0.75 - 1.0625    0.946
Options expired or terminated in 1998 .....   (26,000)      1.211         1.211
                                              -------
Options outstanding, December 31, 1998 ....   295,999  $0.75 - $2.261    $1.302
Options expired or terminated in 1999 .....    (3,000)      1.211         1.211
                                              -------
Options outstanding, December 31, 1999
      and 2000 ............................   292,999  $0.75 - $2.261    $1.304
                                              =======

Options exercisable, December 31, 2000 ....   266,333  $0.75 - $2.261    $1.339
                                              =======

     All options to purchase Limited  Partnership Units that were outstanding at
the  completion  of the December  1997  restructuring  of the  Partnership  were
divided into separate options to purchase Limited  Partnership  Units and a like
number of FFP Marketing common shares.  The exercise price for the then existing
options for Limited Partnership Units was divided between the two new options in
proportion  to the closing price on the American  Stock  Exchange of the Limited
Partnership  Units and FFP  Marketing's  common  shares.  The adjusted  exercise
prices of the unit options  outstanding at December 31, 2000, 1999, and 1998 are
as follows:

                             2000                 1999                 1998
                      -------------------  ----------------    -----------------
   Issue   Exercise   Options   Options    Options  Options     Options  Options
    Date    Price   Outstndng Exercsble Outstndng Exercsble  Outstndng Exercsble
---------- -------  --------- --------- ---------- --------  ---------- --------

11/17/1992 $1.2110   136,333    136,333    136,333  136,333     139,333  139,333
10/06/1994  1.2516     6,666      6,666      6,666    6,666       6,666    6,666
04/06/1995  1.9380    25,000     25,000     25,000   25,000      25,000   25,000
09/19/1995  2.2610    25,000     25,000     25,000   25,000      25,000   25,000
02/26/1997  1.3929    20,000     20,000     20,000   13,333      20,000    6,666
07/23/1998  1.0625    50,000     33,334     50,000   16,668      50,000        0
09/16/1998  0.7500    30,000     20,000     30,000   10,000      30,000        0
                    --------    -------    -------  -------     -------  -------
                     292,999    266,333    292,999  233,000     295,999  202,665
                    ========    =======    =======  =======     =======  =======

     The weighted  average  exercise  price of  outstanding  options to purchase
Limited  Partnership  Units under the plans at  December  31, 2000 was $1.30 per
unit, and the weighted average  remaining  contractual life of those options was
4.2 years.

     The  Partnership  did not grant  any  options  in 2000 or 1999 to  purchase
Limited Partnership Units.

     The  Partnership  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  Partnership
determined compensation expense under SFAS No. 123, the Partnership's net income
would have been reduced to the pro forma amounts indicated below:

                                               2000         1999          1998
                                              -----        -----        -------
                                        (in thousands, except for per unit data)

Net income (loss) -
     As reported ......................        $310         $132         $(179)
     Pro forma ........................         291           98          (213)
Net income (loss) per unit -
     As reported -
         Basic ........................       $0.14        $0.06        $(0.08)
         Diluted ......................        0.14         0.06         (0.08)
     Pro forma -
        Basic .........................       $0.13        $0.04        $(0.10)
        Diluted .......................        0.13         0.04         (0.10)


     Pro forma net income  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  income  amounts
presented above because  compensation  cost for options granted prior to 1995 is
not considered.

6. TERMINATION OF UNIT PURCHASE RIGHTS

     In  August  1989,  the  Partnership  entered  into a Rights  Agreement  and
distributed  the right (the "Rights") to the then owners of Limited  Partnership
Units to purchase Rights Units, which were  substantially  equivalent to Limited
Partnership  Units,  at a price of $20.00 per Unit.  By their terms,  all of the
Rights expired in August 1999.

7. TRANSFER RESTRICTIONS

     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
Limited Partnership Units. The amended agreement provides that any transfer that
would  otherwise  result in a person  owning  more than this  amount of  Limited
Partnership Units will be null and void, and the Limited  Partnership 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 Partnership.

8. REAL ESTATE LEASES

     In connection  with financing  obtained by the Partnership in October 1999,
the Partnership,  as lessor, and FFP Marketing, as lessee, 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  Partnership's  current rental income
from FFP Marketing  under those leases equals  $156,000 per month.  These 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  Partnership  purchased 14 improved real  properties
from a third  party on which 12  convenience  stores  and two  truck  stops  are
operational.  The Partnership immediately leased the properties to FFP Marketing
under 15-year leases. The Partnership's rental payments from FFP Marketing under
those  leases  total  $99,000 per month.  Of that  amount,  $28,000 per month is
allocated to the land portion of those leases and  classified  as rental  income
under  operating  leases,  while  $71,000 per month is allocated to the building
portion  of those  leases and  classified  as  payments  received  under  direct
financing  leases.  These  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 shows the  Partnership's  anticipated  lease  payment
receipts  under direct  financing  leases for years  subsequent  to 2000 and the
components  of its net  investment  in direct  financing  leases at December 31,
2000:

                                                      (in thousands)

     2001 ......................................           $853
     2002 ......................................            853
     2003 ......................................            853
     2004 ......................................            853
     2005 ......................................            853
     Thereafter ................................          6,966
                                                         ------
     Total minimum lease payments ..............         11,231
          Amount representing interest income ..         (7,386)
                                                         ------
     Net investment in direct financing leases..          3,845
          Current portion ......................            (53)
                                                         ------
     Net investment in direct financing ........
          leases, excluding current portion ....         $3,792
                                                         ======

     Other than the  20-year  leases and the  15-year  leases  described  above,
substantially all of the remaining real properties of the Partnership 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
Partnership's current rental income from FFP Marketing under those leases equals
$64,000 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  Partnership,  and
parcels  where only the building is owned by the  Partnership  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
Partnership acquired the Building Only Properties,  the Partnership'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  Partnership  that they do not currently  intend to extend the ground leases
past 2007. The Partnership's  rental income from the Building Only Properties in
2000, 1999, and 1998 was $692,000, $795,000, and $795,000, respectively.

9. RELATED PARTY TRANSACTIONS

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

     In  2000,  the  Partnership  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
Partnership  prior to 1998. In 2000,  1999, and 1998, the  Partnership  received
lease payments from FFP Marketing in the amount of $2,951,000,  $2,952,000,  and
$2,628,000, respectively. The Partnership also paid $853,000 and $710,000 to FFP
Marketing in 2000 and 1999, respectively, as direct financing lease payments for
the  buildings  purchased by the  Partnership  and leased in February  1999.  In
addition,  the  Partnership  paid  interest  of  $892,000  and  $693,000  to FFP
Marketing in 1999 and 1998, respectively,  under a note payable to FFP Marketing
that was repaid in full in October 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 its annual partnership tax returns,
annual audit fees,  et al.) plus  $200,000 for  indirect  overhead  costs of the
Partnership.  For each of 2000, 1999 and 1998, the Partnership  paid $200,000 to
FFP Marketing as the indirect overhead cost reimbursement.