<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statements of financial position of U.S. Franchise Systems, Inc.
and subsidiaries as of September 30, 1996 and the related consolidated
statements of operations for the nine months ended September 30, 1996.
Common stock and other stockholders' equity include common stock and additional
paid-in capital classified as redeemable common stock in the Company's financial
statements.
The net loss and related per share amounts are based on the losses applicable to
common shareholders which represents the net loss adjusted for accrued dividends
on the redeemable preferred stock.
</LEGEND>
       
                             
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1995
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                      10,777,000
<SECURITIES>                                         0
<RECEIVABLES>                                  144,000
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                            12,753,000
<PP&E>                                         516,000
<DEPRECIATION>                                  29,000
<TOTAL-ASSETS>                              18,817,000
<CURRENT-LIABILITIES>                        3,529,000
<BONDS>                                        731,000
<PREFERRED-MANDATORY>                       18,037,000
<PREFERRED>                                          0
<COMMON>                                        78,000
<OTHER-SE>                                 (6,720,000)
<TOTAL-LIABILITY-AND-EQUITY>                18,817,000
<SALES>                                              0
<TOTAL-REVENUES>                               864,000
<CGS>                                                0
<TOTAL-COSTS>                                6,206,000
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             108,000
<INCOME-PRETAX>                            (4,913,000)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                        (4,913,000)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (6,191,000)
<EPS-PRIMARY>                                   (0.58)
<EPS-DILUTED>                                   (0.58)