ATLANTA U.S. Franchise Systems reported a loss of $3.15 million or $0.16 per share in the second quarter of 2000, compared to earnings of $1.51 million of $0.08 per share in the second quarter of 1999. Included in the loss for the quarter were charges of approximately $2.4 million for a contract termination payment for the release of certain obligations of the Company unrelated to franchise agreements, and approximately $1.5 million from the discontinuation of the Company s management services business. Total revenues, excluding management services for the second quarter 2000 increased 47% to $6.28 million up from $4.27 million during the same period in 1999. The largest component of revenue growth came from franchise royalty fees that increased 76% from $2.42 million in second quarter 1999 to $4.26 million in second quarter 2000. This reflects a 60% increase in the number of hotels paying royalties to USFS from 273 at June 30, 1999 to 436 at June 30, 2000. During the second quarter, 75 franchises were sold, 41 properties broke ground or began the conversion process and 47 properties opened. USFS ended the quarter with a systemwide total of 464 hotels open and 116 under construction.(8/14/00)