STANDARD FORM APPLEBEE'S NEIGHBORHOOD GRILL & BAR DEVELOPMENT AGREEMENT

                                                                    EXHIBIT 10.1










                                  STANDARD FORM

                       APPLEBEE'S NEIGHBORHOOD GRILL & BAR

                              DEVELOPMENT AGREEMENT





                            ------------------------
                               (Name of Developer)


                            ------------------------
                                     (Date)



                            -------------------------
                       (General Description of Territory)



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                                TABLE OF CONTENTS
<TABLE>
<S>      <C>                                                                                               <C>
RECITALS.............................................................................................      E-3

    1.   GRANT OF DEVELOPMENT RIGHTS.................................................................      E-4
    2.   INITIAL DEVELOPMENT SCHEDULE................................................................      E-4
    3.   SUBSEQUENT DEVELOPMENT SCHEDULE;
         DEVELOPMENT OBLIGATIONS GENERALLY...........................................................      E-5
    4.   FRANCHISE FEE AND ROYALTY RATE..............................................................      E-13
    5.   SITE APPROVALS:  PLANS AND SPECIFICATIONS...................................................      E-14
    6.   FEES AND FRANCHISE AGREEMENTS...............................................................      E-15
    7.   DEVELOPER ORGANIZATION, AUTHORITY,
         FINANCIAL CONDITION AND SHAREHOLDERS........................................................      E-16
    8.   TRANSFER....................................................................................      E-18
    9.   TERMINATION.................................................................................      E-22
    10.  PREREQUISITES TO OBTAINING FRANCHISES
         FOR INDIVIDUAL RESTAURANT UNITS.............................................................      E-24
    11.  RESTRICTIONS................................................................................      E-25
    12.  DEVELOPMENT PROCEDURES......................................................................      E-27
    13.  NO WAIVER OF DEFAULT........................................................................      E-28
    14.  FORCE MAJEURE...............................................................................      E-28
    15.  CONSTRUCTION, SEVERABILITY, GOVERNING
         LAW AND JURISDICTION........................................................................      E-29
    16.  MISCELLANEOUS...............................................................................      E-30


APPENDIX A:             TERRITORY....................................................................      E-32

APPENDIX B:             FORM OF FRANCHISE AGREEMENT..................................................      E-33

APPENDIX C:             STATEMENT OF OWNERSHIP INTERESTS.............................................      E-34

APPENDIX D:             REVIEW AND CONSENT WITH RESPECT
                        TO TRANSFERS.................................................................      E-35

APPENDIX E:             CONFIDENTIALITY AGREEMENT AND
                        COVENANT NOT TO COMPETE......................................................      E-36

APPENDIX F:             CONFIDENTIALITY AGREEMENT....................................................      E-39
</TABLE>


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                       APPLEBEE'S NEIGHBORHOOD GRILL & BAR
                              DEVELOPMENT AGREEMENT


This Agreement is made this ________ day of ___________________, 20_____, by and
between APPLEBEE'S INTERNATIONAL,  INC., a Delaware corporation  ("FRANCHISOR"),
________________________________________,  a (_______________  corporation, sole
proprietorship,  ______________________  partnership,  _________________ limited
partnership [strike inappropriate  language]) ("DEVELOPER") and ----------------
________________________________  (collectively,  the  "PRINCIPAL  SHAREHOLDERS"
and,  individually,  a "PRINCIPAL  SHAREHOLDER" of Developer if a corporation or
general  partner of  Developer  is a limited  partnership  having as its general
partner  a   corporation)   and   ______________________________________________
("GENERAL PARTNER") of Developer if Developer is a limited  partnership).* * (If
Developer is not a corporation  or a sole  proprietorship,  or if Developer is a
limited  liability  company,  the parties  hereto  hereby agree that an Addendum
shall  be   attached   to  this   Agreement   so  as  properly  to  reflect  the
responsibilities of the partners of any general partnership, the general partner
of any limited partnership and the shareholders of any corporate general partner
of any partnership, or the members of any limited liability company.)


WITNESSETH:

                                    RECITALS

     A.  Franchisor  owns the rights to develop and  operate a unique  system of
restaurants which specialize in the sale of high quality, moderately priced food
and  alcoholic  beverages  in  an  attractive,  casual  setting,  which  include
proprietary   rights  in  certain  valuable  trade  names,   service  marks  and
trademarks,  including the service mark Applebee's  Neighborhood Grill & Bar and
variations  of such  mark,  designs,  decor and  color  schemes  for  restaurant
premises,  signs,  equipment,  procedures  and formulae for  preparing  food and
beverage  products,  specifications  for  certain  food and  beverage  products,
inventory  methods,  operating  methods,  financial control  concepts,  training
facilities and teaching techniques (the "System").

     B. Franchisor has  established,  through its own development and operation,
and through the granting of franchises, a chain of Applebee's Neighborhood Grill
& Bar restaurants which are distinctive; which are similar in appearance, design
and decor; and which are uniform in operation and product consistency.

     C. The value of Franchisor's  trade names,  service marks and trademarks is
based upon: (1) the maintenance of uniform high quality  standards in connection
with the preparation and sale of Franchisor-approved food and beverage products,
(2) the uniform high standards of appearance of the individual  restaurant units
in the System, (3) the use of distinctive  trademarks,  service marks,  building
designs and advertising  signs  representing a uniformly high quality of product
and services,  and (4) the assumption by Franchisor  and its  franchisees of the

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obligation  to maintain and enhance the goodwill  and public  acceptance  of the
System (and of Franchisor's trade names, service marks and trademarks) by strict
adherence to the high standards required by Franchisor.

     D. Developer  desires to obtain the exclusive  right to develop  restaurant
units franchised by Franchisor  within the geographic area specified in Appendix
A hereto ("Territory"),  for the period specified in Subsection 1.1, pursuant to
the terms, conditions and provisions which are set forth in this Agreement.

NOW,  THEREFORE,  in  consideration  of  Franchisor  granting to  Developer  the
exclusive  right to develop  restaurant  units  franchised by  Franchisor  which
employ the System  ("Restaurants")  in the  Territory  for such  period,  and in
consideration  of the mutual  obligations  which are provided for herein,  it is
hereby agreed as follows:

1. GRANT OF DEVELOPMENT RIGHTS

     1.1 Franchisor grants Developer the exclusive right to develop  Restaurants
only in the Territory for a period commencing on the date hereof and expiring on
___________,  20__, unless sooner terminated as hereinafter provided.  Developer
has no rights  under  this  Agreement  to  develop  Restaurants  outside  of the
Territory or to develop  restaurants  which do not employ the System,  including
the Applebee's Neighborhood Grill & Bar service mark.

     1.2  During  the term of this  Agreement,  Franchisor  shall not  operate a
restaurant  utilizing  the  System  or  license  any other  person to  operate a
restaurant  utilizing  the  System in the  Territory.  However,  nothing in this
Agreement  shall  prohibit  or  infringe  upon  Franchisor's  right to operate a
restaurant  or license any other person to operate a restaurant in the Territory
which does not utilize the System or use the Applebee's Neighborhood Grill & Bar
service mark. In addition, Franchisor specifically reserves the right to operate
or license any other person to operate  restaurants  in any  location  within an
airport  (serviced by one or more public or charter  carrier),  arena,  stadium,
state or national park, or military  fort,  post or base which may be within the
boundaries of the Territory otherwise granted to Developer.  Further,  Developer
acknowledges and agrees that Franchisor or any one (1) or more of its subsidiary
or affiliated  companies or divisions shall have the right to operate or license
any other  person to operate  such other  restaurants  which may or will compete
with the  Restaurants,  under a system and  service  mark other than  Applebee's
Neighborhood Grill & Bar.

     1.3 After this Agreement  expires or is terminated,  Franchisor  shall have
the  complete  and  unrestricted  right to operate or license  other  persons to
operate a restaurant utilizing the System in the Territory.

2. INITIAL DEVELOPMENT SCHEDULE

     2.1  Developer  shall  develop  a total  of  _________  (____)  Restaurants
franchised by Franchisor  in the Territory  during the period  commencing on the
date hereof and  expiring on  _____________,  20_____,  in  accordance  with the
following development schedule:

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          (a)(1)  During  the  first  Initial   Development  Period  under  this
     Agreement,  Developer shall develop at least  _________  (___)  Restaurants
     within the  Territory,  each of which shall be open for operation and doing
     business  on  _________________,  ________  (the end of the  first  Initial
     Development Period under this Agreement).

          (b) During the second Initial Development Period under this Agreement,
     Developer  shall  develop the number of  Restaurants  within the  Territory
     necessary to result in the  existence of _________  (___) such  Restaurants
     developed by Developer  which are open for operation and doing  business on
     _________________,  ________  (the end of the  second  Initial  Development
     Period under this Agreement).

          (c) During the third Initial  Development Period under this Agreement,
     Developer  shall  develop the number of  Restaurants  within the  Territory
     necessary to result in the existence of _________  (____) such  Restaurants
     developed by Developer  which are open for operation and doing  business on
     ______________,  ________ (the end of the third Initial  Development Period
     under this Agreement).

Each of the periods  specified  in  Subparagraphs  (a) through  (___)  hereof is
sometimes referred to hereinafter as an "Initial Development Period."

     2.2 During any Initial  Development  Period,  subject to the  provisions of
this Agreement,  Developer is free to develop more than the total minimum number
of  Restaurants  which  Developer  is  required to develop  during that  Initial
Development Period. Any such Restaurants developed, open for operation and doing
business  during an Initial  Development  Period in excess of the minimum number
required to be developed during that Initial Development Period shall be applied
to satisfy Developer's development obligation during the next succeeding Initial
Development Period or next succeeding Subsequent  Development Period (as defined
in Section 3 hereof),  if any,  as the case may be.  Notwithstanding  the above,
Developer shall not develop more than the total number  Restaurants  approved by
Franchisor for development under this Agreement.

     2.3 Strict compliance with the development schedule specified in Subsection
2.1 hereof is of the essence of this  Agreement.  If Developer  fails to fulfill
its  specified  development  obligation  with  respect  to any  of  the  Initial
Development  Periods  specified in Subsection 2.1 hereof,  this Agreement  shall
terminate  sixty (60) days after the end of the  Initial  Development  Period in
question,  unless  by the  end of such  sixty  (60)  day  period  Developer  has
fulfilled  the  development  obligation  relating  to such  Initial  Development
Period.

3. SUBSEQUENT DEVELOPMENT SCHEDULE; DEVELOPMENT OBLIGATIONS GENERALLY

     3.1 During the period commencing on ______________,  20_____,  and expiring
on _________________,  20____,  Developer shall develop and open for business in
the Territory,  in accordance with the parameters  established  under Subsection
3.2, that number of additional  Restaurants as is required to achieve at the end



(1) The periods specified in Subsection 2.1(a)-(c) may be revised, deleted or
added to in order to reflect the number of Restaurants Developer is obligated to
develop and the time in which the Developer is obligated to open such
Restaurants.


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of such period,  a total  number of  Restaurants  open for  business  within the
Territory  which,  after including the Restaurants  developed during the Initial
Development  Periods,  will  equal  the  Minimum  Development  Potential  of the
Territory (as defined herein below).

     3.2 (a) Each  consecutive  two (2) year period,  commencing with the period
beginning on _______________,  20____, is hereafter referred to as a "Subsequent
Development Period."

          (b) On or  before  the  commencement  of each  Subsequent  Development
     Period,  Franchisor  shall  provide to  Developer  in writing the number of
     Restaurants to be developed by Developer during such Subsequent Development
     Period  ("Subsequent  Development  Schedule"),  together  with  a  detailed
     summary of the Minimum Development Potential calculations used to determine
     the Subsequent  Development  Schedule.  The minimum  development  potential
     ("Minimum Development Potential") shall be determined as follows:

               (i) Each Area of Dominant Influence ("A.D.I."),  as determined by
          the  1988  Arbitron  Ratings,  comprising  all  or a  portion  of  the
          Territory shall be placed into one of four market categories  ("Market
          Categories"),  identified as either a "Small Market", defined as those
          A.D.I.'s  containing  less than  135,000  households  in  metropolitan
          counties  within the  Territory  with  incomes  greater  than  $25,000
          ("Income  Qualified Metro Household");  a "Medium Market",  defined as
          those A.D.I.'s  containing  135,000 to 399,999 Income  Qualified Metro
          Households;  a "Large  Market",  defined as those A.D.I.'s  containing
          400,000 to 1,399,999  Income  Qualified Metro  Households;  or a "Mega
          Market", defined as those A.D.I.'s containing 1,400,000 or more Income
          Qualified Metro Households (Small Market,  Medium Market, Large Market
          or Mega  Market  may also be  referred  to herein  individually  as an
          "A.D.I. Market" or collectively as "A.D.I.  Markets". The income level
          set forth above may,  but need not, be adjusted  upward or downward by
          Franchisor  once every  five (5) years in order to reflect  changes in
          household  income,  such  adjustments to be determined by reference to
          the United States Census Bureau's Median  Household Income Index or if
          such  index no longer  exists  at the time it is to be used,  then the
          index employed shall be such other  generally  known index used by NPD
          Crest or other such similar company then used by Franchisor.

               (ii) Each county within an A.D.I. Market shall be classified as a
          "Metropolitan  County", those counties with a total population greater
          than  50,000;  a "Small  Town  County",  those  counties  with a total
          population of 20,000 to 50,000;  or an "Other County",  those counties
          with a total population less than 20,000  (Metropolitan  County, Small
          Town  County and Other  County may be for  description  purposes  also
          referred to herein as a "County Type").

               (iii) Each A.D.I. Market shall at that time be assigned to one of
          four  development   groups  according  to  the  level  of  development
          penetration  which  Developer  has  achieved  in the A.D.I.  Market as
          compared  to the  level of  development  penetration  achieved  by all
          domestic  development in the System.  The four development groups will
          be determined by ranking each A.D.I.  in the System within each of the
          Market Categories from most developed to least developed. The A.D.I.'s

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          in ranking order from most developed to least  developed shall then be
          divided   into   four   substantially    equal   development   groups:
          "Opportunistic  Group", "Second Group", "Third Group" and "Lower Limit
          Group".  The average number of Restaurants per Income  Qualified Metro
          Household  developed by the top three territories in the System of the
          Second Group in each A.D.I.  Market  category shall be the development
          target for each such A.D.I. Market category ("Penetration Target").

               (iv) The total number of Restaurants to be developed by Developer
          in each Metropolitan  County of an A.D.I. Market shall be equal to the
          number of Income  Qualified  Metro  Households  in such A.D.I.  Market
          divided  by  the   Penetration   Target   ("Metropolitan   Development
          Potential").  The Metropolitan  Development Potential minus the number
          of Restaurants in each Metropolitan  County then open and operating in
          said  A.D.I.  Market  shall  be the  number  of  Restaurants  in  each
          Metropolitan  County  then  available  for  development  in the A.D.I.
          Market ("Metropolitan Development Balance").

               (v) The Minimum Development Potential shall be the maximum number
          of Restaurants  Franchisor  may include on the Subsequent  Development
          Schedule  and thus require  Developer to develop in the A.D.I.  Market
          during the next Subsequent  Development Period;  subject,  however, to
          the minimum and maximum development criteria outlined in paragraph (c)
          and (d) of this  Subsection 3.2. In the event,  however,  a particular
          A.D.I. Market is in the Opportunistic Group,  Developer and Franchisor
          shall  negotiate  in  good  faith  a  mutually  agreeable   Subsequent
          Development Schedule;  provided,  however, said Subsequent Development
          Schedule  shall  not  reflect a number  of  Restaurants  less than the
          remaining   undeveloped   portion  of  the  Metropolitan   Development
          Potential,  nor shall the Developer be required  (without its consent)
          to  develop  more  than  the  remaining  undeveloped  portion  of  the
          Metropolitan Development Potential.

          (c) During each Subsequent  Development Period that Developer has less
     than ten (10)  Restaurants  open and operating in the Territory,  Developer
     shall be required to develop no more than one (1) Restaurant  each calendar
     year that the number of Restaurants in Developer's  Territory does not meet
     or exceed the Minimum Development  Potential of the Territory.  During each
     Subsequent   Development  Period  that  Developer  has  ten  (10)  or  more
     Restaurants  in the  Territory,  Developer  shall be required to develop no
     more  than two (2)  Restaurants  each  calendar  year  that the  number  of
     Restaurants   in  the  Territory  does  not  meet  or  exceed  the  Minimum
     Development Potential for the Territory.

          (d)  Notwithstanding  the  Minimum  Development  Potential  for  which
     Developer  might otherwise be obligated in order to satisfy the Penetration
     Target for the Territory,  Developer  shall not be required to develop more
     than ten (10) Restaurants in any one calendar year in the Territory. In the
     event Developer holds other  development  agreements with the System or the
     Principal   Shareholders   of  Developer   are  the   identical   Principal
     Shareholders  of other  entities  who hold other  development  agreement(s)
     within  the  System  (such  other  entities  being  defined   hereunder  as
     "Affiliates"),  Developer,  together  with such  Affiliates,  may limit its
     combined development under all such development  agreements to no more than
     ten (10)  Restaurants  in the  aggregate  in any calendar  year.  Provided,

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     however,  Developer and Principal Shareholder(s) hereby acknowledge that if
     Developer  exercises its option under this  provision to limit its combined
     development  with its  Affiliates  and after so  limited  its  development,
     Developer  (together  with its  Affiliate)  does not achieve such aggregate
     development, Developer shall be in default under that development agreement
     (or all such  development  agreements  as the  case  may be) but only  such
     development  agreement(s)  which  did not  meet the  individual  Subsequent
     Development   Schedule   calculated  and  agreed  to  for  that  individual
     development agreement.

          (e) If the Developer has timely developed and opened for operation the
     Restaurant  called for by the Initial  Development  Schedule and thereafter
     during a Subsequent  Development  Period objects to the  development of the
     last Restaurant  required during that Subsequent  Development  Period under
     Article 3 hereof, then Franchisor hereby grants Developer the right to make
     a written  demand for a study as to  whether  said last  Restaurant  may be
     located in the  Territory  or  whether  said  Restaurant  will at that time
     cannibalize  the sales  and  traffic  with  respect  to its other  existing
     Restaurants  in the  Territory.  In the event a written  request for such a
     study  is  received  by  Franchisor  prior  to the  end  of the  Subsequent
     Development  Period  in  question  and  prior  to  any  default  under  the
     Development  Agreement,  then in such an event,  Franchisor  and  Developer
     shall in good faith attempt to resolve the issue regarding whether the last
     Restaurant  should or should not be developed  and opened.  If an agreement
     cannot be reached  (which  process may include the Franchisor and Developer
     ordering a PIN study at Developer's  cost),  Franchisor and Developer shall
     submit the disagreement to the National Franchise Mediation Board ("NFMB"),
     as herein defined below,  for handling and  disposition.  The submission of
     said disagreement will be in accordance with subsection 3.2 (f)(i) hereof.

          (f) The following  shall apply to the  submission to the NFMB pursuant
     to the preceding paragraph:

          (i) The  disagreement  shall be submitted by the Developer by way of a
          written demand for mediation tendered to Franchisor within thirty (30)
          days after  Franchisor  has  indicated to Developer  than an agreement
          cannot be reached.  Developer will deposit  $35,000 with Franchisor at
          the time of the filing of its  written  demand for  mediation.  If the
          demand  or the  deposit  or  either  or both of them are not so timely
          made,  then in such an event,  the  Developer  shall be deemed to have
          waived its right to request mediation and further,  shall be deemed to
          have elected to accept the full number of  Restaurants  Franchisor had
          determined for the Subsequent Development Period then in question. The
          NFMB will determine in its sole discretion the procedure,  time limits
          and  additional  filing and  responses  required  with  respect to the
          mediation.  However,  it is understood  and agreed by all parties that
          the mediation is intended to provide a more expeditious  resolution of
          the  matter  submitted  to the  NFMB.  The  mediation  decision  to be
          rendered  by  the  NFMB  will  be  binding  upon  all  parties  to the
          mediation.  The party for whom a favorable  decision is rendered shall
          receive from the other party reimbursement for all out-of-pocket costs
          and  expenses,  including  attorneys'  fees incurred and any PIN study
          conducted  with respect to the  mediation,  which are determined to be
          reasonable by the NFMB.

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          (ii) At the  conclusion  of the  mediation,  the NFMB shall  issue its
          decision  either  supporting  Developer and  indicating  that the last
          Restaurant  need  not  be  developed  as  a  part  of  the  Subsequent
          Development Period in question,  or conversely,  supporting Franchisor
          and  indicating  that  the  last  Restaurant  should  be a part of the
          development for that Subsequent Development Period. If the decision of
          the NFMB supports the Developer,  then in such an event, the Developer
          shall  maintain  its  exclusive  rights  to the  Territory,  and shall
          continue  to  maintain  its right to develop  therein  in the  future.
          Provided,  however,  Franchisor may request further development during
          future Subsequent  Development Periods. In addition,  Franchisor shall
          reimburse   Developer   the  $35,000   previously   deposited  at  the
          commencement of the mediation process.

          (iii) If the  decision of the NFMB  supports the  Franchisor,  then in
          such an event,  the Developer  shall be required to construct and open
          the last Restaurant,  pursuant to the development  schedule originally
          listed as a part of the Subsequent  Development Period so in question.
          In  addition,   the  funds  previously  deposited  by  Developer  with
          Franchisor  shall  be  applied  to the  Franchise  Fee  due  for  such
          Restaurant.  However,  in the event  Developer  fails to  develop  the
          Restaurant,  the  $35,000  shall be  forfeited  and shall  become  the
          exclusive   property  of   Franchisor   and  further,   the  exclusive
          development   rights  granted  by  the  Development   Agreement  shall
          terminate and be of no further force and effect.

          (iv) If,  after a new  developer  has been  appointed to open the last
          Restaurant,  and said Restaurant has opened for operation,  and within
          the  first  twelve  (12)  months  of  operation  of  said  Restaurant,
          Developer  believes  that said new  developer's  Restaurant  has had a
          significant  cannibalization  effect  upon one or more of  Developer's
          Restaurants,  then in such an event, the Developer may avail itself of
          the following post impact process  ("Post Impact  Process").  The Post
          Impact  Process will consist of the submission of the positions of the
          Developer,  new  developer  and  Franchisor  to the NFMB for study and
          mediation.  The Post Impact  Process is and shall be from time to time
          more fully  outlined in the Manuals.  The NFMB shall have the right to
          issue a non-binding determination as to whether or not the Developer's
          Restaurant  or  Restaurants  (as the  case  may  be)  were,  in  fact,
          significantly  cannibalized  as  contended  by  Developer  and  if  so
          determined,  a recommendation  on whether any and what type of royalty
          relief  or other  relief,  if any,  shall be  granted  Developer.  The
          parties agree to exhaust the foregoing remedies and seek the mediation
          provided by the NFMB prior to  submitting  the matter to any  judicial
          tribunal.

     3.3  Strict  compliance  with  the  development   schedule  established  in
accordance with  Subsection 3.2 hereof is of the essence of this  Agreement.  If
Developer  shall fail to  fulfill  its  specified  development  obligation  with
respect to any Subsequent Development Period, this Agreement shall automatically
terminate sixty (60) days after the end of the Subsequent  Development Period in
question,  unless  by the  end of such  sixty  (60)  day  period  Developer  has
fulfilled the development  obligation  relating to such  Subsequent  Development
Period.
      
     3.4 If,  during the term of this  Agreement,  (a)  Developer  transfers  or
disposes of any Restaurant developed hereunder in accordance with the provisions
hereof,  or for any other  reason  ceases to operate  any  Restaurant  developed
hereunder,  and (b) after such  transfer or other  cessation  of  operation  the

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premises no longer are utilized for the operation of a  Restaurant,  Developer's
development  obligation in the Initial or Subsequent Development Period in which
such transfer or other cessation of operations occurred shall increase,  subject
to the general limitations on Developer's  development  obligations set forth in
Section  2 and  Section  3, by the  number of  Restaurants  which  Developer  so
transferred, disposed of or which otherwise ceased to operate.

     3.5  Franchisor  represents  that it is the sole owner of the service  mark
Applebee's  Neighborhood  Grill & Bar.  If  Franchisor  determines  that a third
person  has rights  under the law of any state  with  respect to such mark which
precludes  Developer from fulfilling any portion of its development  obligations
pursuant to this  Agreement,  Franchisor and Developer  shall  negotiate in good
faith for a revision of those  development  obligations,  a redefinition  of the
Territory, or such other modifications of this Agreement as may be reasonable in
the circumstances.

     3.6 Notwithstanding  the foregoing  Subsection 3.2 and in addition thereto,
Franchisor shall further divide those counties identified as Small Town Counties
and Other Counties ("STC") and provide for the development of such counties.

          (a) Franchisor  shall request  Developer to commit to develop and open
     for operation pursuant to a pre-determined  development schedule the number
     of  Restaurants   utilizing  a  Small  Town   Restaurant   prototype  ("STC
     Restaurant") and in the specified counties set forth on the written request
     tendered to  Developer by  Franchisor  (the "STC  Notice").  The STC Notice
     provided Developer will further reflect the proposed  development  schedule
     for all such STC Restaurants. Within 30 days of Developer's receipt of such
     STC  Notice,  Developer  shall  indicate  in writing  whether it desires to
     develop  an STC  Restaurant  in all or a portion  of the  counties  listed.
     Thereafter,  the development  schedule  suggested in the STC Notice will be
     adjusted by the Franchisor, using the same pace of development as set forth
     in Subsection 3.2(c) and Subsection  3.2(d).  With respect to this process,
     the  Franchisor and Developer  will review the  development  feasibility of
     each county listed in the STC Notice,  giving appropriate  consideration to
     such  factors  as  liquor  license  availability,   proximity  to  existing
     Restaurants, the presence or absence of competitive concepts and other such
     matters as  Franchisor  deems  appropriate.  Any counties  removed from the
     purview of the STC Notice by such negotiations will be returned to the pool
     of unused  counties  for  possible  future  development.  At or before  the
     conclusion  of the 30-day  notice  period,  unless  otherwise  extended  in
     writing, Developer shall:

          (i) Signify its agreement to develop in accordance with the STC Notice
          in all of the listed  counties  and in  accordance  with the  proposed
          development  schedule  included  with the  revised STC Notice and as a
          result,  Developer's  exclusive  right to develop  Restaurants  in the
          Territory as previously granted remains unaffected;

          (ii) Signify its  agreement to develop an STC  Restaurant in a portion
          of the STC Notice  listed  counties,  and in such an event,  Developer
          shall no longer have the exclusive right to develop Restaurants in the
          counties in which it chose not to develop the STC  Restaurant and will
          be subject to the terms set forth in subparagraph (c) below; or

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          (iii) Reject the  development  of an STC  Restaurant in all of the STC
          Notice  listed  counties,  and in such an  event,  Developer  shall no
          longer have the exclusive right to develop Restaurants in the counties
          listed in the final STC  Notice  and will be  subject  to the terms of
          subparagraph (c) below; or

          (iv) Seek mediation of the inclusion of one or more of the counties in
          the  STC  Notice  with  the  National  Franchise  Mediation  Board  in
          accordance with Subsection 3.6(b); or

          (v) Fail to respond in writing to the STC  Notice,  in which event the
          Developer  will  no  longer  have  the  exclusive   right  to  develop
          Restaurants  in the  counties  set forth in the STC Notice and will be
          subject to the terms of subparagraph (c) below.

     (b) In the event the  Developer  contests the STC Notice as  referenced  in
subsection  3.6(a)(iv) above, such disagreement shall be submitted for mediation
to the National  Franchise  Mediation Board, which shall be comprised of two (2)
individuals  appointed  by  Franchisor,  two (2)  individuals  appointed  by the
Franchise  Business Council and one (1) individual  chosen by the foregoing four
(4) individuals, in accordance with the following:

          (i) Developer  will deposit with  Franchisor at the time of the filing
          of its written  demand for  mediation an amount equal to $35,000 times
          the  number  of  counties   about  which   Developer   is   contesting
          development.  Notwithstanding  the  foregoing,  in no event shall less
          than  $35,000 be so  deposited.  If the deposit is not so timely made,
          then in such an event,  the  Developer  shall be deemed to have waived
          its right to request  mediation  and  further,  deemed to have elected
          alternative (v) as set forth in subparagraph 3.6(a).

          (ii) The NFMB will  determine in its sole  discretion  the  procedure,
          time limits and additional filing and responses  required with respect
          to the mediation.  However, it is understood and agreed by all parties
          that  the  mediation  is  intended  to  provide  a  more   expeditious
          resolution of the matter submitted to the NFMB.

          (iii)  The  mediation  decision  to be  rendered  by the NFMB  will be
          binding upon all parties to the mediation.

          (iv) The party for whom a favorable decision is rendered shall receive
          from the other party  reimbursement  for all  out-of-pocket  costs and
          expenses,  including  attorneys'  fees,  incurred  with respect to the
          mediation which are determined to be reasonable by the NFMB.

          (v) At the  conclusion  of the  mediation,  the NFMB  shall  issue its
          decision   either   supporting   Developer  and  indicating  that  the
          county(ies) to which the Developer  objected shall be removed from the
          STC  Notice  and  returned  to the  pool  of  unused  county(ies),  or
          conversely,  supporting Franchisor and indicating that the county(ies)

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          about which an objection  was raised