GUARANTY

Exhibit 10.16

GUARANTY

dated as of January 31, 2007

among

SBARRO HOLDINGS, LLC,

THE SUBSIDIARY GUARANTORS FROM TIME TO TIME PARTY HERETO,

BANK OF AMERICA, N.A.,

as Administrative Agent

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GUARANTY dated as of January 31, 2007 (as amended, restated, modified or supplemented from time to time, this “ Agreement ”) among SBARRO HOLDINGS, LLC, a Delaware limited liability company (“ Holdings ”), the Subsidiary Guarantors from time to time party hereto (the “ Subsidiary Guarantors ” and, together with Holdings, the “ Guarantors ”) and BANK OF AMERICA, N.A., as Administrative Agent for the benefit of the Finance Parties referred to herein.

Holdings and MidOcean SBR Acquisition Corp., a New York corporation (“ AcquisitionCo ” and, prior to the Merger, the “ Borrower ”), Sbarro, Inc., a New York corporation (“ Sbarro ” and, following the Merger, the “ Borrower ”), propose to enter into a credit agreement dated as of January 31, 2007 (as amended, restated, modified, supplemented, restructured or refinanced from time to time, the “ Credit Agreement ”) among Holdings, AcquisitionCo, Sbarro, the banks and other lending institutions from time to time party thereto (each a “ Lender ” and, collectively, the “ Lenders ”), Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer, Credit Suisse, as Syndication Agent, and Banc of America Securities LLC and Credit Suisse Securities (USA) LLC, as Joint Lead Arrangers and Joint Book Managers (collectively, the “ Lead Arrangers ”). Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Credit Agreement.

Certain Lenders and their Affiliates acting as Swap Creditors may from time to time provide forward rate agreements, options, swaps, caps, floors and other Swap Agreements to the Loan Parties. In addition, certain Lenders or their Affiliates may provide credit cards, stored value cards or cash or treasury management services to, for the benefit of, or otherwise in respect of, the Borrower and its subsidiaries (including controlled disbursement, intraday credit, Automated Clearing House (ACH) services, foreign exchange services, return items, overdrafts, daylight overdrafts, zero balance arrangements and interstate depository network services). (i) The Lenders or their Affiliates providing such credit cards, stored value cards or treasury and cash management services which the Borrower may from time to time notify the Administrative Agent and the Collateral Agent are intended to constitute Finance Obligations under the Finance Documents, (ii) each L/C Issuer, (iii) the Swing Line Lender, (iv) each other Lender, (v) the Administrative Agent and (vi) the Syndication Agent, the Documentation Agent, the Collateral Agent and the Control Agent and their respective successors and assigns, are herein referred to individually as a “ Credit Party ” and collectively as the “ Credit Parties ”, and each Credit Party and each Swap Creditor and their respective successors and assigns are herein referred to individually as a “ Finance Party ” and collectively as the “ Finance Parties ”.

To induce the Credit Parties to enter into the Credit Agreement and the other Loan Documents referred to therein (collectively with the Credit Agreement, the “ Loan Documents ”), certain Lenders and their Affiliates to enter into agreements or other instruments to provide the credit cards, stored value cards or treasury and cash management services referred to above which the Borrower may from time to time notify the Administrative Agent and the Collateral Agent are intended to constitute Finance Obligations under the Finance Documents and the Swap Creditors to enter into Swap Agreements permitted under the Credit Agreement (collectively with the Loan Documents, the “ Finance Documents ”), and as a condition precedent to the obligations of the Credit Parties under the Credit Agreement, Holdings and each of the Subsidiaries of the Borrower which shall become parties hereto from time to time in accordance with Section 5.11 (each a “ Subsidiary Guarantor ” and, collectively, the “ Subsidiary Guarantors ” and, together

with Holdings, the “ Guarantors ”), have agreed, jointly and severally, to provide a guaranty of all obligations of Holdings, the Borrower and the other Loan Parties under and in respect of the Finance Documents. Holdings, the Borrower and the Subsidiary Guarantors are referred to herein individually as a “ Loan Party ” and, collectively, as the “ Loan Parties ). As used herein, “ Other Loan Parties ” means, with respect to any Guarantor, any and all of the Loan Parties other than such Guarantor.

Upon the consummation of the Acquisition and Merger, Holdings is the direct parent of the Borrower, each of the Subsidiary Guarantors is a subsidiary of the Borrower and Holdings, and the Subsidiary Guarantors will receive not insubstantial benefits from the financial accommodation to be provided by the Finance Parties under the Finance Documents. Accordingly, the Guarantors hereby agree with the Administrative Agent for the benefit of the Finance Parties as follows:

ARTICLE I

GUARANTY

Section 1.01 The Guaranty . Each Guarantor unconditionally guarantees, jointly with the other Guarantors, and severally, as a primary obligor and not merely as a surety: (x) the due and punctual payment of:

(i) all Senior Credit Obligations of the Borrower;

(ii) all Swap Obligations of all Loan Parties permitted under the Credit Agreement and owed or owing to any Swap Creditor; and

(iii) all Cash Management Obligations of all Loan Parties owing to a Lender or one or more of its Affiliates which the Borrower has notified the Administrative Agent are intended to constitute “Finance Obligations” under the Finance Documents;

in each case whether now or hereafter due, owing or incurred in any manner, whether actual or contingent, whether incurred solely or jointly with any other Person and whether as principal or surety (and including all liabilities in connection with any notes, bills or other instruments accepted by any Credit Party in connection therewith), together in each case with all renewals, modifications, consolidations or extensions thereof, and (y) the due and punctual performance of all covenants, agreements, obligations and liabilities of Holdings, the Borrower and the Other Loan Parties under or pursuant to the Loan Documents and the other Finance Documents (all such monetary and other obligations being herein collectively referred to as the “ Guaranteed Obligations ”).

Anything contained in this Agreement to the contrary notwithstanding, the obligations of each Subsidiary Guarantor hereunder shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Subsidiary Guarantor’s obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any provisions of applicable state law (collectively, the “ Fraudulent Transfer Laws ”), in each case after giving effect to all other liabilities of such Subsidiary Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically

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excluding, however, any liabilities of such Subsidiary Guarantor (i) in respect of intercompany indebtedness to the Borrower or any of its Affiliates to the extent that such indebtedness (A) would be discharged or would be subject to a right of set-off in an amount equal to the amount paid by such Subsidiary Guarantor hereunder or (B) has been pledged to, and is enforceable by, the Collateral Agent on behalf of the Finance Parties and (ii) under any guaranty of Indebtedness subordinated in right of payment to the Guaranteed Obligations which guaranty contains a limitation as to a maximum amount similar to that set forth in this paragraph pursuant to which the liability of such Subsidiary Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount) and after giving effect as assets of such Subsidiary Guarantor to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, contribution, reimbursement, indemnity or similar rights of such Subsidiary Guarantor pursuant to (i) applicable Law or (ii) any agreement providing for an equitable allocation among such Subsidiary Guarantor and other Affiliates of the Borrower of obligations arising under guaranties by such parties (including the agreements in Article II of this Agreement). If any Subsidiary Guarantor’s liability hereunder is limited pursuant to this paragraph to an amount that is less than the total amount of the Guaranteed Obligations, then it is understood and agreed that the portion of the Guaranteed Obligations for which such Subsidiary Guarantor is liable hereunder shall be the last portion of the Guaranteed Obligations to be repaid.

Section 1.02 Guaranty Absolute . Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Finance Documents, regardless of any Law now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Finance Parties with respect thereto. The obligations of the Guarantors under this Agreement are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Agreement, irrespective of whether any action is brought against the Borrower or any Other Loan Party or whether the Borrower or any Other Loan Party is joined in any such action or actions. This Agreement is an absolute and unconditional guaranty of payment when due, and not of collection, by each Guarantor, jointly and severally with each other Guarantor of the Guaranteed Obligations in each and every particular. The obligations of each Guarantor hereunder are several from those of the Other Loan Parties and are primary obligations concerning which each Guarantor is the principal obligor. The Finance Parties shall not be required to mitigate damages or take any action to reduce, collect or enforce the Guaranteed Obligations.

The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including the existence of any claim, set-off or other right which any Guarantor may have at any time against any Other Loan Party, any Agent or other Finance Party or any other Person, whether in connection herewith or any unrelated transactions. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any Other Loan Party to any Finance Party under the Finance Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Borrower or such Other Loan Party.

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Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be released, discharged or otherwise affected or impaired by:

(i) any extension, renewal, settlement, compromise, acceleration, waiver or release in respect of any obligation of any Other Loan Party under the Credit Agreement, the Notes, any Swap Agreement, any other Finance Document or any other agreement or instrument evidencing or securing any Guaranteed Obligation, by operation of Law or otherwise;

(ii) any change in the manner, place, time or terms of payment of any Guaranteed Obligation or any other amendment, supplement or modification to the Credit Agreement, the Notes, any Swap Agreement, any other Finance Document or any other agreement or instrument evidencing or securing any Guaranteed Obligation;

(iii) any release, non-perfection or invalidity of any direct or indirect security for any Guaranteed Obligation, any sale, exchange, surrender, realization upon, offset against or other action in respect of any direct or indirect security for any Guaranteed Obligation or any release of any Other Loan Party or any other guarantor or guarantors of any Guaranteed Obligation;

(iv) any change in the existence, structure or ownership of any Other Loan Party or any insolvency, bankruptcy, reorganization, arrangement, readjustment, composition, liquidation or other similar proceeding affecting any Other Loan Party or its assets or any resulting disallowance, release or discharge of all or any portion of any Guaranteed Obligation;

(v) the existence of any claim, set-off or other right which any Guarantor may have at any time against any Other Loan Party, any Agent, any other Finance Party or any other Person, whether in connection herewith or any unrelated transaction; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

(vi) any invalidity or unenforceability relating to or against any Other Loan Party for any reason of the Credit Agreement, any Note, any Swap Agreement, any other Finance Document or any other agreement or instrument evidencing or securing any Guaranteed Obligation or any provision of applicable Law purporting to prohibit the payment by any Other Loan Party of any Guaranteed Obligation;

(vii) any failure by any Agent or any other Finance Party: (A) to file or enforce a claim against any Other Loan Party or its estate (in a bankruptcy or other proceeding); (B) to give notice of the existence, creation or incurrence by any Other Loan Party of any new or additional indebtedness or obligation under or with respect to the Guaranteed Obligations; (C) to commence any action against any Other Loan Party; (D) to disclose to any Guarantor any facts which such Agent or such other Finance Party may now or hereafter know with regard to any Other Loan Party; or (E) to proceed with due diligence in the collection, protection or realization upon any collateral securing the Guaranteed Obligations;

(viii) any direction as to application of payment by any other Loan Party or any other Person;

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(ix) any subordination by any Finance Party of the payment of any Guaranteed Obligation to the payment of any other liability (whether matured or unmatured) of any Other Loan Party to its creditors;

(x) any act or failure to act by the Administrative Agent, any other Finance Party under this Agreement or otherwise which may deprive any Guarantor of any right to subrogation, contribution or reimbursement against any Other Loan Party or any right to recover full indemnity for any payments made by such Guarantor in respect of the Guaranteed Obligations; or

(xi) any other act or omission to act or delay of any kind any Other Loan Party, the Administrative Agent or any Finance Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this clause, constitute a legal or equitable discharge of any Guarantor’s obligations hereunder (except that a Guarantor may assert the defense of final payment in full of the Guaranteed Obligations).

Each Guarantor irrevocably and unconditionally has delivered this Agreement to the Administrative Agent for the benefit of the Finance Parties, and the failure by any Other Loan Party or any other Person to sign this Agreement or a guaranty similar to this Agreement or otherwise shall not discharge the obligations of any Guarantor hereunder. The irrevocable and unconditional liability of each Guarantor hereunder applies whether it is jointly and severally liable for the entire amount of the Guaranteed Obligations, or only for a pro-rata portion, and without regard to any rights (or the impairment thereof) of subrogation, contribution or reimbursement that such Guarantor may now or hereafter have against any Other Loan Party or any other Person. This Agreement is and shall remain fully enforceable against each Guarantor irrespective of any defenses that any Other Loan Party may have or assert in respect of the Guaranteed Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury, except that a Guarantor may assert the defense of final payment in full of the Guaranteed Obligations.

Section 1.03 Payments .

(a) Payments to be Made Upon Default . If the Borrower or any Other Loan Party fails to pay or perform any Guaranteed Obligation when due in accordance with its terms (whether at stated maturity, by acceleration or otherwise) or if any Event of Default specified in Section 8.01(f ) of the Credit Agreement occurs with respect to the Borrower, the Guarantors shall, forthwith on demand of the Administrative Agent, pay the aggregate amount of all Guaranteed Obligations owed respectively to the Administrative Agent.

(b) General Provisions as to Payments . Each payment hereunder shall be made without set-off, counterclaim or other deduction, in Federal or other funds immediately available in New York City, to the Administrative Agent at the addresses referred to in Section 5.01 (it being understood that a Guarantor may assert the defense of final payment in full of the Guaranteed Obligations).

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(c) Application of Payments .

(i) Priority of Distributions . All payments received by the Administrative Agent hereunder shall be applied as provided in Section 8.03 of the Credit Agreement.

(ii) Distributions with Respect to Letters of Credit . Each of the Guarantors and the Finance Parties agrees and acknowledges that if (after all outstanding Loans and L/C Disbursements have been paid in full) the Lenders are to receive a distribution on account of undrawn amounts with respect to Letters of Credit issued (or deemed issued) under the Credit Agreement, such amounts shall be deposited in the L/C Cash Collateral Account as cash security for the repayment L/C Obligations or shall otherwise be distributed in accordance with Section 2.05(i) of the Credit Agreement.

Section 1.04 Discharge; Reinstatement in Certain Circumstances . Each Guarantor’s obligations hereunder shall remain in full force and effect until (i) the principal of and interest (including interest accruing on or after the commencement of Insolvency or Liquidation Proceeding, whether or not a claim for such interest is, or would be, allowed in such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the Loan Documents and termination of all commitments to lend or otherwise extend credit under the Loan Documents, (ii) payment in full of all other Finance Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (including legal fees and other expenses, costs or charges accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such fees, expenses, costs or charges is, or would be, allowed in such Insolvency or Liquidation Proceeding but excluding contingent indemnification obligations), (iii) termination, cancellation or cash collateralization in accordance with Section 2.05 of the Credit Agreement of, all letters of credit issued or deemed issued under the Loan Documents, (iv) termination or cash collateralization of any Swap Agreement with a Swap Creditor and the payment in full in cash of all Swap Obligations owed to a Swap Creditor (the occurrence of all of the foregoing subclauses (i) through (iv) being referred to herein as “ Discharge of Senior Finance Obligations ”) and (v) such time as such Guarantor is no longer required to be a Guarantor under the Credit Agreement. No payment or payments made by the Borrower, any Other Loan Party or any other Person or received or collected by any Finance Party from the Borrower, any Other Loan Party or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder, it being understood that each Guarantor shall, notwithstanding any such payment or payments, remain liable for the Guaranteed Obligations until Discharge of Senior Finance Obligations. If at any time any payment by the Borrower, any Other Loan Party or any other Person of any Guaranteed

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Obligation is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or such Other Loan Party or other Person or upon or as a result of the appointment of a receiver, intervener or conservator of, or trustee or similar officer for, the Borrower or such Other Loan Party or other Person or any substantial part of its respective property or otherwise, each Guarantor’s obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time. Each Guarantor agrees that payment or performance of any of the Guaranteed Obligations or other acts which toll any statute of limitations applicable to the Guaranteed Obligations shall also toll the statute of limitations applicable to each Guarantor’s liability hereunder.

Section 1.05 Waiver by the Guarantors . Each Guarantor hereby waives, only to the extent permitted by applicable Law, presentment to, demand of payment from and protest to the Other Loan Parties of any of the Guaranteed Obligations, and also waives to the extent permitted by applicable Law, promptness, diligence, notice of acceptance of its guarantee, any other notice with respect to any of the Guaranteed Obligations and this Agreement and any requirement that any Agent or any other Finance Party protect, secure, perfect or insure any Lien or any property subject thereto. Each Guarantor further waives to the extent permitted by applicable Law, any right to require that resort be had by any Agent or any other Finance Party to any security held for payment of the Guaranteed Obligations or to any balance of any deposit, account or credit on the books of any Agent or any other Finance Party in favor of any Loan Party or any other Person. Each Guarantor hereby consents and agrees to each of the following to the fullest extent permitted by Law, and agrees that such Guarantor’s obligations under this Agreement shall not be released, diminished, impaired, reduced or adversely affected by any of the following, and waives to the extent permitted by applicable Law, any rights (including rights to notice) which such Guarantor might otherwise have as a result of or in connection with any of the following:

(i) any renewal, extension, modification, increase, decrease, alteration or rearrangement of all or any part of the Guaranteed Obligations or any instrument executed in connection therewith, or any contract or understanding