PARENT GUARANTY AGREEMENT dated as of March 9, 2007 by CARROLS RESTAURANT GROUP, INC., as Parent Guarantor, in favor

Exhibit 10.3

EXECUTION COPY

PARENT GUARANTY AGREEMENT

dated as of March 9, 2007

by

CARROLS RESTAURANT GROUP, INC.,

as Parent Guarantor,

in favor of

WACHOVIA BANK, NATIONAL ASSOCIATION

as Agent

TABLE OF CONTENTS

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PARENT GUARANTY AGREEMENT (as amended, restated, supplemented or otherwise modified, this “ Parent Guaranty ” or this “ Agreement ”), dated as of March 9 , 2007, is made by CARROLS RESTAURANT GROUP, INC., a Delaware corporation (the “ Parent Guarantor ”), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, the “ Agent ”) for the ratable benefit of itself and the Secured Parties.

STATEMENT OF PURPOSE

Pursuant to the terms of the Loan Agreement dated as of even date herewith (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”) by and among Carrols Corporation, a Delaware corporation, as borrower (the “ Borrower ”), the financial institutions who are or may become party thereto (the “ Lenders ”) and the Agent, the Lenders have agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein.

The Borrower and the Parent Guarantor, though separate legal entities, comprise one integrated financial enterprise, and all extensions of credit to the Borrower will inure, directly or indirectly to the benefit of the Parent Guarantor.

It is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Loan Agreement that the Parent Guarantor shall have executed and delivered this Parent Guaranty to the Agent, for the ratable benefit of itself and the Secured Parties.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, and to induce the Agent and the Lenders to enter into the Loan Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, the Parent Guarantor hereby agrees with the Agent, for the ratable benefit of itself and the Secured Parties, as follows:

ARTICLE I

DEFINED TERMS

SECTION 1.1 Definitions . The following terms when used in this Parent Guaranty shall have the meanings assigned to them below:

“ Applicable Insolvency Laws ” means all Legal Requirements governing bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550 and other “avoidance” provisions of Title 11 of the United States Code, as amended or supplemented).

“ Guaranteed Obligations ” has the meaning set forth in Section 2.1 .

“ Secured Parties ” means the Agent, each Lender and any counterparty to an Interest Rate Risk Agreement that is a Lender or an Affiliate of a Lender at the time such Interest Rate Risk Agreement is executed.

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“ Subsidiary Guarantor ” means each Subsidiary of the Borrower party to the Subsidiary Guaranty.

“ Subsidiary Guaranty ” means the Subsidiary Guaranty Agreement, dated as of even date herewith, made by certain Subsidiaries of the Borrower in favor of the Agent for the ratable benefit of itself and the Secured Parties, as amended, restated, supplemented or otherwise modified.

SECTION 1.2 Other Definitional Provisions . Capitalized terms used and not otherwise defined in this Parent Guaranty including the preambles and recitals hereof shall have the meanings ascribed to them in the Loan Agreement. In the event of a conflict between capitalized terms defined herein and in the Loan Agreement, the Loan Agreement shall control. The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import when used in this Parent Guaranty shall refer to this Parent Guaranty as a whole and not to any particular provision of this Parent Guaranty, and Section references are to this Parent Guaranty unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to the Parent Guarantor, shall refer to the Parent Guarantor’s Collateral or the relevant part thereof.

ARTICLE II

GUARANTY

SECTION 2.1 Parent Guaranty . The Parent Guarantor hereby unconditionally guarantees to the Agent for the ratable benefit of itself and the Secured Parties, and their respective permitted successors, endorsees, transferees and assigns, the prompt payment and performance of:

(a) all Obligations of the Borrower; and

(b) all liabilities and obligations of the Parent Guarantor and each of its Subsidiaries with respect to overdrafts, returned items and related liabilities and all indemnification obligations under the Loan Documents now or hereafter owing by any such Person to the Agent or any Lender arising from or in connection with treasury, depositary or cash management services or in connection with any automated clearinghouse transfer of funds for the benefit of such Person, in each case, whether primary or secondary (whether by way of endorsement or otherwise), whether now existing or hereafter arising, whether or not from time to time reduced or extinguished (except by payment thereof) or hereafter increased or incurred, whether enforceable or unenforceable as against the Borrower, whether or not discharged, stayed or otherwise affected by any Applicable Insolvency Law or proceeding thereunder, whether created directly with the Agent or any Secured Party or acquired by the Agent or any Secured Party through assignment or endorsement or otherwise, whether matured or unmatured, whether joint or several, as and when the same become due and payable (whether at maturity or earlier, by reason of acceleration, mandatory repayment or otherwise), in accordance with the terms of any

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such instruments evidencing any such obligations, including all renewals, extensions or modifications thereof (all Obligations of the Borrower, including all of the foregoing being hereafter collectively referred to as the “ Guaranteed Obligations ”).

SECTION 2.2 Bankruptcy Limitations on Parent Guarantor . Notwithstanding anything to the contrary contained in Section 2.1 , it is the intention of the Parent Guarantor and the Secured Parties that, in any proceeding involving the bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution or insolvency or any similar proceeding with respect to the Parent Guarantor or its assets, the amount of the Parent Guarantor’s obligations with respect to the Guaranteed Obligations shall be equal to, but not in excess of, the maximum amount thereof not subject to avoidance or recovery by operation of Applicable Insolvency Laws. To that end, but only in the event and to the extent that the Parent Guarantor’s obligations with respect to the Guaranteed Obligations or any payment made pursuant to such Guaranteed Obligations would, but for the operation of the first sentence of this Section 2.2 , be subject to avoidance or recovery in any such proceeding under Applicable Insolvency Laws, the amount of the Parent Guarantor’s obligations with respect to the Guaranteed Obligations shall be limited to the largest amount which, after giving effect thereto, would not, under Applicable Insolvency Laws, render the Parent Guarantor’s obligations with respect to the Guaranteed Obligations unenforceable or avoidable or otherwise subject to recovery under Applicable Insolvency Laws. To the extent any payment actually made pursuant to the Guaranteed Obligations exceeds the limitation of the first sentence of this Section 2.2 and is otherwise subject to avoidance and recovery in any such proceeding under Applicable Insolvency Laws, the amount subject to avoidance shall in all events be limited to the amount by which such actual payment exceeds such limitation and the Guaranteed Obligations as limited by the first sentence of this Section 2.2 shall in all events remain in full force and effect and be fully enforceable against the Parent Guarantor. The first sentence of this Section 2.2 is intended solely to preserve the rights of the Agent hereunder against the Parent Guarantor in such proceeding to the maximum extent permitted by Applicable Insolvency Laws and neither the Parent Guarantor, the Borrower, any Subsidiary Guarantor nor any other Person shall have any right or claim under such sentence that would not otherwise be available under Applicable Insolvency Laws in such proceeding.

SECTION 2.3 Agreements Regarding Subrogation and Reimbursement .

(a) Agreement Regarding Subrogation . Notwithstanding any payment or payments by the Parent Guarantor hereunder, or any set-off or application of funds of the Parent Guarantor by the Agent or any Secured Party, or the receipt of any amounts by the Agent or any Secured Party with respect to any of the Guaranteed Obligations, the Parent Guarantor shall not be entitled to be subrogated to any of the rights of the Agent or any Secured Party against the Borrower, any of the Subsidiary Guarantors or any other guarantor of the Guaranteed Obligations or against any collateral security held by the Agent or any Secured Party for the payment of the Guaranteed Obligations, nor shall the Parent Guarantor seek any reimbursement from the Borrower, any of the Subsidiary Guarantors or any other guarantor of the Guaranteed Obligations in respect of payments made by the Parent Guarantor in connection with the Guaranteed Obligations, until all amounts owing to the Agent and the Secured Parties on account of the Guaranteed Obligations are paid in full and the Revolving Loan Commitments are terminated. If any amount shall be paid to the Parent Guarantor on account of such subrogation

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rights at any time when all of the Guaranteed Obligations shall not have been paid in full or the Revolving Loan Commitments are not terminated, such amount shall be held by the Parent Guarantor in trust for the Agent, segregated from other funds of the Parent Guarantor, and shall, forthwith upon receipt by the Parent Guarantor, be turned over to the Agent in the exact form received by the Parent Guarantor (duly endorsed by the Parent Guarantor to the Agent, if required) to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as set forth in the Loan Agreement.

(b) Agreement Regarding Reimbursement . Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge and agree that, as the Borrower is a wholly-owned Subsidiary of the Parent Guarantor and part of an integrated financial enterprise to which the Parent Guarantor and each Subsidiary Guarantor is a party, each Subsidiary Guarantor shall have a right of reimbursement and indemnity from the Parent Guarantor for any amount paid by such Subsidiary Guarantor in lieu of a right of contribution between the Subsidiary Guarantors and the Parent Guarantor.

SECTION 2.4 Nature of Parent Guaranty .

(a) The Parent Guarantor agrees that this Parent Guaranty is a continuing, unconditional guaranty of payment and performance and not of collection, and that its obligations under this Parent Guaranty shall be primary, absolute and unconditional, irrespective of, and unaffected by:

(i) the genuineness, validity, regularity, enforceability or any future amendment of, or change in, the Loan Agreement or any other Loan Document or any other agreement, document or instrument to which the Parent Guarantor, the Borrower or any Subsidiary Guarantor is or may become a party;

(ii) the absence of any action to enforce this Parent Guaranty, the Loan Agreement or any other Loan Document or the waiver or consent by the Agent or any Secured Party with respect to any of the provisions of this Parent Guaranty, the Loan Agreement or any other Loan Document;

(iii) the existence, value or condition of, or failure to perfect its Lien against, any security for or other guaranty of the Guaranteed Obligations or any action, or the absence of any action, by the Agent or any Secured Party in respect of such security or guaranty (including, without limitation, the release of any such security or guaranty); or

(iv) any other action or circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor;

it being agreed by the Parent Guarantor that, subject to the first sentence of Section 2.2 , its obligations under this Parent Guaranty shall not be discharged until the final indefeasible payment and performance, in full, of all of the Guaranteed Obligations and the termination of the Revolving Loan Commitments.

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(b) The Parent Guarantor represents, warrants and agrees that its obligations under this Parent Guaranty are not and shall not be subject to any counterclaims, offsets or defenses of any kind (other than the defense of payment) against the Agent, any Secured Party, the Borrower or any Subsidiary Guarantor whether now existing or which may arise in the future.

(c) The Parent Guarantor hereby agrees and acknowledges that the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Parent Guaranty, and all dealings between the Borrower and the Parent Guarantor, on the one hand, and the Agent and the Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Parent Guaranty.

SECTION 2.5 Waivers . To the extent permitted by law, the Parent Guarantor expressly waives all of the following rights and defenses (and agrees not to take advantage of or assert any such right or defense):

(a) any rights it may now or in the future have under any statute, or at law or in equity, or otherwise, to compel the Agent or any Lender to proceed in respect of the Guaranteed Obligations against the Borrower, the Subsidiary Guarantors or any other Person or against any security for or other guaranty of the payment and performance of the Guaranteed Obligations before proceeding against, or as a condition to proceeding against, the Parent Guarantor;

(b) any defense based upon the failure of the Agent or any Secured Party to commence an action in respect of the Guaranteed Obligations against the Parent Guarantor, the Borrower, any of the Subsidiary Guarantors, any other guarantor of the Guaranteed Obligations or any other Person or any security for the payment and performance of the Guaranteed Obligations;

(c) any right to insist upon, plead or in any manner whatever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, marshalling of assets or redemption laws, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by the Parent Guarantor of its obligations under, or the enforcement by the Agent or the Secured Parties of this Parent Guaranty;

(d) any right of diligence, presentment, demand, protest and notice (except as specifically required herein) of whatever kind or nature with respect to any of the Guaranteed Obligations and waives, to the extent permitted by any Legal Requirement, the benefit of all provisions of law which are or might be in conflict with the terms of this Parent Guaranty; and

(e) any and all right to notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Agent or any Secured Party upon, or acceptance of, this Parent Guaranty.

The Parent Guarantor agrees that any notice or directive given at any time to the Agent or any Secured Party which is inconsistent with any of the foregoing waivers shall be null and void and may be ignored by the Agent or such Secured Party, and, in addition, may not be pleaded or introduced as evidence in any litigation relating to this Parent Guaranty for the reason that such pleading or introduction would be at variance with the written terms of this Parent Guaranty,

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unless the Agent and the Majority Lenders have specifically agreed otherwise in writing. The foregoing waivers are of the essence of the transaction contemplated by the Loan Agreement and the other Loan Documents and