Sample Business Contracts

License Agreement - La Salsa Franchise Inc., La Salsa Holding Co. and Fuddruckers Inc.

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                                    LA SALSA

                                LICENSE AGREEMENT


                                    LA SALSA
                                LICENSE AGREEMENT

                                TABLE OF CONTENTS


         1.1      Grant
         1.2      Development and Operation
         1.3      Additional Restaurants; Relocation


         2.1      Term
         2.2      Removal; Termination Without Cause


         3.1      Openings
         3.2      Operation
         3.3      The Manuals
         3.4      Changes to the Manuals
         3.5      Products and Services
         3.6      Confidentiality
         3.7      LSF Property
         3.8      Covenants
         3.9      Employees
         3.10     Approved Suppliers
         3.11     Proprietary Ingredients


         4.1      Initial Training
         4.2      Certified Training
         4.3      Training Employees
         4.4      Continuing Training
         4.5      Expenses




         5.1      Repairs and Maintenance
         5.2      Modernization


         6.1      Fees
         6.2      No Fees Refundable
         6.3      Payment of Fees


         7.1      Marketing, Promotion and Advertising Programs
         7.2      Local or Regional Advertising
         7.3      Marketing Fund
         7.4      Marketing Fund Policy
         7.5       Temporary Investment
         7.6      Advertising Co-op
         7.7      Approval of Advertising


         8.1      Records
         8.2      Sales Reports
         8.3      Other Reports


         9.1      Audit Rights
         9.2      Inspection
         9.3      Books and Records


         10.1     Indemnification


         11.1     Insurance
         11.2     Certificates




         12.1     Debts and Taxes
         12.2     Compliance with Laws


         13.1     Ownership
         13.2     Goodwill
         13.3     Use of Marks
         13.4     Changes in Marks; Protection
         13.5     Infringements


         14.1     Personal Contracts; Definition
         14.3     FUDDRUCKERS Franchisees
         14.4     Assumption
         14.5     Definition of "Change of Control"


         15.1     Termination for Cause
         15.2     Requirements Upon Termination


         16.1     No Effect
         16.2     Right and Remedies
         16.3     Consents
         16.4     Partial Invalidity
         16.5     Arbitration; Jurisdiction
         16.6     Attorneys' Fees
         16.7     Governing Law
         16.8     Notices
         16.9     Terms and Headings
         16.10    Entire Agreement
         16.11    Amendment or Modification
         16.12    Counterparts
         16.13    Facsimile Signatures



                                    LA SALSA
                                LICENSE AGREEMENT

         THIS  LICENSE  AGREEMENT  is made and  executed as of February 14, 1996
("Effective  Date")  by and  between  La Salsa  Franchise,  Inc.,  a  California
corporation with its principal place of business at Los Angeles,  CA ("LSF") and
La Salsa Holding Co., a Delaware corporation  ("Holding"),  on the one hand, and
Fuddruckers, Inc., a Texas corporation, on behalf of itself and its subsidiaries
("Fuddruckers"),  and DAKA International, Inc., a Delaware corporation ("DAKA"),
on the other hand.


         A. LSF and its parent Holding have developed a distinctive  concept and
type of fresh Mexican grill restaurant  featuring Mexican style food and related
items and beverages under the name "LA SALSA" (LA SALSA Restaurants").

         B.  Holding  has  authorized  LSF to license  others to use the various
trademarks  and service marks  employed in LA SALSA  Restaurants,  including the
federally  registered mark "LA SALSA"  (referred to together as the "Marks") and
to use the recipes,  procedures and other techniques  involved in operating a LA
SALSA Restaurant (the "Operating System").

         C.  Fuddruckers,  a wholly-owned  subsidiary of DAKA, has developed and
operates a chain of gourmet hamburger  restaurants under the name "FUDDRUCKERS,"
which are well known and established on a national basis ("Restaurants").

         D. DAKA and Fuddruckers desire that Fuddruckers obtain a license to use
the marks and Operating  System in the  operation of fresh  Mexican  grills (the
"Grills")  to be  included  as  part  of  the  continued  operation  of  certain
company-owned FUDDRUCKERS Restaurants which are now, and others which will be in
the future, mutually agreed upon by LSF and Fuddruckers.

         E.  LSF  and  Fuddruckers  anticipate  that in the  future  FUDDRUCKERS
franchisees  will be  offered  the  right  to  operate  Grills  as part of their
franchised FUDDRUCKERS restaurants under one or more additional agreements.

         F. LSF is willing to grant a license to Fuddruckers  upon the terms and
conditions set forth herein.

         NOW THEREFORE,  in  consideration  of the mutual promises  contained in
this Agreement, the parties hereby agree as follows:

                           SECTION 1: GRANT OF LICENSE

         1.1 Grant.  LSF hereby grants  Fuddruckers a limited license to use the
Marks and the Operating  System solely in direct  connection with the sale of LA
SALSA food, beverage and other products from Grills contained within Restaurants
identified  and  mutually  agreed upon  between LSF and  Fuddruckers.  The first
twenty Restaurants will be identified by the parties within six months after the
date of this  Agreement  and  specified  on  Exhibit  A-2  attached  hereto  and
incorporated  herein by  reference.  A partial  list is  currently  attached  as
Exhibit A-1. Fuddruckers expressly  acknowledges and agrees that LSF has granted
franchise   development   territories  and  franchise  locations  which  include
protected territory provisions that may prevent the development and/or operation
of any Grills by Fuddruckers within such protected territories.


         1.2 Development and Operation.

                  (a)  Fuddruckers  agrees to use its best  efforts  to open and
operate Grills at such twenty Restaurants as soon as possible after execution of
this  Agreement  and in any  event  within  six  months  after  the date of this
Agreement. These Grills will be opened and operated by Fuddruckers as test units
which will contain the image, signage,  size, menu items,  equipment,  fixtures,
personnel, point of sale systems and other aspects of LA SALSA operations as LSF
and Fuddruckers may agree upon as to each Grill.

                  (b) Prior to  developing  additional  Grills  beyond the first
twenty and before the end of the Initial Term (defined below),  the parties will
set forth in writing the plans and  specifications  to be used by Fuddruckers in
opening  and  operating  such  additional  Grills and will sign and attach  such
document  to this  Agreement  as Exhibit  B. The  parties  will also  specify on
Exhibit  B  the  mutually   acceptable   procedures  for  selecting   additional
Restaurants   for  installing   Grills  and  for  relocating   Grills  to  other
Restaurants. Fuddruckers agrees to comply with all of such plans, specifications
and procedures unless it has received the prior written consent of LSF.

                  (c) Only  company-owned  FUDDRUCKERS  restaurants  operated by
Fuddruckers and its subsidiaries in the United States will be operated  pursuant
to  this  Agreement.  A  current  list  of the  addresses  of the  company-owned
FUDDRUCKERS  Restaurants to which the parties anticipate a Grill may be added is
attached hereto and  incorporated  herein by reference as Exhibit C. Fuddruckers
may add additional  Restaurants to such list with the prior written  approval of
LSF which approval will not be  unreasonably  withheld.  Prior to the end of the
initial Term (as defined below),  and from time to time thereafter,  Fuddruckers
will delete any  Restaurant  from such list whenever it concludes  that no Grill
will be added to such Restaurant.

                   (d)  DAKA  agrees  to  cause  Fuddruckers  to meet all of its
obligations under this Agreement.

         1.3 Additional Restaurants; Relocation. Fuddruckers may add one or more
Restaurant  Grills to this Agreement by written agreement signed in each case by
both  Fuddruckers  and LSF prior to  opening  of the Grill for such  Restaurant.
Fuddruckers  will not relocate a Grill or any other part of the program from any
of the Restaurants  without the prior written consent of LSF, which consent will
not be unreasonably withheld.


         1.4 Protected Territory.

                  (a) "Protected Territory" for purposes of this Agreement shall
mean the area within three existing city blocks of any  Restaurant  located in a
central business district or within a one-mile radius of any Restaurant  located

                  (b) During the term of this Agreement, neither LSF nor Holding
will own, operate or grant any franchise or license to own or operate a LA SALSA
Restaurant  within the  Protected  Territory  around a  Restaurant  containing a

                  (c) During  the three  years  following  the  Effective  Date,
neither LSF nor Holding will own,  operate or grant any  franchise or license to
own or operate a LA SALSA  Restaurant  within the Protected  Territory  around a
Restaurant listed on Exhibit C or added to Exhibit C pursuant to either Sections
1.2(c) or 1.3.

                  (d) Fuddruckers  and Daka  acknowledge and agree that LSF will
during  the  term  hereof  continue  the  development  of LA SALSA  company  and
franchise  Restaurants  within areas adjacent to such Protected  Territories and
expects to grant  franchise area  development  rights to third parties  covering
such areas.

                  (e) If Fuddruckers gives written notice of cancellation during
the Initial  Term under  Section  2.1(a)  below,  LSF and Holding  shall have no
continuing obligation under this Section 1.4.

                                 SECTION 2: TERM

         2.1 Term.

                  (a) This  Agreement will be effective as of the Effective Date
set forth above and will  continue for an initial term ending one year after the
Effective Date (the "Initial Term"), subject to earlier termination as expressly
provided for in this  Agreement.  Unless  Fuddruckers  gives  written  notice of
cancellation  to LSF on or before  thirty  days prior to the end of the  Initial
Term,  this Agreement will  automatically  continue after the Initial Term for a
period ending on the tenth of the Effective Date.


                  (b) Each Grill opened by Fuddruckers during each calendar year
may operate under the terms of this Agreement  until December 31 of the calendar
year set forth in the following table:

                         Calendar            Expiration
                     Year of Opening       Date of License

                            1996          December 31, 2006
                            1997          December 31, 2007
                            1998          December 31, 2008
                            1999          December 31, 2009
                            2000          December 31, 2010
                            2001          December 31, 2006
                            2002          December 31, 2006
                            2003          December 31, 2006
                            2004          December 31, 2006
                            2005          December 31, 2006
                            2006          December 31, 2006

                  (c) Prior to the end of the ten-year  term of this  Agreement,
the parties may enter into an additional  ten-year License  Agreement  regarding
Grills upon terms and conditions  mutually  satisfactory to the parties. So long
as the following  conditions are met,  Fuddruckers  may at its option by written
notice to LSF extend  this  Agreement  to operate  the Grills for an  additional
period  for each Grill of ten years  from the  expiration  date set forth in the
above  table and add  additional  Grills  under this  Agreement  for an extended
period ending on December 31, 2016 (the  "Extended  Term"),  so long as it meets
the following conditions:

(i)  Fuddruckers  must give LSF written notice of extension not less than ninety
     days before the end of the initial ten-year term;

(ii) Fuddruckers  must not at the time of its written  notice of extension be in
     material  default (as defined  hereafter) of this Agreement  without having
     cured such default within the applicable cure period;

(iii)Fuddruckers  must agree to make  within a  reasonable  period  agreed to by
     Fuddruckers  and LSF all required  changes as set forth in a written notice
     from LSF, including as examples,  (A) additional training  requirements and
     (B)  modernization  of the Grills and their  equipment such as redecorating
     certain  Grills and installing new equipment to reflect the then current LA
     SALSA standards and image as set forth in the Manuals or in writings issued
     by LSF; and

(iv) Fuddruckers  and LSF will  adjust to their  satisfaction  the amount of the
     Fees  referred to in Section  6.1 in order to reflect  changes in such fees
     charged by LSF at that time.


                   (d)  For  purposes  of  this   Agreement   unless   otherwise
specifically provided, "material default" shall be defined as a Grill's material
deviation  from LA  SALSA's  recipes,  basic  menu,  decor  and  trade  dress as
described in Exhibit B.

         2.2      Removal; Termination Without Cause.

                  (a) LSF agrees that after the Initial Term  Fuddruckers may at
any time and from  time to time upon  thirty  (30)  days  written  notice to LSF
remove any Restaurant from this Agreement.

                  (b) LSF further agrees that after the initial Term Fuddruckers
may at any time upon  thirty  (30) days  written  notice to LSF  terminate  this
Agreement in full without cause.

                  (c) Fuddruckers agrees that upon the effectiveness of any such
removal or such  termination,  LSF and Holding shall have no further  obligation
under  Section  1.4  above  as to  any  Restaurant  to  which  such  removal  or
termination applies.


         3.1  Openings.  LSF will advise and assist  Fuddruckers  in opening and
operating  each  Grill,  including  attendance  at each of the first three Grill
openings.  LSF  representatives  will assist  Fuddruckers  in  coordinating  the
pre-opening  activities  for each Grill and will be available to assist with its
operations  for up to five (5) days  during the  opening  week or as  reasonably
requested  by  Fuddruckers.  Fuddruckers  agrees  to  reimburse  LSF or  Holding
promptly following invoice for all of their reasonable travel, lodging and other
costs  incurred in connection  with living  expenses in providing  this in-store
training and assistance for each Grill  opening.  Fuddruckers  will carry out an
advertising  program  designed for the opening of each Grill, as mutually agreed
upon between Fuddruckers and LSF.

         3.2      Operation.

                  (a)  Fuddruckers  agrees that it will  identify and appoint an
individual who will be its  representative  in managing the Restaurants,  Grills
and who will devote his or her best efforts and personal attention to the day to
day  operation of the Grills (the  "Representative")  Fuddruckers  may change to
another Representative from time to time following written notice to LSF.

                  (b)   Fuddruckers   hereby   authorizes   and   appoints   the
Representative  with full authority to act on behalf of Fuddruckers  and DAKA in
regard to performing or  administering  this Agreement.  LSF may deal completely
with the  Representative  in such regard unless and until its actual  receipt of
written notice from Fuddruckers of cancellation of such authority.


                  (c)  Fuddruckers  agrees  that it will  operate  each LA SALSA
Grill in  accordance  with the LA SALSA  standards  of high quality and friendly
service  which will at no time be less than the same degree of high  quality and
friendly service that Fuddruckers otherwise requires at the operation of its own
FUDDRUCKERS  restaurants,  recognizing  that an integral  part of the  Operating
System includes vary friendly treatment of customers.

                  (d) Without  limitation,  Fuddruckers  specifically  agrees to
comply with all health,  safety and other laws  applicable  to the  operation of
each Grill.

         3.3 The  Manuals.  LSF will  furnish  Fuddruckers  with one copy of its
current LA SALSA operations Manuals ("Manuals") for each Restaurant prior to the
opening of each Grill.  Fuddruckers  acknowledges  and agrees  that  because the
recipes and procedures set forth in the Manuals are fundamental to the Operating
System  and the way the  public  identifies  the  Marks  with the LA SALSA  food
products,  it will strictly  follow such procedures and recipes at all times and
will use only high quality  ingredients  in preparing  such products  consistent
with the same level of quality used in its own food products.

         3.4 Changes to the Manuals.

                  (a)  Fuddruckers  specifically  agrees that the Manuals are an
integral,  necessary and material  element of the  Operating  System and that it
will be  necessary  for LSF,  in  order to  maintain  the  high  quality  of the
Operating System and maximize its competitive position, to revise and update the
Manuals from time to time.  LSF has the right at any time and from time to time,
in the good faith  exercise  of its  reasonable  business  judgment,  to revise,
delete from and add to the  materials  contained in the Manuals.  Subject to the
limitations  described  below,  Fuddruckers  expressly agrees to comply promptly
with all such changes to the Manuals that are applicable system-wide to LA SALSA
outlets.  LSF will furnish  Fuddruckers from time to time portions or all of the
Manuals  as and when they are  updated,  and  Fuddruckers  will keep each of the
Manuals current at all times.

                  (b) In light of the  limited  menu to be served at the  Grills
and their location within FUDDRUCKERS  Restaurants,  the parties agree that: (i)
during  the  Initial  Term   Fuddruckers  will  not  be  required  to  make  any
expenditures  of more than  $1,000.00  per Grill to comply  with  changes to the
Manuals;  and (ii) after the Initial Term,  Fuddruckers  will not more than once
during any twelve (12) month period be obligated  to make  expenditures  of more
than  $5,000.00  per Grill to comply with  changes in the Manuals or to make any
such change if  Fuddruckers  and LSF agree in the  reasonable  exercise of their
business judgment that the expenditures would not be commercially  reasonable in
light of the remaining term of this Agreement.

         3.5 Products and  Services.  Fuddruckers  agrees to offer for sale from
the Grill at each Restaurant the food, beverages and other products described in
Exhibit B unless  Fuddruckers  and LSF agree in  writing  to any  exceptions  to
Exhibit B.


         3.6      Confidentiality.

                  (a)  Fuddruckers  and DAKA each agree that Holding and LSF are
the  owners  of  all  rights  in  and to the  Operating  System,  including  the
information  and materials  described or contained in the Manuals,  and that the
Operating  System and Manuals  contain trade secrets and  themselves  constitute
trade secrets of LSF which have been or will be revealed to  Fuddruckers  and/or
DAKA in confidence.  Fuddruckers and DAKA each agree not to disclose, duplicate,
license,  sell or reveal  any  portion  thereof to any other  person,  except an
employee of  Fuddruckers  required  by his or her work to be familiar  with such
information.   Fuddruckers   and  DAKA  each  agree  to  keep  and  respect  all
confidential information received from LSF, to obtain from the Representative an
agreement to keep and respect all such  confidences  and to be  responsible  for
compliance by the Representative with such agreement.

                  (b)  Fuddruckers  and DAKA  will  pursuant  to this  Agreement
disclose  to  LSF  and  Holding  confidential,   proprietary  and  trade  secret
information  regarding Fuddruckers and DAKA. LSF agrees that it and Holding will
keep and respect all confidential information received from Fuddruckers and DAKA
and will not disclose, duplicate, license, sell or reveal any portion thereof to
any person, except any employee of LSF or Holding required by his or her work to
be familiar with such information.

         3.7 LSF  Property.  The  Manuals and all other  confidential  materials
furnished to Fuddruckers hereunder are on loan only, will remain the property of
LSF and are required to be returned to LSF immediately for any Grill which is no
longer being operated under this Agreement.

         3.8      Covenants.

                  (a) Fuddruckers and DAKA each agree that LA SALSA  Restaurants
must  compete  (by among  other  things  introducing  new  products,  conducting
advertising programs and establishing  alternative distribution outlets) against
similar  businesses  which may have far greater  financial  resources and may be
better established in the restaurant industry.  Therefore,  Fuddruckers and DAKA
agree to use their best efforts to assure compliance throughout the term of this
Agreement with this Section 3.8.

                  (b) LSF recognizes and agrees that (i) FUDDRUCKERS Restaurants
currently  sell  certain  Mexican  style  food  items,   (ii)  that  other  DAKA
subsidiaries  and  affiliates  sell  unbranded   Mexican  style  food  items  at
institutional  and other  retailer  specialty  outlets and (iii) that other DAKA
subsidiaries  and affiliates are  franchisees  of other  restaurant  chains that
feature Mexican style food items.

                   (c) DAKA and  Fuddruckers  agree that during the term of this
Agreement and any extension and for a period of one year after its expiration or
termination,  Fuddruckers  will not (i) use the LA  SALSA  Marks,  trade  dress,
recipes and other  proprietary  parts of the Operating  System without the prior
express  written  consent  of  LSF,  (ii)  do any  act  which  is  injurious  or
prejudicial to the goodwill  associated  with the LA SALSA chain,  the Operating
System or the value of the  marks,  (iii)  operate  under a  different  name any
restaurant  chain  similar to the LA SALSA chain of  restaurants  which  feature
primarily  Mexican  style food and related  items under a  "taqueria"  or "fresh
Mexican grill" concept.


                  (d) Fuddruckers and DAKA each agree that any violation of this
Section 3.8 would result, in irreparable  injury to LSF and its Operating system
and that LSF would be without an adequate  remedy at law.  Fuddruckers  and DAKA
each therefore  agree that in the event of a breach or threatened  breach of any
such  covenant,  LSF may obtain,  in addition to any other remedies which it may
have hereunder or at law or in equity, a temporary  and/or permanent  injunction
and a decree for specific  performance  of the terms of this section 3.8 without
the necessity of showing actual or threatened damage.

                  (e) The  parties  agree that each of the  foregoing  covenants
will be  construed  as  independent  of each other and of any other  covenant or
provision of this Agreement. If all or any portion of a covenant in this section
3.6 is  held  unenforceable  by a court  having  valid  jurisdiction  in a final
decision  between  the  parties  hereto  and from  which no appeal has or may be
taken, Fuddruckers expressly agrees to be bound by the remaining portion of such

         3.9  Employees.  The parties each hereby agree that such party will not
knowingly  recruit  and hire any person  employed  by the other  party or by any
other LA SALSA  franchisee  without first  obtaining such other party's  written
consent.  The  parties  agree  that in the event of a breach  of this  covenant,
actual damages would be extremely difficult to compute, and accordingly,  in the
event of such a breach,  the breaching party agrees to pay the prior employer of
such person  liquidated  damages equal to the greater of (a) such person a prior
annual salary or (b) the annual salary and any bonus and other  benefits paid or
to be paid by the  breaching  party to such  person  during  the  first  year of

         3.10 Approved  Suppliers.  Fuddruckers  agrees to purchase all products
for sale at the Grille from suppliers who are then approved in writing by LSF as
an approved LA SALSA  supplier.  If  Fuddruckers  wants to purchase any products
from a supplier  who is not so  approved,  Fuddruckers  will  notify LSF of such
supplier  and  instruct  the  proposed  supplier to contact LSF and follow LSF's
procedures for becoming an approved LA SALSA supplier.  LSF may charge a $250.00
fee for the fees and costs  involved in these  approval  procedures.  LSF agrees
upon request by  Fuddruckers  to expedite the  approval  process if  Fuddruckers
demonstrates  that it has been  unable  to  purchase  sufficient  supplies  from
approved suppliers on a timely basis to meet its needs.

         3.11 Proprietary  Ingredients.  Fuddruckers agrees to buy to the extent
required by the Manuals certain proprietary ingredients from LSF or a designated
approved  supplier (which may be an affiliate of LSF).  Fuddruckers  understands
and agrees that such  ingredients are prepared  pursuant to secret,  proprietary
recipes and/or procedures belonging to LSF or its affiliates. LSF agrees that if
reasonably  requested by Fuddruckers,  it will use its best efforts to have such
proprietary  ingredients  made  available  for  sale  by  additional  designated
approved  suppliers,   subject  to  strict   confidentiality   requirements  and
reasonable  fees which may be charged by LSF to such  suppliers for approval and
regular inspections for compliance.


                               SECTION 4: TRAINING

         4.1 Initial Training. LSF will make available to the Representative and
those  persons  identified  to act  as  Grill  Training  managers  the LA  SALSA
Restaurant   operations   Training   Course.   Fuddruckers   agrees   that   the
Representative  and each Grill  Training  Manager must attend and complete LSF's
Restaurant Operations Training Course to the reasonable satisfaction of LSF. All
or a portion  of the  Restaurant  Operations  Training  Course  may be waived in
writing by LSF.

         4.2 Certified  Training.  LSF will make  available to  Fuddruckers a LA
SALSA Operations  Training Course program for purposes of training  Fuddruckers,
Grill Training Managers.  Certification training will be conducted by a LA SALSA
training manager either at a Holding  Restaurant or an operating Grill which has
been certified by LSF for training.  Upon successful  completion of the Training
Course to LSF's  satisfaction,  LSF will certify each such Training  Manager for
the  purpose  of  training  other  employees  of  Fuddruckers.  It is  expressly
understood  and agreed that each certified  Training  Manager and each certified
training  Grill must continue to meet, on an ongoing  basis,  LSF's  established
criteria to maintain such status as certified for LA SALSA training.

         4.3  Training  Employees.  Except  as set  forth  specifically  herein,
Fuddruckers  will be responsible for the initial and continuing  training of all
Grill employees.

         4.4 Continuing Training. The Representative and such other employees as
LSF may  designate  will,  from  time to time  as  reasonably  required  by LSF,
personally  attend  and  complete  LSF-provided  refresher  courses  in LA SALSA
operations and food  preparation and any training  sessions held for the purpose
of introducing new products or procedures.

         4.5  Expenses.  Fuddruckers  agrees  to  pay  LSF  $2,500.00  for  each
Fuddruckers  employee who enrolls in the LA SALSA initial Restaurant  Operations
Training  Course  and for each  Certified  Training  Manager  trained  by LSF or
Holding.  Such payment will be paid prior to each such person's  commencement of
training. Operations refresher courses and new product or new procedure training
sessions  will  be  tuition-free  to  Fuddruckers  and   Fuddruckers,   eligible
employees.  All other training costs and expenses will be the  responsibility of
Fuddruckers,  such as the cost of travel,  lodging,  meals and other related and
incidental expenses.



         5.1 Repairs and Maintenance.  Fuddruckers agrees to maintain each Grill
and other portions of each  Restaurant  consistent with its own high quality and
service standards  applicable to all FUDDRUCKERS  restaurants as well as with LA
SALSA's  standards  as set  forth in the  Manuals.  Except  as may be  expressly
provided  in  Exhibit  B or the  manuals,  no  changes  of any  kind in  design,
equipment or decor will be made in any Grill without the prior written  approval
of LSF in each instance.

         5.2      Modernization.

                  (a) Subject to the  limitations  sct forth below,  Fuddruckers
agrees,   from  time  to  time  as  reasonably  required  by  LSF  (taking  into
consideration cost and the then remaining term of this Agreement),  to modernize
each Grill to LSF's  then  current  standards  and  specifications.  Fuddruckers
understands  and agrees that this  obligation is in addition to the need to make
repairs,  maintain  equipment and purchase new equipment.  No such modernization
will be required by LSF unless and until LSF,  Holding  and their  wholly  owned
affiliates  ("Affiliates")  have at that time  implemented  such  standards  and
specifications in at least twenty-five percent (25%) of the LA SALSA Restaurants
operated by them in the continental United States. No such modernization will be
required of Fuddruckers during the last two years of any Grill's operation under
this Agreement.

                  (b) In light of the  limited  menu to be served at the  Grills
and their  location  within  Fuddruckers  Restaurants,  the  parties  agree that
Fuddruckers  will not more than once  during  any twelve  (12)  month  period be
obligated to make  modernization  expenditures of more than $15,000 per Grill or
to make any such change if Fuddruckers and LSF agree in the reasonable  exercise
of their  business  judgment  that tho  expenditures  would not be  commercially
reasonable in light of the remaining term of this  Agreement.  The parties agree
that the foregoing  $15,000 limit may be increased during the term hereof by any
increases in the Cost of Living  index  determined  by  reference to  nationwide
United States governmental  statistics as compared to those existing at the date
of this Agreement.

                                 SECTION 6: FEES

         6.1 Fees.  As  partial  consideration  for the  rights  granted by LSF,
Fuddruckers will pay LSF:

                  (a) (i) For each of the first  twenty  Restaurants  at which a
Grill is  opened,  an  "Initial"  fee for  each  Grill in the  total  amount  of
$6,275.00  due on or  before  the  opening  of  such  Grill;  and  (ii)  for any
Restaurants  after the first twenty at which a Grill is opened, an "Initial" fee
for each Grill in the total amount of $3,600.00  due on or before the opening of
such Grill;


                  (b) A monthly  "License  Fee"  equal to five  percent  (5%) of
Gross Sales (as defined below) as payment to LSF for the continuing right to use
the LA SALSA Operating System and Marks; and

                  (c) A  "Marketing  Fund"  Fee  for  each  such  month  as  its
contribution to the Marketing Fund provided for in Section 7.3 below.

         6.2 No Fees  Refundable.  Fuddruckers  agrees that the fees referred to
above in Section 6.1 are not refundable in whole or part under any circumstances
and have been fully earned by LSF by the grant of this license.

         6.3 Payment of Fees.

                  (a)  Fuddruckers  agrees  to pay  LSF  the  License  Fees  and
Marketing  Fund Fees  provided  for above  monthly  in lump sum so that LSF will
receive all of such Fees within  fifteen (15)  calendar  days after the end each
month.  Fuddruckers  agrees that TIME IS OF THE ESSENCE regarding payment of all

                  (b) Fuddruckers agrees to pay the License Fees and Fees to LSF
by timely  mailing  or  delivering  of a or less of the  Restaurants  containing
Grills  are DAKA or  Fuddruckers  to a party not a member of the  Companies  (as
defined below), LSF may by written that the License Fees and Marketing Fund Fees
for paid by  automatic  direct  transfer  of funds.  Within  ten (10) days after
receipt of such notice,  the transferee  must furnish the  information,  execute
such  forms,  make  such  arrangements  and  complete  such  procedures  as  are
reasonably  necessary to establish  direct transfers from its account(s) to such
account(s)  as LSF may  designate  in  order to pay  directly  the  License  and
Marketing  Fund Fees  within  the  payment  period  referred  to above.  Without
limiting the  foregoing,  the  transferee  must obtain a telefax  machine and/or
computer point of sale system as designated by LSF and to make timely telefax or
modem reports to LSF of the sales and other  information  necessary to allow LSF
to cause such  transfers to be made and must  maintain  sufficient  funds in its
account(s) to allow timely  honoring of each payment to LSF by its bank or other
financial institution. LSF will require the transferee to specifically authorize
LSF to make such direct transfers of the License Fees and Marketing Fund Fees so
long as such  transfers are limited to amounts  computed with reference to sales
information furnished to LSF or with reference to good faith estimates by LSF.

                  (c)  Notwithstanding  when  Fees  are  required  to  be  paid,
Fuddruckers  agrees to provide written sales reports to LSF on a weekly basis as
reasonably  required  by  LSF so  that  LSF  may  maintain  current  information
regarding sales information.

                  (d) License  Fees and  Marketing  Fund Fees which are not paid
when due will bear  interest  from and after their  respective  due dates at the
rate of eighteen  percent (18%) per annum or the highest rate  permitted by law,
whichever is less.  Any late payment of any fees must be  accompanied  by a late
payment administrative charge of $25.00.


         6.4 Gross Sales.  The term "Gross Sales" as used in this Agreement will
mean the total of all cash or other form of  payment  ("Receipts")  received  by
Fuddruckers  for the  sale of LA  SALSA  food,  beverages  and  other  products,
including  promotional  items  or  for  catering  services  involving  LA  SALSA
products.  Gross  Sales  will  include  all  sales  of LA SALSA  items  that are
collected  through  any  FUDDRUCKERS  Restaurant  so long as they  are  directly
related to the Grill.  if a Grill does not  collect  Receipts  directly  for the
beverages  sold with LA SALSA food  products , the  allocation  of  beverages to
Gross Sales shall be computed  each month by applying  the  percentage  of sales
from Receipts of LA SALSA food products at the  Restaurant to the  percentage of
Receipts from all food  products at the  Restaurant  against the total  beverage
Receipts received during such month by such Restaurant.  Neither Gross Sales nor
Receipts  shall  include  (a) any sums  collected  and paid out for sales  taxes
levied on the sale of food,  beverages,  property or services,  (b) the proceeds
from the sale of a Grill' s used  equipment,  (c) meals  provided to Fuddruckers
employees  according to established  Fuddruckers  policies,  (d) sales for which
refunds are made due to customer dissatisfaction or (e) any discounts or coupons
which are applied against the full sales price.


         7.1 Marketing,  Promotion and  Advertising  Programs.  Recognizing  the
value of  marketing,  advertising  and  promotions  to enhance the  goodwill and
public image of the LA SALSA chain of  restaurants,  the parties  agree that LSF
will develop marketing,  promotion and advertising  programs designed to promote
and enhance the  collective  success of all LA SALSA  Restaurants  including the
Grills. It is expressly agreed that in all respects of such marketing, promotion
and advertising (such as type, quantity,  timing, placement and choice of media,
market areas and advertising agencies),  the decisions of LSF made in good faith
will be final and  binding.  In regard to all  advertising  and sales  promotion
programs,  both parties agree to cooperate  with each other and refrain from any
action which the other party may deem to be harmful to its image.

         7.2 Local or  Regional  Advertising.  Fuddruckers  agrees to spend on a
quarterly  basis a minimum  dollar amount equal to two percent (2%) of its Gross
Sales from the  Grills in  conducting  direct  advertising  and sales  promotion
programs for the Grills. All such programs must be approved in advance by LSF in
writing,  and such  expenditures  will  not  include  any  overhead  related  to
marketing or advertising.  LSF specifically  agrees that Fuddruckers may conduct
advertising that promotes the Grills in conjunction  with the  Restaurants.  LSF
may require  Fuddruckers to provide proof of all such  marketing,  promotion and
advertising expenditures.  Payments made to an Advertising Cooperative ("Co-op")
for the area in which a Grill is located, as provided for below, will be applied
towards Fuddruckers, required spending.


         7.3      Marketing Fund.

                  (a) LSF has  established  and maintains a marketing  Fund, and
Fuddruckers   agrees  that  its  purpose  is  to  maximize  the  general  public
recognition  and acceptance of LA SALSA  Restaurants.  Monies from the Marketing
Fund  must be  used to pay for  marketing,  promotion  and  advertising  program
development  such as, but not  limited  to,  costs and  expenses  related to the
employment of advertising  agencies,  payment of talent and residuals,  research
and  development,  design and  development of trademarks and logos,  creation of
materials,  promotions,  public  relations,  market  research  and  clearance of
marketing, advertising and promotional programs.

                  (b) In addition to the spending required by Section 7.2 above,
Fuddruckers  agrees to pay LSF a Marketing Fund Fee of one percent (1%) of Gross
Sales from  operating  the Grills for each payment  period as set forth above in
Section 6.

                  (c) LSF, at its sole discretion,  may at any time increase the
Marketing  Fund Fee in any  increments so long as the total  Marketing  Fund Fee
does not exceed a maximum of two percent (2%) of Gross Sales.

                  (d) LSF, Holding and their  wholly-owned  Affiliates will also
contribute  to the  Marketing  Fund the same  percentage of the Gross Sales from
their operations of LA SALSA Restaurants in the continental United States.

                  (e) LSF will  deposit  all  Marketing  Fund Fees in a separate
Marketing Fund account which is not considered an asset of LSF.

                  (f)  Fuddruckers  agrees  that LSF has so  obligation  to make
expenditures  for Fuddruckers or others which are equivalent or proportionate to
the  contributions  made to the Marketing  Fund or to ensure that any particular
Grill benefits directly or pro rata from any marketing program or advertising.

                  (g) It  negotiations on behalf of the Marketing Fund result in
payment by suppliers of allowances or rebates designated for the Marketing Fund,
all such funds will be paid promptly into the Marketing Fund.

                  (h) All monies in the Marketing  Fund,  including any interest
or other income  earned from the  investment  of such monies,  must be spent and
disbursed  only in accordance  with this Agreement and the Marketing Fund Policy
provided for in Section 7.4 below.

                  (i) LSF agrees to cause an annual  accounting of the Marketing
Fund and to make the results of such  accounting  available to Fuddruckers  upon
request.  If such  accounting is made by an  independent  accounting  firm,  the
expenses thereof shall be paid from the marketing Fund.


         7.4 Marketing Fund Policy. LSF may develop and modify from time to time
as  necessary  a  Marketing  Fund  Policy  which  will  include  procedures  and
guidelines for  disbursements and expenditures from the Marketing Fund and other
administrative procedures as LSF may deem necessary or appropriate.

         7.5 Temporary Investment.  LSF may temporarily invest any or all of the
monies held in the  Marketing  Fund from time to time at the sole  discretion of
LSF in accordance  with the Marketing Fund Policy.  All interest or other income
received  from such  investments  will be used by LSF to pay for the expenses of
administering the Marketing Fund pursuant to the Marketing Fund Policy. Interest
or income  received  from  temporary  investments  that  exceed  the  reasonable
expenses of  administering  the fund will be  considered  part of the  Marketing

         7.6      Advertising Co-op.

                  (a) LSF may  from to  time  at its  discretion  designate  any
geographical  area as a basis  for an  Advertising  Co-op  for  the  purpose  of
marketing,  advertising  and  promoting  LA  SALSA  Restaurants  in  that  area,
including the  restaurants  operated by Holding.  The Co-op will also serve as a
means of exchanging of ideas, sharing of information and problem solving.

                  (b)  Fuddruckers  agrees  to become a member of a Co-op at any
time a Grill is located within the designated area for such Co-op.

                  (c) For each such  Co-op,  Fuddruckers  agrees to execute  and
deliver any agreements or  undertakings  required by such Co-op, to make minimum
contributions as required by its members and to maintain Fuddruckers states as a
member in good standing of such Co-op at all times.

                  (d) The  contribution  to a Co-op  will be not  less  than one
percent  (it) or more than two  percent  (21) of Gross  Sales  unless  the Co-op
members agree to additional funding in accordance with established Bylaws.

                  (e) Fuddruckers agrees that a failure by Fuddruckers to comply
with a  properly  approved  requirement  or  decision  of such  Co-op  will be a
material default under this Agreement.

         7.7      Approval of Advertising.

                  (a)  All   advertising   copy  and  other  materials  used  by
Fuddruckers must be in strict compliance with the requirements  contained in the
Manuals and otherwise set forth by LSF.


                  (b) If Fuddruckers wishes to use other or modified  materials,
Fuddruckers  must submit to LSF, in each  instance and at least 15 business days
prior to first use, the proposed  advertising copy and materials for approval in
advance of  publication.  Fuddruckers may use only  advertising  materials which
have been approved in writing by LSF.

                  (c) In no  event  will  Fuddruckers,  advertising  for  Grills
contain any statement or material  which may be  considered  (i) in bad taste or
offensive  to the public or to any group of persons  or (ii)  defamatory  of any
person or an attack on any competitor.

         7.8 Grand Opening. Fuddruckers agrees to conduct for each Grill a grand
opening promotion as mutually agreed to in each case by LSF and Fuddruckers.


         8.1 Records.  Fuddruckers  will  maintain and preserve for a minimum of
three (3) years from the date of preparation full,  complete and accurate books,
records and accounts in accordance with generally accepted accounting principles
covering all of the  Restaurants at which a Grill is or has been  operated.  LSF
and DAKA will from time to time as  necessary  work  together  in good faith and
agree upon the use by Fuddruckers of the appropriate  electronic cash registers,
computer programs, bookkeeping and record keeping forms.

         8.2      Sales Reports.

                  (a)  Fuddruckers  agrees  to  provide  LSF with  weekly  Sales
Reports for each Grill  using such forms as are  mutually  agreed  upon  between
Fuddruckers  and LSF.  Fuddruckers  will transmit such reports by modem or other
electronic means as mutually agreed upon by the parties so that LSF will receive
each report within twenty-four hours after the end of each LSF sales week (which
currently  begins on Tuesday and ends at the close of business on the  following

                  (b)  Fuddruckers  will also provide LSF with Sales Reports for
each Grill  covering each  Fuddruckers  accounting  period and each  Fuddruckers
fiscal year.  Such reports will be sent to LSF within  thirty (30) calendar days
after each  accounting  period and ninety (90)  calendar  days after each fiscal
year,  respectively.  If the accounting  period does not cover the same weeks as
the Weekly Sales Reports, the report will include a reconciliation  showing each
week or partial week included in such report.

         8.3 Other Reports. In addition, if the ownership of Fuddruckers changes
to the extent  that there is a change of control  (as  defined  below),  LSF may
require additional reports and documents  regarding  operation of the Grills and
the  Restaurants at which Grills are located similar to what it then requires of
its LA SALSA franchisees, such as:


                  (a) Restaurant Profit and Loss Statements,  Balance Sheets and
Statements of cash Flows for each  accounting  period  designated by LSF,  which
information may be unaudited but must be certified by Fuddruckers to be true and
accurate  and which must be received by LSF not later than thirty (30)  calendar
days after the end of the accounting period as prescribed by LSF;

                  (b)  Annual  Balance  Sheet,  Profit  and Loss  statement  and
Statements of Cash Flow for each Restaurant,  which information may be unaudited
but must be certified by  Fuddruckers  to he true and accurate and which must be
received by LSF not later than ninety (90)  calendar  days after the end Of each
fiscal year;

                   (c) Sales and income tax reports covering the Grills; and

                   (d) Any  amendments or  corrections  of any of the foregoing,
which must be sent immediately to LSF following preparation.

         TIME IS OF THE ESSENCE with respect to  completion  and  submission  of
each such document.

                        SECTION 9: AUDITS AND INSPECTIONS

         9.1 Audit  Rights.  Fuddruckers  agrees that LSF will at all times have
the following audit rights:

                  (a)  Representatives  of LSF may on a reasonable basis review,
inspect and copy any and all accounting  records and other such documents as may
be reasonably  necessary to audit  Fuddruckers,  compliance with this Agreement,
including documents held or maintained by other affiliates of Fuddruckers.

                  (b) If any such  inspection  or audit  reveals  that the Gross
Sales  reported in any report or statement  are less then the actual Gross Sales
calculated during such inspection, then Fuddruckers will immediately pay LSF the
additional  amount of fees owing by reason of the  understatement of Gross sales
previously  reported,  together with interest as provided in Section 6.3. In the
event that any report or statement  by  Fuddruckers  understated  gross sales by
more than three percent (3%) of the actual Gross Sales  calculated  during LSF's
inspection, Fuddruckers will, in addition to paying for the additional fees, pay
and  reimburse  LSF for any and all  expenses  incurred in  connection  with its
inspection, including, but not limited to, reasonable accounting and legal fees,
together  with  interest if such fees are not timely  reimbursed.  Such payments
will be without  prejudice  to any other  rights or remedies  LSF may have under
this Agreement or otherwise.

                   (c) In addition to the above, in the event that the ownership
of  Fuddruckers  changes to the extent  there is a change of control (as defined
below),  representatives of LSF may inspect and copy such other documents as may
be reasonably necessary to confirm Fuddruckers, compliance with this Agreement.


         9.2  Inspection.  LSF will  have the right at any time and from time to
time without notice to have its  representatives  enter the Restaurant  premises
for the purpose of inspecting  its condition and its  operations  for compliance
with LSF's requirements  contained in this Agreement and in the Manuals, and for
any other reasonable purpose connected with the operation of a Grill.

         9.3 Books and Records.  Without limiting the generality of Section 9.1,
LSF  representatives  will have the right at all times  during  normal  business
hours  to  confer  with  Restaurant  employees  and  customers  and  to  inspect
Fuddruckers,  books,  records and sales tax returns or ouch portions  thereof as
pertain to the operation of any Grill.

                           SECTION 10: INDEMNIFICATION

         10.1     Indemnification.

                  (a) Fuddruckers will indemnify LSF, Holding their subsidiaries
and other affiliates and its or their officers,  directors,  employees,  agents,
affiliates, successors and assigns from and against (i) any and all claims based
upon,  arising out of or in any way related to the operation or condition of any
part  of  the  Restaurants  or  Restaurants'   premises,   the  conduct  of  the
Restaurants,  businesses,  the  ownership  or  possession  of real  or  personal
property, any negligent act, misfeasance or nonfeasance by Fuddruckers or any of
its  agents,  contractors,   servants  or  employees,  and  including,   without
limitation,  all obligations of Fuddruckers  incurred pursuant to any provisions
of this  Agreement and (ii) any and all fees  (including  reasonable  attorneys,
fees),  costs  and  other  expenses  incurred  by or on  behalf  of  LSF  in the
investigation of or defense against any and all such claims.

                  (b) LSF and Holding will indemnify DAKA and Fuddruckers, their
subsidiaries  and  other  affiliates  and  its  or  their  officers,  directors,
employees,  agents, affiliates,  successors and assigns from and against any and
all claims based upon, arising out of or in a any way related to (i) claims that
the  operation of any Grill  violates  territorial  exclusivity  granted to a LA
SALSA franchisee or developer by LSF or Holding,  (ii) claims that the operation
of any Grill breaches an express or implied  contractual  obligation owed by LSF
or Holding to any LA SALSA  franchisee  or  developer  or (iii)  claims that the
operation of any Grill  constitutes  tortious  conduct against any such LA SALSA
franchisee  or  developer  so  long as the  operation  of such  Grill  has  been
expressly approved by LSF. such  indemnification  shall include any and all fees
(including  reasonable attorneys' fees), costs and other expenses incurred by or
on behalf of LSF in the  investigation  of or defense  against  any and all such


                              SECTION 11: INSURANCE

         11.1  Insurance.  Fuddruckers  agrees to maintain at all times adequate
insurance regarding the operation of each Restaurant at which a Grill is located
consistent  with  its  general  policy   regarding   insurance  at  all  of  its
Restaurants. Such policy may include self-insurance so long as it is adequate to
ensure continued  operation of the Grills.  Fuddruckers will take such action as
is necessary to cause LSF and Holding to be named as additional  insureds in all
liability policies covering the Grills so that Fuddruckers, LSF and Holding will
at all times be protected  against any and all loss,  liability  or  occurrence,
arising out of or in connection with the construction, condition, operation, use
or occupancy of the Grills, the Restaurants or the Restaurants' premises. In all
events the insurance policy or policies will include (a)  comprehensive  general
liability  insurance,   including  product  liability  coverage,  in  an  amount
sufficient  to satisfy the  requirements  of the  umbrella  liability  insurance
policy required below, (b) liquor liability coverage (if any alcoholic beverages
are offered for sale from the  Restaurant)  , (c) umbrella  liability  insurance
providing  a  minimum  of  $5,000,000  additional  coverage,  and  (d)  workers,
compensation  insurance as required by applicable law. Fuddruckers obligation to
maintain  such  insurance  will  not be  limited  in any  way by  reason  of any
insurance  maintained by LSF. LSF may require  additional  insurance if there is
any change in control of Fuddruckers or the Grill.

         11.2  Certificates.  Upon  obtaining  the  insurance  required  by this
Agreement and on each policy renewal date  thereafter,  Fuddruckers will deliver
to LSF for its approval  certificates of insurance  showing  compliance with the
requirements of this Section 11. Such certificates must state that the policy or
policies  will not be  canceled  or altered  without at least  thirty (30) days,
prior written notice to LSF.  Maintenance of such insurance and the  performance
by  Fuddruckers  of its  obligations  under  this  Section  11 will not  relieve
Fuddruckers  under the  indemnity  provisions  of this  Agreement  or limit such

                              SECTION 12: COVENANTS

         12.1 Debts and Taxes.  Fuddruckers will pay promptly when due all debts
and other  obligations  incurred  directly or indirectly in connection  with the
Restaurants and their operation;  including,  without limitation,  all taxes and
assessments  that may be assessed against the  Restaurants'  land,  building and
other improvements,  equipment, fixtures, signs, furnishings and other property,
and all undisputed liens and  encumbrances of every kind and character  incurred
by  or on  behalf  of  Fuddruckers  in  conducting  the  Restaurants'  business.
Fuddruckers  may  contest any ouch debt or  obligation  in good faith so long as
such  contest  will  not  result  in the  loss  of the  Restaurant  premises  or
interruption of the Restaurant's operation.

         12.2 Compliance with Laws. Fuddruckers will at its own cost and expense
promptly  comply  with all laws,  ordinances,  orders,  rules,  regulations  and
requirements  of all federal,  state and municipal  governments  and appropriate
departments,  commissions,  boards and offices  thereof.  Without  limiting  the
generality of the foregoing,  Fuddruckers will abide by all applicable rules and
regulations of any Public Health Department.


                             SECTION 13: TRADEMARKS

         13.1 Ownership.  Fuddruckers agrees that LSF has the sole and exclusive
right (except for rights granted under existing and future  franchise or license
agreements)  to use the Marks in  connection  with the  products and services to
which they are or may be applied by LSF.  Fuddruckers  represents,  warrants and
agrees that neither  during the term of this  Agreement nor after its expiration
or other termination will Fuddruckers  directly or indirectly  contest or aid in
contesting the validity, ownership or use of the Marks by LSF or take any action
whatsoever in derogation of the rights claimed therein by LSF.

         13.2 Goodwill. Nothing contained in this Agreement will be construed to
vest in  Fuddruckers  any  right,  title or  interest  in or to the  Marks,  the
goodwill now or hereafter associated therewith or any right in the design of any
Grill,  other than the rights and license  expressly  granted  herein during the
term hereof.  Any and all goodwill  associated  with or  identified by the Marks
will inure  directly and  exclusively to the benefit of LSF,  including  without
limitation any goodwill resulting from operation and promotion of the Grills.

         13.3 Use of Marks.  Fuddruckers  will not use the  Marks in  connection
with any  statement  or material  which may,  in the  judgment of LSF, be in bad
taste or inconsistent  with LSF's public image, or tend to bring  disparagement,
ridicule or scorn upon LSF, the Marks or the goodwill associated therewith.

         13.4 Changes in Marks; Protection.  LSF will have the right at any time
and from time to time upon notice to Fuddruckers to make additions to, deletions
from,  and  changes  in the  Marks,  or any of  them,  all of  which  additions,
deletions and changes will be as effective as if they were  incorporated in this
Agreement. All such additions, deletions and changes will be made in good faith,
on a reasonable basis and with a view toward the overall beat interest of the LA
SALSA  Restaurants.  LSF will protect and preserve the integrity and validity of
the  marks  by  taking  the  actions  deemed  by  LSF in  its  discretion  to be
appropriate in the event of any apparent infringement of the Marks.

         13.5 Infringements.  Fuddruckers will notify LSF promptly of any claims
or charges of trademark infringement against LSF or Fuddruckers,  as well as any
information  Fuddruckers  may have of any suspected  infringement  of the Marks.
Fuddruckers  will take no action with regard to such  matters  without the prior
written  approval of LSF and will  cooperate in a manner  expressly  approved by


                              SECTION 14: TRANSFER

         14.1 Personal Contracts; Definition.

                  (a)   Fuddruckers   agrees   that  a  material   part  of  the
consideration for LSF's entering into this Agreement is the personal  confidence
reposed in Fuddruckers and its management.  No person will succeed to any of the
rights of  Fuddruckers  under  this  Agreement  by virtue  of any  voluntary  or
involuntary  proceeding  in  bankruptcy,  receivership,  attachment,  execution,
assignment  for the benefit of  creditors,  other legal  process or transfer not
expressly authorized by LSF.

                  (b)  Fuddruckers or DAKA may transfer  interests  herein among
members of the DAKA Family of Companies so long as DAKA and  Fuddruckers  remain
fully  responsible  for  compliance  with this  Agreement and LSF is given prior
written notice of such transfer.

                  (c) For  purposes  of  this  Agreement,  the  DAKA  Family  of
Companies is defined as any  corporation,  partnership,  joint  venture or other
entity more than fifty percent (50%) of which is owned directly or indirectly by

         14.2 Material Breach. Any attempt by Fuddruckers to transfer any of its
rights or interest  under this Agreement  will  constitute a material  breach of
this  Agreement,  and in such  event LSF will have the right to  terminate  this
Agreement  upon  written  notice  to  Fuddruckers.  LSF will not be bound by any
attempted  transfer in any manner  whatsoever,  by law or  otherwise,  of any of
Fuddruckers, rights or interests under this Agreement.

         14.3 FUDDRUCKERS Franchisees. While the parties intend for LSF to grant
Grill licenses to FUDDRUCKERS franchisees as part of this program, the terms and
conditions  of such  licenses have not been agreed upon between these parties at
the time of this Agreement.  The parties will negotiate in good faith during the
Initial Term to reach mutual agreement in regard to such licenses, including any
transfers by Fuddruckers to a franchisee of an existing Restaurant  containing a
Grill. No such transfer will be allowed hereunder until such time.

         14.4  Assumption.  This  Agreement  and  LSF's  rights,  interests  and
obligations  hereunder will inure to the benefit of any entity which succeeds to
the business of LSF and assumes the  obligations of LSF hereunder.  Subject only
to notice thereof, Fuddruckers hereby consents and agrees to any such transfer.

         14.5 Definition of "Change of Control".  The parties agree that for all
purposes of this Agreement,  a "change of control" of ownership shall be defined
as any  change of more than  fifty  percent  (50%) of the  beneficial  or record
ownership of Fuddruckers and Fuddruckers or the surviving entity has a net worth
which is less  than  that of DAKA on a  consolidated  basis as of the  Effective



         15.1     Termination for Cause.

                  (a) LSF  will  have  the  right to  terminate  this  Agreement
immediately  upon written notice to Fuddruckers if a petition in bankruptcy,  an
arrangement  for the benefit of creditors or a petition  for  reorganization  is
filed by or against Fuddruckers,  or if Fuddruckers will make any assignment for
the benefit of  creditors,  or if a receiver or trustee is appointed for any one
of the  Restaurants,  unless  remedied to the  satisfaction of LSF within twenty
(20) days.

                  (b) In the event of any  material  failure by  Fuddruckers  to
make its payment obligations hereunder, LSF may terminate this Agreement in full
following  ten (10) days  written  notice to  Fuddruckers  and DAKA  unless such
delinquency has been cured within such ten day period.

                  (c) LSF may  terminate the right of any Grill to operate under
his  Agreement  in the event of any  substantial  non-monetary  default  of this
Agreement as applied to such Grill. Fuddruckers will have the right to cure such
default  during the period ending thirty (30) days after receipt from LSF or its
authorized  representative  of a written notice of default,  except that if such
default cannot by its nature reasonably be cured within such thirty-day  period,
and so long as Fuddruckers is diligently taking all action reasonably  necessary
to effect such cure, the cure period will be extended to a reasonable  amount of
time to effect such cure.  If such  default has not been cured by the end of the
applicable cure period,  this Agreement will automatically  terminate as to such

                  (d)  if a  non-monetary  default  is a  material  default  (as
defined in Section  2.1 above) and that  material  default has not been cured by
the  end of the  applicable  cure  period,  this  Agreement  will  automatically
terminate  as to such Grill,  and  Fuddruckers  agrees to pay LSF as  liquidated
damages the amount of $25,000.00 for each Grill in such material  default,  with
the parties  agreeing that actual  damages are extremely  difficult to ascertain
for any such default and that the foregoing  liquidated damages are a reasonable
estimate thereof and for the costs to LSF of enforcing this Agreement.

                  (e) if at any time  one-fifth  (20%) of the  Grills  operating
under this  Agreement  have  failed  during the  applicable  cure period to cure
material  defaults  under  subsection  (d)  above  or to pay LSF its  liquidated
damages  thereunder,  LSF may immediately  terminate this Agreement in full upon
written notice to DAKA and Fuddruckers.

                  (f) In the  event  of any  termination  in  full  or as to any
Grill,  LSF will have no further  obligation  under  Section 1.4 above as to any
Restaurant no which such termination applies.


         15.2 Requirements Upon Termination. Upon the expiration, termination or
cancellation  for  whatever  reason  of the  operation  of a  Grill  under  this
Agreement, Fuddruckers must in regard to each such Grill:

                   (a)  immediately  discontinue  the use of the  marks  and the
Operating System, including all LA SALSA recipes;

                   (b) unless LSF  consents  to the  contrary,  remove the Marks
from  all  buildings,  signs,  fixtures  and  furnishings  in  each  Restaurant,
eliminate  entirely  LSF's  trade  dress and alter and paint the  Grills  with a
design and color which is basically  different from LSF's authorized  design and
painting  schemes so that there will no longer be any  indication  to the public
that the Restaurant was used to sell LA SALSA products.  If Fuddruckers fails to
make or cause to be made any such change  within  thirty (30) days after written
notice, LSF will have the right to enter upon any Restaurant  premises,  without
being deemed guilty of trespass or any other tort,  and make or cause to be made
such changes,  and  Fuddruckers  will  reimburse  LSF for all of its  reasonable
expenses immediately following demand;

                   (c) return to LSF all copies of the manuals,  advertising and
promotional  materials and other  proprietary  information  relating to LA SALSA
Restaurants; and

                   (d) not thereafter use any identifying characteristic that is
in any way  associated  with LA SALSA or  similar  to those  associated  with LA
SALSA, or operate or do business under any name or in any manner that might tend
to give the public the  impression  that  Fuddruckers is or was a licensee of or
otherwise associated with LSF and LA SALSA.

                            SECTION 16: MISCELLANEOUS

         16.1 No Effect. The waiver by either party of any breach or default, or
series of breaches or defaults,  of any term, covenant or condition herein or of
any same or similar term,  covenant or condition in any other agreement  between
LSF and Fuddruckers  will not be deemed a waiver of any subsequent or continuing
breach  or  default  of the same or any other  terms,  covenants  or  conditions
contained  in  this  Agreement,  or in  any  other  agreement  between  LSF  and

         16.2 Right and  Remedies.  All rights and  remedies  of a party will be
cumulative  and not  alternative,  in addition to and not exclusive of any other
rights or remedies  provided  for herein or which may be  available at law or in
equity in case of any breach,  failure or default or threatened breach,  failure
or default of any term, provision or condition of this Agreement. All rights and
remedies  will be  continuing  and not exhausted by any one or more uses thereof
and  may be  exercised  at any  time or from  time  to time as  often  as may be
expedient  Any option or  election  to  enforce  any such right or remedy may be
exercised or taken at any time and from time to time.  The expiration or earlier
termination of this Agreement will not discharge or release Fuddruckers from any
liability or obligation  then accrued or any liability or obligation  continuing
beyond  or  arising  out  of the  expiration  or  earlier  termination  of  this


         16.3  Consents.  Whenever  the consent of a party is sought or required
hereunder, such consent will not be unreasonably withheld.

         16.4 Partial  Invalidity.  If any part of this  Agreement  will for any
reason be declared  invalid,  unenforceable or impaired in any way, the validity
of the  remaining  portions  will not be affected  thereby,  and such  remaining
portions  will  remain in full  force and effect as if this  Agreement  had been
executed  with  such  invalid  portion  eliminated.  it is hereby  declared  the
intention of the parties that they would have executed the remaining  portion of
this  Agreement  without  including  therein  any such  portions  which might be
declared invalid.

         16.5  Arbitration;  Jurisdiction.  Except as set forth in this  Section
16.5,  any dispute  between the parties which involves this Agreement and cannot
be resolved by the parties  themselves will be submitted to binding  arbitration
in accordance with the rules of the American Arbitration  Association applicable
to  commercial  arbitrations.  Such  arbitration  will be held within either the
county where LSF's executive headquarters are located or the county where DAKA's
executive headquarters are located (the "Home Counties"),  and judgment upon the
decision of the arbitrator may be entered in any court having  jurisdiction over
the matter. However, arbitration will not be used for any dispute which involves
Fuddruckers,  continued usage of any of the Marks or the Operating System or any
issue involving injunctive relief against any party, all of which issues will be
submitted  initially  to a court  within a Home  County.  The parties  expressly
consent to  personal  jurisdiction  in either Home County as set forth above and
agree that such court(s) will have exclusive  jurisdiction  over any such issues
not subject to arbitration.

         16.6  Attorneys'  Fees. If either party  initiates any  arbitration  or
other legal proceeding which involves issues arising out of this Agreement,  the
prevailing party in such action will be paid its reasonable attorneys,  fees and
costs by the other party.

         16.7  Governing  Law.  The  parties  agree that the law of the State of
California will apply to the  construction and enforcement of this Agreement and
govern all questions which arise with reference hereto.

         16.8  Notices.  All  notices  and  other  communications   required  or
permitted to be given  hereunder  will be deemed given when delivered in person,
sent by  telefax  to  such  person's  telefax  number,  sent  by an  established
overnight  delivery  service or mailed by registered or certified mail addressed
to the  recipient  at the address set forth  below,  unless that party will have
given such written  notice of change of address to the sending  party,  in which
event the new address so specified will be used. It mailed, such notice shall be
deemed to have been received three days after mailing,  and if sent by overnight
delivery,  such notice shall be deemed to have been  received the day  following


LSF and                               La Salsa Franchise, Inc.
Holding:                              11601 Santa Monica Blvd.
                                      Los Angeles, CA  90025
                                      ATTN:  The President

FUDDRUCKERS:                          Fuddruckers, Inc.
                                      One Corporate Plaza
                                      55 Ferncroft Road
                                      Danvers, MA  01923-4001
                                      ATTN:  General Counsel

DANA:                                 DANA International, Inc.
                                      One Corporate Plaza
                                      55 Ferncroft Road
                                      Danvers, MA  01923-4001
                                      ATTN:  Sr. VP & General Counsel

         16.9 Terms and Headings. All terms used in this Agreement regardless of
the number and gender in which they are used,  will be deemed and  construed  to
include any other number,  singular or plural, and any other gender,  masculine,
feminine or neuter,  as the context or sense of this Agreement may require,  the
same as if such  words  had  been  written  in this  Agreement  themselves.  The
headings inserted in this Agreement are for reference purposes only and will not
affect the  construction of this Agreement or limit the generality of any of its

         16.10 Entire  Agreement.  This Agreement and the documents  referred to
herein  constitute  the entire  agreement  between the parties and supersede and
cancel  any  and  all  prior  and  contemporaneous  agreements,  understandings,
representations,  inducements and statements, oral or written, of the parties in
connection with the subject matter hereof.

         16.11 Amendment or Modification. Except as expressly authorized herein,
no amendment or  modification  of this Agreement will be binding unless executed
in writing by both LSF and Fuddruckers.

         16.12  Counterparts.  This  Agreement  may be executed in any number of
counterparts,  each of which shall be deemed an original of this Agreement,  but
all of which together shall constitute one and the same instrument.

         16.13  Facsimile  Signatures.  The parties  agree that signed copies of
this  Agreement  sent  to the  other  parties  by  telefax  or  other  facsimile
transmission  will be  considered  binding on such signing  party the same as if
delivered  personally.  Each  party  will  thereafter  send to each of the other
parties an originally signed copy of this Agreement for such party's records.


         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
day and year first above written.

FUDDRUCKERS:                                         FUDDRUCKERS, INC.


DAKA:                                                DAKA INTERNATIONAL, INC.


LSF:                                                 LA SALSA FRANCHISE, INC.


HOLDINGS:                                            LA SALSA HOLDING CO.


                                                                     EXHIBIT A-1
                         FUDDRUCKERS/LA SALSA LOCATIONS
                               (February 14, 1996)

1.       Park Plaza Center
         340 Third Avenue
         Chula Vista, CA 91910

2.       5500 Grossmont Center
         La Mesa, CA 92041

3.       Hastings Ranch Plaza
         3883 E. Foothill Boulevard
         Pasadena, CA 91107

4.       Lakewood Center Mall
         5229 North Clark St.
         Lakewood, CA 90714


                                                                     EXHIBIT A-2

                                    (To Come)


                                                                       EXHIBIT B

                                    (To Come)


                                                                       EXHIBIT C

                                February 14, 1996


3440 Galleria Circle #135
Birmingham, AL  35244


Rolling Hills Plaza SC #050
2549 Pacific Coast Highway
Torrance, CA  91107

Park Plaza Center #055
340 3rd Avenue
Chula Vista, CA  91941

Lakewood Center Mall #078
5229 North Clark Street
Lakewood, CA  90714


240 Perimeter Center
Parkway #015
Atlanta, GA  30060

Peachtree Corners #065
3384 Holcombe Bridge Road
Norcross, GA  30092

Northlake Tower Festival
3953 La Vista Road
Tucker, GA  30084

3953 La Vista Road
Tucker, GA  30084

1086 S. Baxter Street #185
Athens, GA  30606

Gwinnett Mall #220
2180 Merchants Way
Duluth, GA  30136


                                January 17, 1996

Town Center Mall #223
2708 Town Center Drive
Kennesaw, GA  30144

6360 Northpoint Parkway #233
Alpharetta, GA  30210


1500 Branding Lane #067
Downes Grove N. IL  60515

7731 Lemont Road #129
Downers Grove, S. IL 60515

1000 Rohlwing #188
Addison, IL 60101

4250 Fox Valley Center Drive #201
Aurora, IL 60504

1538 Clavey Road #057
Highland Park, IL 60035

300 Town Center #090
Matteson, IL 60443

1990 River Oaks Drive #105
Calumet City, IL 60409

1151 E. Dundee Road #134
Palatine, IL 60067

15756 South Harlem Avenue #213
Orland Park, IL 60452

(Barrington Road) #240
395 Barrington Road
Schaumburge, IL 60193



95 West 81st Avenue #226
Merrillville, IN  46410


Fuddruckers Express Care #259
1050 Southtown Drive
Waterloo, IA  50702


(Turfway) #239
135 Hansel Avenue
Florence, KY  41042


Annapolis Restaurant Park #065
175 Jennifer Road
Annapolis, MD  21401

125 Market Street #143
Baltimore, MD  21202

1300 Rockville Pike #174
Rockville, MD 20852

17111 Darnestown Road #218
Gaithersburg, MD 20878

1700 Riverstown Road #247
Pikesville, MD  21208


(City Place) #150
27 Stuart Street
Boston, MA  02116

900 Broadway #151
Saugus, MA  01906



4061 28th Street SE #166
Kentwood, MI  49512


3801 West 77th Street #043
Bloomington, MN  55435

2740 N. Snelling Avenue #060
Roseville, MN 55113

Park Place W. Office Center #073
6445 Wayzata Boulevard
St. Louis Park, MN 55337

8955 Spring Brook Road #242
Coon Rapids, MN 55433

5800 Shingle Creek Parkway #248
Brooklyn Center, MN 54430


10752 Sunset Plaza #132
St. Louis, MO 63127

2175 Barrett Station Road #141
St. Louis, MO  63131

12333 Dorsett Road #207
Maryland Heights, MO 63043


(Beechmont) #228
7705 Five Mile Road
Cincinati, OH 45230

(Winton Rd) #230
11992 Chaser Plaza Drive
Forest Park, OH 45740


(Fields Ertel) #237
9996 Escott Drive
Mason, OH 45040

(Glenway) #238
6421 Glenway Avenue
Cincinnati, OH 45211

(Rookwood Pavilion( #245
2692 Madison Road Suite 3K
Norwood, OH 45206

(Crosswoods) #266
121 East Campus View Blvd.
Columbus, OH 43234


8602 Botts Lane #001
San Antonio, TX 78216

3100 Chimney Rock #002
Houston, TX 77056

9845 IH-10 West #003
San Antonio, TX 78230

2700 West Anderon Lane #004
Austin, TX 78757

(Willowbrook) #005
7611 FM 1960 West
Houston, TX 77070

(Greens Road) #007
403 Greens Road
Houston, TX 77060

2040 Nasa Road One #008
Clearlake, TAX 77058

855 Normandy #009
Houston, TX 77015


(Brodie Oaks) #011
4024 South Lamar
Austin, TX 78704

2475 Kirkwood #013
Houston, TX 77077

11950 Kurland #026
Houston, TX 77034

3644 Irving Mall #063
Irving, TX 75062

115 Alamo Plaza #084
San Antonio, TX 78205

West Park Plaza (Ingram)
6759 N.W. Loop 410
San Antonio, TX 78238

2205 North Central
Expressway #118
Suite 100
Plano, TX 75075

5080 Spectrum Drive #124
Suite 111W
Dallas, TX 75248

2290 Buckthorne Place #024
Woodlands, TX 77381

3301 FM 1960 West #200
Houston, TX 77068

10500 Town & Country #231
Houston, TX 77024

4360 Kingwood Drive #232
Kingwood, TX 77339

13010 N.W. Freeway #246
Houston, TX 77040


(Copperfield) #269
7250 Highway 6 North
Houston, TX 7095


8317 West Broad Street #079
Richmond, VA 23229

4300 Backlick Road #083
Annandale, VA 22003

4625 Virginia Beach Blvd. #114
Virginia Bch., VA 23462

6201 Arlington Blvd., #142
Falls Church, BA 22011

1030 Elden Street #177
Herndon, VA 22070

3575 Chain Bridge Rd. #199
Fairfax, VA 22030

4141C Duke Street #209
Alexandria, VA 22134

1105 Merchants Way #243
Chesapeake, VA 23328

773 South Park Blvd. #249
Colonial Heights, VA 23834

101 Regal Avenue #250
Newport News, VA 23602

101 Midlothian Turnpike #260
Midlothian, VA 23235

2871 Plank Rd. #252
Fredericksburg, VA 22407


(Potomac Mills) #264
14075 Shoppers Best Way
Woodbridge, VA 22193


160 West Bluemound #053
Brookfield, WI 53005


                                UNDER DEVELOPMENT

         2400 Chesapeake Square Ring Rd., Chesapeake, VA 23321

         11825 Technology Dr., Eden Prarie, MN 55344

         6146 Cleveland Avenue, Columbus, OH 43231

         14500 Weaver Lake Road, Maple Grove, MN 55231

         3586 West Dublin Granville Road, Columbus, OH 43235

         5271 East Main St., Columbus, OH 43213

         Crossroads Shopping Center, Turnpike Street, No. Andover, MA 01845

         1915 Scenic Highway (Presidential Market Ctr.), Snellville, GA 30278

         6607 135 Frontage Rd., North Bound, Austin, TX 78752

         3929 Southwest Freeway, Houston, TX 77027

         Turnpike Street, Rout 139, Stoughton Crossing, Stoughton, MA (zip N/A)

         Eagan Promenade

         Westview Restaurant Park, Frederick, MD

         Quarry Square Mall, Milford, MA

         Lakeside Shopping Center, Columbia, MD

         Morse Rd. and I-270, Easton, OH