Exhibit 10

GUARANTY

1. In order to induce The Huntington National Bank, a Michigan banking
corporation (“Bank”), to extend credit and other financial accommodations to
ROBERT E. SCHERMER, JR., whose address is 475 Golf Road, Grand Rapids, Michigan
49546 (“Debtor”), which credit and financial accommodations will be used by
Debtor to acquire stock from Guarantor, together with other valuable
consideration, the receipt and adequacy of which are hereby acknowledged the
undersigned, MERITAGE HOSPITALITY GROUP INC., a Michigan corporation, with its
principal place of business located at 1971 East Beltline, N.E., Suite 200,
Grand Rapids, Michigan 49525 (“Guarantor”), absolutely, unconditionally, and
irrevocably guarantees prompt payment when due and at all times in the future of
any and all indebtedness and liabilities of every nature and kind of Debtor to
Bank pursuant to a promissory noted dated March 1, 2002 in the original
principal amount of Five Hundred Thirty-Eight Thousand Nine Hundred Dollars
($538,900.00) (“Indebtedness”) a copy of which is attached hereto. This Guaranty
shall apply only to the Indebtedness and shall terminate upon the full
satisfaction of the Indebtedness. If the Debtor repays any portion of the
principal of the Indebtedness and subsequently borrows from Bank the amount of
principal that was repaid, the Indebtedness shall not include the principal
amount which Debtor subsequently borrows from Bank.

2. Guarantor shall reimburse Bank for all costs, reasonable attorney fees, and
other expenses at any time expended or incurred by Bank in collecting or
attempting to collect the Indebtedness or in enforcing this Guaranty or in
realizing upon any security for this Guaranty.

3. This Guaranty’s effectiveness is not subject to the satisfaction of any
conditions, including without limitation the execution of this or another
Guaranty or the granting of any other security by any other person, firm, or
corporation. Bank may grant or continue credit to Debtor from time to time
without giving notice to or obtaining Guarantor’s consent. Bank shall not be
obligated at any time, whether in connection with the granting of credit to
Debtor or otherwise, to make any factual disclosure to Guarantor. This includes,
without limitation, any disclosure concerning Debtor’s financial condition,
assets, liabilities, activities, operations, or the status of the Indebtedness
or of any other security for the Indebtedness. The execution of this Guaranty by
Guarantor does not create any obligation or duty of Bank to grant or continue
credit to Debtor.

4. Bank in its sole discretion may, without affecting, impairing, or reducing
this Guaranty, (a) apply payments or collections received from any source to the
payment of indebtedness other than the Indebtedness, even though Bank could have
applied those payments to the Indebtedness, unless the Debtor designates in
writing at the time payment is made that such payment is to be applied to the
Indebtedness, and (b) apply payments or collections received from Guarantor or
from any present or future security for this Guaranty to any liability of
Guarantor under this Guaranty or to any liability of Guarantor for payment to
Bank of any other indebtedness, unless the Guarantor designates in writing at
the time payment is made that such payment is to be applied to the Indebtedness.
Any payments or collections that Bank applies to the liability of Guarantor
under this Guaranty shall be applied to costs or expenses described in paragraph
2 above, to the interest on or principal of the Indebtedness, or to other
components of the Indebtedness, all in the manner that Bank in its sole
discretion shall determine.

5. Unless and until the Indebtedness is paid in full, Guarantor waives any and
all claims and rights (whether arising in equity, at common law, or under a
statute or agreement) of subrogation, contribution, indemnity, and exoneration
(a) against Debtor or any other person liable for payment of all or any part of
the Indebtedness or (b) as to any security for the Indebtedness.

6. Guarantor warrants and represents to Bank that (a) no representations or
agreements of any kind have been made to Guarantor which would limit or qualify
in any way the terms of this Guaranty; (b) Guarantor has not and will not,
without the prior written consent of Bank, sell, lease, assign, encumber,
hypothecate, transfer or otherwise dispose of all or substantially all of
Guarantor’s assets or any interest therein unless and until the Indebtedness is
paid in full; (c) upon Bank’s request, Guarantor will provide Bank Guarantor’s
financial statements in the form that such statements are filed with the
Securities and Exchange Commission; (d) no material adverse change has occurred
in Guarantor’s financial condition since the date of the most recent financial
statements provided to Bank; (e) Bank has made no representation to Guarantor as
to the credit worthiness of Debtor; (f) all financial statements and other
information concerning Guarantor including, but not limited to, information
concerning restrictions on the Debtor’s ability to sell shares of stock issued
to him by Guarantor, furnished to Bank are true and correct in all material
respects; (g) the execution, delivery, and performance of this Guaranty by
Guarantor will not violate any law, rule, judgment, order, agreement, or
instrument binding upon Guarantor, nor require the approval of any public
authority or other third party; and (h) this Guaranty constitutes the valid and
binding obligation of Guarantor, enforceable in accordance with its terms.

7. Guarantor waives (a) notice of the acceptance of this Guaranty and of the
extension or continuation of all or any part of the Indebtedness; (b)
presentment, protest, notice, demand, or action with respect to any default in
payment of all or any part of the Indebtedness and with respect to any default
by Guarantor in Guarantor’s obligations under this Guaranty; and (c) any right
to require Bank to sue Debtor, any other guarantor, or any other person
obligated with respect to all or any part of the Indebtedness, or to foreclose
or realize upon any security for all or any part of the Indebtedness. Anything
in this paragraph 7 or other paragraphs of this Guaranty to the contrary
notwithstanding, Bank shall provide written notice to Guarantor of the
occurrence of any default with respect to the Indebtedness, and Guarantor shall
have a period of five (5) business days from receipt of such notice to cure, or
cause Debtor to cure, such default before Guarantor shall be required to pay any
sums to Bank pursuant to this Guaranty. In the event that Guarantor satisfies
the Indebtedness in its entirety, Guarantor shall be subrogated to all of Bank’s
rights with respect to the Indebtedness including any collateral pledged
therefor.

8. Except as otherwise provided herein, this Guaranty may not be terminated or
revoked without Bank’s prior written consent. If this Guaranty is terminated or
revoked, it shall continue in effect as to all Indebtedness incurred, arising,
or committed for before the termination or revocation, including any extensions,
renewals, or modifications of such Indebtedness made after the termination or
revocation.

9. The validity and enforceability of this Guaranty shall not be impaired or
affected by any act or omission by Bank (whether occurring before or after
receipt by Bank of notice of termination of this Guaranty) with respect to all
or part of the Indebtedness or any agreement relating to it, or with respect to
any present or future Guaranty or other security for all or part of the
Indebtedness, including but not limited to (a) any extension, modification,
renewal, indulgence, or substitution; (b) any failure or omission to enforce any
right, power, or remedy; (c) any waiver of any right, power, or remedy or of any
default; (d) any release, surrender, compromise, settlement, subordination, or
modification, with or without consideration; (e) the unenforceability or
invalidity of the Indebtedness or other security; (f) any failure by Bank to
perfect or secure any priority of its rights with respect to any security; or
(g) any consent by Bank to any sale or transfer of any security; all whether or
not the undersigned shall have had notice or knowledge of any act, omission, or
circumstance referred to in this paragraph.

10. The liability of Guarantor is independent of any other guaranties or
obligations at any time in effect with respect to all or any part of the
Indebtedness and may be enforced regardless of the existence, validity,
enforcement, or nonenforcement of any such other guaranties or other
obligations. Bank is authorized to release or modify the obligations of,
surrender any security given by, or waive any rights against any of the persons
who have executed this Guaranty as Guarantor, without in any manner affecting or
impairing the liability of the other persons.

11. Guarantor waives any and all defenses, claims, and discharges of Debtor or
any other obligor with respect to the Indebtedness, except the defense of
discharge by payment. Without limiting the generality of the foregoing,
Guarantor will not assert, plead, or enforce against Bank any defense of waiver,
release, discharge in bankruptcy, statute of limitations, res judicata, statute
of frauds, anti-deficiency statute, fraud, incapacity, minority, usury,
illegality, or unenforceability that may be available to Debtor or any other
person liable with respect to any Indebtedness or any setoff available against
Bank to Debtor or any such other person, whether or not on account of a related
transaction. Guarantor shall be liable for any deficiency remaining after
foreclosure of or realization upon any security for all or part of the
Indebtedness, whether or not the liability of Debtor or any other obligor for
the deficiency is discharged pursuant to statute or judicial decision.

12. If any payment applied by Bank to the Indebtedness is set aside, recovered,
rescinded, or required to be returned for any reason (including without
limitation the bankruptcy, insolvency, or reorganization of Debtor or any other
obligor), the Indebtedness to which the payment was applied shall for the
purposes of this Guaranty be deemed to have continued in existence,
notwithstanding the application, and this Guaranty shall be enforceable as to
that Indebtedness as fully as if Bank had not made the application.

13. This Guaranty shall be governed by and interpreted in accordance with the
laws of the State of Michigan, without giving effect to conflict-of-laws
principles. Guarantor irrevocably agrees and consents that any action against
Guarantor for collection or enforcement of this Guaranty may be brought in any
state or federal court that is located in, or whose district includes, Ottawa
County, Michigan, and that any such court shall have personal jurisdiction over
Guarantor for purposes of that action.

14. This Guaranty embodies the entire agreement between Guarantor and Bank with
respect to the subject matter of this Agreement. There are no promises, terms,
conditions, or obligations other than those contained in this agreement. This
Guaranty may not be modified except by a writing signed by the party to be
charged.

15. This Guaranty shall be binding upon and inure to the benefit of Bank and
Guarantor and their respective heirs, executors, administrators, legal
representatives, successors, and assigns.

         In witness whereof, this Guaranty is executed on this 1st day of March,
2002.

GUARANTOR:

Meritage Hospitality Group Inc.

/s/ James R. Saalfeld
James R. Saalfeld, Vice President

         The undersigned, Robert E. Schermer, Jr., acknowledges that he has read
and understands this Guaranty.

/s/ Robert E. Schermer, Jr.

TERM LOAN NOTE

$538,900.00

Grand Rapids, Michigan
March 1, 2002

        FOR VALUE RECEIVED, the undersigned, ROBERT E. SCHERMER, JR. (the
“Borrower”) whose address is 475 Golf Road, Grand Rapids, Michigan 49546, hereby
promises to pay to the order of THE HUNTINGTON NATIONAL BANK, a Michigan banking
corporation (the “Bank”), whose address is, 173 Ottawa, N.W., Grand Rapids,
Michigan, 49503, in lawful currency of the United States of America and in
immediately available funds, the principal sum of Five Hundred Thirty-Eight
Thousand Nine Hundred Dollars ($538,900.00), together with interest on the
unpaid principal balance thereof according to the terms set forth in this Note.

     1.

Definitions. The following definitions shall apply:

        “Banking Day” means any day other than a Saturday, Sunday or other day
on which the Bank is open for the transaction of substantially all of its
banking functions.

        “Dollars” and the sign “$” means lawful money of the United States of
America.

        “Loan” means the term loan made pursuant to this Note.

        “Overdue Rate” means a rate per annum that is equal to the sum of three
hundred twenty-five (325) basis points plus the Prime Rate.

         "Payment Date" shall mean the first day of each month.

        “Prime Rate” mean the interest rate announced by the Bank from time to
time as its “Prime Rate” which may not be the lowest lending rate charged by the
Bank.

        “Termination Date” means the earlier to occur of (a) February 1, 2005,
or (b) the date of an Event of Default as set forth in Paragraph 9 below.

     2.      Interest Rates. The interest rate on this Note is equal to the
Prime Rate. Notwithstanding the foregoing, the Borrower agrees to pay interest
on demand at the Overdue Rate on the outstanding principal amount and any other
amount payable by the Borrower hereunder (other than interest) which is not paid
in full when due (whether at stated maturity, by acceleration or otherwise) for
the period commencing on the occurrence of an Event of Default until the same is
paid in full or until the Event of Default is cured. Under no circumstances
shall the interest rate exceed the maximum rate allowed by law.

     3.     Principal and Interest Payments. On each Payment Date beginning on
March 1, 2002, the Borrower shall pay interest to the Bank on the unpaid
principal amount of this Note at the interest rate then in effect as set forth
in Section 2 above. Unless earlier payment is required under this Note, the
Borrower shall pay to the Bank on the Termination Date the outstanding principal
amount of this Note together with accrued and unpaid.

     4.      Optional Prepayments. The Borrower may prepay all or part of the
principal of this Note without premium. If Borrower prepays all or any portion
of the principal of this Note, Lender shall be under no obligation to advance
additional funds pursuant to this Note.

     5.     Method of Calculating Interest. Interest on this Note and other
amounts due under this Note shall be computed on the basis of a year consisting
of 360 days and paid for actual days elapsed, calculated as to each month from
and including the first day thereof and including the last day thereof.

     6.      Additional Costs. In the event that any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect and
whether or not presently applicable to the Bank, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Bank with any
request or directive of any such authority (whether or not having the force of
law), shall (i) affect the basis of taxation of payments to the Bank of any
amounts payable by the Borrower under this Note (other than taxes imposed on the
overall net income of the Bank), or (ii) shall impose, modify or deem applicable
any reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by the Bank, or (iii) shall
impose any other condition with respect to this Note, or the principal amount
outstanding, and the result of any of the foregoing is to increase the cost to
the Bank of maintaining the balance of this Note or to reduce the amount of any
sum receivable by the Bank thereon, then the Borrower shall pay to the Bank,
from time to time, upon request by the Bank additional amounts sufficient to
compensate the Bank for such increased cost or reduced sum receivable. A
detailed statement as to the amount of that increased cost or reduced sum
receivable, prepared in good faith and submitted by the Bank to the Borrower,
shall be prima facie evidence of that amount absent manifest error in
computation.

     7.     Illegality and Impossibility. In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by the Bank with any request or directive of such authority (whether
or not having the force of law), including without limitation exchange controls,
shall make it unlawful or impossible for the Bank to maintain the Loan under
this Note, the Borrower shall upon receipt of notice thereof from the Bank,
either convert the Loan to a Loan of a different type, or repay in full the then
outstanding principal amount of the Loan together with all accrued interest
thereon to the date of payment.

     8.       Late Charge. If any payment of principal or interest is not paid
within ten (10) days after it is due, the Borrower shall forthwith pay to the
Bank a late charge in an amount equal to the greater of $50.00 or one-tenth
(1/10) of one percent (1%) of the unpaid principal balance as of the date the
late charge is assessed. This late charge is in addition to the Bank’s other
rights and remedies for default in payment of an installment of principal or
interest when due.

     9.      Default and Acceleration. Each of the following shall be an event
of default ("Event of Default") under this Note:

        (a)    The Borrower fails to pay when due any interest or principal of
this Note or out-of-pocket expense at any time owing to the Bank under this Note
(whether at scheduled maturity or by acceleration) or in the payment of any
other indebtedness or obligation now or hereafter owing by the Borrower to the
Bank, as and when the same shall be or become due and payable, that failure
shall continue unremedied for ten (10) days; or

        (b)    An event of default, as set forth in any agreement between Bank
and Borrower and such default continues for 3 days after Borrower receives
written notice of such default.

        Upon the occurrence of any Event of Default all or any part of the
indebtedness evidenced hereby and all or any part of all other indebtedness and
obligations then owing by the Borrower to the Bank shall, at the option of the
Bank, become immediately due and payable without notice or demand. If (i) a
voluntary or involuntary case in bankruptcy, receivership, or insolvency shall
at any time be instituted by or against the Borrower and, as to an involuntary
case only, is not dismissed within sixty (60) days after filing or (ii) any
levy, writ of attachment, garnishment, execution, or similar process shall be
issued against or placed upon any property of the Borrower, and is not dismissed
or released within thirty (30) days thereafter, unless the levy, writ of
attachment, garnishment, execution or similar process is being contested in good
faith by appropriate proceedings, then all such indebtedness evidenced by this
Note shall automatically become immediately due and payable.

     10.      Place and Application of Payments.  Each payment upon this Note
shall be made at the Bank’s address set forth above or such other place as the
holder hereof may direct in writing. Any payment upon this Note shall be applied
first to any expenses (including expenses of collection) then due and payable to
the Bank hereunder, then to late charges due and payable, then to any accrued
and unpaid interest hereunder and then to the unpaid principal balance.

     11.      Setoff. The Bank shall have the right at any time following an
Event of Default to set off any indebtedness that the Bank then owes to the
Borrower against any indebtedness evidenced by this Note that is then due and
payable.

     12.      Remedies. The Bank shall have all rights and remedies provided by
law and by agreement of the Borrower. The Borrower agrees to pay any and all
expenses, including reasonable attorney fees and legal expenses, paid or
incurred by the Bank in protecting and enforcing the rights of and obligations
to the holder under any provision of this Note.

     13.       Waivers. No delay by the Bank in the exercise of any right or
remedy shall operate as a waiver thereof. No single or partial exercise by the
Bank of any right or remedy shall preclude any other or future exercise thereof
or the exercise of any other right or remedy. No waiver by the Bank of any
default or of any provision hereof shall be effective unless in writing and
signed by the Bank. No waiver of any right or remedy on one occasion shall be a
waiver of that right or remedy on any future occasion.

                The Borrower waives demand for payment, presentment, notice of
dishonor, and protest of this Note and consents to any extension or postponement
of time of its payment, to any substitution, exchange, or release of all or any
part of any security given to secure this Note and, to the addition of any party
hereto.

     14.       Applicable Law and Jurisdiction. This Note shall be governed by
and interpreted according to the laws of the State of Michigan, without giving
effect to principles of conflict of laws. The Borrower irrevocably agrees and
consents that any action against the Borrower for collection or enforcement of
this Note may be brought in any state or federal court that has subject matter
jurisdiction and is located in, or whose district includes Ottawa County,
Michigan, and that any such court shall have personal jurisdiction over the
Borrower for purposes of such action.

/s/ Robert E. Schermer, Jr.

Accepted by:

THE HUNTINGTON NATIONAL BANK

By: /s/ Gregory Randall, Vice President