2003 AMENDMENT
TO FRANCHISE AGREEMENT

     This 2003 Amendment to Franchise Agreement (this “Amendment”) is entered
into as of December 17, 2003 by and between Ryan’s Properties, Inc. (“Ryan’s”)
and Family Steak Houses of Florida, Inc. (“FSH”).

     WHEREAS, Ryan’s and FSH are parties to that certain Franchise Agreement,
dated as of September 16, 1987, as amended prior to the date hereof (the
“Existing Franchise Agreement”; the Existing Franchise Agreement as amended by
this Amendment shall be referred to as the “Franchise Agreement”) (all
capitalized terms used herein that are not otherwise defined herein to have the
meanings ascribed to them in the Existing Franchise Agreement); and

     WHEREAS, FSH has informed Ryan’s that FSH does not expect to have in
operation at December 31, 2003 a number of Restaurants (defined as restaurants
of FSH operating as Ryan’s Family Steak Houses) equal to at least 80% of the
number of Restaurants required to be in operation as of that date pursuant to
the terms of the Existing Franchise Agreement; and

     WHEREAS, Section XV (Termination and Defaults) of the Existing Franchise
Agreement provides, among other matters, that FSH shall be in default under the
Existing Franchise Agreement if “at the end of any calendar year the number of
Restaurants in operation is less than 80% of the number of Restaurants required
to be in operation as of that date pursuant to the terms of this Agreement, as
amended”; and

     WHEREAS, the parties desire to wind down and terminate the franchise
relationship under the Existing Franchise Agreement in an amicable manner that
minimizes unnecessary disruption;

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged by each of the parties hereto, the parties hereto agree
as follows:

     1.  Termination or Conversion of Restaurants.

          (a)  FSH agrees that, in accordance with the schedule set forth on the
attached Exhibit A, FSH shall complete as to each and every one of FSH’s
Restaurants:

            (i) its sale to an unaffiliated third party to be operated as a
restaurant with a name and logo (immediately upon consummation of such sale)
that differs sufficiently from “Ryan’s Family Steak House” and “Fire Mountain”
to avoid any reasonable likelihood of confusion;               (ii) the
termination of its operation as a restaurant of any sort; and/or    
          (iii) the conversion of that Restaurant from a “Ryan’s Family Steak
House” to a restaurant with a name and logo that differs sufficiently from
“Ryan’s

 

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  Family Steak House” and “Fire Mountain” to avoid any reasonable likelihood of
confusion between any of FSH’s restaurants and any of Ryan’s restaurants;
provided, further, that, if at any time FSH changes the exterior façade or
interior design of any such Restaurant (or former Restaurant), FSH shall cause
the new exterior façade or interior design (as applicable) to differ
sufficiently from Ryan’s’ “Fire Mountain” and the ‘lodge look’ of “Ryan’s Family
Steak House” to avoid any reasonable likelihood of confusion between any of
FSH’s restaurants and any of Ryan’s restaurants.

          (b)  FSH shall cause each such Restaurant sale, termination or
conversion to be accomplished in as commercially reasonable a manner as possible
consistent with the requirements of this Amendment.

          (c)  No later than five (5) business days after the completion of the
sale, termination or conversion of a Restaurant pursuant to this Amendment, FSH
shall certify that fact in writing to Ryan’s. Ryan’s may request any and all
such information, and may make any and all such inspections, as may be
reasonably necessary to verify the sale, termination or conversion of any or all
Restaurants in accordance with this Amendment.

          (d)  The Continuing Services and Royalty Fee set forth in the Existing
Franchise Agreement shall continue to apply to the total gross receipts from
each of FSH’s Restaurants until the date the sale, termination or conversion as
contemplated by this Amendment of such Restaurant is completed. Payment of any
unpaid Continuing Services and Royalty Fee for any sold, terminated or converted
Restaurant shall be made in accordance with the Existing Franchise Agreement.

          (e)  From and after January 1, 2004, (i) Ryan’s shall have no further
obligations under Paragraphs II (Location), IV (Training and Assistance),
Subparagraph B of Paragraph V (Advertising) or Subparagraph D of Paragraph VI
(Confidential Operating Manual) of the Franchise Agreement, and (ii) Attachment
1 to the July 13, 1992 letter agreement amending the Franchise Agreement shall
no longer be in effect. From and after the date that the sale, termination or
conversion as contemplated by this Amendment of an FSH Restaurant is completed,
Ryan’s shall have no further obligations under any provision of the Franchise
Agreement with respect to such Restaurant. Without limiting the preceding
provisions, from and after the earlier of (i) the date that all Restaurants are
sold, terminated or converted or (ii) June 30, 2005, FSH shall not be entitled
to receive supplies that are proprietary to Ryan’s. Nothing contained herein,
however, shall impede FSH from continuing to use recipes obtained from Ryan’s
and now used at the Restaurants in its converted restaurants; provided, however,
that FSH shall remain obligated under Paragraph XIV.D and, to the extent
applicable, Paragraph VI.B with respect to such recipes.

          (f)  FSH acknowledges that the deadlines set forth in Exhibit A are of
the essence. Accordingly, if FSH fails to complete the sale, termination or
conversion as contemplated by this Amendment of the cumulative number of
Restaurants as contemplated by this Amendment by any applicable date set forth
on Exhibit A:

            (i) (A) if such failure is with respect to the requirement that all
of the Restaurants be sold, terminated or converted by June 30, 2005, such
failure shall constitute a default under the Franchise Agreement, and, without
the necessity

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  of any notice (including without limitation any “Notice to Cure” or
#147;Notice of Cure”), Ryan’s shall have all remedies available under the
Franchise Agreement, at law and/or in equity by reason of such breach; or    
               (B) if such failure is with respect to the cumulative number of
Restaurants required by this Amendment to be sold, terminated or converted by
any date other than June 30, 2005, such failure shall constitute a default under
the Franchise Agreement if such failure is not fully cured within one hundred
eighty (180) days after the occurrence of such failure, and in such event,
without the necessity of any notice (including without limitation any “Notice to
Cure” or “Notice of Cure”), Ryan’s shall have all remedies available under the
Franchise Agreement, at law and/or in equity by reason of such breach; and    
          (ii) without limiting clause (i) in any way, during any quarterly
period (except for the first thirty (30) days of such quarterly period, if
immediately prior to such period FSH was in compliance with the Franchise
Agreement) that more FSH’s Restaurants are in operation than permitted by this
Amendment (such excess number of Restaurants at any time being hereinafter
referred to as the “Excess Number”), the Continuing Service and Royalty Fee
during that quarter shall be equal to the sum of (A) 4% of the total gross
receipts of all of FSH’s Restaurants in operation, plus (B) the product of
(x) 2% of the total gross receipts of all of FSH’s Restaurants in operation,
multiplied by (y) the quotient of (1) the Excess Number, divided by (2) the
total number of FSH’s Restaurants in operation.

Each of subparagraphs (i)(A), (i)(B) and (ii) of this paragraph (f) is
independent of the other, and Ryan’s’ rights under any of such subparagraphs
shall not be affected by whether or not Ryan’s then has rights under the terms
of any of the other such subparagraphs.

     2.  Additional Agreements.

          (a)  Ryan’s agrees that, unless and until FSH defaults under any of
its obligations under this Amendment or any of its other obligations under the
Franchise Agreement, Ryan’s shall not exercise any of the remedies (other than
this Amendment) available to it under the Franchise Agreement, at law and/or in
equity with respect to the failure by FSH to have in operation as of December
31, 2003 a number of Restaurants at least equal to 80% of the number of
Restaurants required to be in operation as of that date under the Existing
Franchise Agreement.

          (b)  For so long as FSH is not in default under the Franchise
Agreement, Ryan’s shall make no derogatory remark concerning FSH to any third
party, and shall instruct its officers and directors not to make any such
derogatory remark. For so long as Ryan’s is not in default under the Franchise
Agreement, FSH shall make no derogatory remark concerning Ryan’s to any third
party, and shall instruct its officers and directors not to make any such
derogatory remark.

          (c)  Unless required by law in the reasonable judgment of a party,
neither party shall make any public announcement concerning this Amendment or
the relationship between the parties without giving the other party a reasonable
opportunity to comment on

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the proposed announcement and without the other party’s consent, which consent
shall not be unreasonably withheld or delayed.

          (d)  FSH shall not construct or open any additional Restaurant as a
Ryan’s Family Steak House.

          (e)  If not earlier terminated pursuant to the terms of the Franchise
Agreement, and subject to paragraph (f) below, the Franchise Agreement shall
terminate and expire at such time as the sale, termination or conversion as
contemplated by this Amendment of all of FSH’s Restaurants has been completed
and all payments due under the Franchise Agreement from any party to the other
party have been finally paid in full.

          (f)  This Amendment and the following provisions of the Franchise
Agreement shall survive the expiration and termination of the Franchise
Agreement:

            (i) Clause 2 of Subparagraph A of Paragraph III (Proprietary Marks);
              (ii) Subparagraphs B and C of Paragraph VI (Confidential Operating
Manual);               (iii) Subparagraph C of Paragraph VIII (Accounting and
Records);               (iv) Paragraph XII (Insurance), to the extent of any
applicable statute of limitations, with respect to insurance protecting Ryan’s
and its officers and employees against any loss, liability or expense whatsoever
from personal injury, death, property damage or products liability, arising or
occurring upon or in connection with any Restaurant or by reason of FSH’s
operation upon, from or occupancy of such Restaurant prior to the date that such
Restaurant is sold, terminated or converted as contemplated by this Amendment;  
            (v) Subparagraphs B, D and E of Paragraph XIV (Covenants);    
          (vi) Paragraph XVI (Rights and Duties of Parties upon Expiration or
Termination), other than Subparagraph B thereof;    
          (vii) Subparagraph B of Paragraph XXI (Independent Contractor);    
          (viii) Paragraph XXIV (Liability for Breach), subject to Section 3 of
this Amendment; and               (ix) Paragraphs XXII (Non-Waiver), XXIII
(Notice), XXVII (Applicable Law) and XXVIII (Arbitration).

Notwithstanding the termination of any provision of the Franchise Agreement, but
subject to Section 3 of this Amendment, a party shall be liable to the other
party for any breach of

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any such terminated provision that occurs prior to the date of termination and
expiration of the Franchise Agreement.

          (g)  Notwithstanding the terms of Subparagraph C of Paragraph XIV
(Covenants) of the Existing Franchise Agreement, such Subparagraph C shall not
survive the expiration and termination of the Franchise Agreement pursuant to
Section 2(e) of this Amendment. Ryan’s acknowledges and agrees that FSH is free
to construct and operate restaurants at any time and anywhere, even if such
restaurants compete with Ryan’s, so long as FSH does not thereby violate the
Franchise Agreement as then in effect. Similarly, FSH acknowledges and agrees
that Ryan’s is free to construct and operate restaurants at any time and
anywhere, under the name “Ryan’s Family Steak House” or “Fire Mountain” or any
other name that Ryan’s may then lawfully use, even if such restaurants compete
with FSH.

     3.  Releases.

          (a)  Subject to the limitations contained in paragraph (b) of this
Section 3, FSH, on behalf of itself and its successors and assigns, hereby
irrevocably and unconditionally releases and forever discharges, individually
and collectively, Ryan’s, and each of its officers, directors, agents,
employees, parent companies, subsidiaries, affiliates, successors and assigns
(hereinafter collectively the “Ryan’s Parties”), of and from any and all
charges, claims, complaints, demands, liabilities, causes of action, losses,
costs and expenses (collectively, “Claims”) of any kind whatsoever (including
related attorneys’ fees and costs), whether arising in contract or tort or under
a statute or any other law or otherwise, known or unknown, or suspected or
unsuspected, that FSH may now have or has ever had against any of the Ryan’s
Parties by reason of any act, omission, transaction or event occurring prior to
or on the date of this Amendment. The final release and discharge set forth in
the immediately preceding sentence constitutes a material part of the
consideration flowing from FSH to Ryan’s under this Amendment, and each of the
individuals and entities included within the term “Ryan’s Parties” is an
intended beneficiary of this consideration.

          (b)  Notwithstanding anything to the contrary herein, the releases and
discharges contained in paragraph (a) of this Section 3 do not release,
discharge or otherwise affect any of the following Claims:

            (i) Claims relating to Ryan’s’ obligations under this Amendment or
arising after the date hereof under the Franchise Agreement; and    
          (ii) Claims arising from any fraud or illegal activities of Ryan’s.

          (c)  Subject to the limitations contained in paragraph (d) of this
Section 3, Ryan’s, on behalf of itself and its successors and assigns, hereby
irrevocably and unconditionally releases and forever discharges, individually
and collectively, FSH, and each of its officers, directors, agents, employees,
parent companies, subsidiaries, affiliates, successors and assigns (hereinafter
collectively the “FSH Parties”), of and from any and all Claims of any kind
whatsoever (including related attorneys’ fees and costs), whether arising in
contract or tort or under a statute or any other law or otherwise, known or
unknown, or suspected or unsuspected, that Ryan’s may now have or has ever had
against any of the FSH Parties by reason of any act, omission, transaction or
event occurring prior to or on the date

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of this Amendment. The final release and discharge set forth in the immediately
preceding sentence constitutes a material part of the consideration flowing from
Ryan’s to FSH under this Amendment, and each of the individuals and entities
included within the term “FSH Parties” is an intended beneficiary of this
consideration.

          (d)  Notwithstanding anything to the contrary herein, the releases and
discharges contained in paragraph (c) of this Section 3 do not release,
discharge or otherwise affect any of the following Claims:

            (i) Claims relating to FSH’s obligations under this Amendment or
arising after the date hereof under the Franchise Agreement;    
          (ii) Claims arising under the Franchise Agreement for any unpaid
Continuing Services and Royalty Fees, whether such Fees are payable with respect
to past or future periods; and               (iii) Claims arising from any fraud
or illegal activities of FSH.

          (e)  The parties understand that the Claims released and discharged
under this Section 3 include, without limitation, all such Claims arising from
FSH’s relationship with Ryan’s or any of its parent companies or subsidiaries,
the termination of such relationship and any other conduct or negotiations
occurring on or prior to the date of this Amendment, except as specifically
excluded in paragraph (b) or (d) above.

          (f)  The releases and discharges set forth in this Section 3 may be
pleaded as a full and complete defense to, and may be used as the basis for an
injunction against, any action, suit, or other proceeding that may be
instituted, prosecuted or attempted in breach of this Section 3.

          (g)  Each of FSH and Ryan’s acknowledges and agrees that the releases
and other consideration described in this Section 3 are offered and exchanged in
good faith and will not, for any purpose, be considered as admissions of
liability on the part of any party, which liability is expressly denied, and no
past or present wrongdoing on the part of any party is implied by such releases
or other consideration under the terms of this Section 3.

          (h)  Each party warrants to the other party that it has not assigned
any Claim released herein.

     4.  Miscellaneous.

          (a)  Except as amended by this Amendment, the Existing Franchise
Agreement shall remain in full force and effect.

          (b)  This Amendment shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, and shall inure to the
benefit of the Ryan’s Parties and the FSH Parties to the extent provided in
Section 3 hereof.

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          (c)  This Amendment shall be construed as a contract entered into
under the laws of the State of South Carolina, without regard to its rules
respecting conflicts of laws. Any dispute regarding this Amendment shall be
subject to the dispute resolution procedures set forth in the Franchise
Agreement.

          (d)  This Amendment and the Franchise Agreement embody the entire
agreement of the parties with respect to the subject matter hereof and thereof,
and there are no promises, representations, warranties, covenants or
undertakings of any party to the other with respect to such subject matter other
than those expressly set forth herein or therein.

          (e)  No provision contained in this Amendment or the Franchise
Agreement shall be deemed to have been waived by reason of any failure or delay
to enforce the same, regardless of the number of breaches or violations that may
occur. All waivers of any such provision shall be in writing executed by the
party against whom the same is sought to be enforced. This Amendment and the
Franchise Agreement may be amended only by a writing executed by each party
hereto.

          (f)  In the event any provision of this Amendment is determined, in
accordance with the dispute resolution procedures set forth in the Franchise
Agreement, to be unenforceable for any reason, the remaining provisions hereof
shall remain in full force and effect and the unenforceable provision(s) shall
be interpreted and rewritten to give effect to the parties’ economic intentions.

          (g)  Each of Ryan’s’ rights under this Amendment is cumulative to its
other rights under this Amendment or the Franchise Agreement, at law or in
equity.

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          (h)  This Amendment may be executed in several counterparts, all of
which shall form one and the same agreement.

     IN WITNESS WHEREOF, Ryan’s and FSH have executed this Amendment as of the
date first set forth above.

RYAN’S:

RYAN’S PROPERTIES, INC.
a Delaware corporation

          By:            

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    Name:   Charles D. Way     Title:   President              

FSH:

FAMILY STEAK HOUSES OF FLORIDA, INC.
a Florida corporation

          By:            

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    Name:            

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    Title:            

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              Attest:            

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    Name:            

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    Title:            

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EXHIBIT A

          Cumulative Number of Restaurants         For Which Sale, Termination  
      or Conversion Has Been Completed   Deadline  

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3
  March 31, 2004
5
  June 30, 2004
8
  September 30, 2004
11
  December 31, 2004
14
  March 31, 2005
18
  June 30, 2005

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