EMPLOYMENT AGREEMENT

     THIS  AGREEMENT  is dated as of January 1, 2000,  by and between  Franchise
Finance  Corporation  of America,  a Delaware  corporation  (the  "Company") and
Morton H. Fleischer ("Executive").

                                    RECITALS

     In order to induce  Executive  to serve as  Chairman  and  Chief  Executive
Officer  of  the  Company,   the  Company  desires  to  provide  Executive  with
compensation  and other  benefits on the terms and  conditions set forth in this
Agreement.

     Executive is willing to accept such employment and perform services for the
Company, on the terms and conditions hereinafter set forth.

     It is therefore hereby agreed by and between the parties as follows:

     1. DEFINED  TERMS.  The following  terms shall have the following  meanings
unless otherwise specifically defined in this Agreement:

     "ACTUAL  BONUS"  means the highest  annual cash bonus  payable to Executive
with respect to any of the three years  immediately  preceding  the  Termination
Year.

     "AGREEMENT"  means this  Employment  Agreement  dated as of January 1, 2000
between the Company and Executive.

     "ANNUAL  CASH BONUS"  means the cash  compensation  payable to Executive as
calculated and paid in a manner substantially  similar to the methods and timing
used to calculate and pay  Executive's  bonus for calendar year 1999;  PROVIDED,
HOWEVER,  that  during the term of this  Agreement,  neither the Company nor the
Compensation  Committee  shall  change such methods and timing in a manner which
will be less favorable to Executive.

     "BASE  SALARY"  means the annual base salary of  Executive  as set forth in
Section 4(a).

     "BOARD" means the board of directors of the Company.

     "CAUSE" means:

               (a) the willful and  continued  failure of Executive to perform a
          substantial  portion of his duties  with the  Company  (other than any
          such  failure  resulting  from  incapacity  due to  physical or mental
          illness),  after a  written  demand  for  substantial  performance  is
          delivered to Executive by the Board, which specifically identifies the
          manner  in  which  the  Board   believes   that   Executive   has  not
          substantially performed his duties;

               (b)  the  willful  engaging  by  Executive  in  gross  misconduct
          (including, without limitation, fraud or embezzlement); or
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               (c) the conviction of, or plea of guilty or NOLO CONTENDERE to, a
          felony.

     "CHANGE IN CONTROL" means:

               (a) any "Person" as defined in Section  3(a)(9) of the Securities
          and Exchange Act of 1934, as amended (the "Exchange Act"), and as used
          in Section 13(d) and 14(d) thereof,  including a "group" as defined in
          Section  13(d) of the Exchange Act but  excluding  the Company and any
          subsidiary  and any employee  benefit plan  sponsored or maintained by
          the  Company or any  subsidiary  (including  any  trustee of such plan
          acting as trustee),  directly or indirectly,  becomes the  "beneficial
          owner"  (as  defined  in  Rule  13d-3  under  the  Exchange  Act),  of
          securities  of the Company  representing  25% or more of the  combined
          voting power of the Company's then outstanding  securities (other than
          indirectly as a result of the Company's redemption of its securities);
          PROVIDED, HOWEVER, that, in the event that any such person becomes the
          beneficial  owner  of 25% or  more,  but  not  exceeding  50%,  of the
          combined voting power of the Company's then outstanding securities, no
          Change of  Control  shall be deemed to occur so long as the  Incumbent
          Directors (as defined below)  continue to constitute a majority of the
          Board in accordance with the terms of paragraph (c) below; or

               (b) the consummation of any merger or other business  combination
          of the  Company,  sale of all or  substantially  all of the  Company's
          assets  (other  than with  respect to sales of assets in the  ordinary
          course of business,  securitization  and whole loan sales  provided by
          the   Company's   interim  and  permanent   financing   arrangements),
          liquidation  or  dissolution  of the  Company  or  combination  of the
          foregoing  transactions (the "Transactions")  other than a Transaction
          immediately  following  which the  shareholders of the Company and any
          trustee or fiduciary of any Company  employee benefit plan immediately
          prior  to the  Transaction  own at  least  51%  of the  voting  power,
          directly or indirectly,  of (A) the surviving  corporation in any such
          merger  or  other  business  combination;  (B)  the  purchaser  of  or
          successor to the Company's assets (other than with respect to sales of
          assets in the ordinary  course of business,  securitization  and whole
          loan sales provided by the Company's  interim and permanent  financing
          arrangements); (C) both the surviving corporation and the purchaser in
          the  event  of any  combination  of  Transactions;  or (D) the  parent
          company owning 100% of such surviving  corporation,  purchaser or both
          the surviving corporation and the purchaser, as the case may be; or

               (c) within any  twenty-four-month  period,  the  persons who were
          directors  immediately  before  the  beginning  of  such  period  (the

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          "Incumbent  Directors")  shall cease (for any reason other than death)
          to  constitute  at  least a  majority  of the  Board  or the  board of
          directors  of a  successor  to the  Company.  For  this  purpose,  any
          director who was not a director at the  beginning of such period shall
          be deemed to be an Incumbent  Director if such director was elected to
          the Board by, or on the  recommendation of or with the approval of, at
          least  two-thirds  of the  directors  who then  qualified as Incumbent
          Directors  (so long as such director was not nominated by a person who
          commenced  or  threatened  to commence  an  election  contest or proxy
          solicitation  by or on behalf of a Person other than the Board) or who
          has  entered  into an  agreement  to  effect a Change  in  Control  or
          expressed an intention to cause such Change in Control.

     "CODE"  means  the  Internal  Revenue  Code of 1986,  as  amended,  and the
provisions of any successor law.

     "COMPANY"  means  Franchise  Finance  Corporation  of  America,  a Delaware
corporation.

     "COMPENSATION COMMITTEE" means the compensation committee of the Board.

     "EFFECTIVE DATE" means January 1, 2000.

     "EXECUTIVE" means Morton H. Fleischer.

     "EXPENSE  PAYMENT"  means payments made to Executive for expenses which are
permitted under this Agreement and have been incurred but not yet reimbursed.

     "GOOD REASON" means any of the following without  Executive's express prior
written consent:

               (a) any  material  diminution  or adverse  change in  Executive's
          duties,  titles or responsibilities with the Company (or any affiliate
          thereof) from those in effect immediately prior to any such diminution
          or adverse  change;  PROVIDED,  HOWEVER,  that no such  diminution  or
          adverse change shall be deemed to exist solely as a consequence of the
          Company  ceasing to be a Company with  publicly-traded  securities  or
          becoming a wholly-owned subsidiary of another company;

               (b) if after a  Change  in  Control  there  is any  reduction  in
          Executive's  aggregate annual cash  compensation  (which shall include
          Base Salary and Actual  Bonus) in  Executive's  aggregate  annual cash
          compensation in effect immediately prior to such reduction;

               (c) any  requirement  that  Executive be based at a location more
          than 35 miles from the Company's headquarters,  located in Scottsdale,
          Arizona  (or a  substantial  increase  in the  amount of  travel  that
          Executive is required to do because of a relocation  of the  Company's
          headquarters from Scottsdale, Arizona);

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               (d) any failure by the Company to obtain  from any  successor  to
          the Company an  agreement  reasonably  satisfactory  to  Executive  to
          assume and  perform  this  Agreement,  as  contemplated  by Section 13
          hereof; or

               (e) during the thirty-day period immediately  following the first
          anniversary  of the  Change  in  Control  there is a  Thirteenth-Month
          Termination by Executive.

     "PERMANENT   DISABILITY"  means  the  total  and  permanent  disability  of
Executive  as  defined  in  the  Company's  long-term  disability  benefit  plan
applicable to senior executive officers in effect on the Effective Date.

     "RETIREMENT" means Executive's voluntary termination of employment pursuant
to late,  normal or early  retirement  under a pension plan (which may include a
defined benefit plan or a defined  contribution  plan) sponsored by the Company,
as  defined  in such  plan,  but  only  if such  retirement  occurs  prior  to a
termination by the Company for Cause or by Executive for Good Reason.

     "TERMINATION  DATE" means the date this Agreement is terminated,  except to
the extent the  provisions  of Section  16 are  applicable,  which  shall be the
earlier  of  December  31,  2002  or the  date  of  termination  of  Executive's
employment pursuant to this Agreement.

     "TERMINATION  YEAR"  means  the year in which  Executive's  termination  of
employment occurs.

     "THIRTEENTH-MONTH   TERMINATION"   means  the  voluntary   termination   of
employment by Executive for any reason or no reason at all.

     "VACATION PAYMENT" means payments made to Executive with respect to accrued
but unused vacation days.

     2. EMPLOYMENT.

          (a) Subject to the terms and conditions of this Agreement, the Company
     agrees to employ Executive during the term hereof as its Chairman and Chief
     Executive Officer or as an officer of the Company having the same or a more
     senior title and greater responsibilities.  In his capacity as the Chairman
     and Chief Executive  Officer of the Company,  Executive shall report to the
     Board and shall have the customary powers, responsibilities and authorities
     of a Chairman and Chief Executive  Officer for corporations of the size and
     character  of the  Company,  as it  exists  from  time to time,  and as are
     assigned by the Board.

          (b) Subject to the terms and conditions of this  Agreement,  Executive
     hereby  accepts  employment  with the Company  commencing  on the Effective
     Date,  and agrees to devote his full working time and efforts,  to the best
     of his ability,  experience  and talent,  to the  performance  of services,
     duties  and  responsibilities  in  connection  therewith.  Executive  shall
     perform  such  duties  and  exercise  such  powers,  commensurate  with his
     position,  as the Board  shall  from time to time  delegate  to him on such

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     terms  and  conditions  and  subject  to such  restrictions  the  Board may
     reasonably  from time to time impose.  Executive  also agrees to serve,  if
     elected, as a member of the Board.

          (c) Nothing in this Agreement shall preclude Executive,  so long as in
     the reasonable  determination of the Board such activities do not interfere
     with his duties and responsibilities hereunder, from engaging in charitable
     and community affairs,  from managing any passive investment made by him in
     publicly traded equity securities or other property  (provided that no such
     investment  may exceed 5% of the equity of any  entity) or,  without  prior
     notice to the Board and  subject to Section 15 and  Section  16(b)  hereof,
     from  serving  as a member of boards of  directors  or as a trustee  of any
     other corporation, association or entity.

     3. EFFECTIVE DATE; TERM OF EMPLOYMENT. This Agreement shall be effective as
the Effective Date.  Executive's  term of employment  under this Agreement shall
commence on the Effective  Date hereof and,  subject to the terms hereof,  shall
terminate on the Termination Date;  provided,  however,  that any termination of
Employment  by  Executive  for Good  Reason or pursuant to the Change in Control
provisions  of Section 8 may only be made on 30 days' prior  written  notice and
any other termination of employment by Executive other than for death, Permanent
Disability or Good Reason may only be made upon 90 days' prior written notice to
the Company.

     4. COMPENSATION.

          (a) SALARY.  The Company shall pay  Executive  during the term of this
     Agreement  the Base  Salary,  as  calculated  pursuant  to this  Section 4,
     payable in cash not less  frequently  than  bimonthly.  As of the Effective
     Date,  the Base Salary  shall be  $525,000.  As of January 1 of each annual
     anniversary  of the Effective  Date,  the Base Salary of Executive  will be
     increased from Executive's  Base Salary for the preceding  calendar year by
     the  greater  of (i) five  percent,  (ii)  the  average  percentage  salary
     increase  awarded  to all  employees  of the  Company  who are  not  senior
     executive  officers  of the  Company or (iii) an amount  determined  by the
     Compensation Committee.

          (b) ANNUAL CASH BONUS. In addition to Base  Compensation,  the Company
     will  pay  to  Executive  on or  prior  to  January  30 of  each  year  for
     performance in the preceding calendar year the Annual Cash Bonus.

          (c)  COMPENSATION  PLANS AND PROGRAMS.  Executive shall be eligible to
     participate in any compensation  plan or program  maintained by the Company
     from time to time, which compensation plans and programs are intended to be
     comparable to those  currently  maintained  by the Company,  in which other
     senior executives of the Company  participate on terms that are intended to
     be comparable to those applicable to such other senior executives.

          (d) STOCK  OPTIONS AND  RESTRICTED  STOCK AWARDS.  Executive  shall be
     eligible to receive grants of stock options and restricted  stock awards as
     determined in the discretion of the Compensation  Committee under any stock
     option plan or incentive plan of the Company or any affiliate.

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<PAGE>
     5. EMPLOYEE BENEFITS.

          (a) EMPLOYEE BENEFIT PROGRAMS,  PLANS AND PRACTICES. The Company shall
     provide Executive during the term of his employment hereunder with coverage
     under  all  employee  pension  and  welfare  benefit  programs,  plans  and
     practices (commensurate with his positions in the Company from time to time
     and to the extent  permitted under any employee benefit plan) in accordance
     with the terms  thereof,  which the Company  makes  available to its senior
     executives and which employee pension and welfare benefit  programs,  plans
     and  practices  that are  intended  to be  comparable  to  those  currently
     maintained by the Company;  provided,  however,  such  programs,  plans and
     practices  will be no less favorable than those in existence as of the date
     of execution of this Agreement.

          (b) VACATION AND FRINGE  BENEFITS.  Executive  shall be entitled to no
     less than the number of business  days paid  vacation in each calendar year
     to which  Executive  is entitled  immediately  prior to  execution  of this
     Agreement,  which  shall  be taken at such  times  as are  consistent  with
     Executive's  responsibilities  hereunder.  In addition,  Executive shall be
     entitled  to the  perquisites  and other  fringe  benefits  currently  made
     available  to  senior  executives  of the  Company,  commensurate  with his
     position with the Company.

     6.  EXPENSES.  Executive  is  authorized  to incur  reasonable  expenses in
carrying out his duties and  responsibilities  under this Agreement,  including,
without limitation, expenses for travel and similar items related to such duties
and responsibilities. The Company will reimburse Executive for all such expenses
upon  presentation by Executive from time to time of appropriately  itemized and
approved (consistent with the Company's policy) accounts of such expenditures.

     7. TERMINATION OF EMPLOYMENT.

          (a)  TERMINATION  BY COMPANY  OTHER THAN FOR CAUSE OR BY EXECUTIVE FOR
     GOOD REASON.  (i) The Company may terminate  Executive's  employment at any
     time for any reason. If Executive's employment is terminated by the Company
     other than for Cause) or if Executive  terminates  his  employment for Good
     Reason  prior  to  the  Termination  Date,  Executive  shall  receive  such
     payments,  if any, under  applicable  plans or programs,  including but not
     limited  to  those  referred  to in  Section  4(c)  hereof,  to which he is
     entitled  pursuant  to the terms of such plans or  programs.  In  addition,
     Executive shall be entitled to receive the following:

                    (A) A cash lump sum payment  equal to the sum of three times
               (1) Executive's  Base Salary at the annual rate as of the date of
               termination and (2) the Actual Bonus; and

                    (B) a cash lump sum payment with respect to (1) the Vacation
               Payment  and (2) the Expense  Payment  which shall be paid by the
               Company  to  Executive  within 30 days after the  termination  of
               Executive's employment by check payable to the order of Executive
               or by wire transfer to an account specified by Executive;

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                    (C)  Executive  shall  also  be  entitled  to the  following
               benefits:

                         (i)  continued  medical,   dental,   vision,  and  life
                    insurance   coverage   (excluding   accident,   death,   and
                    disability  insurance) and any fringe benefit or perquisites
                    in effect  immediately  prior to the date of termination for
                    Executive and  Executive's  eligible  dependents  or, to the
                    extent such benefits are not  commercially  available,  such
                    other arrangements  reasonably  acceptable to Executive,  on
                    the  same   basis  as  in  effect   prior  to  the  date  of
                    termination,   whichever  is  deemed  to  provide  for  more
                    substantial benefits, for a period ending December 31, 2002;

                         (ii)  immediate 100% vesting of all  outstanding  stock
                    options,  stock  appreciation  rights and  restricted  stock
                    granted  or  issued  by  the   Company  to  the  extent  not
                    previously vested;

                         (iii)  all  other   accrued  or  vested   benefits   in
                    accordance  with the  terms of the  applicable  plan,  which
                    vested benefits shall include Executive's otherwise unvested
                    account  balances in the Company's  401(k) plan, which shall
                    be vested as of the date of termination; and

                         (iv)  if  so  requested  by   Executive,   outplacement
                    services  shall be provided by a  professional  outplacement
                    provider selected by Executive; PROVIDED, HOWEVER, that such
                    outplacement  services  shall be provided to  Executive at a
                    cost to the Company of not more than fifteen (15) percent of
                    such Executive's Base Salary.

          (b)   CURE   PERIOD   OF   COMPANY   FOR  GOOD   REASON   TERMINATION.
     Notwithstanding  the foregoing,  in the event that  Executive  provides the
     Company with a notice of  termination  stating  Good Reason,  except in the
     event of a  Thirteenth-Month  Termination,  the Company  shall have 30 days
     thereafter in which to cure or resolve the behavior otherwise  constituting
     Good Reason.  Any good faith  determination  by Executive  that Good Reason
     exists shall be presumed correct and shall be binding upon the Company.

          (c) PERMANENT  DISABILITY  OF EXECUTIVE.  If Executive has a Permanent
     Disability,  the Company or Executive may terminate Executive's  employment
     on  written  notice  thereof,  and  Executive  shall  receive  or  commence
     receiving, as soon as practicable:

               (i)  amounts  payable  pursuant  to  the  terms  of a  disability
          insurance policy or similar  arrangement  which the Company  maintains
          during the term hereof;

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               (ii) the Actual Bonus,  prorated by a fraction,  the numerator of
          which is the number of days of the fiscal year until  termination  and
          the denominator of which is 365;

               (iii) the Vacation Payment and the Expense Payment; and

               (iv) such payments under applicable plans or programs,  including
          but not limited to those referred to in Section 4(c) hereof,  to which
          he is entitled pursuant to the terms of such plans or programs.

          (d) DEATH.  In the event of  Executive's  death during the term of his
     employment hereunder,  Executive's estate or designated beneficiaries shall
     receive or commence receiving, as soon as practicable:

               (i) the Actual  Bonus,  the  numerator  of which is the number of
          days of the fiscal year until his death and the  denominator  of which
          is 365;

               (ii) any  death  benefits  provided  under the  employee  benefit
          programs,  plans and practices  referred to in Section 5(a) hereof, in
          accordance with their terms;

               (iii) the Vacation Payment and the Expense Payment; and

               (iv) such payments under applicable plans or programs,  including
          but not limited to those referred to in Section 4(c) hereof,  to which
          Executive's  estate or designated  beneficiaries are entitled pursuant
          to the terms of such plans or programs.

          (e) TERMINATION BY THE COMPANY FOR CAUSE OR BY EXECUTIVE  WITHOUT GOOD
     REASON

               (i) The Company shall have the right to terminate the  employment
          of Executive for Cause.  In the event that  Executive's  employment is
          terminated  by the Company for Cause,  or by Executive  other than for
          Good Reason,  Executive shall only be entitled to receive the Vacation
          Payment  and the Expense  Payment.  Executive  shall not be  entitled,
          among other things, to the payment of any Annual Cash Bonus in respect
          of all or any  portion  of the fiscal  year in which such  termination
          occurs.  After the  termination of Executive's  employment  under this
          Section 7(e),  the  obligations of the Company under this Agreement to
          make any further payments or provide any benefits  specified herein to
          Executive shall thereupon cease and terminate.

               (ii) Termination of Executive for Cause shall be made by delivery
          to Executive of a copy of a resolution duly adopted by the affirmative
          vote of not less than a majority of the non-employee  directors of the
          Board at a regular or special  meeting  of such  directors  called and
          held  for  such  purpose,  after  30 days'  prior  written  notice  to
          Executive   specifying  the  basis  for  such   termination   and  the
          particulars  thereof and a reasonable  opportunity for Executive to be
          heard  prior to or at such  meeting,  finding  that in the  reasonable
          judgment of such  directors,  that any  conduct or event  constituting
          Cause has  occurred  and that  such  occurrence  warrants  Executive's
          termination.

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     8. CHANGE IN CONTROL.

               (a) Executive shall be entitled to the compensation  provided for
          in this  Section 8  hereof,  if  within  two  years  after a Change in
          Control, Executive's employment by the Company shall be terminated (A)
          by the Company  for any reason  other than (I)  Executive's  Permanent
          Disability or Retirement,  (II) Executive's  death or (III) for Cause,
          or (B) by Executive with Good Reason.

               (b) In addition,  Executive shall be entitled to the compensation
          provided for in this Section 8, if the following  events occur: (A) an
          agreement is signed which, if consummated, would result in a Change of
          Control,  (B) Executive is terminated  without Cause by the Company or
          terminates employment with Good Reason prior to the anticipated Change
          in Control,  and (C) such  termination  (or the action leading to such
          termination,  in  the  case  of  Good  Reason)  is at the  request  or
          suggestion  of  the  acquiror  or  merger   partner  or  otherwise  in
          connection  with the  anticipated  Change in Control,  except that any
          termination of employment as set forth in clause (C), above,  shall be
          presumed,  in the  absence  of clear and  convincing  evidence  to the
          contrary,  to have  occurred in  connection  with a Change in Control,
          whether or not a Change in Control actually occurs.

               (c) The Company shall pay or cause to be paid to Executive a cash
          severance  amount  equal to  three  times  the sum of (i)  Executive's
          annual  Base  Salary on the date of the  Change  in  Control  (or,  if
          higher,  the annual  Base  Salary in effect  immediately  prior to the
          giving  of the  notice of  termination),  and (ii) the  Actual  Bonus;
          PROVIDED,  HOWEVER,  that in the event that Executive's  employment is
          terminated  by  a  Thirteenth-Month   Termination,   Executive's  cash
          severance  amount  shall only be equal to two times the sum of (i) and
          (ii) above.  This cash severance amount shall be payable in a lump sum
          calculated  without any discount or, at the election of Executive,  on
          any deferred payment schedule selected by Executive.

               (d) No compensation  or other benefit  pursuant to this Section 8
          hereof shall be payable under this  Agreement  unless and until either
          (i) a Change in Control  shall have  occurred  while  Executive  is an
          employee  of a  Company  and  Executive's  employment  by the  Company
          thereafter  shall have  terminated in  accordance  with this Section 8
          hereof  or (ii)  Executive's  employment  by the  Company  shall  have
          terminated in accordance with this Section 8 hereof in anticipation of
          the occurrence of a Change in Control.

               (e) Executive shall also be entitled to the (i) Vacation  Payment
          and the Expense  Payment,  (ii) the medical and other  benefits  under
          Section  7(a)(C)(i),  (iii) vesting of certain  security  rights under
          Section 7(a)(C)(ii), (iv) other accrued and vested plans under Section
          7(a)(C)(iii) and (v) outplacement services under Section (a)(C)(iv)

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     9. EXCESS PARACHUTE EXCISE TAX.

               (i) If it is determined (as hereafter  provided) that any payment
          or  distribution  by the Company to or for the  benefit of  Executive,
          whether paid or payable or  distributed or  distributable  pursuant to
          the terms of this  Agreement or otherwise  pursuant to or by reason of
          any other agreement,  policy, plan, program or arrangement,  including
          without  limitation  any stock  option,  stock  appreciation  right or
          similar right,  or the lapse or  termination of any  restriction on or
          the vesting or  exercisability  of any of the foregoing (a "Payment"),
          would be subject to the excise tax imposed by Section 4999 of the Code
          by reason of being "contingent on a change in ownership or control" of
          the  Company,  within the meaning of Section  280G of the Code (or any
          successor provision thereto) or to any similar tax imposed by state or
          local law, or any  interest or  penalties  with respect to such excise
          tax (such tax or taxes, together with any such interest and penalties,
          are  hereafter  collectively  referred to as the "Excise  Tax"),  then
          Executive  shall be  entitled  to  receive  an  additional  payment or
          payments (a "Gross-Up  Payment") in an amount such that, after payment
          by Executive of all taxes (including any interest or penalties imposed
          with respect to such taxes),  including  any Excise Tax,  imposed upon
          the  Gross-Up  Payment,  Executive  retains an amount of the  Gross-Up
          Payment equal to the Excise Tax imposed upon the Payments.

                    (A) Subject to the provisions of this Section 9 hereof,  all
               determinations   required  to  be  made  under  this  Section  9,
               including  whether an Excise Tax is payable by Executive  and the
               amount of such  Excise  Tax and  whether a  Gross-Up  Payment  is
               required and the amount of such Gross-Up  Payment,  shall be made
               by the nationally recognized firm of certified public accountants
               (the  "Accounting  Firm") used by the Company prior to the Change
               in Control  (or, if such  Accounting  Firm shall be a  nationally
               recognized firm of certified public  accountants,  as selected by
               Executive).  The Accounting Firm shall be directed by the Company
               or Executive to submit its preliminary determination and detailed
               supporting  calculations to both the Company and Executive within
               15 calendar days after the date of termination of employment,  if
               applicable,  and any other such time or times as may be requested
               by the Company or Executive.  If the Accounting  Firm  determines
               that any Excise Tax is payable by  Executive,  the Company  shall
               pay the  required  Gross-Up  Payment  to, or for the  benefit of,
               Executive  within  five  business  days  after  receipt  of  such
               determination and calculations. If the Accounting Firm determines
               that no Excise Tax is payable by Executive, it shall, at the same
               time as it makes such  determination,  furnish  Executive with an
               opinion  that he has  substantial  authority  not to  report  any
               Excise Tax on his/her federal,  state,  local income or other tax
               return. Any determination by the Accounting Firm as to the amount
               of the  Gross-Up  Payment  shall be binding  upon the Company and
               Executive absent a contrary determination by the Internal Revenue

                                       10
<PAGE>
               Service or a court of competent jurisdiction;  provided, however,
               that  no  such  determination   shall  eliminate  or  reduce  the
               Company's  obligation to provide any Gross-Up  Payment that shall
               be due as a result of such contrary determination. As a result of
               the  uncertainty  in the  application of Section 4999 of the Code
               (or any  successor  provision  thereto)  and the  possibility  of
               similar uncertainty  regarding state or local tax law at the time
               of any  determination  by the Accounting  Firm  hereunder,  it is
               possible that  Gross-Up  Payments that will not have been made by
               the Company should have been made (an "Underpayment"), consistent
               with the calculations required to be made hereunder. In the event
               that  the  Company  exhausts  or  fails to  pursue  its  remedies
               pursuant to Section  6(f)(i)  hereof and Executive  thereafter is
               required  to make a payment of any Excise  Tax,  Executive  shall
               direct  the  Accounting  Firm  to  determine  the  amount  of the
               Underpayment  that has occurred  and to submit its  determination
               and  detailed  supporting  calculations  to both the  Company and
               Executive as promptly as possible. Any such Underpayment shall be
               promptly paid by the Company to, or for the benefit of, Executive
               within five business days after receipt of such determination and
               calculations.

                    (B) The federal, state and local income or other tax returns
               filed by  Executive  (or any filing  made by a  consolidated  tax
               group which  includes the Company) shall be prepared and filed on
               a consistent basis with the  determination of the Accounting Firm
               with  respect to the Excise Tax payable by  Executive.  Executive
               shall make proper payment of the amount of any Excise Tax, and at
               the  request  of the  Company,  provide to the  Company  true and
               correct copies (with any  amendments)  of his/her  federal income
               tax  return  as  filed  with the  Internal  Revenue  Service  and
               corresponding state and local tax returns, if relevant,  as filed
               with the applicable  taxing  authority,  and such other documents
               reasonably requested by the Company,  evidencing such payment. If
               prior to the filing of Executive's  federal income tax return, or
               corresponding  state  or  local  tax  return,  if  relevant,  the
               Accounting  Firm  determines  that  the  amount  of the  Gross-Up
               Payment should be reduced,  Executive  shall within five business
               days pay to the Company the amount of such reduction.

               (ii) In the event that the Internal  Revenue  Service claims that
          any payment or benefit  received under this  Agreement  constitutes as
          "excess parachute  payment",  within the meaning of Section 280G(b)(1)
          of the Code,  Executive  shall  notify the  Company in writing of such
          claim. Such notification  shall be given as soon as practicable but no
          later than 10 business days after  Executive is informed in writing of
          such claim and shall  apprise  the Company of the nature of such claim
          and the date on which such claim is  requested  to be paid.  Executive
          shall not pay such claim prior to the  expiration of the 30 day period
          following the date on which Executive gives such notice to the Company
          (or such shorter  period  ending on the date that any payment of taxes
          with respect to such claim is due). If the Company notifies  Executive

                                       11
<PAGE>
          in writing  prior to the  expiration of such period that it desires to
          contest  such  claim,   Executive  shall  (1)  give  the  Company  any
          information  reasonably  requested  by the  Company  relating  to such
          claim;  (2) take such action in connection  with contesting such claim
          as the Company shall reasonably  request in writing from time to time,
          including  without  limitation,  accepting legal  representation  with
          respect  to such  claim  by an  attorney  reasonably  selected  by the
          Company and reasonably  satisfactory to Executive;  (3) cooperate with
          the Company in good faith in order to effectively  contest such claim;
          and (4) permit the Company to participate in any proceedings  relating
          to such claim; provided,  however, that the Company shall bear and pay
          directly  all costs  and  expenses  (including,  but not  limited  to,
          additional  interest and  penalties and related  legal,  consulting or
          other similar fees) incurred in connection with such contest and shall
          indemnify and hold Executive harmless,  on an after-tax basis, for and
          against any Excise Tax or other tax (including  interest and penalties
          with respect thereto) imposed as a result of such  representation  and
          any payment of costs and expenses.

                    (A) The  Company  shall  control  all  proceedings  taken in
               connection with such contest and, at its sole option,  may pursue
               or  forgo  any  and  all  administrative  appeals,   proceedings,
               hearings  and  conferences  with the tax  authority in respect of
               such claim and may, at its sole option,  either direct  Executive
               to pay the tax  claimed and sue for a refund or contest the claim
               in any permissible manner, and Executive agrees to prosecute such
               contest before any administrative tribunal, in a court of initial
               jurisdiction and in one or more appellate  courts, as the Company
               shall determine;  provided,  however, that if the Company directs
               Executive  to pay such  claim and sue for a refund,  the  Company
               shall  advance  the  amount of such  payment to  Executive  on an
               interest-free  basis,  and  shall  indemnify  and hold  Executive
               harmless, on an after-tax basis, from any Excise Tax or other tax
               (including  interest and penalties with respect  thereto) imposed
               with  respect  to such  advance or with  respect  to any  imputed
               income with respect to such advance; and provide , further,  that
               if Executive is required to extend the statute of  limitations to
               enable the  Company to contest  such claim,  Executive  may limit
               this  extension  solely to such contested  amount.  The Company's
               control of the contest shall be limited to issues with respect to
               which a  corporate  deduction  would be  disallowed  pursuant  to
               Section  280G of the Code and  Executive  shall  be  entitled  to
               settle or contest,  as the case may be, any other issue raised by
               the Internal  Revenue Service or any other taxing  authority.  In
               addition,  no position may be taken nor any final  resolution  be
               agreed to by the  Company  without  Executive's  consent  if such
               position or resolution  could reasonably be expected to adversely
               affect  Executive  (including  adversely  affecting any other tax
               position of Executive unrelated to matters covered hereby).

                    (B)  If,  after  the  receipt  by  Executive  of any  amount
               advanced  by the  Company in  connection  with the contest of the
               Excise Tax  claim,  Executive  becomes  entitled  to receive  any

                                       12
<PAGE>
               refund with respect to such claim,  Executive  shall promptly pay
               to the  Company  the  amount of such  refund  (together  with any
               interest  paid  or  credited   thereon  after  taxes   applicable
               thereto); provided, however, if the amount of that refund exceeds
               the amount advanced by the Company or it is otherwise  determined
               for any  reason  that  additional  amounts  could  be paid by the
               Company to Executive  without  incurring any Excise Tax, any such
               amount will be promptly  paid by the  Company to  Executive.  If,
               after the  receipt  by  Executive  of an amount  advanced  by the
               Company in connection  with an Excise Tax claim, a  determination
               is made that  Executive  shall not be entitled to any refund with
               respect to such claim and the Company  does not notify  Executive
               in writing of its  intent to  contest  the denial of such  refund
               prior to the expiration of 30 days after such determination, such
               advance  shall be forgiven and shall not be required to be repaid
               and shall be deemed to be in consideration  for services rendered
               after the date of the Termination.

               (iii) The Company and Executive shall each provide the Accounting
          Firm access to and copies of any books,  records and  documents in the
          possession of the Company or Executive, as the case may be, reasonably
          requested by the  Accounting  Firm,  and otherwise  cooperate with the
          Accounting Firm in connection with the preparation and issuance of the
          determination contemplated by this Section 9.

               (iv)  The  fees  and  expenses  of the  Accounting  Firm  for its
          services  in  connection  with  the  determinations  and  calculations
          contemplated  by this  Section 9 hereof shall be borne by the Company.
          If such fees and expenses are  initially  advanced by  Executive,  the
          Company  shall  reimburse  Executive  the full amount of such fees and
          expenses  within five business days after receipt from  Executive of a
          statement therefor and reasonable evidence of his payment thereof.

     10.  MITIGATION  OF  DAMAGES.  Executive  shall not be required to mitigate
damages or the  amount of any  payment  provided  for under  this  Agreement  by
seeking other  employment or otherwise  after the  termination of his employment
hereunder.

     11. NOTICES.  All notices or communications  hereunder shall be in writing,
addressed as follows:

     To the Company:

          Franchise Finance Corporation of America
          17207 North Perimeter Drive
          Scottsdale, AZ  85255
          Attention: General Counsel

                                       13
<PAGE>
     To Executive:

          Mr. Morton H. Fleischer
          17207 North Perimeter Drive
          Scottsdale, AZ 85255

Any such notice or  communication  shall be delivered by hand, by telecopy (with
machine confirmation) or by courier or sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other address
as such party may designate in a notice duly delivered as described above),  and
the third  business day after the actual date of mailing  shall  constitute  the
time at which notice was given.

     12.  SEVERABILITY;  LEGAL FEES. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability  shall not affect the remaining  provisions  hereof which shall
remain in full force and effect.  In the event that any dispute  arises  between
Executive and the Company as to the terms or  interpretation  of this Agreement,
whether  instituted  by formal legal  proceedings  or  otherwise,  including any
action that Executive  takes to enforce the terms of this Agreement or to defend
against any action taken by the Company,  Executive  shall be reimbursed for all
costs and expenses,  including  reasonable  attorneys'  fees,  arising from such
dispute,  proceedings  or  actions,  provided  that  Executive  shall  obtain  a
settlement or final judgement by a court of competent jurisdiction substantially
in favor of Executive.  Such reimbursement shall be paid within ten (10) days of
Executive's  furnishing  to the Company  written  evidence,  which may be in the
form,  among  other  things,  of a cancelled  check or receipt,  of any costs or
expenses incurred by Executive.

     13. SUCCESSORS; BINDING AGREEMENT, ASSIGNMENT.

          (a) The  Company  shall  require  any  successor  (whether  direct  or
     indirect,  by  purchase,  merger,  consolidation  or  otherwise)  to all or
     substantially  all  of  the  business  of  the  Company,  by  agreement  to
     expressly,  absolutely and unconditionally assume and agree to perform this
     Agreement in the same manner and to the same extent that the Company  would
     be required to perform it if no such succession had taken place. Failure of
     the Company to obtain such agreement prior to the effectiveness of any such
     succession  shall be a material  breach of this Agreement and shall entitle
     Executive  to  terminate  Executive's  employment  with the Company or such
     successor  for Good Reason  immediately  prior to or at any time after such
     succession. As used in this Agreement, "Company" shall mean (i) the Company
     as  hereinbefore  defined,  and (ii) any  successor to all the stock of the
     Company or to all or substantially all of the Company's  business or assets
     (other  than  with  respect  to sales of  assets  in the  ordinary  course,
     securitization  and whole loan sales provided by the Company's  interim and
     permanent financing  arrangements) which executes and delivers an agreement
     provided for in this Section 13(a) or which otherwise  becomes bound by all
     the terms and provisions of this  Agreement by operation of law,  including
     any parent or subsidiary of such a successor.

          (b) This Agreement shall inure to the benefit of and be enforceable by
     Executive's personal or legal representatives,  executors,  administrators,
     successors, heirs, distributees, devisees and legatees. If Executive should
     die while any amount would be payable to  Executive  hereunder if Executive

                                       14
<PAGE>
     had continued to live, all such amounts,  unless otherwise provided herein,
     shall be paid in accordance with the terms of this Agreement to Executive's
     estate or  designated  beneficiary.  Neither this  Agreement  nor any right
     arising hereunder shall be assignable or otherwise subject to hypothecation
     by  Executive  (except  by will or by  operation  of the laws of  intestate
     succession)  or by the  Company,  except  that the  Company may assign this
     Agreement to any  successor  (whether by merger,  purchase or otherwise) to
     all or substantially all of the stock, assets or businesses of the Company,
     if such successor expressly agrees to assume the obligations of the Company
     hereunder.

     14.  AMENDMENT.  This Agreement may only be amended by written agreement of
the parties hereto.

     15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.  At any time during or after
Executive's employment with the Company,  Executive shall not, without the prior
written consent of the Company, use, divulge, disclose or make accessible to any
other person, firm, partnership, corporation or other entity any confidential or
proprietary  information pertaining to the business of the Company or any of its
subsidiaries,  pursuant  to the  policies  set forth in the  Company's  employee
handbook and compliance manual, as amended from time to time.

     16. COVENANT NOT TO COMPETE.

          (a) During the period of his employment hereunder and for the first to
     occur of (i) one year following the  termination of employment of Executive
     or (ii) December 31, 2002, Executive agrees that, without the prior written
     consent of the Company, (a) he will not, directly or indirectly,  either as
     principal,  manager,  agent,  consultant,  officer,  stockholder,  partner,
     investor, lender or employee or in any other capacity, carry on, be engaged
     in or have any financial  interest in (other than an ownership  position of
     less than five percent in any company  whose  shares are publicly  traded),
     any business,  which is in  Competition  (as defined in Section 16(b)) with
     the existing business of the Company or its subsidiaries,  and (b) he shall
     not,  on his own  behalf  or on  behalf  of any  person,  firm or  company,
     directly or indirectly,  solicit or offer  employment to any person who has
     been employed by the Company or its  subsidiaries at any time during the 12
     months immediately preceding such solicitation.

          (b) For purposes of this Section 16, a business  shall be deemed to be
     in  Competition  with the  Company  or its  subsidiaries  if a  significant
     portion of its  business is  providing  financing to operators in the chain
     restaurant, convenience store or automotive service and parts industries in
     any portion of the United States.

          (c)  Executive and the Company agree that this covenant not to compete
     is a reasonable covenant under the circumstances, and further agree that if
     in the opinion of any court of competent jurisdiction such restraint is not
     reasonable  in any  respect,  such court  shall  have the right,  power and
     authority to excise or modify such provision or provisions of this covenant
     as to the court shall appear not reasonable and to enforce the remainder of
     the  covenant  as so  amended.  Executive  agrees  that any  breach  of the
     covenants  contained  in this  Section  16  would  irreparably  injure  the
     Company. Accordingly, Executive agrees that the Company may, in addition to

                                       15
<PAGE>
     pursuing any other  remedies it may have in law or in equity,  cease making
     any payments  otherwise required by this Agreement and obtain an injunction
     against  Executive  from any  court  having  jurisdiction  over the  matter
     restraining any further violation of this Agreement by Executive.

     17. BENEFICIARIES;  REFERENCES.  Executive shall be entitled to select (and
change,  to the extent  permitted  under any  applicable  law) a beneficiary  or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's  death,  and may change such election,  in either case by giving the
Company written notice thereof.  In the event of Executive's death or a judicial
determination  of his  incompetence,  reference  in this  Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal  representative.  Any reference to the masculine  gender in this Agreement
shall include, where appropriate, the feminine.

     18.  SURVIVORSHIP.  The  respective  rights and  obligations of the parties
hereunder  shall  survive  any  termination  of  this  Agreement  to the  extent
necessary to the intended preservation of such rights and obligations, including
the  provisions of Section 16 herein.  The  provisions of this Section 18 are in
addition to the survivorship provisions of any other section of this Agreement.

     19.  GOVERNING  LAW. This  Agreement  shall be construed,  interpreted  and
governed in accordance with the laws of the State of Arizona  without  reference
to rules relating to conflicts of law.

     20.  EFFECT  ON  PRIOR  AGREEMENTS.  This  Agreement  contains  the  entire
understanding  between the parties  hereto and  supersedes  in all  respects any
prior or other agreement or  understanding  between the Company or any affiliate
of the Company and  Executive  including,  without  limitation,  the  Continuity
Agreement dated as of May 12, 1999 between the Company and Executive.

     21. WITHHOLDING. The Company shall be entitled to withhold from payment any
amount of withholding required by law.

                                       16
<PAGE>
     22.   COUNTERPARTS.   This  Agreement  may  be  executed  in  two  or  more
counterparts, each of which will be deemed an original.

                                        FRANCHISE FINANCE CORPORATION OF AMERICA


                                        By /s/ Christopher H. Volk
                                           -------------------------------------
                                           Name   Christopher H. Volk
                                           Title  President, Chief Operating
                                                  Officer, Assistant Secretary
                                                  and Assistant Treasurer


                                        /s/ Morton H. Fleischer
                                        ----------------------------------------
                                        Morton H. Fleischer

                                       17