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                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT


         This Agreement is made as of July 1, 1999 by and between FAMOUS DAVE'S
OF AMERICA, INC., a Minnesota corporation (the "Company"), and MARTIN J. O'DOWD
(the "Executive").

                               W I T N E S S E T H

          WHEREAS, the Company desires to employ Executive in accordance with
the terms and conditions stated in this Agreement; and

         WHEREAS, Executive desires to accept that employment pursuant to the
terms and conditions of this Agreement;

          NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, the parties hereto agree as follows:

I.       EMPLOYMENT

         1.1 Employment as Chief Executive Officer. The Company hereby employs
Executive as President and Chief Executive Officer and Executive accepts such
employment pursuant to the terms of this Agreement. Executive shall report to
and take direction from the Chairman of the Board of Directors (the "Board") and
the Board. All other employees of the Company will report, directly or
indirectly, to Executive. Executive will perform those duties which are usual
and customary for a President and Chief Executive Officer of a restaurant
enterprise. Executive shall be employed at the Company's corporate offices. He
shall perform his duties in a manner reasonably expected of a President and
Chief Executive Officer of a restaurant company.

         1.2 Term. Unless terminated by Executive or the Company pursuant to
Article III hereof, Executive's employment pursuant to this Employment Agreement
shall be for a term of three (3) years, such term to commence on August 1, 1999.

II.      COMPENSATION, BENEFITS AND PERQUISITES

         2.1 Base Salary. During the term and effectiveness of this Agreement,
the Company shall pay Executive an annualized base salary ("Base Salary") at the
annual rate of Three Hundred Thousand Dollars ($300,000). The Base Salary shall
be payable in equal installments in the time and manner that other employees of
the Company are compensated. The Board will review the Base Salary at least
annually and may, in its sole discretion, increase it to reflect performance,
appropriate industry guideline data or other factors.

         2.2 Bonus. Executive will receive an annual bonus (the "Base Bonus") in
the amount of $75,000, payable at the end of each fiscal year. Executive may
receive an additional



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performance-based bonus (the "Incentive Bonus") of up to $50,000, the amount of
which, if any, will be determined and paid at the sole discretion of the Board's
compensation committee (the "Compensation Committee") at the end of each year of
service based upon Executive's satisfaction of certain criteria mutually agreed
upon by Executive and the Board, including without limitation, the
accomplishment by the Company of certain expectations regarding the Company's
budget, restaurant development and performance, and management retention. The
Board and Executive will review and, if mutually agreed, revise the criteria for
the Incentive Bonus at least annually.

         2.3 Vacation. Executive shall be entitled to four (4) weeks' paid
vacation, or such greater amount of time as determined by the Board.

         2.4 Employee Benefits. Throughout the term of this Agreement, Executive
shall be entitled to the usual and customary benefits and perquisites which the
Company generally provides to its other senior executives under its applicable
plans and policies (including, without limitation, healthcare coverage and
retirement benefits). If the Company adopts a benefit plan, Executive shall be
entitled to the benefits which the Company provides to its other executives
under such plan. Executive shall pay any contributions which are generally
required of executives to receive any such benefits.

III.     TERMINATION OF EXECUTIVE'S EMPLOYMENT

         3.1 Termination of Employment.

             (a) Executive's employment under this Agreement may be
         terminated by Executive at any time for any reason. This Agreement
         shall terminate in its entirety immediately upon the death of
         Executive.

             (b) Executive's employment under this Agreement may be
         terminated by the Company at any time for any reason; provided,
         however, that if (i) Executive's employment is terminated by the
         Company during the term of this Agreement for a reason or disability
         other than for "Cause" as defined in Section 3.2, or (ii) Executive
         resigns for "Good Reason" as defined in Section 3.2, Executive shall
         receive a severance payment (the "Severance Payment") in the amount of
         Two Hundred Thousand Dollars ($200,000), and shall not receive any
         additional compensation or bonuses.

             (c) If, during the term of this Agreement, Executive
         terminates his employment with the Company following a "Change of
         Control" of Company, Executive shall continue to receive his Base
         Salary, Base Bonus and Incentive Bonus (the annual amount of which
         shall equal (i) the amount of the Incentive Bonus payment made to
         Executive at the end of the year preceding termination, or (ii)
         $50,000, if such change of control and termination occur during the
         first year of Executive's employment) for the remaining term of this
         Agreement; provided however, that if Executive obtains other




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         employment during such remaining term, the Company shall receive a
         dollar-for-dollar credit against its severance obligation hereunder
         with respect to compensation and benefits received by Executive in his
         new employment.

                  (d) Any termination shall be effective as of the date
         specified by the party initiating the termination in a written notice
         delivered to the other party, which date shall not be earlier than the
         date such notice is delivered to the other party. Except as expressly
         provided to the contrary in this section or applicable law, Executive's
         rights to pay and benefits shall cease on the date his employment under
         this Agreement terminates.

         3.2      Definitions.  For purposes of this Article III,

                  (a) "Cause" shall mean only the following: (i) commission of a
         felony; (ii) theft or embezzlement of Company property or commission of
         similar acts involving moral turpitude; or (iii) the failure by
         Executive to substantially perform his material duties under this
         Agreement (excluding nonperformance resulting from Executive's
         disability) which failure is not cured within 30 days after written
         notice from the Chairman of the Board specifying the act of
         nonperformance or within such longer period (but no longer than 90 days
         in any event) as is reasonably required to cure such nonperformance.
         Notwithstanding the foregoing, Executive shall not be deemed to have
         been terminated for Cause unless and until there shall have been
         delivered to Executive a copy of a resolution duly adopted by the
         affirmative vote of the Board at a meeting of the Board called and held
         for this specific purpose.

                  (b) "Good Reason" shall mean only the following: (i) Executive
         has been demoted; or (ii) Executive has incurred a substantial
         reduction in his authority or responsibility.

                  (c) "Change of Control" shall mean the occurrence of any of
         the following events:

                      (i) any person or group of persons becomes the
                  beneficial owner of thirty-five percent (35%) or more of any
                  equity security of the Company entitled to vote for the
                  election of directors;

                      (ii) a majority of the members of the board of
                  directors of the Company is replaced within the period of less
                  than two (2) years by directors not nominated and approved by
                  the board of directors; or

                      (iii) the stockholders of the Company approve an
                  agreement to merge or consolidate with or into another
                  corporation or an agreement to sell or otherwise dispose of
                  all or substantially all of the Company's assets (including a
                  plan of liquidation).

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         3.3 Disability. If Executive has become disabled such that he cannot
perform the essential functions of his job with or without reasonable
accommodation, and the disability has continued for a period of more than 90
days, the Board may, in its discretion, terminate his employment under this
Agreement. Upon any such termination for disability, Executive shall be entitled
to such disability, medical, life insurance, and other benefits as may be
provided generally for disabled employees of the Company during the period he
remains disabled.

         3.4 Notice. Executive must provide the Company with at least 30 days'
written notice if Executive desires to terminate his employment under this
Agreement.

IV.      CONFIDENTIALITY

         4.1 Prohibitions Against Use. Both parties to this Agreement
acknowledge and agree that during the term of this Agreement they may have
access to various trade secrets and confidential business information
("Confidential Information") of each other. Each party agrees that it shall use
such Confidential Information solely in connection with his obligations under
this Agreement and shall maintain in strictest confidence and shall not disclose
any such Confidential Information, directly or indirectly or use such
information in any other way during the term of this Agreement or for a period
of one (1) year after the termination of this Agreement. The parties further
agree to take all reasonable steps necessary to preserve and protect the
Confidential Information. The provisions of this Section shall be equally
applicable to each parties' officers, directors, agents or employees. The
provisions of this Section shall not apply to information which (i) was in
possession of a party prior to receipt from the other party, or (ii) is or
becomes generally available to the public other than as a result of a disclosure
by a party, its directors, officers, employees, agents or advisors, or (iii)
becomes available to a party from a third party having the right to make such
disclosure.

         4.2 Remedies. Executive acknowledges that the Company's remedy at law
for any breach or threatened breach by Executive of Section 4.1 will be
inadequate. Therefore, the Company shall be entitled to injunctive and other
equitable relief restraining Executive from violating those requirements, in
addition to any other remedies that may be available to the Company under this
Agreement or applicable law.

V.       NON-COMPETITION

         5.1 Agreement Not to Compete. Executive agrees that, on or before the
date which is two (2) years after the date Executive's employment under this
Agreement terminates, he will not, unless he receives the prior approval of the
Board, directly or indirectly engage in any of the following actions:

             (a) Own an interest in (except as provided below), manage,
         operate, join, control, lend money or render financial or other
         assistance to, or participate in or be connected with, as an officer,
         employee, partner, stockholder, consultant or otherwise,

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         any entity whose primary business is the retail sale of barbequed food.
         However, nothing in this subsection (a) shall preclude Executive from
         holding (i) less than one percent of the outstanding capital stock of
         any corporation required to file periodic reports with the Securities
         and Exchange Commission under Section 13 or 15(d) of the Securities
         Exchange Act of 1934, as amended, the securities of which are listed on
         any securities exchange, quoted on the National Association of
         Securities Dealers Automated Quotation System or traded in the
         over-the-counter market, or (ii) holding an interest in the restaurant
         concepts which Executive was involved with in the last three (3) years.

                  (b) Intentionally solicit, endeavor to entice away from the
         Company, or otherwise interfere with the relationship of the Company,
         any person who is employed by or otherwise engaged to perform services
         for the Company (including, but not limited to, any independent sales
         representatives or organizations), whether for Executive's own account
         or for the account of any other individual, partnership, firm,
         corporation or other business organization.

If the scope of the restrictions in this section are determined by a court of
competent jurisdiction to be too broad to permit enforcement of such
restrictions to their full extent, then such restrictions shall be construed or
rewritten (blue-lined) so as to be enforceable to the maximum extent permitted
by law, and Executive hereby consents, to the extent he may lawfully do so, to
the judicial modification of the scope of such restrictions in any proceeding
brought to enforce them.

         5.2      Remedies. Executive acknowledges that the Company's remedy at
law for any breach or threatened breach by Executive of Section 5.1 will be
inadequate. Therefore, the Company shall be entitled to injunctive and other
equitable relief restraining Executive from violating those requirements, in
addition to any other remedies that may be available to the Company under this
Agreement or applicable law.

VI.      STOCK OPTION AGREEMENT

         Contemporaneously herewith and in connection with this Agreement, the
parties hereto have entered into a Stock Option Agreement, pursuant to which the
Company granted to Executive the right and option (the "Option") to purchase up
to Five Hundred Thousand (500,000) shares of the Company's common stock, subject
to the terms, conditions and exercise price set forth in the form of Stock
Option Agreement attached hereto as Exhibit A.

VII.     MISCELLANEOUS

         7.1      Amendment. This Agreement may be amended only in writing,
signed by both parties.

         7.2      Entire Agreement. This Agreement contains the entire
understanding of the

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parties with regard to all matters contained herein. There are no other
agreements, conditions or representations, oral or written, expressed or
implied, with regard thereto. This Agreement supersedes any prior agreements
relating to the employment of Executive by the Company.

         7.3 Assignment. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties and their respective successors, assigns, heirs
and personal representatives and any entity with which the Company may merge or
consolidate or to which the Company may sell substantially all of its assets.

         7.4 Notices. Any notice required to be given under this Agreement shall
be in writing and shall be delivered either in person or by certified or
registered mail, return receipt requested.
Any notice by mail shall be addressed as follows:

                           If to the Company, to:

                                    Famous Dave's of America, Inc.
                                    7657 Anagram Drive
                                    Eden Prairie, MN 55344
                                    Attention: Chairman of the Board

                           If to Executive, to:

                                    Martin J. O'Dowd
                                    3719 Xerxes Avenue South
                                    Minneapolis, Minnesota 55410

or to such other addresses as either party may designate in writing to the other
party from time to time.

         7.5 Waiver of Breach. Any waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.

         7.6 Severability. If any one or more of the provisions (or portions
thereof) of this Agreement shall for any reason be held by a final determination
of a court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions (or portions of the provisions) of this Agreement, and the
invalid, illegal or unenforceable provisions shall be deemed replaced by a
provision that is valid, legal and enforceable and that comes closest to
expressing the intention of the parties hereto.

         7.7 Governing Law.  This Agreement shall be interpreted and
enforced in accordance

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with the laws of the State of Minnesota, without giving effect to conflict of
law principles.

         7.8 Arbitration. Any controversy or claim arising out of or relating to
this Agreement or the breach of this Agreement shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and a judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction. The arbitration award shall be subject
to review only in the manner provided in the Uniform Arbitration Act as adopted
in Chapter 572, Minnesota Statutes, as the Act is amended at the time of
submission of the issue to arbitration. The arbitrator(s) shall have the
authority to award the prevailing party its costs and reasonable attorney's fees
which shall be paid by the non-prevailing party. In the event the parties hereto
agree that it is necessary to litigate any dispute hereunder in a court, the
non-prevailing party shall pay the prevailing party its costs and reasonable
attorney's fees.

         IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.

                                                FAMOUS DAVE'S OF AMERICA, INC.


                                                By:   s/ David W. Anderson
                                                      --------------------------
                                                Its:  Chairman
                                                      --------------------------

                                                 s/ Martin J. O'Dowd
                                                --------------------------------
                                                MARTIN J. O'DOWD














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