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                                                                    EXHIBIT 10.1


                              CONSULTING AGREEMENT


         This Consulting Agreement ("Agreement") is made and entered into as of
this first day of August, 1999 ("Effective Date"), by and between DOUGLAS S.
LANHAM, an individual, and FAMOUS DAVE'S OF AMERICA, INC., a Minnesota business
corporation (the "Company").

         The parties hereby agree as follows:

         1. Resignation; Termination of Employment Agreement. Upon the Effective
Date of this Agreement, Lanham shall resign from his seat on the Company's Board
of Directors and from his position as President and Chief Operating Officer of
the Company, and from any and all of his positions as director or officer of any
subsidiaries of the Company. The Employment Agreement entered into between the
Company and Lanham dated January 23, 1997, is hereby terminated and this
Agreement shall supersede such Employment Agreement in all respects, unless
otherwise excepted herein.

         2. Services; Nature of Consulting Duties. The Company retains Lanham
for the term set forth below in Paragraph 3 to perform such consulting services
and duties for the Company relating to its business activities as the parties
from time to time mutually agree.

         3. Term. Subject to the terms, covenants and conditions hereof, the
term of this Agreement shall be for a period of one (1) year commencing on the
Effective Date.

         4. Base Compensation; Manner of Payments; Acceleration. During the term
of this Agreement, Lanham shall receive a base compensation of Two Hundred
Twenty Five Thousand Dollars ($225,000.00). The base compensation shall be
payable in equal installments at the time of the Company's regular employee
payroll dates. At Lanham's election, however, a portion of the base compensation
may be accelerated once during this Agreement in an amount up to Seventy Five
Thousand Dollars ($75,000.00) by providing written notice to the Company,
provided the requested amount of acceleration does not exceed the balance of the
outstanding base compensation remaining at the time such request is made.
Following an accelerated payment, the new remaining balance of base compensation
shall be paid in prorated equal installments made at the time of the Company's
regular employee payroll dates calculated to pay the final amount owing at the
expiration of the term of this Agreement.

         5. Per Diem Compensation. In addition to the base compensation
described above, Lanham shall receive One Thousand Two Hundred Dollars
($1,200.00) for each day he provides consulting services to the Company pursuant
to this Agreement, plus reasonable out-of-pocket expenses incurred therein at
the Company's request.

         6. Amendment of Stock Option Agreements. As additional consideration,
the parties hereby agree to amend various Option Agreements as follows:




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            a. January 23, 1997 Option Agreement. In addition to the 150,000
share portion which has vested under the parties' Option Agreement dated January
23, 1997 (hereinafter "January 23 Option"), an additional 50,000 share portion
of such Option shall vest on the date hereof. Further, notwithstanding anything
to the contrary contained in the January 23 Option, the remaining 50,000
unvested share portion of the January 23 Option, as amended hereby, is
terminated and Lanham shall be entitled to exercise the vested portion of such
Option in the manner set forth in the January 23 Option at any time on or prior
to November 1, 2001 (the "Option Exercise Period"). Upon the expiration of the
Option Exercise Period, the January 23 Option shall terminate and become null
and void.

            b. July 28, 1997 Option Agreement. The Option Agreement between the
parties dated July 28, 1997 is hereby terminated and is null and void.

            c. June 18, 1999 Option Agreement. Notwithstanding anything to the
contrary contained in the parties' Option Agreement dated June 18, 1999
(hereinafter "June 18 Option"), the 25,000 unvested share portion of such option
is terminated and Lanham shall be entitled to exercise the remaining 125,000
shares covered by the June 18 Option in the manner set forth in such option at
any time prior to November 1, 2001 (the "Option Exercise Period"). Upon the
expiration of the Option Exercise Period, June 18 Option shall terminate and
become null and void.

            d. July 28, 1997 Anderson Option Agreement. Lanham hereby agrees
that the Option Agreement dated July 28, 1997 between he and David W. Anderson
is hereby terminated and is null and void.

         7. Status as Independent Contractor. Using commercially reasonable
efforts, Lanham shall devote such time to the performance of the services
described in this Agreement as reasonably requested from time to time by the
Company. Lanham may perform the services described in this Agreement at
locations other than in the State of Minnesota and may engage in other business
activities; provided, however, that Lanham complies with his confidentiality and
other obligations under this Agreement. Lanham shall have no power to act as an
agent of the Company or bind the Company in any respect. Lanham shall be an
independent contractor in the performance of this Agreement, and shall not be
deemed an employee of the Company for any purpose whatsoever. Lanham shall not
be entitled to participate in any benefit programs for employees of the Company,
including without limitation health benefits, life insurance, pension or profit
sharing plans or paid vacation and sick leave.

         8. Agreement Not to Compete. Lanham agrees that during the term of this
Agreement he will not, unless he receives the prior approval of the Company's
Board, directly or indirectly engage in the following:

            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, any entity whose primary business

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is the retail sale of barbequed food. However, nothing in this subparagraph
shall preclude Lanham 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)
Lanham's existing interests in Casa Roja, Inc. (d/b/a Rudy's), a barbequed food
restaurant in Albuquerque, New Mexico.

            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 whether for
Lanham'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 paragraph 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
re-written (blue-lined) so as to be enforceable to the maximum extent permitted
by law, and Lanham 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.

         9. Confidential Information. Both parties to this Agreement acknowledge
and agree that during Lanham's tenure as Director and Chief Operating Officer,
as well as during the term of this Agreement, Lanham has had and will have
access to various trade secrets and confidential business information
("Confidential Information") of the Company. Lanham agrees that he 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 expiration of this Agreement. The parties further agree to take
all reasonable steps necessary to preserve and protect such Confidential
Information. The provisions of this paragraph shall not apply to information
which (i) was in Lanham's possession prior to receipt from the Company, or (ii)
is or becomes generally available to the public other than as a result of a
disclosure by Lanham, or (iii) becomes available to Lanham from a third party
having the right to make such disclosure.

         10. Remedies and Enforcement. The parties acknowledge that the
Company's remedy at law for any breach or threatened breach of the non-compete
provisions of Paragraph 8 and the confidentiality provisions of Paragraph 9
above will be inadequate. Therefore, the Company shall be entitled to injunctive
and other equitable relief restraining Lanham from violating those requirements,
in addition to any other remedies that may be available to the Company under
this Agreement or applicable law.

         11. Mutual Release. In consideration of the foregoing and except for
the obligations, responsibilities and liabilities created by this Agreement, the
Company, on behalf of itself and on behalf of its predecessors, successors,
subsidiaries, affiliates, officers, directors, employees, agents,

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representatives, attorneys and assigns, and Lanham, on behalf of himself and on
behalf of his agents, successors, heirs, assigns, executors, administrators and
all other persons, do hereby absolutely and unconditionally release and forever
discharge each other and their respective predecessors, successors,
subsidiaries, affiliates, officers, directors, employees, agents,
representatives, attorneys, heirs, executors, administrators and all other
persons from any and all claims, demands, actions or causes of action of any
kind, nature, description or origin, under any state or federal law or laws or
the common law, from the beginning of time to the date of this Agreement which
they have ever had or now have against each other, including, without limiting
the generality of the foregoing, all claims arising from Lanham's employment
with the Company including, but not limited to, any alleged breach of contract,
wrongful termination, wrongful discrimination, including any and all claims
under the Minnesota Human Rights Act ("MHRA") and the federal Age Discrimination
in Employment Act ("ADEA"), interference with contract, defamation, promissory
estoppel, or infliction of emotional distress or for any other alleged unlawful
employment practice arising out of or relating to Lanham's employment with the
Company. Lanham acknowledges that the consideration provided to him in this
Agreement is full and fair compensation for his foregoing release of rights and
claims.

            Notwithstanding the foregoing, nothing in this Agreement shall be
construed to release the Company from Lanham's right, under Minnesota law or
under the Company's Articles of Incorporation or By-Laws, to indemnification
resulting from him being made or threatened to be made a party to any legal
proceeding by reason of his present or former official capacity as an officer
and/or director of the Company.

            a. Right to Rescind Under Minnesota Law. Lanham understands that he
has a right to rescind the above general release of discrimination rights and
claims which he may have under the MHRA within fifteen (15) calendar days of the
date upon which he signs this Agreement. He further understands that, if he
desires to rescind the above general release of discrimination rights and claims
under the MHRA, he must put such rescission request in writing and deliver it to
the Company by hand or by certified mail, return receipt requested, within
fifteen (15) calendar days of the date of execution of this Agreement by him. If
notice of rescission is given by mail, it must be postmarked within fifteen (15)
days of the date Lanham signs this Agreement and must be addressed to David W.
Anderson, Famous Dave's of America, Inc., 7657 Anagram Drive, Eden Prairie,
Minnesota 55344.

            b. Right to Rescind Under Federal Law. Lanham also understands that
he has twenty one (21) days to consider this Agreement and the above release of
any and all claims he may have against the Company under the ADEA, beginning on
the date on which he first received this Agreement. Lanham further understands
that if he signs this Agreement, he will then be entitled to revoke his release
of any rights and claims of age discrimination under the ADEA within seven (7)
days of executing it, and the release of his ADEA rights and claims shall not
become effective until the seven-day period has expired.

            c. Effect of Rescission or Revocation. Lanham also understands that
if he

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rescinds or revokes the general release set forth above, all of the Company's
obligations under this Agreement will immediately cease, and the Company will
not pay Lanham any of the money or other benefits provided for in this
Agreement.

            d. Denial of Liability. The Company does not admit that it is
responsible or legally obligated to Lanham, and in fact the Company denies that
it is responsible or legally obligated to Lanham even though it has provided
Lanham full and fair consideration to release his claims.

         12. Miscellaneous Provisions.

            a. Entire Agreement. This Agreement sets forth the entire agreement
of the parties with respect to the subject matter hereof, and supersedes all
prior agreements with respect to Lanham's services to the Company. This
Agreement may not be amended or modified in any manner except by a written
instrument signed by the parties.

            b. Further Assurances. The parties represent and warrant that they
will take any additional action necessary to effectuate the terms and conditions
of this Agreement, including by way of example, but not limitation, executing
written modifications to their Option Agreements.

            c. Severability. The invalidity or unenforceability of one or more
provisions of this Agreement shall not affect the validity or enforceability of
any of the other provisions, and this Agreement shall be construed as if such
invalid or unenforceable provisions were omitted. If any provision is
unenforceable because it is overly broad, the parties agree that such provision
shall be limited to the extent necessary to make it enforceable, it being the
intent of the parties that provisions of this Agreement be enforced to the
maximum extent possible.

            d. Choice of Law; Choice of Forum. This Agreement shall be deemed to
have been entered into in, and shall be construed and enforced in accordance
with the laws of the State of Minnesota; and any legal action or proceeding
regarding the construction or enforcement of this Agreement shall be venued only
in a state or federal court located in Hennepin County, Minnesota.

            e. Waivers. The failure of any party to insist, in any one or more
instances, upon the performance of any of the terms or conditions of this
Agreement or to exercise any right, shall not be construed as a waiver of the
future performance of any such term or condition or the future exercise of such
right.

            f. Free Execution; Opportunity to Consult with Counsel. Each of the
undersigned parties represents and warrants to the other that they have read
this Agreement and fully understand all of its terms; that this Agreement has
been executed freely by each party, without promises or threats or the exertion
of influence by or upon the other; and that each party has had the full
opportunity to consult with legal counsel of its choice concerning the legal and
practical effect of this document.

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            g. Headings. The heading of the paragraphs used in this Agreement
are included for convenience only and are not to be used in construing or
interpreting this Agreement.

            h. Notices. Any notice to be given under this Agreement shall be
personally delivered in writing or shall be deemed duly given when received
within five (5) business days of deposit in the United States mail, postage
prepaid, registered or certified, return receipt requested, whichever is
earlier. If mailed to the Company, it shall be addressed to Mr. David W.
Anderson, Chairman, Famous Dave's of America, Inc., 7657 Anagram Drive, Eden
Prairie, Minnesota 55344, and if mailed to Lanham, it shall be addressed to him
at 11-B Arroyo Hondo Trail, Sante Fe, New Mexico 87505, or at such other
addresses as the parties may hereafter designate in writing to each other.

            i. Assignment. Lanham may not assign or subcontract his rights or
obligations under this Agreement without the prior written consent of the
Company. The Company may assign its rights or obligations.

            j. Execution. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
instrument.


FAMOUS DAVE'S OF AMERICA, INC.                  DOUGLAS S. LANHAM


By:  s/David Anderson                           s/Douglas S. Lanham
     -------------------------------            --------------------------------
                                                Douglas S. Lanham
 Its:  Chairman of the Board
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