EXHIBIT 10.1


                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT ("AGREEMENT") is made as of March 22, 2000,
between Grow Biz International, Inc. ("EMPLOYER") and John L. Morgan
("EMPLOYEE").

                                  INTRODUCTION

         Employer desires to employ Employee under the terms of this Agreement,
including the non-solicitation, registration rights and other covenants stated
below, and Employee is willing to enter into such covenants in return for the
benefits hereunder.

                                    AGREEMENT

         In consideration of the foregoing, the parties agree as follows:

1.       NATURE AND CAPACITY OF EMPLOYMENT. Employer agrees to employ Employee
         as Chief Executive Officer of Employer under the terms of this
         Agreement. Employee agrees to perform, or be available to perform, on a
         full-time basis, the functions of this position, under the terms of
         this Agreement.

2.       TERM OF EMPLOYMENT. The term of this Agreement will commence as of
         March 23, 2000 and continue until such time as terminated under Section
         9 below.

3.       ANNUAL BASE SALARY. The annual base salary, exclusive of any benefits
         or bonuses, which Employer agrees to pay to Employee for the first year
         of this Agreement will be Fifty Thousand Dollars ($50,000). All amounts
         paid under this Agreement will be paid consistent with Employer's
         normal payroll practice and will be subject to all normal and required
         withholdings.

4.       BONUS. The Compensation Committee of Employer's Board of Directors may,
         in its sole discretion, establish certain criteria under which Employee
         may become eligible to receive an annual bonus payment, and will also
         maintain the right to adjust such criteria in its sole discretion,
         however the Committee is not obligated to grant any bonus to Employee.

5.       EMPLOYEE EXPENSES. Employer agrees to reimburse Employee for the
         reasonable business expenses Employee incurs on behalf of Employer upon
         proof of expenditure.

6.       EMPLOYEE BENEFITS. Employee will be eligible for those benefits
         provided to executive management employees.

7.       EMPLOYEE FRINGE BENEFITS. Employee will receive the following fringe
         benefits ("EMPLOYEE FRINGE Benefits"):

         7.1      STOCK OPTIONS. Employee will be issued a six year option (the
                  "OPTION"), under the terms of the stock option agreement
                  attached hereto as EXHIBIT A, to

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                  purchase 600,000 shares of Employer's common stock (the
                  "OPTION SHARES"), at an exercise price of $5 per share,
                  vesting at the rate of 120,000 shares per year on the
                  anniversaries of this Agreement.

         7.2      REGISTRATION RIGHTS. Employer has agreed to register under the
                  Securities Act of 1933, as amended ("SECURITIES ACT"), the
                  Option, the Option Shares and the 700,000 shares of Employer's
                  common stock which Employee and others are purchasing from K.
                  Jeffrey Dahlberg, for resale by Employee.

8.       UNDERTAKINGS OF EMPLOYEE. Employee agrees to spend Employee's full
         working time and effort in performing Employee's duties with Employer
         so long as employed by Employer, and will not, during the course of
         employment by Employer, without prior written approval of Employer,
         become an employee, director, officer, agent, partner of or consultant
         to, or a stockholder of (except a stockholder of a public company in
         which Employee owns less than five percent (5%) of the issued and
         outstanding capital stock of such company) any company or other
         business entity which is a significant competitor, supplier, or
         customer of Employer.

9.       TERMINATION OF EMPLOYMENT AGREEMENT. Employee's employment under this
         Agreement may be terminated, by either party for any reason or no
         reason upon 30 days written notice to Employee.

10.      CONFIDENTIAL INFORMATION. For purposes hereof, "CONFIDENTIAL
         INFORMATION" means any information that Employee learns or develops
         during the course of employment that derives independent economic value
         from being not generally known by the public and includes trade
         secrets, methods of research and testing, customer lists, vendor lists
         and financial information, and information relating to such matters as
         management systems and sales or marketing techniques. Employee will not
         directly or indirectly use or disclose any Confidential Information for
         anyone other than Employer either during the course of employment or
         after the termination of employment. Employee recognizes that the
         Confidential Information constitutes a valuable asset of Employer and
         agrees to act in such a manner as to prevent its disclosure and use by
         any person unless such use is for Employer. Employee's obligations
         under this paragraph are unconditional and will not be excused by any
         Employer conduct, except prior voluntary disclosure by Employer of the
         information.

11.      INVENTIONS. Employee agrees to promptly disclose to Employer in writing
         any invention, improvement, work of authorship, discovery or idea
         (including those which may be subject to copyright protection)
         generated, conceived, or reduced to practice by Employee alone or in
         conjunction with others, during or after working hours, while an
         employee of Employer ("INVENTIONS"); and all such Inventions will be
         Employer's exclusive property and are hereby assigned to Employer.
         Further, Employee will, at Employer's expense, give Employer all
         assistance it reasonably requires to perfect, protect, and use its
         rights to Inventions. In particular, Employee will sign all documents,
         do all things, and supply all information that Employer may deem
         necessary to: (i) transfer or record the transfer of


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         Employee's entire right, title and interest in Inventions; and (ii)
         enable Employer to obtain copyright or trademark protection for
         Inventions. Employee's obligations under this Section will continue
         beyond the termination of employment with respect to Inventions and
         will be binding on assigns, executors, and other legal representatives.

         NOTICE: PURSUANT TO MINNESOTA STATUTES SS. 181.78, EMPLOYEE IS NOTIFIED
         THAT THE AGREEMENT DOES NOT APPLY TO ANY INVENTION FOR WHICH NO
         EQUIPMENT, SUPPLIES, FACILITY, OR TRADE SECRET INFORMATION OF EMPLOYER
         WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON EMPLOYEE'S OWN TIME, AND
         WHICH DOES NOT RELATE DIRECTLY TO EMPLOYER'S BUSINESS OR TO ITS ACTUAL
         OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR WHICH DOES NOT
         RESULT FROM ANY WORK EMPLOYEE PERFORMED FOR EMPLOYER.

12.      NON-SOLICITATION. Employee covenants that during the term of his
         employment by Employer, and for one year after the termination of his
         employment, regardless of the cause of termination, Employee will not,
         without Employer's prior written consent, directly or indirectly,
         employ or seek to employ, in any capacity, any person who, within the
         preceding six months, has been an employee of Employer, or any
         franchisee of Employer.

13.      INDEMNIFICATION BY EMPLOYER. In addition to any indemnification to
         which Employee may be entitled in his capacity as an officer and
         director of Employer, Employer shall indemnify, defend and hold
         harmless Employee from and against any and all costs, expenses, losses,
         damages, claims, liabilities, obligations, actions or causes of action
         (including, without limitation, reasonable attorneys' fees and
         expenses) incurred, sustained or suffered by him as a result of any
         claim, suit, cause of action, investigation or proceeding, whenever
         instituted or commenced, against Employee by a third party that is not
         directly or indirectly affiliated or related to Employee, arising out
         of the actions or inactions of Employer with respect to Employer's
         business prior to March 22, 2000. Should any claim covered by the
         indemnity provided in Section 13 be asserted, Employee shall promptly
         notify Employer and give Employer an opportunity to defend the same
         either in Employer's name or, as required by applicable laws and
         regulations, in Employee's name; provided, that the failure to give
         prompt notice shall not affect the rights of Employee to
         indemnification hereunder except to the extent that such failure either
         shall have materially prejudiced Employer in the defense of such claim
         or shall have increased the amount of the obligation of Employer.
         Employee shall extend reasonable cooperation in connection with such
         defense and shall have the right, at his own expense, to participate
         in, but not to control, any such defense by Employer. If Employer shall
         fail, after notice from Employee, to defend against such claim within a
         reasonable time, then Employee shall be entitled to assume the defense
         thereof, and Employer shall be liable to repay Employee for all of his
         expenses reasonably incurred in connection with such defense, including
         reasonable attorney's fees and settlement payments. No settlement shall
         be made by Employee of any claim which Employer has assumed pursuant to
         this Section 13, or of any other claim or actions with respect to which
         indemnification is claimed hereunder, without the prior written consent
         of Employer, so long as such consent is not unreasonably withheld or
         delayed.


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14.      NO RESTRICTIONS. Employee represents and warrants to Employer that he
         is not subject to any covenant, agreement, understanding or restriction
         of any kind or nature which would prohibit, restrict or interfere in
         any way with his ability to perform the functions of his positions with
         Employer.

15.      MISCELLANEOUS.

         15.1     INTEGRATION. This Agreement and the Stock Option Agreement of
                  even date herewith contains the entire agreement and
                  understanding among the parties relative to the subject matter
                  hereof and supersedes all prior agreements and understandings
                  relating thereto.

         15.2     APPLICABLE LAW. This Agreement and the rights of the parties
                  will be governed by and construed and enforced under the laws
                  of the state of Minnesota. The venue for any action hereunder
                  will be in the state of Minnesota, and the parties consent to
                  the jurisdiction of the courts of the state of Minnesota,
                  County of Hennepin, and the U.S. District Court, District of
                  Minnesota.

         15.3     BINDING EFFECT. Except as herein provided, this Agreement will
                  be binding upon and will benefit the parties and their
                  respective heirs, successors, assigns and personal
                  representatives; provided, however, that Employee may not
                  assign his rights or obligations hereunder without Employer's
                  prior written consent. Employer may assign its rights and
                  obligations under this Agreement, provided the assignee agrees
                  to fulfill Employer's obligations hereunder.

         15.4     NOTICES. All notices, requests and other communications
                  hereunder will be given in writing and deemed to have been
                  given if personally delivered, or sent by first class,
                  certified mail, return receipt requested, postage prepaid, to
                  the party at the address as provided below, or to such other
                  address as such party may hereafter designate by written
                  notice to the other party:

                  (a)      If to Employer, to the address of its then principal
                           office.

                  (b)      If to Employee, to the address last shown in
                           Employer's records.

         15.5     MODIFICATION. This Agreement will not be modified or amended
                  except by a written instrument signed by the parties.

         15.6     SEVERABILITY. The invalidity or partial invalidity of any
                  portion of this Agreement will not invalidate the remainder
                  thereof. If any provision of this Agreement is, for any
                  reason, held to be excessively broad as to scope, activity,
                  subject or otherwise, so as to be unenforceable at law, such
                  provision will be construed by the appropriate judicial body
                  by limiting or reducing it, so as to be enforceable to the
                  maximum extent compatible with then applicable law.


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         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date herein first above written.

                                       EMPLOYER:

                                       Grow Biz International, Inc.

Dated:    March 22, 2000               By:  /s/ Ronald G. Olson
                                           -------------------------------------
                                            Ronald G. Olson, Vice Chairman



                                       EMPLOYEE:

Dated:    March 22, 2000               By:  /s/ John L. Morgan
                                           -------------------------------------
                                            John L. Morgan


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                                                                       EXHIBIT A

                          GROW BIZ INTERNATIONAL, INC.
                       NONQUALIFIED STOCK OPTION AGREEMENT

                                                                  March 22, 2000

TO:      John L. Morgan (the "OPTIONEE")

         As the new Chief Executive Officer of Grow Biz International, Inc., a
Minnesota corporation (the "COMPANY"), you are hereby granted an option (the
"OPTION"), pursuant to a resolution of the Board of Directors of the Company
adopted on March 22, 2000.

         The Option entitles you to purchase up to 600,000 shares of Common
Stock (the "STOCK") of the Company at a price of $5.00 per share, which was in
excess of the sales price of the Stock as reported on the NASDAQ SmallCap Market
as of the time of the approval of the grant of this Option and as of the close
of business on the date immediately prior to the date of the grant of this
Option.

         Your Option is in all respects limited and conditioned by the following
terms and conditions:

1.       DEFINITIONS. In addition to definitions that may be contained elsewhere
         herein, for purposes of this Agreement and the Option, the following
         terms, when capitalized, shall have the following meanings:

                  (a)      "AGREEMENT" means this written agreement evidencing
                           the Option granted hereunder which is signed by both
                           the Company and Optionee.

                  (b)      "BOARD" means the Board of Directors of the Company.

                  (c)      "CODE" means the Internal Revenue Code of 1986, as
                           amended from time to time, and any successor thereto.

                  (d)      "DISABILITY" means disability as defined in Section
                           22(e)(3) of the Code.

                  (e)      "FAIR MARKET VALUE" means, as of any given date,
                           unless otherwise determined by the Board in good
                           faith, the closing sales price of the Stock for that
                           date as reported on the NASDAQ SmallCap Market.

2.       OPTION TERMS. You will be entitled to purchase up to 120,000 shares of
         Stock on March 22, 2001, and an additional 120,000 shares on each of
         March 22, 2002, March 22, 2003, March 22, 2004 and March 22, 2005, so
         long as you are still serving as Chief Executive Officer of the Company
         on such date. If you cease serving as Chief Executive Officer of


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         the Company, any nonvested portion of the Option is terminated
         immediately, and any vested portion is exercisable for thirty (30) days
         following the last day on which you served as Chief Executive Officer
         of the Company or until the expiration of the Option, whichever period
         is shorter.

3.       TERM. This Option expires in its entirety on March 22, 2006. Subject to
         the vesting schedule set forth in Section 2 hereof, the Option may be
         exercised in whole or in part at any time during the term of the
         Option.

4.       EXERCISE. The Option may be exercised by delivery of the attached
         Notice of Exercise to the Company. The exercise price may be paid in
         cash, by certified check, or by transfer to the Company of shares of
         Stock having a Fair Market Value, as of the date of exercise, not less
         than the purchase price of the Stock being acquired pursuant to your
         Option, or any combination thereof. The Company's obligation to deliver
         shares upon the exercise of the Option will be subject to applicable
         federal, state, and local tax withholding requirements. Unless
         otherwise determined by the Board, withholding obligations may be
         settled with Stock, including Stock received as part of the exercise
         giving rise to the withholding requirement.

5.       DEATH. If Optionee's service to the Company as Chief Executive Officer
         of the Company terminates by reason of death, the Option held by
         Optionee may thereafter be exercised by the legal representative of
         Optionee's estate or by any person who acquires the Option by will or
         the laws of descent and distribution for a period of one year from the
         date of such death or until the expiration of the stated term of the
         Option, whichever period is shorter. The Option shall be exercisable
         only to the extent that the Option was exercisable as of the date of
         death.

6.       DISABILITY. If Optionee's service to the Company as Chief Executive
         Officer of the Company terminates by reason of Disability, Optionee may
         exercise such portion of the Option as was exercisable at the date of
         termination for a period of one year from the date of termination or
         until the expiration of the stated term of the Option, whichever period
         is shorter. The Option shall be exercisable only to the extent that the
         Option was exercisable as of the date termination.

7.       NONTRANSFERABILITY. The Option is transferable only by will or the laws
         of descent and distribution or pursuant to a qualified domestic
         relations order as defined by the Code or Title I of the Employee
         Retirement Income Security Act ("ERISA"), or the rules thereunder.
         Except as permitted by the preceding sentence, neither the Option nor
         any of the rights and privileges thereby conferred may be transferred,
         assigned, pledged, or hypothecated in any way (whether by operation of
         law or otherwise), and no such option, right, or privilege will be
         subject to execution, attachment, or similar process. The Option may be
         exercised during Optionee's lifetime only by Optionee or his or her
         guardian or legal representative.

8.       INVESTMENT INTENT. Unless a registration statement under the Securities
         Act of 1933 (and applicable state securities laws) is in effect with
         respect to Stock to be purchased pursuant


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         to this Option, you agree with, and represent to, the Company that you
         are acquiring the Option and Stock for the purpose of investment and
         with no present intention to transfer, sell, or otherwise dispose of
         the Stock. In the absence of such registration, no shares of Stock
         acquired pursuant to the exercise, in whole or in part, of the Option
         may be transferred unless, in the opinion of counsel to the Company,
         such transfer is in compliance with applicable securities laws, and
         each certificate representing any shares of Stock issued to Optionee
         hereunder will have endorsed thereon an appropriate legend referring to
         the restrictions against transfer. Prior to the transfer of any Stock
         to you, the Company may require an opinion of counsel satisfactory to
         it that at all times the Company will be in compliance with applicable
         federal and state securities laws.

9.       ADJUSTMENT IN CAPITALIZATION. In the event of any merger,
         reorganization, consolidation, recapitalization, Stock dividend, Stock
         split, or other change in corporate structure affecting the Stock, such
         substitution or adjustment will be made in the number and option price
         of shares purchasable hereunder, in the aggregate number of shares
         reserved for issuance with respect to the Option, and in the number and
         option price of shares subject to any outstanding portion of the Option
         as may be determined to be appropriate by the Board to prevent dilution
         or enlargement of Option rights granted hereunder, provided that the
         number of shares subject to the Option will always be a whole number.

10.      NONQUALIFIED OPTION. This Option is not intended to be an "incentive
         stock option" as defined in the Code and is granted outside any stock
         option plan adopted by the Company.

11.      NONEXCLUSIVITY. The granting of the Option will not be construed as
         limiting the power of the Board to adopt such other incentive
         arrangements as it may deem desirable, including the granting of other
         stock options. Such arrangements may be either generally applicable or
         applicable only in specific cases.

12.      GOVERNING LAW. The Option and this Agreement will be governed by and
         construed in accordance with the laws of the State of Minnesota without
         regard to conflicts of laws principles, and all terms will be
         interpreted and construed so that there will not be committed any
         violation of applicable state or federal securities laws.

13.      NO RIGHT TO SERVE. The granting of the Option does not grant Optionee
         any right of service as a director, and the Company retains the right
         to terminate service of Optionee as its Chief Executive Officer, or
         otherwise, pursuant to Company's Articles of Incorporation, Bylaws and
         applicable law.


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         IN WITNESS WHEREOF, Company and Optionee have each executed this
Agreement effective as of the date first above written.

COMPANY:                                      OPTIONEE:

GROW BIZ INTERNATIONAL, INC.



/s/ Ronald G. Olson                           /s/ John L. Morgan
----------------------------------            ----------------------------------
By:  Ronald G. Olson                          John L. Morgan
Its: Vice Chairman


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                       NOTICE OF EXERCISE OF STOCK OPTION
                          AND RECORD OF STOCK TRANSFER

TO:      Grow Biz International, Inc.
         4200 Dahlberg Drive
         Golden Valley, MN 55422-4837


         I hereby exercise my stock option granted by Grow Biz International,
Inc. ("COMPANY"), effective March 22, 2000, subject to all terms and provisions
thereof and notify you of my desire to purchase ________ shares of Common Stock
of the Company ("SHARES"), offered to me pursuant to said Option. Enclosed is a
certified check in the sum of $________ or payment in such other form as the
Company has specified.

         [THIS SECTION IS APPLICABLE IF THE SHARES ARE NOT REGISTERED UNDER THE
SECURITIES ACT OF 1933.] I hereby represent that the Shares are being acquired
by me as an investment and not with a view to, or for resale in connection with,
the distribution of any shares of the Company. I understand that the Shares are
not registered under the Securities Act of 1933, as amended ("ACT"), or
applicable state securities laws, that the Shares may not be sold or otherwise
transferred except pursuant to an effective registration statement under the Act
and said laws, unless the Company has received an opinion of counsel
satisfactory to it that such transfer or disposition does not require
registration under the Act or said laws and, for any sales under Rule 144 of the
Act, such evidence as it shall request for compliance with that rule or
applicable state securities laws. I further understand that the certificate
representing the Shares will contain a legend referring to such restrictions.

         I acknowledge that I am responsible for payment of any taxes for which
I may become liable as a result of the exercise of this Option.


                      ,                /s/ John L. Morgan
---------------------- ------          -----------------------------------------
                                       John L. Morgan





         RECEIPT is hereby acknowledged of the delivery to me by Grow Biz
International, Inc. on _______________, _____ of stock certificate no. _________
for __________ shares of Common Stock purchased by me pursuant to the terms and
conditions of the option agreement referred to above.


                                       /s/ John L. Morgan
                                       -----------------------------------------
                                       John L. Morgan