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                                                                 Exhibit 10.12


October 4, 1996




Lattimore M. Michael
Back Yard Burgers, Inc.
dba:  Back Yard Burgers
2768 Colony Park Drive
Memphis, TN 38118

Dear Mr. Michael:

Phoenix Leasing Incorporated is pleased to offer your organization a commitment
for the loan transaction described below subject to the terms and conditions
listed below:

<TABLE>
<S>                        <C>         
Borrower:                  Back Yard Burgers, Inc. ("Borrower")
Lender:                    Phoenix Leasing Incorporated ("PLI")
Transaction Structure:     Secured Loan
Commitment Amount:         $2,000,000.00
Term of Loan:              72 months   End Position:  10%
Rate Factor:               .01820 for 72 months and 1% Origination Fee with 1
                           payment due at closing.
                           One time .5% Documentation Fee.
Guarantors:                Back Yard Burgers, Inc.
Additional Collateral:     None
</TABLE>

Borrower must return the following documentation and other items in form and
substance acceptable to PLI with this signed and dated commitment letter.

         Articles of Incorporation (if a corporation).
         Copy of all Deeds of Trust or Space Leases (including legal 
         description) covering the real property             
         where collateral will be located.
         Additional deposit of $11,000.00

UPON RECEIPT OF THE ABOVE ITEMS, PLI WILL SEND TO YOU THE FOLLOWING FORMS:

         Senior Loan and Security Agreement and Promissory 
         Note to be properly executed and notarized.
         Corporate Resolution to Borrow (if a corporation).
         UCC-1 and UCC fixture financing statement.
         Acceptance Notice.
         Landlord waivers (for non-company owned properties).


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October 4, 1996
Back Yard Burgers, Inc.
Page 2

ADDITIONAL DOCUMENTS AND PROCEDURES REQUIRED PRIOR TO FUNDING:

          Insurance Certificate showing Phoenix as loss payee and additional
          insured, minimum equipment and leasehold coverage.
          Equipment to be inspected and tagged prior to each funding. (PLI will
          arrange.) Origination Fee equal to 1% of the total principal amount on
          each Note/draw. Any other documents PLI may reasonably require.

THIS COMMITMENT EXPIRES THIRTY (30) DAYS AFTER THE DATE HEREOF IF THIS LETTER
IS NOT SIGNED AND RETURNED TO PLI WITH ANY REQUIRED DEPOSIT WITHIN SUCH 30 DAY
PERIOD.  IN ALL EVENTS, PLI'S COMMITMENT TO ENTER INTO THE LOAN AND SECURITY
AGREEMENT AND FUND THE LOAN UNDER THE TERMS OF THIS COMMITMENT EXPIRES ON MARCH
24, 1997; PROVIDED, HOWEVER, PLI MAY REVOKE THIS COMMITMENT AT ANY TIME IF (I)
PLI DETERMINES IN ITS SOLE DISCRETION THERE HAS BEEN A MATERIAL ADVERSE CHANGE
IN BORROWER'S'S OR AN AFFILIATE OF BORROWER'S FINANCIAL CONDITION, (II) PLI
RECEIVES ADDITIONAL ADVERSE INFORMATION RELATING TO THE CREDITWORTHINESS,
FINANCIAL CONDITION OR STABILITY, SOLVENCY AND/OR SOUNDNESS OF BORROWER, ANY
AFFILIATE OF BORROWER, ANY GUARANTOR OF BORROWER, OR THE LOAN TRANSACTION OR
(III) AN EVENT OF DEFAULT OCCURS UNDER THE LOAN AND SECURITY AGREEMENT.  ALL
FEES AND DEPOSITS WHICH BORROWER PAYS IN CONNECTION WITH THIS TRANSACTION ARE
NONREFUNDABLE (EXCEPT TO THE EXTENT PROVIDED BELOW).

Borrower has previously paid to PLI a deposit of $500.00. If Borrower enters
into a Loan with PLI, PLI will apply the deposit first to reimburse PLI for all
out-of-pocket costs, including, but not limited to, UCC search and preparation
costs, documentation preparation costs in an amount equal to $300.00, title
search costs and attorney's fees, if any. Deposit of $11,000.00 will be used to
cover out of pocket costs and $10,000.00 Documentation Fee. The balance of the
deposit less $10,000.00 Documentation Fee, will be returned to Borrower unless
Borrower (a) fails to execute final documents with PLI, (b) chooses not to use
at least $20,000 of the Commitment Amount, or (c) PLI revokes Borrower's
commitment pursuant to the paragraph above (items I, II or III). If any event
described in (a), (b) or (c) occurs, PLI shall retain the deposit in full. If
out-of-pocket costs exceed $11,500.00, Borrower shall pay any excess in advance.

Borrower acknowledges if this commitment expires before Borrower has utilized
the full amount of the Commitment Amount, and if Borrower wishes to continue
drawing on the commitment Amount, Borrower may reapply and pay PLI an additional
deposit of $500.00 subject to the same conditions described above. PLI may, in
it sole discretion, then extend the period of this commitment.

Borrower acknowledges the Origination Fee is due prior to PLI funding each
Note/draw, and Borrower further acknowledges and agrees that the Origination Fee
shall be refunded to Borrower if PLI does not fund such Note/draw, unless PLI
does not fund such Note/draw due to an Event of Default under the Senior Loan
and Security Agreement. In that event, PLI may retain such Origination Fee.

Borrower acknowledges the 0.5% Documentation Fee is due with this signed
Commitment Letter. This is a one time charge of $10,000.00 which will not be
refunded.


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October 4, 1996
Back Yard Burger, Inc.
Page 3


This commitment letter constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all previous agreements,
promises or representations. This commitment may not be changed or modified
except by an instrument in writing signed by duly authorized representatives of
Borrower and PLI.

By signing below, Borrower acknowledges and agrees that PLI shall have no
liability or obligation to Borrower, including, but not limited to, funding the
loan, until all of the above conditions have been satisfied.

Sincerely,

PHOENIX LEASING INCORPORATED

By:
   ----------------------------------

Name:  Rick Anderson

Title:  General Manger, Franchising

ACKNOWLEDGED AND AGREED:

Back Yard Burgers, Inc.


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