EXHIBIT 10.12

Consulting Agreement between William B. Snow
and M.G.A., Inc.


December 12, 1996



William B. Snow
517 Riveredge Parkway
Dothan, Alabama  36301


RE:      Retirement and Consulting Agreement

Dear Bill:

This letter sets forth my understanding of the consulting  arrangement  which we
have discussed, and upon execution by you, it shall serve as a binding agreement
between Movie Gallery,  Inc.,  (the  "Company") and you. In connection with your
retirement  as an officer of the  Company,  the  Company  desires to engage your
services as a consultant to the  Executive  Committee,  in  accordance  with the
following terms:

         1. You agree to make  yourself  available to consult with the Executive
         Committee (and the individual  members thereof) on a first-call  basis,
         as and when needed.

         2. In consideration  of the consulting  services to be performed by you
         during  the  term  of  this  Agreement,  the  Company  shall  pay you a
         consulting  fee of  $60,000  per  year,  payable  in  equal  successive
         bi-weekly payments, due on the Company's normal payroll payment dates.
         
         3. The term of this consulting agreement shall be two (2) years,
         commencing January 1, 1997.

         4.  You  shall  continue  to  serve as Vice  Chairman  of the  Board of
         Directors  of the Company,  subject to annual  election;  however,  you
         shall  function as an outside  director,  and as such you shall receive
         the same director's fees as the other outside directors of the Company.

         5. The Company shall continue to maintain your family health  insurance
         coverage and you shall  continue to have the use of your Company credit
         card, both to the same extent (if any) as the Executive Officers of the
         Company.

         6.  During  the term of this  Agreement,  you  agree to  maintain your 
         principal  residence  in  Dothan, Alabama.


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Mr. Snow
December 12, 1996
Page Two


         7.  This Agreement shall be binding upon the Company, its successors 
         and/or assigns.

         8. This  Agreement  shall  immediately  terminate  upon  your  death or
         permanent  disability.  For  purposes of this  Agreement,  you shall be
         deemed to be permanently disabled in the event that you are unable, due
         to mental or  physical  disability,  to  perform  services  under  this
         Agreement for a continuous period of more than ninety (90) days.

         9. You shall have the right to  terminate  this  Agreement  upon thirty
         (30) days written notice to the Executive Committee.

         10.  In the  event  that you  fail to  comply  with  the  terms of this
         Agreement  for any  reason  other  than  death or  mental  or  physical
         disability,  then this Agreement  shall terminate upon thirty (30) days
         written notice to you.

If you are in agreement with the above,  please execute this letter in duplicate
in the space provided below and return one original to me.

Sincerely,


/s/ J. T. Malugen
J. T. Malugen

JTM/mw

AGREED TO AND ACKNOWLEDGED THIS
12th DAY OF DECEMBER, 1996.

/s/ William B. Snow
----------------------------------------
William B. Snow




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