FOURTH AMENDMENT TO PARTICIPATION AGREEMENT


     THIS FOURTH AMENDMENT TO PARTICIPATION AGREEMENT (hereinafter, as it may be
modified,  amended or supplemented from time to time, called this  "Amendment"),
made and entered  into as of February  22, 1999,  among (i) AVADO  BRANDS,  INC.
formerly known as Apple South, Inc., a corporation  organized and existing under
the laws of Georgia (herein,  together with its successors and assigns permitted
hereunder, called the "Lessee"), (ii) FIRST SECURITY BANK, NATIONAL ASSOCIATION,
a  national  banking  association  ("First  Security"),  not in  its  individual
capacity except as expressly  provided herein, but solely as Owner Trustee under
Apple  South  Trust  No.  97-1  (herein  in such  capacity,  together  with  its
successors and assigns permitted hereunder,  called the "Owner Trustee"),  (iii)
STI CREDIT  CORPORATION,  a Nevada  corporation,  as assignee of SunTrust  Bank,
Atlanta,  in its capacity as the holder of the beneficial  interest in the trust
estate  established under Apple South Trust No. 97-1 (in such capacity as of the
date  hereof,  the  "Holder",  and  together  with its  successors  and  assigns
permitted hereunder,  called the "Holders"), (iv) the financial institutions now
parties to the  Participation  Agreement  (as  defined  below) as Lenders  (each
herein in such  capacity,  together with its  successors  and assigns  permitted
hereunder, called a "Lender" and collectively,  the "Lenders"), and (v) SUNTRUST
BANK,  ATLANTA, a banking  corporation  organized and existing under the laws of
Georgia,  ("SunTrust"),  as collateral  agent and  administrative  agent for the
Lenders and the Holders (in such capacity, the "Administrative Agent").

                               W I T N E S S E T H

     WHEREAS,  the Lessee,  the Owner Trustee,  the Holder,  the Lenders and the
Administrative Agent are parties to that certain Participation Agreement,  dated
as of September 24, 1997, as amended by the First Amendment to the Participation
Agreement, dated as of March 27, 1998, as amended by the Second Amendment to the
Participation  Agreement,  dated as of August  14,  1998,  and as amended by the
Third Amendment to the  Participation  Agreement,  dated as of November 13, 1998
(as so amended, the "Participation Agreement");

     WHEREAS,  the Lessee,  the Owner Trustee,  the Holder,  the Lenders and the
Administrative Agent have agreed to amend the Participation Agreement in certain
respects, as described more particularly below;

     NOW,  THEREFORE,  in consideration of the sum of TEN DOLLARS ($10.00),  the
foregoing  premises,  to  induce  the  Holder  and  the  Lenders  to  amend  the
Participation Agreement and to continue to perform their obligations thereunder,
and for other good and valuable  consideration,  the  sufficiency and receipt of
all of which are acknowledged,  the Lessee,  the Owner Trustee,  the Holder, the
Lenders and the Administrative Agent agree as follows:

                                 A. DEFINITIONS

     Unless the context  otherwise  requires,  all capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth in Appendix A
to the Participation  Agreement for all purposes of this Amendment.  The General
Provisions of Appendix A to the Participation  Agreement are hereby incorporated
by reference herein.

                                 B. AMENDMENTS:

     1. Amendment to Existing  Section 5.4:  Effective as of September 27, 1998,
existing  Section  5.4 of the  Participation  Agreement  shall be deleted in its
entirety and the following revised Section 5.4 shall replace same:

     Stockholder's  Equity  will  at no  time  be  less  than  the  sum  of  (i)
$210,000,000, beginning with the last day of the Fiscal Quarter ended closest to
September 30, 1998.



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     2. Amendment to Existing  Section  5.11:Section  5.11 of the  Participation
Agreement is amended by deleting  subsection (k) of such Section in its entirety
and substituting in is place the following revised subsection (k):

     (k)  Other  Restaurant   Concepts:Make   investments  in  other  restaurant
concepts,  besides  "Applebee's,"  so  long  as the  total  amount  of all  such
investments made subsequent to April 1, 1998 does not exceed Twelve Million Five
Hundred Thousand Dollars ($12,500,00);

     3. Amendment to Existing  Section  5.11:Section  5.11 of the  Participation
Agreement is amended by deleting  subsection (m) of such Section in its entirety
and substituting in its place the following revised subsection (m):

     (m) Other  Advances:  Make loans or advances to  Affiliates,  shareholders,
directors,  officers or employees, in addition to those described in clauses (a)
through  (l)  hereinabove,  in an  aggregate  amount,  as to all such  loans and
advances at any one time  outstanding to all such Persons,  not to exceed Twelve
Million  Dollars  ($12,000,000),  so long as and provided  that, (A) no Event of
Default  then exists and (B) each such loan or advance is repaid,  in full,  not
later than two (2) years from the date of its disbursement.

     4. Amendment to Existing Article 5: The Participation  Agreement is further
amended by adding the following as a new Section 5.28:

     5.28 Stock  Purchases,  Etc.  The Lessee will not,  and will not permit any
Consolidated  Subsidiary  of the Lessee,  to purchase  any Capital  Stock of the
Lessee,  whether in a "spot" transaction  pursuant to an Equity Forward Contract
or otherwise,  except in respect of shares of Capital Stock which are subject to
Equity Forward  Contracts  pending  settlement as of December 31, 1998; nor will
Lessee  enter into or permit any  Consolidated  Subsidiary  to enter  into,  any
Equity Forward Contract or amend or modify any Equity Forward Contract in effect
on December  31, 1998 so as to increase the amount of, or price of any shares of
Capital Stock which are subject to Equity Forward Contracts  pending  settlement
as of December 31, 1998.

     4. Amendment to Existing Article 5: The Participation  Agreement is further
amended by adding the following as a new Section 5.29:

     5.29  Prepayment of Senior  Debt.The  Lessee will not prepay,  and will not
permit any Consolidated Subsidiary to prepay, the principal amount of any of the
Lessee's 9-3/4% Senior Notes, due 2006,  heretofore  issued by the Lessee in the
aggregate principal amount of $125,000,000.

     5.  Amendment  to Appendix A: The  definition  of  "Stockholder  Equity" in
Appendix A of the Participation  Agreement is amended by adding the following to
the end of such definition:

     In determining  "Stockholder's  Equity," however,  the amount of any Equity
Forward Contracts, pending settlement, shall be excluded therefrom.

     6.  Amendment  to  Appendix A: The  definition  of "Total  Funded  Debt" in
Appendix A of the Participation  Agreement is amended by adding the following to
the end of such definition:

     In  determining  "Total  Funded  Debt,"  however,  the amount of any Equity
Forward Contracts, pending settlement, shall be excluded therefrom.

     7.  Amendment to Appendix A: Appendix A of the  Participation  Agreement is
amended  by  adding  the  following  definition  to  Appendix  A in  the  proper
alphabetical order:

     "Equity Forward Contract" shall mean any contract, whether now or hereafter
existing,  whereby the Lessee or any of its  Consolidated  Subsidiaries  agrees,
directly or  indirectly,  to purchase  Capital Stock of the Lessee on any future
date at a fixed price.



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                                C. MISCELLANEOUS

     1. In  consideration  of, and to induce  their  entry into this  Amendment,
Lessee shall remit to the  Administrative  Agent, for the ratable benefit of the
Lenders and the Holder based on their respective  Commitments,  an amendment fee
of $15,000 (the "Amendment  Fee").  Upon the  Administrative  Agent's receipt of
executed  signature  pages from all parties to this  Amendment and the Amendment
Fee, all  amendments  to the  Participation  Agreement  made herein shall become
effective as of the date hereof unless  expressly  stated to become effective as
of any other date.  Pursuant  to Section  10.1 (a) of the Trust  Agreement,  the
Holder authorizes and request that the Owner Trustee execute this Amendment.

     2. Except as expressly set forth herein, this Amendment shall be deemed not
to waive or modify any  provision  of the  Participation  Agreement or the other
Operative Agreements,  and all terms of the Participation  Agreement, as amended
hereby, and all other Operative Agreements shall be and remain in full force and
effect and shall constitute a legal, valid, binding and enforceable  obligations
of the Lessee.  All references to the Participation  Agreement shall hereinafter
be references to the  Participation  Agreement as amended by this Amendment.  To
the extent any terms and  conditions  in any of the Operative  Agreements  shall
contradict or be in conflict  with any terms or conditions of the  Participation
Agreement,  after giving effect to this Amendment, such terms and conditions are
hereby  deemed  modified  and  amended  accordingly  to  reflect  the  terms and
conditions of the Participation  Agreement as modified and amended hereby. It is
not intended by the parties that this Amendment  constitute,  and this Amendment
shall not constitute, a novation or accord and satisfaction.

     3.  To  induce  the  Owner  Trustee,   the  Holder,  the  Lenders  and  the
Administrative Agent to enter into this Amendment (A) Lessee hereby restates and
renews each and every  representation and warranty  heretofore made by it under,
or in  connection  with,  the  execution  and  delivery  of,  the  Participation
Agreement;  (B) Lessee hereby  restates,  ratifies and reaffirms  each and every
term and condition set forth in the Participation  Agreement, as amended hereby,
and in  the  Operative  Agreements  as  amended  hereby,  and  in the  Operative
Agreements,  effective as of the date hereof;  and (C) Lessee  hereby  certifies
that no Lease Event of Default has occurred and is continuing.

     4. THIS AMENDMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,
THE LAWS OF THE STATE OF GEORGIA AND ALL APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

     5. This  Amendment  may be  executed in one or more  counterparts,  each of
which shall be deemed an original,  but all of which together  shall  constitute
one and the same document.

     6. This  Amendment  shall be binding on, and shall inure to the benefit of,
the successors and assigns of the parties hereto.

     7. In the  event  that  any  part of this  Agreement  shall  be found to be
illegal or in violation of public  policy,  or for any reason  unenforceable  at
law, such finding shall not invalidate any other part thereof.

     8. TIME IS OF THE ESSENCE UNDER THIS AGREEMENT.

     9. The parties agree that their  signatures by telecopy or facsimile  shall
be effective  and binding upon them as though  executed in ink on paper but that
the parties shall exchange original ink signatures  promptly  following any such
delivery by telecopy or facsimile.
    
     10.  Lessee  agrees to pay all costs and expenses of  Administrative  Agent
incurred in connection with the preparation, execution, delivery and enforcement
of this  Amendment  and all other  Operative  Agreements  executed in connection
herewith,   including  the  reasonable  fees  and   out-of-pocket   expenses  of
Administrative Agent's counsel.

     11. This Amendment shall constitute a Operative  Agreement for all purposes
of the Participation Agreement and shall be governed accordingly.



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                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            PARTICIPATION AGREEMENT]

     IN WITNESS WHEREOF,  the Lessee, the Owner Trustee, the Holder, each Lender
and the  Administrative  Agent have set their hands as of the day and year first
above written.

                                "LESSEE"

                                AVADO BRANDS, INC. formerly known as
                                Apple South, Inc.

                                By:_________________________________
                                   Erich J. Booth
                                   Chief Financial Officer and Treasurer

                                Attest:_____________________________
                                       Tonya Benjamin
                                       Assistant Secretary


                                "OWNER TRUSTEE"

                                FIRST SECURITY BANK, N.A.

                                By:_________________________________
                                Name:____________________________
                                Title:_____________________________


                                "HOLDER"

                                STI CREDIT CORPORATION
                                By:_________________________________
                                Name:____________________________
                                Title:_____________________________


                                "LENDERS"
                                SUNTRUST BANK, ATLANTA, as the Administrative 
                                Agent and as a Lender

                                By:_________________________________
                                Name:____________________________
                                Title:_____________________________

                                By:_________________________________
                                Name:____________________________
                                Title:_____________________________

   
                                BANCBOSTON LEASING, INC.

                                By:_________________________________
                                Name:____________________________
                                Title:_____________________________


                                SOUTHTRUST BANK, N.A.

                                By:_________________________________
                                Name:____________________________
                                Title:_____________________________


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