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                               CARROLS CORPORATION

                             STOCK OPTION AGREEMENT
                           (NONQUALIFIED STOCK OPTION)


        THIS  AGREEMENT,  dated as of December 30, 1996 (the "Date of Grant") is
made by and between Carrols  Corporation,  a Delaware  corporation  (hereinafter
called the "Company") and Alan Vituli,  an employee of the Company  (hereinafter
referred to as the  "Optionee").  All  capitalized  terms herein shall have such
meanings as are ascribed to them in the Plan and in this Agreement.

               1. Grant and Approval of Option. The Company hereby grants to the
Optionee a nonqualified stock option (this "Option") to purchase all or any part
of the aggregate of 160,451.60  shares of $.01 par value common stock of Carrols
Holdings Corporation (the "Shares"),  subject to all of the terms and conditions
of this agreement (the  "Agreement") and the Carrols  Corporation 1996 Long-Term
Incentive Plan (the "Plan").


               2. Exercise Price and Period of Option.  Subject to the terms and
conditions of the Plan and this Agreement,  this Option shall become exercisable
(a) with regard to 56,629.98  Shares, on the Date of Grant, at an exercise price
per share (the  "Exercise  Price") of  $29.7192;  (b) with  regard to  56,629.98
Shares,  on December 31, 1997,  at an Exercise  Price of $35.1227;  and (c) with
regard to  47,191.64  Shares,  on December  31,  1997,  at an Exercise  Price of
$37.8245.  If the Optionee's  employment with the Company is terminated prior to
such  dates,  other  then  due  to  death,  Permanent  Disability,   Retirement,
termination for Good Reason or termination  without Cause, this Option shall not
become exercisable.


               3. Expiration of Option.  This Option may not be exercised to any
extent by Optionee after the first to occur of the following events:

               (a)    the tenth anniversary of the Date of Grant; or

               (b)    a Change of Control (as defined in the Plan).


               4.     Manner of Exercise.

               (a) This Option shall be exercisable by delivery to the Secretary
of the Company of an executed  written Notice and Agreement in the form attached
hereto as Exhibit A, or in such other form as may be  required  by the  Company,
which shall set forth Optionee's election to exercise this Option, the number of
Shares being purchased and such other  representations and agreements  regarding
Optionee's investment intent and access to information as may be required by the
Company to comply with applicable securities laws.




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               (b)  Such  Notice  and  Agreement  shall be  accompanied  by full
payment  of the  Exercise  Price  for the  Shares  being  purchased  (i) in cash
(including  check,  bank  draft or money  order);  (ii)  where  approved  by the
Committee in its sole discretion, by surrender of Shares of the Company owned by
the Optionee  having a Fair Market Value equal to the Exercise  Price;  (iii) by
delivery of a  promissory  note to the  Controlling  Shareholder  payable over a
three (3) year period and bearing  interest at the rate  provided  under Section
1274(d) of the Code;  (iv) by any combination of the foregoing where approved by
the  Committee  in writing in its sole  discretion;  or (v) any other method the
Committee  may  approve  in  its  sole  discretion,  subject  to the  terms  and
conditions of the Plan.

               (c) Prior to the  issuance  of the Shares  upon  exercise of this
Option,  Optionee  must pay or,  in a manner  acceptable  to the  Company,  make
adequate  provision to pay, any applicable  federal,  state or local withholding
obligations as determined by the Company.

               (d) Provided that the foregoing  Notice and Agreement and payment
are in form and substance  satisfactory to counsel for the Company,  the Company
shall issue the Shares registered in the name of the Optionee,  the Optionee and
the Optionee's spouse, or the Optionee's legal representative.

               (e) Prior to the  issuance  of the Shares  upon  exercise of this
Option,  the Optionee must execute a  shareholders'  agreement  containing  such
terms and conditions as determined by the Committee and approved by the Board of
Directors.

               (f) Any exercisable  portion of this Option or the entire Option,
if then wholly  exercisable,  may be  exercised  in whole or in part at any time
prior to the time when this Option  becomes  unexercisable  under  Paragraph  3;
provided, however, that any partial exercise shall be for whole Shares only.

               (g) This Option may not be exercised  unless such  exercise is in
compliance with the Securities Act of 1933, as amended, and all applicable state
securities laws, as they are in effect on the date of exercise.


               5.  Redemption  of Options  Upon Change of Control.  In the event
that (i) a Change of  Control  (as  defined in the Plan) of the  Company  occurs
within five (5) years of the Date Of Grant; (ii) the Bahrain  International Bank
E.C.  has  realized  a  return  of  its  investment;  and  (iii)  the  successor
corporation neither assumes this Option nor agrees to substitute a substantially
equivalent  option or  options  at least ten (10) days  prior to the date of the
Change of Control,  the Company shall redeem any options granted to the Optionee
pursuant to the Plan (including,  but not limited to, this Option), in an amount
(the  "Redemption  Amount")  determined  pursuant to Schedule I attached hereto,
payable within thirty (30) days of the date of the Change of Control.


               6.  Compliance  with  Laws  and  Regulations.  The  issuance  and
transfer  of Shares  shall be  subject  to  compliance  by the  Company  and the
Optionee with all applicable  requirements of federal and state  securities laws
and with all applicable requirements of any stock



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exchange  on  which  the  Company's  shares  may be  listed  at the time of such
issuance  or  transfer.  Optionee  understands  that  the  Company  is  under no
obligation  to register or qualify the Shares with the  Securities  and Exchange
Commission, any state securities commission or any stock exchange to effect such
compliance.


               7.   Nontransferability   of  Option.  This  Option  may  not  be
transferred  in any manner except (a) as determined by the Committee in its sole
discretion, or (b) pursuant to Paragraph 7(f) of the Plan.


               8. Rights as Stockholder.  The holder of the Option shall not be,
nor have any of the rights or privileges  of, a stockholder  of the Company with
respect to any shares purchasable upon the exercise of the Option or any portion
thereof, unless and until certificates  representing such Shares shall have been
issued by the Company to such holder.

               9. Sale by Controlling Shareholder.  In the event the Controlling
Shareholder  elects  to  sell  or  otherwise  transfer  to a  third  party  (the
"Purchaser")  any  Shares  owned (as of the  effective  date of the Plan) by the
Controlling Shareholder, the Optionee shall be entitled to sell to the Purchaser
the Shares  issued to and owned by the Optionee  pursuant to the Plan, as of the
same time and at the per share  sale  price to be  received  by the  Controlling
Shareholder,  up  to  an  equivalent  percentage  of  the  Shares  sold  by  the
Controlling Shareholder, in the following manner:

               (i)    the Controlling  Shareholder  shall notify the Optionee of
                      such sale or transfer and its material  terms at least ten
                      (10)  days  prior to the  effective  date of such  sale or
                      transfer;

               (ii)   within five (5) days thereafter, the Optionee shall notify
                      the Company of the number, if any, of such Shares owned by
                      the Optionee to be sold to the Purchaser (the "Participant
                      Shares"), subject to the limitations set forth above;

               (iii)  the  Controlling  Shareholder  shall  sell both its Shares
                      and,  acting on behalf of the  Optionee,  the  Participant
                      Shares, to the Purchaser and, to the extent necessary, the
                      Controlling  Shareholder  shall  reduce  the number of its
                      Shares  available for sale to accommodate  the sale of the
                      Participant Shares.


               10.  Consequences.  Optionee shall be solely  responsible for the
payment  of any taxes due in  connection  with the Plan and this  Option  grant;
provided,  however,  that the  Company may make such  provisions  as it may deem
appropriate for the withholding of any taxes which the Company  determines it is
required to withhold in  connection  with the  issuance,  exercise or vesting of
this Option.


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               11.  Administration.  The  Committee  shall  have  the  power  to
interpret  the  Plan  and  this  Agreement  and to  adopt  such  rules  for  the
administration,  interpretation  and  application  of the Plan as are consistent
therewith  and to interpret or revoke any such rules.  All actions taken and all
interpretations  and  determinations  made by the  Committee  shall be final and
binding upon the  Optionee,  the Company and all other  interested  persons.  No
member of the Committee shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or the Option.


               12.  Notice.  Any  notice  to be given  under  the  terms of this
Agreement  to the  Company  shall be  addressed  to the  Company  in care of its
Secretary,  and any notice to be given to the Optionee shall be addressed to him
at the address given beneath his signature hereto. By a notice given pursuant to
this Paragraph 12, either party may hereafter  designate a different address for
notices  to be  delivered.  Any  notice  which  is  required  to be given to the
Optionee shall, if the Optionee is deceased, be given to the Optionee's personal
representative.  Any notice shall have been deemed duly given when enclosed in a
properly  sealed  envelope or wrapper  addressed as aforesaid,  deposited  (with
postage prepaid) in a post office or branch post office regularly  maintained by
the United States Postal Service.


               13.  Dividends.  In the event the Committee  provides that Awards
granted under the Plan earn dividends or dividend equivalents, such dividends or
dividend  equivalents may, in the Committee's  discretion and in accordance with
the terms of the Plan, (a) be paid  currently,  or (b) be credited to an account
established by the Committee under the Plan in the name of the Optionee.


               14.  Interpretation.  Any dispute regarding the interpretation of
this  Agreement  shall be submitted by the Optionee or the Company  forthwith to
the Committee,  which shall review such dispute at its next regular meeting. The
resolution  of such dispute by the  Committee  shall be final and binding on the
Company and on the Optionee.


               15.    Governing  Document.  This Agreement is  in  every respect
subject  to  the  provisions  of the  Plan,  as it  may  be  amended  from  time
to  time.  The  provisions  of  the  Plan  shall  govern  in  the  case  of  any
inconsistency  between the Plan and this Agreement.


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               16.  Entire  Agreement.  The Plan and the  Notice  and  Agreement
attached as Exhibit A are incorporated herein by reference.  This Agreement, the
Plan and the Notice and Agreement constitute the entire agreement of the parties
and supersede all prior  undertakings and agreements with respect to the subject
matter hereof.


                                        CARROLS CORPORATION




                                        By:  /s/ Joseph Zirkman
                                            ---------------------------------

                                       Its:  Vice President
                                            ---------------------------------






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ACCEPTANCE

        Optionee hereby acknowledges  receipt of a copy of the Plan,  represents
that Optionee has read and  understands  the terms and provisions  thereof,  and
accepts this Option subject to all the terms and provisions of the Plan and this
Agreement. Optionee acknowledges that there may be various tax consequences upon
exercise of this Option or  disposition  of the Shares and that Optionee  should
consult a tax adviser prior to such exercise or disposition.



                                                    /s/ Alan Vituli
                                                 ------------------------------
                                                              Name

                                                          Alan Vituli 
                                                 ------------------------------

                                                  C/O CARROLS CORPORATION
                                                 ------------------------------
                                                  968 James St., Syracuse, NY
                                                 ------------------------------
                                                             Address

                                                           ###-##-####
                                                 ------------------------------
                                                 Taxpayer Identification Number




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