<PAGE>

                                                                   Exhibit 10.16

                              MEMORANDUM AGREEMENT

     This Memorandum Agreement (this "Agreement"), dated May 10, 2001, is
entered into by and among The Snyder Group Company, a Delaware corporation
("SGC"), each former shareholder of SGC listed on Schedule A hereto (the "Former
Shareholders"), Red Robin International, Inc., a Nevada corporation ("Red
Robin"), Red Robin West, Inc. (formerly Red Robin Holding Co., Inc.), a Nevada
corporation and a wholly owned subsidiary of Red Robin ("Red Robin West"),
Rodney Bench (the "Indenture Trustee"), as trustee of that certain Trust
Indenture Agreement, dated May 11, 2000, by and between Red Robin and the
Indenture Trustee (the "Trust Indenture"), and Bunch Grass Leasing, LLC ("Bunch
Grass Leasing").

     RECITALS

     A. On May 11, 2000, SGC merged with and into Red Robin West pursuant to
that certain Agreement and Plan of Merger, dated February 18, 2000, by and among
Red Robin, Red Robin West, SGC and the Former Shareholders, as amended by that
certain Closing Agreement and Amendment to Merger Agreement, dated as of May 11,
2000, by and among Red Robin, Red Robin West, SGC and the Former Shareholders
(as so amended, the "Plan of Merger");

     B. The Plan of Merger provided for the delivery to the Former Shareholders
of merger consideration equal to (i) an aggregate of 5,480,152 shares of Red
Robin's common stock, par value $0.001 per share (the "Shares") and (ii) an
amount in debentures issued by Red Robin pursuant to the Trust Indenture (the
"Debentures") and/or cash equal to an aggregate of $10,960,301, allocated in the
manner provided in the Plan of Merger and subject to adjustment pursuant to
Section 2.9 of the Plan of Merger;

     C. Pursuant to that certain Sinking Fund Agreement, dated September 6,
2000, by and between Red Robin and the Indenture Trustee, Red Robin established
a sinking fund for the payment and performance of the Debentures, which was
subsequently assigned to Bunch Grass Leasing pursuant to that certain Assignment
and Assumption Agreement, dated September 6, 2000, by and among Bunch Grass
Leasing, Red Robin and the Indenture Trustee;

     D. The Former Shareholders desire to amend the Plan of Merger and the Trust
Indenture as more fully described herein to correct certain errors that occurred
in connection with the allocation of the Shares and the Debentures to certain of
the Former Shareholders listed on Schedule B hereto, and, subject to the
conditions set forth herein, Red Robin has agreed to such amendment; and

     E. Red Robin, SGC and the Former Shareholders have agreed that the
adjustment to the Merger Consideration calculated pursuant to Section 2.9 of the
Plan of Merger is equal to $112,000 (the "Merger Consideration Adjustment"),
which the parties agree shall be payable to the Former Shareholders in
accordance with this Agreement.

<PAGE>

     Now, therefore, pursuant to provisions in the Plan of Merger and the Trust
Indenture and in consideration of the mutual promises contained herein, the
parties agree as follows:

     1. Reallocation of Shares.
        ----------------------

          (a) In order to effect a correction of the Merger Consideration
     consisting of common stock of Red Robin to which certain Shareholders were
     entitled to pursuant to the Plan of Merger, concurrent with the closing of
     the transactions contemplated by this Agreement, (i) each Shareholder
     listed on Schedule B hereto agrees to surrender, or cause to be
     surrendered, to Red Robin the Shares issued to such Shareholder pursuant to
     Section 2.8 of the Plan of Merger and delivered to FINOVA Capital
     Corporation, a Delaware corporation (the "Lender"), pursuant to that
     certain Stock Pledge Agreement, dated September 6, 2000, by and among the
     Lender, Red Robin and certain shareholders of Red Robin (the "Finova
     Pledged Shares"), (ii) Red Robin agrees to mark the Finova Pledged Shares
     "cancelled," (iii) Red Robin agrees to issue to each such Shareholder that
     number of shares of common stock of Red Robin, par value $0.001 per share,
     set forth opposite such Shareholder's name on Schedule C hereto (the
     "Corrected Pledged Shares"), representing a portion of the shares of common
     stock of Red Robin to which such Shareholder was entitled to pursuant to
     the Plan of Merger, and (iv) in exchange for the Finova Pledged Shares,
     each such Shareholder agrees to deliver, or cause to be delivered, the
     Corrected Pledged Shares to the Lender.

          (b) Red Robin and the Shareholders listed on Schedule B hereto
     acknowledge and agree that in order to effect the reallocation of the
     Merger Consideration no action is required with respect to (i) the Shares
     issued to such Shareholders in connection with the Plan of Merger and
     deposited with the Bank of New York, as Escrow Agent, pursuant to that
     certain Escrow Agreement, dated May 11, 2000, by and among Red Robin, Red
     Robin West, the Former Shareholders and the Escrow Agent (the "Escrow
     Shares"), as set forth on Schedule D hereto, or (ii) the Shares pledged by
     Michael J. Snyder to Red Robin (the "Red Robin Pledged Shares"), as set
     forth on Schedule E hereto. Red Robin and each Shareholder listed on
     Schedule B hereto further acknowledge and agree that the Corrected Shares
     set forth on Schedule F hereto represent the portion of the Merger
     Consideration consisting of common stock of Red Robin to which such
     Shareholders was entitled to pursuant to the Plan of Merger.

          (c) The reallocation of the Merger Consideration resulting herefrom
     shall be effective as of the effective date of the closing of the
     transactions contemplated by the Plan of Merger.

     2. Reallocation of Debentures.
        --------------------------

<PAGE>

          (a) Concurrent with the transactions contemplated by this Agreement,
     (i) each Shareholder listed on Schedule B hereto agrees to surrender, or
     cause to be surrendered, to the Indenture Trustee and/or Bunch Grass
     Leasing, as agent for and successor to Red Robin with respect to the
     Debentures, the Debentures issued to such Shareholder at the closing of the
     transactions contemplated by the Plan of Merger, (ii) the Indenture Trustee
     and/or Bunch Grass Leasing agree to mark such Debentures "cancelled," and
     (iii) the Indenture Trustee and/or Bunch Grass Leasing agree to issue to
     each such Shareholder that number of debentures set forth opposite such
     Shareholder's name on Schedule G hereto (the "Corrected Debentures"). The
     parties hereto acknowledge and agree that this Section 2 shall not alter or
     affect the satisfaction and release of Red Robin pursuant to Section 3 of
     that certain Assignment and Assumption Agreement, dated September 6, 2000,
     by and among Red Robin, the Indenture Trustee and Bunch Grass Leasing.

          (b) The reallocation of the Merger Consideration resulting herefrom
     shall be effective as of the effective date of the closing of the
     transactions contemplated by the Plan of Merger.

     3. Acknowledgment, Consent and Release by Former Shareholders. Each of the
        ----------------------------------------------------------
Former Shareholders, other than the Shareholders listed on Schedule B hereto,
acknowledges and agrees that no reallocation of the Merger Consideration
received by such Former Shareholders in connection with the Plan of Merger is
required. Each of the Former Shareholders hereby consents to the correction, in
accordance with this Agreement, of the allocation of the Merger Consideration
consisting of Debentures and common stock of Red Robin to which the Shareholders
listed on Schedule B hereto were entitled to pursuant to the Plan of Merger.
Each of the Former Shareholders hereby releases Red Robin from any and all
obligations or liabilities arising from or in connection with the transactions
contemplated by this Agreement.

     4. Merger Consideration Adjustment.
        -------------------------------

          (a) Red Robin, SGC and the Former Shareholders acknowledge and agree
     that the Merger Consideration Adjustment calculated pursuant to Section 2.9
     of the Plan of Merger equals $112,000 and has been finally determined in
     accordance with the Plan of Merger. Concurrent with the closing of the
     transactions contemplated by this Agreement and in fulfillment of Red
     Robin's obligations under Section 2.9 of the Plan of Merger: (A) Red Robin
     agrees to (i) issue to each Former Shareholder that number of shares of the
     common stock of Red Robin, par value $0.001 per share, set forth opposite
     such Former Shareholder's name on Schedule H hereto (the "Additional
     Shares"), (ii) deposit with the Indenture Trustee or Bunch Grass Leasing an
     amount in cash equal to $37,739.94, and (iii) deliver by cash or certified
     funds to each Former Shareholder the amount set forth opposite such Former
     Shareholder's name on Schedule I hereto (the "Additional Cash
     Consideration"); and (B) Bunch Grass Leasing and/or the Indenture Trustee
     agrees to issue to each Shareholder listed on Schedule B hereto that number
     of debentures listed opposite such Shareholder's

<PAGE>

     name on Schedule J hereto (the "Additional Debentures"). The parties
     acknowledge and agree that the performance of the obligations set forth in
     this Section 4(a) are deemed to be in full and complete satisfaction of the
     obligations of Red Robin pursuant to Section 2.9 of the Plan of Merger.

          (b) The Merger Consideration Adjustment resulting herefrom shall be
     effective as of the date hereof.

     5. Surrender of Certificates. Concurrent with the closing of the
        -------------------------
transactions contemplated by this Agreement, each Shareholder listed on Schedule
B hereto has surrendered, or caused to be surrendered, to Red Robin and the
Indenture Trustee or Bunch Grass Leasing, as provided herein, any certificate
evidencing the Shares or the Debentures which are to be cancelled pursuant to
Sections 1 and 2 above. Each of the Shareholders listed on Schedule B hereto
represents and warrants that each such certificate has not been pledged,
encumbered, or transferred except to Red Robin or in accordance with the Pledge
Agreement.

     6. Amendment. This Agreement corrects and amends the Plan of Merger and the
        ---------
Trust Indenture. Except as amended hereby, the terms of the Plan of Merger and
the Trust Indenture shall continue in full force and effect and shall not be
modified in any manner and shall be controlling as to the enforcement and
interpretation hereof. The Former Shareholders acknowledge that this Agreement
represents an amendment to the Plan of Merger, and hereby consent to and approve
such amendment pursuant to the authority of Section 228 of the Delaware General
Corporation Law.

     7. Representations and Warranties. By execution hereof, each person who is
        ------------------------------
a party hereto represents and warrants that this Agreement has been duly
authorized by such person, that such person has capacity to execute and be bound
by the terms of this Agreement, and that this Agreement constitutes the valid,
binding, and enforceable obligations of such person.

     8. Incorporation. The recitals are incorporated in the body of this
        -------------
Agreement as if set forth at length.

     9. Integration. The Schedules attached hereto, together with all documents
        -----------
incorporated by reference therein, form an integral part of this Agreement and
are hereby incorporated into this Agreement wherever reference is made to them
to the same extent as if they were set out in full at the point in which such
reference is made.

     10. Facsimile Signatures. This Agreement may be executed by facsimile
         --------------------
signature. An executed copy delivered with a facsimile signature shall be deemed
an original for all purposes hereof. Each party executing by a facsimile
signature shall provide an original signed copy to the party entitled thereto
within thirty (30) days of such delivery.

<PAGE>

     11. Counterparts. This Agreement and any amendment hereto may be executed
         ------------
in one or more counterparts and by different parties in separate counterparts.
All of such counterparts shall constitute one and the same agreement and shall
become effective (unless otherwise provided) when one or more counterparts have
been signed by each party and delivered to the other parties.

     12. Effective Date. This Agreement is effective upon the closing of the
         --------------
transactions contemplated by the Plan of Merger with respect to the issuance and
delivery of the Corrected Pledged Shares and the Corrected Debentures to the
Shareholders listed on Schedule B hereto and as of the date hereof with respect
to the issuance and delivery of the Additional Shares, the Additional Debentures
and the Additional Cash.

<PAGE>

     In witness whereof the parties have set forth their hands, effective as
indicated herein.

                                        Red Robin International, Inc.,
                                        a Nevada corporation


                                        By: /s/ James P. McCloskey
                                           -------------------------------------
                                            James P. McCloskey,
                                            Chief Financial Officer


                                        The Snyder Group Company,
                                        a Delaware corporation


                                        By:
                                           -------------------------------------
                                            Stephen Snyder,
                                            Vice President


                                        Red Robin West, Inc.,
                                        a Nevada corporation


                                        By: /s/ James P. McCloskey
                                           -------------------------------------
                                            James P. McCloskey,
                                            Chief Financial Officer


                                        Bunch Grass Leasing, LLC,
                                        a Nevada limited liability company


                                        By:
                                           -------------------------------------
                                            Rodney Bench,
                                            Manager



                                        ----------------------------------------
                                        Rodney Bench, trustee of the Trust
                                        Indenture dated as of May 11, 2000



                                        ----------------------------------------
                                        Michael J. Snyder

<PAGE>

 In witness whereof the parties have set forth their hands, effective as
indicated herein.

                                        Red Robin International, Inc.,
                                        a Nevada corporation


                                        By:
                                           -------------------------------------
                                            James P. McCloskey,
                                            Chief Financial Officer


                                        The Snyder Group Company,
                                        a Delaware corporation


                                        By: /s/ Stephen Snyder
                                           -------------------------------------
                                            Stephen Snyder,
                                            Vice President


                                        Red Robin West, Inc.,
                                        a Nevada corporation


                                        By:
                                           -------------------------------------
                                            James P. McCloskey,
                                            Chief Financial Officer


                                        Bunch Grass Leasing, LLC,
                                        a Nevada limited liability company


                                        By:
                                           -------------------------------------
                                            Rodney Bench,
                                            Manager



                                        ----------------------------------------
                                        Rodney Bench, trustee of the Trust
                                        Indenture dated as of May 11, 2000



                                        ----------------------------------------
                                        Michael J. Snyder

<PAGE>

 In witness whereof the parties have set forth their hands, effective as
indicated herein.

                                        Red Robin International, Inc.,
                                        a Nevada corporation


                                        By:
                                           -------------------------------------
                                            James P. McCloskey,
                                            Chief Financial Officer


                                        The Snyder Group Company,
                                        a Delaware corporation


                                        By:
                                           -------------------------------------
                                            Stephen Snyder,
                                            Vice President


                                        Red Robin West, Inc.,
                                        a Nevada corporation


                                        By:
                                           -------------------------------------
                                            James P. McCloskey,
                                            Chief Financial Officer


                                        Bunch Grass Leasing, LLC,
                                        a Nevada limited liability company


                                        By: /s/ Rodney Bench
                                           -------------------------------------
                                            Rodney Bench,
                                            Manager


                                        /s/ Rodney Bench
                                        ----------------------------------------
                                        Rodney Bench, trustee of the Trust
                                        Indenture dated as of May 11, 2000



                                        ----------------------------------------
                                        Michael J. Snyder

<PAGE>

 In witness whereof the parties have set forth their hands, effective as
indicated herein.

                                        Red Robin International, Inc.,
                                        a Nevada corporation


                                        By:
                                           -------------------------------------
                                            James P. McCloskey,
                                            Chief Financial Officer


                                        The Snyder Group Company,
                                        a Delaware corporation


                                        By:
                                           -------------------------------------
                                            Stephen Snyder,
                                            Vice President


                                        Red Robin West, Inc.,
                                        a Nevada corporation


                                        By:
                                           -------------------------------------
                                            James P. McCloskey,
                                            Chief Financial Officer


                                        Bunch Grass Leasing, LLC,
                                        a Nevada limited liability company


                                        By:
                                           -------------------------------------
                                            Rodney Bench,
                                            Manager



                                        ----------------------------------------
                                        Rodney Bench, trustee of the Trust
                                        Indenture dated as of May 11, 2000


                                        /s/ Michael J. Snyder
                                        ----------------------------------------
                                        Michael J. Snyder

<PAGE>

                                        The Stephen S. Snyder Intervivos Trust


                                        By: /s/ Stephen Snyder
                                           -------------------------------------
                                            Stephen Snyder, Trustee


                                        The Louise Snyder Intervivos Trust


                                        By: /s/ Louise Snyder
                                           -------------------------------------
                                            Louise Snyder, Trustee



                                        ----------------------------------------
                                        Michael E. Woods



                                        ----------------------------------------
                                        Robert Merullo


                                        Shamrock Investment Company,
                                        a Washington general partnership


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:



                                        ----------------------------------------
                                        George D. Hansen



                                        ----------------------------------------
                                        Deborah Hansen



                                        ----------------------------------------
                                        Beverly C. Brown



                                        ----------------------------------------
                                        L.V. Brown, Jr.

<PAGE>

                                        The Stephen S. Snyder Intervivos Trust


                                        By:
                                           -------------------------------------
                                            Stephen Snyder, Trustee


                                        The Louise Snyder Intervivos Trust


                                        By:
                                           -------------------------------------
                                            Louise Snyder, Trustee


                                        /s/ Michael E. Woods
                                        ----------------------------------------
                                        Michael E. Woods


                                        /s/ Robert Merullo
                                        ----------------------------------------
                                        Robert Merullo


                                        Shamrock Investment Company,
                                        a Washington general partnership


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:



                                        ----------------------------------------
                                        George D. Hansen



                                        ----------------------------------------
                                        Deborah Hansen



                                        ----------------------------------------
                                        Beverly C. Brown



                                        ----------------------------------------
                                        L.V. Brown, Jr.


<PAGE>

                                        The Stephen S. Snyder Intervivos Trust


                                        By:
                                           -------------------------------------
                                            Stephen Snyder, Trustee


                                        The Louise Snyder Intervivos Trust


                                        By:
                                           -------------------------------------
                                            Louise Snyder, Trustee



                                        ----------------------------------------
                                        Michael E. Woods



                                        ----------------------------------------
                                        Robert Merullo


                                        Shamrock Investment Company,
                                        a Washington general partnership


                                        By: /s/ George D. Hansen
                                           -------------------------------------
                                        Name:
                                        Title:


                                        /s/ George D. Hansen
                                        ----------------------------------------
                                        George D. Hansen


                                        /s/ Deborah Hansen
                                        ----------------------------------------
                                        Deborah Hansen


                                        /s/ Beverly C. Brown
                                        ----------------------------------------
                                        Beverly C. Brown



                                        ----------------------------------------
                                        L.V. Brown, Jr.




<PAGE>

                                        The Stephen S. Snyder Intervivos Trust


                                        By:
                                           -------------------------------------
                                            Stephen Snyder, Trustee


                                        The Louise Snyder Intervivos Trust


                                        By:
                                           -------------------------------------
                                            Louise Snyder, Trustee



                                        ----------------------------------------
                                        Michael E. Woods



                                        ----------------------------------------
                                        Robert Merullo


                                        Shamrock Investment Company,
                                        a Washington general partnership


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:



                                        ----------------------------------------
                                        George D. Hansen



                                        ----------------------------------------
                                        Deborah Hansen



                                        ----------------------------------------
                                        Beverly C. Brown


                                        /s/ L.V. Brown, Jr.
                                        ----------------------------------------
                                        L.V. Brown, Jr.



<PAGE>


                                   Schedule A

                               Former Shareholders

Michael J. Snyder
Stephen S. Snyder, as trustee of the Stephen S. Snyder Intervivos Trust
Louise A. Snyder, as trustee of the Louise A. Snyder Intervivos Trust
Michael E. Woods
Robert Merullo
Shamrock Investment Company, a Washington general partnership
George D. Hansen
Deborah Hansen
Beverly C. Brown
L.V. Brown, Jr.

<PAGE>

                                   Schedule B

                         Shareholders with Reallocations

Michael J. Snyder
Stephen S. Snyder, as trustee of the Stephen S. Snyder Intervivos Trust
Louise A. Snyder, as trustee of the Louise A. Snyder Intervivos Trust



<PAGE>

                             Schedules C, D, E, F, G

<TABLE>
<CAPTION>
                  Schedule C       Schedule D      Schedule E       Schedule F         Schedule G

                  Corrected                        Red Robin                           Corrected
Shareholder       Pledged Shares   Escrow Shares   Pledged Shares   Corrected Shares   Debentures
<S>                 <C>              <C>               <C>              <C>            <C>
M. Snyder           1,115,083        1,025,008         150,000          2,290,091      $5,540,482.37

S. Snyder Trust       632,542          512,504                          1,145,046      $1,809,940.19

L. Snyder Trust       632,542          512,504                          1,145,046      $1,809,940.19
                    ---------        ---------         -------          ---------      -------------
TOTAL               2,380,167        2,050,016         150,000          4,580,183      $9,160,362.75
</TABLE>

<PAGE>

                               Schedule H, I and J

                         Merger Consideration Adjustment

                     Schedule H          Schedule I        Schedule J

                                         Additional Cash   Additional
Former Shareholder   Additional Shares   Consideration     Debentures

M. Snyder                  11,485           $ 4,100.03     $18,869.97

S. Snyder Trust             5,743           $ 2,050.02     $ 9,434.98

L. Snyder Trust             5,743           $ 2,050.02     $ 9,434.98

M. Woods                    1,120           $ 2,240.59        -0-

R. Merullo                  1,120           $ 2,240.59        -0-

Shamrock                    2,222           $ 4,444.59        -0-

G. Hansen                     141           $   282.73        -0-

D. Hansen                     138           $   276.75        -0-

B. Brown                      150           $   299.37        -0-

L. Brown                      150           $   299.37        -0-
                           ------           ----------     ----------

TOTAL                      28,012           $18,284.06     $37,739.94