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                                                                      EXHIBIT B3

                          CARROLS HOLDINGS CORPORATION


                         UNVESTED STOCK OPTION AGREEMENT

               THIS  AGREEMENT,  dated as of  ___________,  1997  (the  "Date of
Grant")  is  made  by and  between  Carrols  Holdings  Corporation,  a  Delaware
corporation  (hereinafter  called  the  "Company")  and  Joseph A.  Zirkman,  an
employee of the Company  (hereinafter  referred  to as the  "Optionee").  Unless
otherwise defined herein or on Exhibit A hereto, which is incorporated herein by
reference, all capitalized terms used herein shall have the meanings assigned to
such terms in the Carrols Holdings Corporation 1996 Long-Term Incentive Plan, as
amended  from time to time (the  "Plan");  provided,  however,  that the  Option
granted hereunder is not subject to or granted under the Plan.

               1. Grant and Approval of Option. The Company hereby grants to the
Optionee a nonqualified  stock option (the "Option") to purchase all or any part
of the  aggregate  of 368  shares  of its  $.01  par  value  common  stock  (the
"Shares"),  subject to all of the terms and  conditions of this  agreement  (the
"Agreement").


               2. Exercise Price and Period of Option; Acceleration of Vesting.

               (a) Effective as of the closing of the Stock  Purchase  Agreement
(the "Closing") and subject to the terms and conditions of this Agreement,  this
Option shall become  exercisable  at an exercise  price per share (the "Exercise
Price") of $101.7646 as follows:  (i) 74 Shares will become  exercisable  on the
first anniversary date of the Closing; (ii) 74 Shares will become exercisable on
the  second  anniversary  date of the  Closing;  (iii)  74  Shares  will  become
exercisable on the third  anniversary  date of the Closing;  (iv) 73 Shares will
become  exercisable on the fourth  anniversary date of the Closing;  and (v) the
remaining 73 Shares will become exercisable on the fifth anniversary date of the
Closing.

               (b) Except as otherwise provided by the Committee,  if Optionee's
employment with the Company terminates:

               (i) for Good Reason or without  Cause,  the portion of the Option
which is not vested and  exercisable on the date on which Optionee  ceases to be
an  employee  shall vest and become  immediately  exercisable  in full and shall
continue to be exercisable  until the date of expiration of the Option  pursuant
to Paragraph 3 of this Agreement;

               (ii) on account of death or Permanent Disability,  Optionee shall
(A) have the right to  purchase  such  additional  Shares to which the  Optionee
would  have  been  entitled  had his  employment  continued  through  the  first
anniversary  date of the Closing  following  Optionee's  date of  termination of
employment on account of death or Permanent  Disability (the "Termination Date")
and (B) have the right to purchase such  additional  Shares equal to the product
of (x) the number of shares  which would have become  exercisable  on the second
anniversary date of the



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Closing  following the  Termination  Date multiplied by (y) a fraction where the
numerator  equals the number of days elapsed since the  anniversary  date of the
Closing  preceding the Termination Date and the denominator  equals 365 days. In
the  event  of  Optionee's  death  or  Permanent  Disability,   all  vested  and
exercisable  Options (including Options that become vested and exercisable under
this paragraph  2(b)(ii))  shall  continue to be  exercisable  until the date of
expiration of the Option pursuant to Paragraph 3 of this Agreement;

               (iii) without Good Reason,  the portion of the Option that is not
vested and  exercisable on the date on which  Optionee  ceases to be an employee
shall terminate and any vested Options shall only be exercisable for a period of
forty-five  (45) days after the  Optionee's  date of  termination  of employment
without Good Reason; and

               (iv) for Cause,  the portion of the Option that is not vested and
exercisable  shall  terminate  and any vested  Options shall be forfeited on the
date the Company  delivers  notice of termination of employment for Cause to the
Optionee.

               (c) In the event of a Change of  Control  during  the term of the
Optionee's  employment with Carrols Corporation,  the portion of the Option that
is not  vested  shall vest and  become  exercisable  in full on the date of such
Change of Control. As soon as practicable but in no event later than thirty (30)
days prior to the occurrence of a Change of Control,  the Committee shall notify
the Optionee of such Change of Control.  Upon a Change of Control that qualifies
as an Approved Sale (as defined in Paragraph 5) in which the outstanding  common
stock of the Company is converted or exchanged for or becomes a right to receive
any cash,  property or securities other than Illiquid  Consideration (as defined
in Paragraph 5), (i) the Option shall become  exercisable  solely for the amount
of such cash,  property or securities that the Optionee would have been entitled
to had the  Option  been  exercised  immediately  prior to such  event  (ii) the
Optionee  shall be given an  opportunity to either (A) exercise the Option prior
to the consummation of the Approved Sale and participate in such sale as holders
of Stock or (B) upon consummation of the Approved Sale,  receive in exchange for
such Option  consideration equal to the amount determined by multiplying (1) the
same amount of consideration per share of Stock received by the holders of Stock
in connection  with the Approved Sale less the exercise price per share of Stock
of such Option to acquire Stock by (2) the number of shares of Stock represented
by such Option;  and (iii) to the extent the Option is not exercised prior to or
simultaneous with such Approved Sale, the Option shall be canceled.

               (d) The Shares are subject to the Stockholders Agreement executed
in connection  with the Securities  Purchase  Agreement  dated February 25, 1997
among the  Company,  Atlantic  Restaurants,  Inc.,  Bahrain  International  Bank
(E.C.),  Madison Dearborn Capital  Partners,  L.P., and Madison Dearborn Capital
Partners II, L.P. (the "Stockholders Agreement").


               3.  Expiration  of  Option.  Notwithstanding  anything  contained
herein to the  contrary,  this  Option  may not be  exercised  to any  extent by
Optionee after the tenth anniversary of the Date of Grant.

               4.     Manner of Exercise.

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               (a) This Option shall be exercisable by delivery to the Secretary
of the Company of an executed written notice (the "Notice"),  or such other form
as may be required by the Committee 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  Committee to comply with  applicable
securities laws.

               (b) Such  Notice  shall be  accompanied  by full  payment  of the
Exercise  Price,  if any, 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 Company that is either (A) unsecured and fully  recourse
against  the  Optionee  or (B)  nonrecourse  but  secured  by the  Shares  being
purchased by such  exercise and by other assets having a Fair Market Value equal
to not less than forty (40) percent of the Exercise Price (a "Nonrecourse Note")
and,  in either  event,  such note shall  mature on the fifth  anniversary  date
thereof and shall bear interest, payable quarterly, at the Federal mid-term rate
provided under Section 1274(d) of the Internal Revenue Code of 1986, as amended;
(iv) by any combination of the foregoing, or any other method, where approved by
the  Committee  in writing in its sole  discretion  ; or (v) by any other  means
approved by the Committee.  The terms of a Nonrecourse  Note shall provide that:
(i) any dividends received on Stock securing a Nonrecourse Note shall be applied
toward payment of the principal and accrued  interest of the  Nonrecourse  Note;
and (ii) the Nonrecourse Note shall become  immediately due and payable upon the
sale of Stock securing the Nonrecourse Note and the proceeds shall be applied to
the  payment  of the  unpaid  principal  balance  and  accrued  interest  of the
Nonrecourse Note. For purposes of this Agreement,  "Fair Market Value" as of any
date (i) of Shares  shall be deemed to equal:  (A) if the  Shares  are  publicly
traded, the average of the last reported sales price of such Shares for ten (10)
consecutive  trading days as officially reported on the principal trading market
on which such  Shares are traded  ending on the second  trading day prior to the
date of determination,  or (B) if the Shares are not publicly traded,  the value
of a Share  as  determined  in good  faith  by the  Committee  or the  Board  of
Directors of the Company on the advice of its independent auditors;  and (ii) of
assets other than Shares shall equal such value as  determined  by the Committee
in its sole discretion.

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

               (d) Promptly  after receipt of any Notice and payment as provided
above,  the Company  shall issue the number of Shares set forth in such  Notice,
registered in the name of the Optionee,  the Optionee and the Optionee's spouse,
or the Optionee's legal representative.

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

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               (f) 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.     Sale of the Company

               (a) If the Board and the holders of a majority  of the  Company's
Stock approve a Sale of the Company (the "Approved Sale"),  the holders of Stock
shall  consent  to and raise no  objections  against  the  Approved  Sale of the
Company,  and if the  Approved  Sale of the Company is  structured  as a sale of
capital stock, the holders of Stock shall agree to sell their shares of Stock on
the terms and conditions  approved by the Board and the holders of a majority of
the Company's Stock. The holders of Stock shall take all necessary and desirable
actions in connection with the consummation of the Approved Sale of the Company.
Notwithstanding  the  foregoing,  in the  event  that  the  consideration  to be
received  by the holders of Stock in  connection  with the  Approved  Sale shall
include  either (a) shares of common  stock of a class  which is not listed on a
national  securities  exchange or in the NASDAQ system and which is not entitled
to  registration  rights  for sale in a  registered  public  offering  under the
Securities  Act of 1933 or (b) shares of senior equity  securities  which do not
provide for a scheduled  redemption or a redemption at the option of the holders
thereof,  such  holders  shall not be  required  to sell  their  shares of Stock
pursuant to this Paragraph 5(a) (collectively, the "Illiquid Consideration").


               (b) The  obligations  of the holders of Stock with respect to the
Approved  Sale of the Company is subject to the  satisfaction  of the  condition
that,  upon the  consummation  of the Approved Sale, all of the holders of Stock
receive the same form and amount of consideration  per share of Stock, or if any
holders of Stock are given an option as to the form and amount of  consideration
to be received, all holders be given the same option.


               (c) If the  Company or the  holders of the  Company's  securities
enter into any  negotiation  or  transaction  for which Rule 506 (or any similar
rule then in effect)  promulgated by the Securities  Exchange  Commission may be
available with respect to such  negotiation or transaction  (including a merger,
consolidation  or other  reorganization),  the  holders  of  Stock  shall at the
request of the Company,  appoint a "purchaser  representative"  (as such term is
defined in Rule 501)  reasonably  acceptable  to the  Company.  If any holder of
Stock appoints a purchaser representative designated by the Company, the Company
shall pay the fees of such purchaser  representative.  However, if any holder of
Stock  declines  to  appoint  the  purchaser  representative  designated  by the
Company, such holder shall appoint another purchaser representative  (reasonably
acceptable to the Company), and such holder shall be responsible for the fees of
the purchaser representative so appointed.


               (d)  Participants  and the other  holders of Stock (if any) shall
bear their pro-rata share (based upon the number of shares sold) of the costs of
any sale of Stock  pursuant  to an  Approved  Sale to the extent  such costs are
incurred for the benefit of all holders of Stock and are not  otherwise  paid by
the Company or the acquiring party. Costs incurred by Participants and



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the other holders of Stock on their own  behalf  shall  not be  considered costs
of the transaction hereunder.


               (e) The provisions of this  Paragraph 5 shall  terminate upon the
completion of a Qualified Public Offering.


               (f) For purposes of this Paragraph 5,  "Independent  Third Party"
shall mean any Person who,  immediately  prior to the contemplated  transaction,
does not own in excess of 5% of the Company's Stock on a fully-diluted  basis (a
"5% Owner");  who is not  controlling,  controlled  by or under control with any
such 5% Owner and who is not the spouse or descendent  (by birth or adoption) of
any such 5% Owner or a trust for the benefit of such 5% Owner  and/or such other
Persons;  "Person" shall mean an individual,  a  partnership,  a corporation,  a
limited liability  company,  an association,  a joint stock company,  a trust, a
joint venture,  an unincorporated  organization and a governmental entity or any
department, agency or political subdivision thereof; "Qualified Public Offering"
shall mean the sale in an  underwritten  public  offering  registered  under the
Securities Act of 1933 of Shares of the Company's  Stock  resulting in aggregate
gross  proceeds  to the Company of at least $50 million and a price per share of
not less than  $108.2353  (as such amount is equitably  adjusted for  subsequent
stock splits, stock dividends and recapitalizations);  and "Sale of the Company"
shall mean the sale of the Company to an  Independent  Third Party or affiliated
group of  Independent  Third  Parties  pursuant  to which  such party or parties
acquire (i) capital stock of the Company  possessing the voting power to elect a
majority of the Company's board of directors  (whether by merger,  consolidation
or sale or transfer of the Company's capital stock) or (ii) all or substantially
all the Company's assets determined on a consolidated basis.

               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  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.  Except as may  otherwise  be
determined by the Company, this Option may not be sold, transferred, assigned or
otherwise  alienated or hypothecated  by the Optionee,  other than by will or by
the laws of  descent  and  distribution,  and shall be  exercisable  during  the
Optionee's lifetime only by the Optionee or the Optionee's legal representative.
The  Optionee  may,  if  permitted  by state law or the  rules  and  regulations
governing  any exchange on which the Company's  Shares are traded,  transfer the
Option,  without  payment  of  consideration,  to a  member  of  the  Optionee's
immediate family or to a trust or partnership whose beneficiaries are members of
the  Optionee's  immediate  family.  For  purposes of this  Paragraph,  the term
"immediate   family"  shall  include  the   Optionee's   spouse,   children  and
grandchildren. Any attempt at assignment, transfer, pledge or disposition of the
Option contrary to the provisions hereof



                                      -5-
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<PAGE>


or the levy of any  execution,  attachment  or similar  process  upon the Option
other than as expressly permitted in this Paragraph 7 shall be null and void and
without effect.

               8.  Rights as  Stockholder.  Other than as provided  herein,  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.  Withholding  of Taxes.  Whenever  the Company  proposes or is
required to deliver or transfer  Shares in connection  with the exercise of this
Option,  the Company  shall have the right to (a) require the recipient to remit
to the Company an amount  sufficient to satisfy any federal,  state and/or local
withholding  tax  requirements   prior  to  the  delivery  or  transfer  of  any
certificate  or  certificates  for such Shares,  or (b) take whatever  action it
deems necessary to protect its interests with respect to tax liabilities.

               10.  Administration.  The  Committee  shall  have  the  power  to
interpret  this  Agreement.  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 this Agreement or the Option.

               11.  Notice.  Any  notice  to be given  under  the  terms of this
Agreement to the Committee  shall be addressed to the Committee,  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 11,
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.

               12.  Interpretation.  Any dispute regarding the interpretation of
this  Agreement  shall be  submitted by the  Optionee to the  Committee  for its
review.  The  resolution  of such  dispute by the  Committee  shall be final and
binding on the Company and on the Optionee.

               13. Entire  Agreement.  This Agreement and the Notice  constitute
the entire  agreement of the parties and  supersede all prior  undertakings  and
agreements with respect to the subject matter hereof.

                                      -6-
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<PAGE>


               14.    Dividends.

               (a) In the  event  that the  Company  declares  a  dividend  with
respect to any Shares  subject to a vested  portion of the  Option,  the Company
shall  mail to  Optionee  a written  notice at least ten (10) days  prior to the
record date for such dividends.

               (b) On any  dividend  payment  date,  the  Exercise  Price of any
unvested  Options  shall be  reduced  by the  amount of any  dividends  that the
Optionee  would have  received had the Optionee  held the Shares  subject to the
Option on the record date with respect to such  dividend,  and in the event that
the aggregate  dividends  declared on such Shares exceeds the aggregate Exercise
Price of the Option, the amount of such excess, if any, shall be deposited in an
interest  bearing bank account  established  by the Committee in the name of the
Optionee.  Any amount held in an interest bearing bank account established under
this Paragraph  14(b), or the pro rata portion thereof in the event of a partial
exercise of this Option,  shall be paid to the Optionee upon exercise of all or,
if relevant, a portion of the Option.

               15.   Adjustments.   In   the   event   of  a   reclassification,
recapitalization, merger, consolidation,  reorganization, stock dividends, stock
split or reverse stock split, including,  without limitation,  a distribution of
the stock of a  Subsidiary,  combination  or exchange of shares,  the  Committee
shall determine, in its discretion, the appropriate adjustments,  if any, to the
number of Shares which may be issued under this Option and the exercise price of
this Option.

               16.    Amendment and Termination.

               (a)  The  Committee   shall  have  the  authority  to  make  such
amendments to the Option provided that no such action shall modify the Option in
a manner adverse to Optionee without Optionee's consent.

               (b) The  Committee may  terminate,  amend or modify the Option at
any time and from  time to time;  provided,  however,  that an  amendment  which
requires  stockholder  approval in order for the Plan to continue to comply with
Rule 16b-3,  Section  162(m) of the Code or any other law,  regulation  or stock
exchange  requirement  shall not be effective  unless  approved by the requisite
vote of stockholders.  The termination,  amendment or modification of the Option
may be in response to changes in the Code, the Exchange Act, national securities
exchange regulations or for other reasons deemed appropriate by the Committee.

               17. Successors. The terms of the Option shall be binding upon the
Company and its successors and assigns.

               18.    Requirements of Law.

               (a) In the  event  any  provision  of the  Option  shall  be held
illegal or invalid for any reason, the illegality or invalidity shall not effect
the  remaining  parts of the  Option,  and the  Option  shall be  construed  and
enforced as if the illegal or invalid provision had not been included.



                                      -7-
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<PAGE>


               (b) To the extent that federal laws do not otherwise control, the
Option  shall be construed  in  accordance  with and governed by the laws of the
State of New York.


                                              CARROLS HOLDINGS CORPORATION


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

                                              Title:
                                                    ---------------------------


                                               ACCEPTED AND AGREED TO:


                                               By:
                                                  -----------------------------
                                                  Joseph A. Zirkman
                                                  321 East 71st Street
                                                  New York, N.Y.  10021



                                      -8-
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                                    Exhibit A

                         to Carrols Holdings Corporation
                         Unvested Stock Option Agreement
                              of Joseph A. Zirkman


Definitions.  As used in this Agreement,  the following  terms  shall  have  the
following meanings:

        "Cause"  means,  except as may otherwise be provided in a  Participant's
        employment  agreement  (if  any)  or in the  Award  Agreement,  (i)  the
        commission  by  the  Participant  of a  felony;  (ii)  the  unauthorized
        disclosure of confidential proprietary information of the Company or any
        Subsidiary which disclosure the Participant  knows or reasonably  should
        have known would be  reasonably  likely to result in material  damage to
        the Company or  Subsidiary;  (iii) the breach by the  Participant of any
        material provision of the Participant's  employment  agreement (if any),
        which breach, if curable,  is not remedied within thirty (30) days after
        the Participant's  receipt of written notice thereof provided,  however,
        that the  Company  need not  permit the  Participant  to cure any breach
        which  has  been  the  subject  of a  prior  written  notice;  (iv)  the
        engagement in material  self dealing in breach of fiduciary  duties with
        respect to the assets or properties of the Company or Subsidiary  unless
        disclosed to and approved by the  disinterested  members of the Board of
        Directors;  (v)  an act of  gross  misconduct  in  connection  with  the
        Participant's  duties under his  employment  agreement (if any); or (vi)
        chronic  alcohol  or  drug  abuse  rendering  Participant  incapable  of
        carrying  out his duties as  determined  in good faith by the  Committee
        continuing  after the  Participant is given a reasonable  opportunity to
        obtain medical or other appropriate treatment or rehabilitation.

        "Good  Reason"  means  (i) the  material  failure  of the  Company  or a
        Subsidiary to comply with the provisions of the Participant's employment
        agreement,  if any,  which  failure  shall not cease  promptly and in no
        event more than thirty (30) days after  receipt by the Company or, where
        appropriate,  a  Subsidiary  of  written  notice  from  the  Participant
        objecting  to such  conduct;  (ii) any  termination  by the  Company  or
        Subsidiary  of the  Participant's  employment  other  than as  expressly
        permitted in the Participant's  employment  agreement,  if any; or (iii)
        the assignment to Participant of duties and responsibilities  materially
        inconsistent with those duties and responsibilities customarily assigned
        to individuals holding positions similar to that of the Participant at a
        company  of  comparable  size  to  the  Company  or  Subsidiary  or  the
        substantial  reduction  by the Company or  Subsidiary  of  Participant's
        duties and responsibilities and, if curable, not remedied by the Company
        or Subsidiary within 30 days after receipt of written notice.

        "Permanent  Disability"  means the  inability  of a  Participant  due to
        physical  or mental  disability  to perform  all of his duties  with the
        Company or Subsidiary pursuant to his employment agreement,  if any, for
        a period of six (6) successive months, or an aggregate of six (6) months
        in any twelve (12) month period, as determined by the Committee upon the
        basis of such evidence, including but not limited to independent medical
        reports and data, as the Committee deems appropriate or necessary.



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