STOCK PURCHASE AGREEMENT
                            ------------------------


                  This  Stock  Purchase  Agreement  (the   "Agreement"),   dated
February 13, 1998, is by and between Franchise Finance Corporation of America, a
real estate  investment trust and a Delaware  corporation  (the "Company"),  and
Colony Investors III, L.P., a Delaware limited partnership ("Purchaser").

                              W I T N E S S E T H:

                  WHEREAS, the Company wishes to issue and sell to Purchaser (i)
certain  shares of the  Company's  common  stock,  $.01 par value per share (the
"Common Stock"),  and warrants (the "Warrants") to acquire  additional shares of
Common Stock for an aggregate  purchase  price of  $100,000,000  (the  "Purchase
Price") on the terms and subject to the  conditions  set forth herein and in the
Other Documents (as defined herein); and

                  WHEREAS,  Purchaser  wishes to purchase such securities on the
terms and subject to the conditions set forth in this Agreement;

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
mutual  covenants  contained  in this  Agreement,  and other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

SECTION 1.        THE SECURITIES


         Section 1.1 Issuance, Sale and Purchase of the Securities.  In reliance
upon  the  representations  and  warranties  made  herein  and  subject  to  the
satisfaction or waiver of the conditions set forth herein, the Company agrees to
issue and sell to Purchaser,  and Purchaser agrees to purchase from the Company,
for  the  Purchase  Price,  (i)  3,792,112  shares  (the  "Common  Shares"  and,
collectively  with the Warrants,  the "Securities") of Common Stock and (ii) the
Warrants, exercisable for seven years (except as provided in a customary Warrant
Agreement  relating thereto to be entered into between the Company and Purchaser
(the  "Warrant  Agreement")),  to acquire an  additional  1,476,908  shares (the
"Warrant  Shares") of Common  Stock at an initial  exercise  price of $31.64 per
share, subject to adjustment as provided in the Warrant Agreement.
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         Section  1.2  Other  Agreements.  Concurrently  with  the  Closing  (as
hereinafter  defined),  the Company will enter into (a) the Warrant Agreement in
form and substance  reasonably  satisfactory to the parties,  (b) the Investor's
Agreement with Purchaser in substantially  the form attached as Exhibit A hereto
(the "Investor's Agreement") and (c) a Registration Rights Agreement in favor of
Purchaser  and its  permitted  assignees  (the  "Holders") in form and substance
reasonably  satisfactory  to  the  parties  providing  for  (i)  three  "demand"
registrations  in favor of the Holders (one of which may, at the election of the
Holders, be a "resale shelf registration"  having a duration of four years, (ii)
customary "piggyback" registrations in favor of the Holders and (iii) such other
reasonable  provisions as the parties negotiate in good faith (the "Registration
Rights  Agreement"  and,   collectively  with  the  Warrant  Agreement  and  the
Investor's Agreement, the "Other Documents").


         Section 1.3 Closing.  The closing (the  "Closing")  shall take place at
the offices of the Company,  The Perimeter Center,  17207 North Perimeter Drive,
Scottsdale,  Arizona 85255, on the tenth business day after the  satisfaction or
waiver  of the  conditions  set  forth  in  Section  3 below,  or at such  other
location,  date and time as may be agreed upon between Purchaser and the Company
(such date and time being  called  the  "Closing  Date").  At the  Closing,  the
Company shall issue and deliver to Purchaser  stock and warrant  certificates in
definitive  form,   registered  in  the  name  of  Purchaser  or  its  designee,
representing the Securities. As payment in full for the Securities,  and against
delivery of the certificates therefor at the Closing, Purchaser shall initiate a
wire transfer in immediately  available  United States funds in accordance  with
the Company's instructions in the amount of the Purchase Price. Each certificate
representing  the Securities  shall bear the following legend in addition to any
other  legend that may be  required  from time to time under  applicable  law or
pursuant to any other contractual obligation:

                           THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  MAY
         NOT BE TRANSFERRED,  SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
         DISPOSED OF (A "TRANSFER")  EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
         AN INVESTOR'S  AGREEMENT  DATED THE CLOSING DATE.  SUCH  SECURITIES ARE
         ALSO SUBJECT TO A REGISTRATION RIGHTS AGREEMENT DATED THE CLOSING DATE.
         ANY TRANSFEREE OF THESE  SECURITIES  TAKES SUBJECT TO THE TERMS OF SUCH
         AGREEMENTS, A COPY OF EACH OF WHICH IS ON FILE WITH THE COMPANY.
                                       2
<PAGE>
                           THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE
         NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933 (THE "ACT") OR
         STATE  SECURITIES LAWS AND NO TRANSFER OF THESE  SECURITIES MAY BE MADE
         EXCEPT (A) PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE
         ACT, OR (B)  PURSUANT TO AN EXEMPTION  THEREFROM  WITH RESPECT TO WHICH
         THE  COMPANY  MAY,  UPON  REQUEST,  REQUIRE A  SATISFACTORY  OPINION OF
         COUNSEL  FOR  THE  HOLDER  THAT  SUCH   TRANSFER  IS  EXEMPT  FROM  THE
         REQUIREMENTS OF THE ACT.


         Section 1.4 Further  Action.  During the period from the date hereof to
the Closing Date, each of the Company and Purchaser shall use their best efforts
to take all action  necessary or appropriate  to satisfy the closing  conditions
contained in Section 3 hereof (including without limitation using all reasonable
efforts to finalize the Warrant Agreement and the Registration  Rights Agreement
in the  most  expeditious  manner  practicable)  and  to  cause  its  respective
representations and warranties contained in Section 2 to be complete and correct
as of the Closing Date, after giving effect to the transactions  contemplated by
this Agreement, as if made on and as of such date.


SECTION 2.        REPRESENTATIONS AND WARRANTIES


         Section 2.1 Representations and Warranties of the Company.  The Company
represents and warrants to Purchaser as follows:
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                           (a)  Each  of  the  Company   and  its   subsidiaries
(collectively,  the  "Subsidiaries")  has been  duly  organized  and is  validly
existing as a  corporation,  trust or  partnership,  as the case may be, in good
standing under the laws of the jurisdiction in which it is organized,  with full
power and  authority to own or lease and occupy its  properties  and conduct its
business, and is duly qualified to do business, and is in good standing, in each
jurisdiction which requires such  qualification,  except where the failure to so
qualify  would not,  individually  or in the  aggregate,  have or be  reasonably
likely to result  in a  material  adverse  effect on the  business,  operations,
business prospects,  earnings,  assets,  liabilities or condition  (financial or
otherwise) (a "Material Adverse Effect") of the Company.  All of the outstanding
shares  of  capital  stock  or  other  equivalent   interests  of  each  of  the
Subsidiaries  have been duly authorized and validly  issued,  are fully paid and
nonassessable,  and,  except  as  disclosed  in  the  Company's  reports,  proxy
statements, forms, and other documents with the SEC filed and publicly available
during the twelve months ended February 13, 1998 (the "Current SEC  Documents"),
are owned by the Company,  directly,  or indirectly through another  Subsidiary,
free and clear of any lien, adverse claim, security interest,  mortgage, pledge,
equity or other encumbrance.  None of the outstanding shares of capital stock or
other  equivalent  interests of the  Subsidiaries was issued in violation of the
preemptive or similar rights of any  stockholder or other holder of interests of
such Subsidiary arising by operation of law, under the charter, by-laws or other
organizational  document of any  Subsidiary  or under any agreement to which the
Company or any  Subsidiary  is a party.  The Company  does not own,  directly or
indirectly through a "qualified REIT subsidiary"  (within the meaning of section
856(i)  of the  Internal  Revenue  Code  of  1986,  as  amended  (the  "Code")),
partnership,  limited liability company, association or other entity, any shares
of stock or any other debt or equity  securities of, or other  interests in, any
corporation, firm, partnership,  limited liability company, association or other
entity,  other than (1) stock of a  corporation  or equity of an entity that the
Company has been advised by its legal  counsel  qualifies  as a "qualified  REIT
subsidiary" within the meaning of section 856(i) of the Code, (2) stock or other
debt  (excluding for this purpose any debt  obligation  that  constitutes a real
estate asset within the meaning of section  856(c)(5)(B)  of the Code) or equity
securities of any issuer (other than a partnership or limited liability company,
the  ownership of which is governed by (3) below) where (i) the Company has been
advised by legal counsel that such ownership  would not constitute  ownership of
more than 9.8% of the voting  securities  of such issuer  (within the meaning of
section  856(c) (5) of the Code) and (ii) the  Company  has  determined  in good
faith that the fair  market  value of the stock and  securities  of any one such
issuer  does not  exceed  4.8% of the value of the total  assets of the  Company
(within the meaning of section  856(c)(5)  of the Code),  or (3)  interests in a
partnership  or limited  liability  company where (i) the Company has received a
written opinion of its legal counsel that such partnership or limited  liability
company is subject to tax as a partnership,  and not an  association  subject to
tax as a  corporation  or a  publicly  traded  partnership  subject  to tax as a
corporation,  for  United  States  federal  income  tax  purposes  and (ii) such
partnership  or  limited  liability  company  does not itself own debt or equity
securities   of  any  issuer  that  could  cause  the  Company  to  violate  the
representation contained in clause (2) above.
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                           (b) The Company and each of the Subsidiaries have all
requisite  power  and  authority,  and all  necessary  material  authorizations,
approvals,   orders,   licenses,   certificates   and   permits   (collectively,
"Governmental  Licenses"),  of and from the appropriate Federal, state, local or
foreign regulatory or governmental  agencies,  officials,  bodies and tribunals,
necessary  to own or lease  their  respective  properties  and to conduct  their
respective  businesses  as now being  conducted,  except  where the  failure  to
possess any such Government Licenses would not have a Material Adverse Effect on
the  Company  or such  Subsidiary,  as the  case may be;  all such  Governmental
Licenses  are in full force and effect,  except  where the failure to be in full
force and effect would not have a Material Adverse Effect on the Company or such
Subsidiary, as the case may be; and the Company and each of the Subsidiaries are
in compliance with all applicable laws and Governmental  Licenses,  except where
the failure to comply would not have a Material Adverse Effect on the Company or
such Subsidiary, as the case may be.

                           (c) Except as otherwise  disclosed in the Current SEC
Documents or as would not have a Material  Adverse Effect on the Company or such
Subsidiary,  as the case may be, (i) the Company and the Subsidiaries  have good
and marketable  title to all properties and assets  described in the Current SEC
Documents as being owned by them,  or  reflected  in the Base Balance  Sheet (as
hereinafter  defined),  other than  properties and assets conveyed or pledged in
customary asset  securitization  transactions (as to which no  representation is
made);  (ii) all liens,  charges,  claims,  restrictions  or  encumbrances on or
affecting the  properties  and assets of the Company or any of the  Subsidiaries
which are required to be disclosed in the Current SEC  Documents  are  disclosed
therein;  (iii) each of the properties of the Company and the  Subsidiaries,  at
the time such  property was acquired or at the time the loan by the Company with
respect to such property was made,  had access to public  rights of way,  either
directly or through insured easements; (iv) each of such properties, at the time
such  property  was acquired or at the time the loan by the Company with respect
to such property was made, was served by all public utilities  necessary for the
current   operations  on  such  property  in  sufficient   quantities  for  such
operations;  (v) each of such properties  complies with all applicable codes and
zoning and subdivision laws and  regulations;  (vi) the real property leases and
equipment  leases, if any, relating to each of such properties are in full force
and effect;  and (vii) there is no pending or threatened  condemnation,  eminent
domain,  zoning  change,  or other  proceeding or action that will in any manner
affect the size of, use of,  improvements  on,  construction on or access to the
properties of the Company and the Subsidiaries.
                                       5
<PAGE>
                           (d)  Except  as  would  not have a  Material  Adverse
Effect on the Company or any of the  Subsidiaries,  each of the  mortgage  loans
held by the Company or the Subsidiaries (the "Mortgage Loans") is (i) secured by
a valid lien on the property  pledged as security for each such  Mortgage  Loan,
(ii) insured by a nationally  recognized title insurance  company for the amount
of each such applicable  Mortgage Loan,  (iii) evidenced by loan documents which
are valid and  enforceable  against the borrower  under each such Mortgage Loan,
(iv) in good standing, without defaults or, to the Company's knowledge,  offsets
or  counterclaims  which could be validly  asserted by any borrower under any of
the Mortgage  Loans,  (v) is documented by loan documents  substantially  in the
form of the Company's  standard loan  documents,  and (vi) except in the case of
loans which have been sold,  assigned or  conveyed in  connection  with an asset
securitization  thereof,  is currently  owned and held by the Company and/or the
Subsidiaries and has not been assigned or pledged to any third party.

                           (e) The  Company  and  the  Subsidiaries  have  title
insurance on all real  property  described in the Current SEC Documents as being
owned (or held under a ground  lease) or financed by any of them in an amount at
least  equal  to the  cost of  acquisition  of  such  property  or the  original
principal  amount of the loan  provided by any of them,  as the case may be, and
there are in effect for such properties and assets insurance  policies  covering
risks  and in  amounts  that  are  commercially  reasonable  for  such  types of
properties  and assets  and that are  consistent  with the types and  amounts of
insurance typically maintained by prudent owners of similar properties or assets
or required by commercial  lenders with respect to similar  properties or assets
and all such insurance is in full force and effect.

                           (f) To the extent  applicable,  the  Company  and the
Subsidiaries  own or possess,  or can acquire on reasonable  terms, the patents,
patent rights,  licenses,  inventions,  copyrights,  know-how  (including  trade
secrets and other  unpatented  and/or  unpatentable  proprietary or confidential
information,  systems or procedures),  trademarks, service marks and trade names
(collectively,  "patent and proprietary  rights")  presently employed by them in
connection  with the business now operated by them,  and neither the Company nor
any of the  Subsidiaries  has received  any notice or is otherwise  aware of any
infringement  of or conflict with asserted  rights of others with respect to any
patent or proprietary rights or of any facts or circumstances which would render
any patent and proprietary  rights invalid or inadequate to protect the interest
of the  Company  or any of  Subsidiaries  therein,  and  which  infringement  or
conflict  (if the  subject of any  unfavorable  decision,  ruling or finding) or
invalidity or inadequacy, either singly or in the aggregate, would result in any
Material Adverse Change (as defined herein).

                           (g)  The   Company's   authorized   and   outstanding
capitalization  (including  all  securities  exercisable  for, or convertible or
exchangeable  into, Common Stock) is as set forth in Schedule 2.1(g) hereto. The
outstanding  shares of Common  Stock have been duly and validly  authorized  and
issued in compliance with all Federal and state  securities  laws, and are fully
paid and nonassessable;  the Common Shares have been duly and validly authorized
and, when issued and delivered  pursuant to this  Agreement,  will be fully paid
and nonassessable; and the holders of outstanding shares of capital stock of the
Company are not entitled to  preemptive  or other  rights to  subscribe  for the
Common Shares.
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<PAGE>
                           (h) There is no action, suit, proceeding,  inquiry or
investigation before or by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company,  threatened,  against
or  affecting  the Company or any of the  Subsidiaries,  which is required to be
disclosed in the Current SEC Documents, or which might reasonably be expected to
result in any Material Adverse Change in the condition,  financial or otherwise,
or in the earnings, business affairs or business prospects of the Company or the
Subsidiaries,  whether  or  not  arising  in the  ordinary  course  of  business
("Material  Adverse  Change"),  or which might  reasonably be expected to have a
Material  Adverse  Effect on the Company or such  Subsidiary or  materially  and
adversely  affect the  consummation  of this Agreement or the performance by the
Company of its  obligations  hereunder;  the  aggregate of all pending  legal or
governmental proceedings to which the Company or any Subsidiary is a party or of
which any of their  respective  property or assets is the subject  which are not
described in the Current SEC Documents,  including  ordinary routine  litigation
incidental  to the  business,  could not  reasonably  be expected to result in a
Material Adverse Change.

                           (i)  The  Company  has  full   corporate   power  and
authority to enter into and perform its obligations under this Agreement and the
Other Documents and to issue,  sell and deliver the  Securities;  this Agreement
and the Other  Documents have been or will, at or prior to the Closing,  be duly
authorized,  executed and delivered by the Company and,  when so executed,  will
each  constitute  a valid and binding  obligation  of the  Company,  enforceable
against  the  Company in  accordance  with its terms,  except to the extent that
enforcement   thereof   may   be   limited   by  (i)   bankruptcy,   insolvency,
reorganization,  moratorium or other similar laws now or  hereinafter  in effect
relating to creditors'  rights  generally and (ii) general  principles of equity
(regardless of whether a proceeding is considered at law or in equity).

                           (j) No consent,  approval,  authorization or order of
any court or  governmental  agency,  authority or body is required  (and has not
been  received) for the execution by the Company of this Agreement and the Other
Documents,  the  performance  by the Company or its  obligations  hereunder  and
thereunder or the consummation by the Company of the  transactions  contemplated
herein and therein.
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<PAGE>
                           (k) Neither  the Company nor any or the  Subsidiaries
is in violation of, in conflict with, in breach of or in default under (and none
of them know of an event which with the giving of notice or the lapse of time or
both would be reasonably  likely to  constitute a default  under) its charter or
by-laws  (and none of them know of an event  which  with the giving of notice or
the lapse of time or both would be reasonably likely to constitute a violation),
and neither the Company nor any  Subsidiary is in default in the  performance of
any  obligation,  agreement  or condition  contained in any loan,  note or other
evidence of  indebtedness  or in any indenture,  mortgage,  deed of trust or any
other material  agreement by which it or its  properties  are bound,  except for
such defaults as would not,  individually  or in the aggregate,  have a Material
Adverse Effect on the Company or such Subsidiary, as the case may be.

                           (l) Except as described in the Current SEC Documents,
(A) neither the Company nor the  Subsidiaries  is in  violation  of any Federal,
state, local or foreign laws or regulations  relating to pollution or protection
of human health, the environment  (including,  without limitation,  ambient air,
surface  water,  groundwater,  land surface or  subsurface  strata) or wildlife,
including,  without limitation,  laws and regulations relating to the release or
threatened  release  of  chemicals,  pollutants,   contaminants,  wastes,  toxic
substances, hazardous substances, petroleum or petroleum products (collectively,
"Hazardous  Materials") or to the manufacture,  processing,  distribution,  use,
treatment,  storage,  disposal,  transport  or handling of  Hazardous  Materials
(collectively,   "Environmental   Laws"),   except  where  the  Company  or  the
Subsidiaries  has obtained one or more  policies of  environmental  insurance to
cover such risks, with deductible  amounts,  loss limits and aggregate liability
limitations  which were deemed  reasonably  appropriate by the Company under the
circumstances,  and  except  for such  violations  as would not have a  Material
Adverse  Effect on the Company or such  Subsidiary,  as the case may be, and (B)
there are no events or  circumstances  that could form the basis of an order for
clean-up or remediation,  or an action,  suit or proceeding by any private party
or governmental  body or agency,  against or affecting the Company or any of the
Subsidiaries  relating  to  any  Hazardous  Materials  or the  violation  of any
Environmental Laws, which, either individually or in the aggregate, would have a
Material Adverse Effect on the Company or such Subsidiary, as the case may be.
                                       8
<PAGE>
                           (m) Neither the issuance  and sale of the  Securities
nor the consummation of any of the other transactions  contemplated herein or in
the Other  Documents  nor the  fulfillment  of the terms hereof and thereof will
conflict with,  result in a breach or violation of or constitute a default under
any law or the  charter or bylaws of the Company or any of the  Subsidiaries  or
the terms of any indenture or other agreement or instrument to which the Company
or any of the  Subsidiaries  is a party or is bound  or any  judgment,  order or
decree  applicable  to the  Company  or any of the  Subsidiaries  of any  court,
regulatory body,  administrative agency,  governmental body or arbitrator having
jurisdiction over the Company or any of the Subsidiaries. To enable Purchaser to
purchase  the  Securities   without   violating  Article  IV  of  the  Company's
Certificate  of  Incorporation,  the Board of Directors of the Company will have
adjusted the ownership  limitations contained therein to the extent necessary to
permit Purchaser's  purchase of the Securities  (including,  without limitation,
the  exercise  from  time  to  time  of  the  Warrants)  and  the   transactions
contemplated hereby and by the Other Documents at or prior to the Closing.

                           (n)  Each  employee  benefit  or  compensation  plan,
program,  policy,  agreement or arrangement of any type  sponsored,  maintained,
contributed  to or  required  to be  contributed  by the  Company  or any  ERISA
Affiliate  for the benefit of any current or former  employee or director of the
Company or any of the  Subsidiaries  (the "Company Plans") has been operated and
administered  in all  material  respects  in  accordance  with its terms and all
applicable law,  including  without  limitation ERISA (as defined below) and the
Code. There are no actions,  suits or claims pending,  other than routine claims
for  benefits,   with  respect  to  the  Company   Plans  or  their   operation,
administration  or maintenance.  Neither the Company nor any ERISA Affiliate has
at any time sponsored, maintained, contributed to or been required to contribute
to any "pension  plan" (within the meaning of Section 3(2) of ERISA)  subject to
Title IV of ERISA,  including  without  limitation any  multiemployer  plan, and
neither  the  Company nor any ERISA  Affiliate  has at any time  incurred or can
expect  to incur  any  liability  under  Title IV of ERISA.  Each  Company  Plan
intended to qualify  under section  401(a) of the Code is so qualified,  and the
Company has timely applied for and received a currently effective  determination
letter from the Internal Revenue Service with respect to each such Company Plan.
The consummation of the transactions  contemplated  hereunder will not result in
the payment,  vesting,  acceleration  or  enhancement  of any benefit  under any
Company Plan.  Except as required  under Sections  601-609 of ERISA,  no Company
Plan provides  medical  benefits to participants  following  retirement or other
termination of employment or service.  For purposes of this  Agreement,  "ERISA"
means the  Employee  Retirement  Income  Security Act of 1974,  as amended;  and
"ERISA  Affiliate"  means any  entity  that,  together  with the  Company or any
subsidiary  would  be  deemed  a  "single  employer"  for  purposes  of  section
4001(b)(1) of ERISA.

                           (o) Except as disclosed in the Current SEC Documents,
other  than the  Warrants  and grants of options to  purchase  an  aggregate  of
740,000,  22,230 and 233,000  shares of Common Stock issued in January 1997, May
1997 and January 1998,  respectively,  and restricted stock awards  representing
29,887 shares of Common Stock issued in January 1998,  there are no  outstanding
warrants or options to purchase  any shares of capital  stock of the Company and
there are no restrictions  upon the voting or transfer of, or the declaration or
payment of any dividend or  distribution  on, any shares of capital stock of the
Company  pursuant to the certificate of incorporation or by-laws of the Company,
any  agreement or other  instrument  to which the Company is a party or by which
the Company is bound, or any order,  law, rule,  regulation or  determination of
any court,  governmental  agency or body  (including,  without  limitation,  any
banking  or  insurance   regulatory   agency  or  body),  or  arbitrator  having
jurisdiction over the Company.
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                           (p)  There  are  no   registration  or  other  rights
entitling any person to  registration by the Company under the Securities Act of
1933,  as amended (the  "Securities  Act"),  with respect to the issued  capital
stock of the Company (other than pursuant to the Registration Rights Agreement),
or to  purchase  or  subscribe  for  capital  stock of the  Company  (other than
pursuant to  understandings  to issue  Common  Stock  representing  an aggregate
purchase price of up to $70 million in two separate underwritten transactions to
one or more unit investment trusts and the Investor's Agreement).

                           (q) The  Company  has  qualified  as a  "real  estate
investment  trust" ("REIT") under section 856 of the Code from its inception and
it has  operated and intends to continue to operate in a manner so as to qualify
as a REIT.  The  Company  has not taken any action or omitted to take any action
that would  reasonably  be expected to result in a challenge  to its status as a
REIT,  and  no  such  challenge  is  pending  or,  to the  Company's  knowledge,
threatened.

                           (r)  Each  of  FFCA  Acquisition  Corporation,   FFCA
Institutional  Advisors,  Inc., FFCA Secured Assets  Corporation,  FFCA Residual
Interest Corporation and FFCA Secured Lending Corporation has been (at all times
during the period each such corporation has been in existence) and is subject to
tax as a  corporation  for United  States  federal  income tax  purposes and the
Company has owned 100% of the stock of each such corporation at all times during
the period each such  corporation  has been in existence.  Each such entity is a
qualified REIT subsidiary, as described in section 856(i) of the Code.

                           (s) FFCA Co-Investment  Limited  Partnership has been
(at all times on and after June 1, 1994) and is subject to tax as a partnership,
and  not  as an  association  taxable  as a  corporation  or a  publicly  traded
partnership  subject to tax as a  corporation,  for United States federal income
tax purposes.
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<PAGE>
                           (t) The  Company  files and has  filed  all  required
reports, proxy statements, forms, and other documents with the SEC since January
1, 1995 (including all information  incorporated therein by reference,  the "SEC
Documents").  True and complete  copies of all such SEC Documents have been made
available to  Purchaser.  As of their  respective  dates,  (i) the SEC Documents
complied in all material respects with the requirements of the Securities Act or
the  Securities  Exchange Act of 1934,  as amended,  as the case may be, and the
rules and regulations of the SEC promulgated  thereunder  applicable to such SEC
Documents,  and (ii) except to the extent that information  contained in any SEC
Document has been revised or superseded by a later filed SEC Document  filed and
publicly  available  prior  to the  date  of  this  Agreement,  none  of the SEC
Documents contains any untrue statement of a material fact or omits to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading.  The financial  statements  of the Company  included in the SEC
Documents comply as to form in all material respects with applicable  accounting
requirements  and the published  rules and  regulations  of the SEC with respect
thereto,  have been prepared in accordance  with generally  accepted  accounting
principles  applied on a consistent basis during the periods involved and fairly
present the consolidated  financial position of the Company and its consolidated
Subsidiaries  as of the dates  thereof  and the  consolidated  results  of their
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited  statements,  to  normal  year-end  audit  adjustments).   Except  for
liabilities  and  obligations  incurred  in the  ordinary  course  of  business,
consistent with past practices,  since the date of the most recent  consolidated
balance sheet included in the SEC Documents  filed and publicly  available prior
to the date of this  Agreement (the "Base Balance  Sheet"),  neither the Company
nor any of the  Subsidiaries  has any  liabilities  or obligations of any nature
(whether  accrued,  absolute,  contingent  or  otherwise)  required by generally
accepted accounting  principles to be set forth on a consolidated  balance sheet
of the Company and its consolidated Subsidiaries or in the notes thereto.

                           (u) Except as  disclosed  in Current  SEC  Documents,
since the date of the Base Balance Sheet, the Company and the Subsidiaries  have
conducted their respective businesses only in the ordinary course of business in
accordance with past practices,  and there has not been (i) any Material Adverse
Change in the Company, (ii) any split, combination or reclassification of any of
its capital  stock or any issuance or the  authorization  of any issuance of any
other  securities in respect of, in lieu of or in substitution for shares of the
capital stock of the Company, (iii) any damage,  destruction or loss, whether or
not covered by  insurance,  that has or  reasonably  could be expected to have a
Material Adverse Effect on the Company or any Subsidiary, as the case may be, or
(iv) any change in  accounting  methods,  principles or practices by the Company
materially  affecting  its  assets  or  liabilities  or  that  otherwise  has or
reasonably could be expected to have a Material Adverse Effect on the Company or
any  Subsidiary,  as the  case  may be and  (v)  except  for  regular  quarterly
dividends  (including a quarterly dividend increase of $.02 declared January 30,
1998) on the Common  Stock,  there has been no dividend or  distribution  of any
kind declared, paid or made by the Company on any class of its capital stock.
                                       11
<PAGE>
                           (v)  The  Company  maintains  a  system  of  internal
accounting  controls  sufficient to provide  reasonable  assurances  that in all
material  respects (i) transactions are executed in accordance with management's
general or specific  authorization;  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted accounting principles and to maintain  accountability for assets; (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization;  and (iv) the  recorded  accountability  for  assets is
compared with existing assets at reasonable  intervals and appropriate action is
taken with respect to any differences.

                           (w) To the Company's  knowledge,  neither the Company
nor any of the  Subsidiaries  nor any  employee  or agent of the  Company or any
Subsidiary  has made any  payment of funds of the Company or any  Subsidiary  or
received or retained any funds in violation of any law, rule or regulation.

                           (x) The Company and each of the Subsidiaries have (i)
duly filed with the appropriate  tax authorities all tax returns  required to be
filed by them,  and such tax  returns  are true,  correct  and  complete  in all
material  respects,  and (ii) duly paid in full or made  provision in accordance
with generally  accepted  accounting  principles for the payment of all material
taxes ending through the date hereof.

                           (y) No  labor  disturbance  by the  employees  of the
Company or the Subsidiaries  exists or (to the best of the Company's  knowledge)
is  imminent  that  would,  individually  or in the  aggregate,  have a Material
Adverse  Effect.  No  collective  bargaining  agreement  exists  with any of the
Company's  employees  and,  to the  best  of the  Company's  knowledge,  no such
agreement is imminent.

                           (z) The  Company  has  been  advised  concerning  the
Investment  Company Act of 1940, as amended (the "1940 Act"),  and the rules and
regulations thereunder, and has in the past conducted, and intends in the future
to conduct, its affairs in such a manner as to ensure that it will not become an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the 1940 Act and such rules and regulations.

                           (aa) The Company  agrees that  neither it, nor anyone
acting  on its  behalf,  will  offer  any of the  Securities  so as to bring the
issuance and sale of the  Securities  within the  provisions of Section 5 of the
Securities  Act, or offer any  similar  securities  for  issuance or sale to, or
solicit  any offer to acquire  any of the same from,  or  otherwise  approach or
negotiate with respect thereto with, anyone if the sale of any of the Securities
or any such similar  securities would be integrated as a single offering for the
purposes of the Securities  Act,  including,  without  limitation,  Regulation D
thereunder.
                                       12
<PAGE>
                           (bb)  The  Company  has  not  retained,  directly  or
indirectly, any broker or finder or incurred any liability or obligation for any
brokerage  fees  or  finder's  fees  with  respect  to  this  Agreement  or  the
transactions contemplated hereby.

                           (cc) All the Company's representations and warranties
herein  shall  survive  until  ninety (90) days  following  the  delivery to the
Company of its signed, audited financial statements for the year ending December
31, 1998.

         Section 2.2  Representations  and  Warranties of  Purchaser.  Purchaser
represents and warrants to the Company that:


                           (a)  Purchaser  has  been  duly  organized,   validly
existing and in good standing  under the laws of the State of Delaware,  and has
all requisite  power and  authority  under such laws to own or lease and operate
its properties and to carry on its business as now conducted.

                           (b) Purchaser has the power and authority to execute,
deliver and perform this  Agreement and the Other  Documents.  All action on the
part of Purchaser  necessary  for the  authorization,  execution and delivery of
this Agreement and the Other Documents and the performance of all obligations of
Purchaser hereunder and thereunder have been taken or will be taken prior to the
Closing.  This  Agreement  and the Other  Documents  have been duly  authorized,
executed and  delivered by Purchaser  and each  constitutes  a valid and legally
binding  obligation of  Purchaser,  enforceable  in  accordance  with its terms,
except as enforceability  may be limited by applicable  bankruptcy,  insolvency,
reorganization,   moratorium  or  similar  laws  affecting  the  enforcement  of
creditors'  rights  generally  and by  general  principles  of  equity  (whether
enforcement is sought by proceedings in equity or at law).

                           (c) The  execution  and delivery by Purchaser of this
Agreement  and the Other  Documents  and the  performance  by  Purchaser  of its
obligations  hereunder and thereunder will not violate any provision of law, the
organizational  documents governing Purchaser or any order of any court or other
agency of  government,  or conflict  with,  result in a breach of or  constitute
(with notice or lapse of time or both) a default under any indenture,  agreement
or other  instrument  by which  Purchaser or any of its  properties or assets is
bound, or result in the creation or imposition of any lien, charge, restriction,
claim or encumbrance of any nature whatsoever known to Purchaser upon any of the
properties or assets of Purchaser.

                           (d) The  Securities  will be acquired for  investment
                                       13
<PAGE>
for Purchaser's own account,  not as a nominee or agent,  and not with a view to
the resale or  distribution  of any part  thereof,  and Purchaser has no present
intention of selling,  granting any participation in, or otherwise  distributing
the same.  Purchaser  further  represents  that it does not  presently  have any
contract,  undertaking,  agreement  or  arrangement  with  any  person  to sell,
transfer or grant  participations  to such person or to any third  person,  with
respect  to any  of  the  Securities.  Purchaser  (i)  has  such  knowledge  and
experience in financial and business matters,  including investments of the type
represented  by the  Securities,  as to be capable of  evaluating  the merits of
investment in the Company;  (ii) has not been  furnished with or relied upon any
oral representation,  warranty or information in connection with the offering of
the Securities; and (iii) is an "Accredited Investor" as such term is defined in
Rule 501 of the rules and  regulations  promulgated  under the  Securities  Act.
Purchaser  and its agents,  attorneys  and advisors  have been provided full and
complete access to all of the books, records,  financial  statements,  accounts,
places of business,  and any other information reasonably related to the conduct
of the business of Company,  and has been afforded the opportunity to conduct an
independent investigation of all of those matters and has satisfied itself as to
all of the risks of the business of the Company,  and has satisfied  itself that
it  has  obtained,  or  been  offered  access  to all  of  the  information  and
descriptions of reasonable  risks  associated with the transaction  contemplated
hereby that a reasonably prudent investor would wish to obtain.

                           (e) The  Company  will  not  have  any  liability  or
obligation  for any  brokerage  fees  or  finder's  fees  with  respect  to this
Agreement  or the  transactions  contemplated  hereby as a result of any  action
taken by Purchaser in connection herewith and therewith.

                           (f) After giving effect to the constructive ownership
rules of section 544 of the Code (as modified by section 856(h) of the Code), no
member of  Purchaser  (each a  "Member")  (i) owns more than 9.8% of the  Common
Stock or (ii) owns directly or indirectly 25% or more of Purchaser.

                           (g) After giving effect to the constructive ownership
rules under  section 318 of the Code (as  modified by section  856(d)(5)  of the
Code),  Purchaser  does not directly or  indirectly  own the stock of any person
that is a tenant  under any lease  with the  Company  and will not  directly  or
indirectly acquire stock in any such tenant if, upon and as a direct consequence
of such  acquisition,  the rents to be derived by the  Company  under such lease
would fail to qualify as rent from real property  pursuant to section  856(d)(2)
of the Code.
                                       14
<PAGE>
                           (h)  Purchaser is a newly formed fund that is its own
ultimate parent as that term is defined in the rules and regulations promulgated
under the Hart-Scott-Rodino  Antitrust Improvements Act of 1976, as amended (the
"HSR Act"),  does not have and will not have a regularly  prepared balance sheet
at the Closing  Date,  and at the Closing Date will not have assets or net sales
of $10  million or more  other than the cash that will be used as  consideration
for the acquisition  and expenses  incidental to the  transactions  contemplated
hereunder and as a result such  transactions are not subject to the notification
and waiting  period  requirements  of the HSR Act pursuant to 16 C.F.R.  Section
801.11(e).

SECTION 3.        CLOSING CONDITIONS


         Section 3.1  Conditions to Obligation of Purchaser.  The  obligation of
Purchaser to purchase the Securities  shall be subject to satisfaction or waiver
by it of the following conditions on or before the Closing Date:


                           (a) The representations and warranties of the Company
contained in Section 2.1 hereof that are  qualified as to  materiality  shall be
true and accurate,  and those not so qualified shall be true and accurate in all
material respects at and as of the Closing Date as if made on the date hereof.

                           (b) The Company shall have  performed and complied in
all material  respects with all agreements,  covenants and conditions  contained
herein that are required to be performed or complied with by it on or before the
Closing Date.

                           (c) The Company  shall have  received  all  consents,
permits,  approvals and other authorizations that may be required from, and made
all such filings and declarations that may be required with, any person pursuant
to any law, statute,  regulation or rule (federal, state, local and foreign), or
pursuant  to any  agreement,  order or decree by which the Company or any of its
assets  is bound,  in  connection  with the  transactions  contemplated  by this
Agreement,  except for (i) notice requirements which may be fulfilled subsequent
to the  Closing  Date and (ii)  consents,  permits,  approvals,  authorizations,
filings and  declarations  the failure to obtain or to undertake  which will not
adversely  affect the Company's  ability to perform its  obligations  under this
Agreement or any agreement executed in accordance herewith.
                                       15
<PAGE>
                           (d)  Purchaser  shall have  received  a  certificate,
dated the  Closing  Date and  signed by the  President  and the Chief  Financial
Officer of the Company,  certifying that the conditions in Sections 3.1(a),  (b)
and (c) are satisfied on and as of such date.

                           (e) The  Company  shall have  entered  into the Other
Documents,  and  Purchaser's  designee shall have been appointed to the Board of
Directors of the Company pursuant to the Investor's Agreement.

                           (f)  Purchaser  and its counsel  shall have  received
copies of the following documents:

                                            (i)     the      Certificate      of
         Incorporation,  certified as of a recent date by the Secretary of State
         of the State of Delaware,  and a certificate of such authority dated as
         of a recent date as to the due  incorporation  and good standing of the
         Company  and  listing  all  documents  of the Company on file with said
         authority;


                                            (ii) a certificate  of the Secretary
         or an  Assistant  Secretary  of the  Company  dated  the  Closing  Date
         certifying:  (A) that  attached  thereto is a true and complete copy of
         the  Bylaws  of  the   Company  as  in  effect  on  the  date  of  such
         certification; (B) that attached thereto is a true and complete copy of
         all  resolutions  adopted  by the Board of  Directors  authorizing  the
         execution,  delivery and  performance  of this  Agreement and the Other
         Documents and the issuance,  sale and delivery of the  Securities,  and
         that all such  resolutions are in full force and effect and are all the
         resolutions adopted in connection with the transactions contemplated by
         this  Agreement;  (C)  that the  Certificate  of  Incorporation  of the
         Company  has not been  amended  since  the  date of the last  amendment
         referred to in the certificate  delivered pursuant to clause (i) above;
         (D) that the Bylaws  have not been  amended  since the date of the last
         amendment referred to in such certificate pursuant to subclause (ii)(A)
         above;  and  (E)  that  each  officer  of the  Company  executing  this
         Agreement and the Other Documents,  the  certificates  representing the
         Securities  and any  agreement,  certificate  or  instrument  furnished
         pursuant  hereto,  was, at the  respective  times of such execution and
         delivery of such  documents,  duly elected or appointed,  qualified and
         acting as such officer, and the signatures of such persons appearing on
         such documents are their genuine signatures or true facsimiles thereof;
         and
                                       16
<PAGE>
                                            (iii)  such  additional   supporting
         documents as Purchaser may reasonably request.


                           (g)   Purchaser   shall  have   received  an  opinion
(satisfactory to Purchaser and its counsel),  dated the Closing Date, from Kutak
Rock in substantially the form of Exhibit B hereto.

                           (h) The Board of Directors of the Company  shall have
adjusted the ownership  limitations  contained in the Company's  certificate  of
incorporation  to the extent  necessary  to permit  Purchaser's  purchase of the
Securities (including, without limitation, the exercise from time to time of the
Warrants) and the transactions contemplated hereby and the Other Documents.

         Section 3.2 Conditions to the Obligations of the Company. The Company's
obligation to sell the Securities shall be subject to the satisfaction or waiver
by it of the following conditions on or before the Closing:


                           (a) The  representations  and warranties of Purchaser
contained in Section 2.2 of this  Agreement that are qualified as to materiality
shall  be true  and  accurate,  and  those  not so  qualified  shall be true and
accurate in all  material  respects at and as of the Closing  Date as if made on
the date hereof.

                           (b)  Purchaser  shall have  performed and complied in
all material  respects with all agreements and conditions  contained herein that
are  required to be  performed  or complied  with by it on or before the Closing
Date, including without limitation, payment of the Purchase Price.

                           (c)  Purchaser  shall  have  received  all  consents,
permits,  approvals and other authorizations that may be required from, and made
all such filings and declarations that may be required with, any person pursuant
to any law, statute,  regulation or rule (federal, state, local and foreign), or
pursuant  to any  agreement,  order or decree by which  Purchaser  or any of its
assets  is bound,  in  connection  with the  transactions  contemplated  by this
Agreement,  except for (i) notice requirements which may be fulfilled subsequent
to the  Closing  Date and (ii)  consents,  permits,  approvals,  authorizations,
filings and  declarations  the failure to obtain or to undertake  which will not
adversely  affect  Purchaser's  ability to perform  its  obligations  under this
Agreement or any agreement executed in accordance herewith.
                                       17
<PAGE>
                           (d) The Company  shall have  received a  certificate,
dated the Closing  Date and signed by the  President  of the general  partner of
Purchaser,  certifying that the conditions in Sections  3.2(a),  (b) and (c) are
satisfied on and as of such date.

                           (e)  The  Company  shall  have  received  an  opinion
(reasonably  satisfactory  to the  Company and its  counsel),  dated the Closing
Date, from outside counsel to Purchaser in  substantially  the form of Exhibit C
hereto.

SECTION 4.        MISCELLANEOUS


                           (a) Each  party  hereto  shall  pay its own  expenses
(including,   without   limitation,   counsel  fees)  in  connection   with  the
transactions  contemplated  hereby,  whether or not such  transactions  shall be
consummated. The Company and the Purchaser shall share all joint filing fees and
related expenses equally.

                           (b) Except as otherwise  provided herein,  covenants,
agreements,  representations  and  warranties  made  in this  Agreement,  or any
certificate or instrument delivered pursuant to or in connection therewith shall
survive the execution and delivery of this Agreement.

                           (c) All  representations,  covenants  and  agreements
contained in this  Agreement by or on behalf of any of the parties  hereto shall
bind and inure to the benefit of the  respective  successors  and assigns of the
parties  hereto whether so expressed or not;  provided that Purchaser  shall not
assign its rights in this  Agreement to any unrelated  third party without first
obtaining the prior written consent of the Company,  and provided  further that,
notwithstanding  the above  provision,  Purchaser  may assign its rights in this
Agreement to any 50% or greater controlled Affiliate of Colony Capital, Inc.

                           (d)  All  notices,   requests,   consents  and  other
communications  hereunder  shall be in writing and shall be delivered in person,
sent by  facsimile or mailed by certified or  registered  mail;  return  receipt
requested, addressed as follows:

If to Purchaser, to:                Colony Investors III, L.P.
                                    c/o Colony Capital, Inc.
                                    1999 Avenue of the Stars, Suite 1200
                                    Los Angeles, California 90067
                                    Telecopier No.: (310) 282-8813
                                    Attention: Mr. Kelvin L. Davis
                                       18
<PAGE>
with a copy to:                     Skadden, Arps, Slate, Meagher & Flom LLP
                                    300 South Grand Avenue
                                    Los Angeles, California 90071
                                    Telecopier No.: (213) 687-5600
                                    Attention: Jonathan H. Grunzweig, Esq.

If to the Company, to:              Franchise Finance Corporation of America
                                    The Perimeter Center
                                    17207 North Perimeter Drive
                                    Scottsdale, Arizona 85255
                                    Telecopier No.: (602) 585-2225
                                    Attention:  Mr. M.H. Fleischer

with a copy to:                     Franchise Finance Corporation of America
                                    The Perimeter Center
                                    17207 North Perimeter Drive
                                    Scottsdale, Arizona 85255
                                    Telecopier No.: (602) 585-2226
                                    Attention:  Dennis L. Ruben, Esq.

with a copy to:                     Kutak Rock
                                    717 Seventeenth Street, Suite 2900
                                    Denver, Colorado 80202
                                    Telecopier No.: (303) 292-7799
                                    Attention: Paul E. Belitz , Esq.

or, in any such case,  at such other  address  or  addresses  as shall have been
furnished  in  writing  by such  party to the  others.  All  notices,  requests,
consents and other  communications  hereunder  shall be deemed to have been duly
given  or  served  on the  date on  which  personally  delivered  or on the date
actually received, with receipt acknowledged.

                           (e) This Agreement shall be governed by and construed
in  accordance  with the laws of the State of  Delaware,  without  regard to the
conflict of laws provisions thereof.

                           (f) This Agreement and the Other Documents constitute
the sole and entire  agreement of the parties with respect to the subject matter
hereof  and  supersedes  any  and  all  prior  or  contemporaneous   agreements,
discussions, representations,  warranties or other communications. All Schedules
and Exhibits hereto are hereby incorporated herein by reference.
                                       19
<PAGE>
                           (g) This  Agreement may be executed in  counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute one and the same instrument.

                           (h) As used in this Agreement,  knowledge shall mean,
with respect to any person,  actual  knowledge of such person (without  imputing
any knowledge to such person), if an individual,  or of any executive officer of
such Person, if not an individual.

                           (i) This  Agreement  may not be amended  or  modified
without the written  consent of the Company and Purchaser,  nor shall any waiver
be effective  against any party  unless in a writing  executed on behalf of such
party.

                           (j) If one or more  provisions of this  Agreement are
held to be unenforceable  under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement  shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance  with its
terms to the fullest extent permitted by law.

                           (k) The titles and subtitles  used in this  Agreement
are  for  convenience  only  and  are  not to be  considered  in  construing  or
interpreting any term or provisions of this Agreement.
                                       20
<PAGE>
                  IN WITNESS WHEREOF, the Company and Purchaser have caused this
Agreement  to be executed  and  delivered  by the  undersigned  duly  authorized
officers as of the day and year first above written.



                                        FRANCHISE FINANCE CORPORATION OF AMERICA


                                        By:  /s/ MORTON H. FLEISCHER
                                                 -------------------
                                             Name:  Morton H. Fleischer
                                             Title:  President and Chief 
                                                     Executive Officer



                                        COLONY INVESTORS III, L.P.

                                        By:  Colony Capital III, L.P.

                                               By:  ColonyGP III, Inc.

                                               By:  /s/ KELVIN L. DAVIS
                                                        ---------------
                                                    Name:  Kelvin L. Davis
                                                    Title:  President and Chief 
                                                            Executive Officer