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                                                                    Exhibit 10.1

                         SEVERANCE AGREEMENT AND RELEASE

         This Severance Agreement and Release is made this 12th day of April,
1998, by and between Robert M. Langford ("Employee") and Shoney's, Inc., a
Tennessee corporation (the "Company"). Terms used herein without definition
shall have the meanings set forth in that certain Employment Agreement, dated as
of November 1, 1996, by and between Employee and the Company (the "Employment
Agreement").

         WHEREAS, Employee and the Company are parties to the Employment
Agreement;

         WHEREAS, Employee has been employed by the Company since October 16,
1995 and has rendered valuable services to the Company;

         WHEREAS, Employee is employed as the Senior Executive Vice President 
and Chief Operating Officer of the Company; and

         WHEREAS, Employee and the Company desire to enter into an agreement
regarding Employee's termination of employment with the Company and to provide
for certain compensation and benefits to the Employee in consideration for a
full release of claims.

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

1. Employee resigns from employment with the Company effective April 12, 1998
(the "Effective Date") and resigns each of the offices held with the Company or
its subsidiaries as of the Effective Date.

2. The Company agrees to make severance payments to Employee in the aggregate
amount of $1,022,262. Of the $1,022,262 payable hereunder, $444,462 shall be
paid in equal weekly payments of $5,555.77 using the Company's regular payroll
periods. Of the remaining $577,800 payable hereunder, $288,900 shall be paid on
each of January 5, 1999 and January 5, 2000. All such payments will be subject
to applicable state and federal tax withholding.

3. Employee's participation in all benefit programs of the Company other than
life, medical and disability insurance shall cease as of the Effective Date.
Employee's participation in the life, medical and disability insurance programs
provided by the Company shall continue on substantially the same terms
(including the amounts paid, if any, for such benefits) as provided prior to the
Effective Date until the earlier of: (a) such time as Employee is employed by
another employer and is covered or permitted to be covered by benefit plans of
another employer without regard to the extent of such

Company ______             (Initial Here)

Employee ______



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coverage; (b) such time as the Company no longer provides such benefit plans to
individuals holding the position of Executive Vice President/Division President
or above; or (c) October 27, 1999.

4. All stock options issued by the Company to, and held by, Employee that have
vested on or prior to the Effective Date shall be exercisable in accordance with
their terms. Any stock options that have not vested on or prior to the Effective
Date shall lapse and be void as of the Effective Date.

5. At any time within fourteen (14) days of the Effective Date, Employee may by
written notice to the Company elect to purchase the Company vehicle currently
provided to Employee at its fair value as determined in accordance with the
Company's normal practice of determining such value.

6. Any vacation benefits earned by Employee as of the Effective Date will be
deemed completely paid as part of the severance, and no further vacation, sick
time, personal time or other paid time off will accrue during the severance
period.

7. The Company will promptly reimburse Employee for expenses incurred by
Employee in the ordinary course of his employment with the Company, in
accordance with applicable Company policy and arising on or prior to the
Effective Date. All such expenses shall be submitted to the Company on or prior
to the 60th day following the Effective Date.

8. In the event Employee dies prior to the payment in full of any amounts due to
the Employee pursuant to paragraph 2 hereof, any remaining payments due to
Employee shall be paid in lump sum to his estate within thirty (30) days after
the Company is given written notice of Employee's death.

9. As conditions of the Company's performance of its obligations arising under
this Agreement, Employee agrees that he:

         (a) shall not, without the written authorization of the Company,
disclose to any person other than the Company any confidential information of
the Company (specifically including financial, tax and customer information),
whether written or oral, received or learned by him in the course of his
employment, nor shall he make use of any such confidential information on his
own behalf or on behalf of any other person or entity, except that this
provision does not limit or restrict Employee from answering questions or
testifying truthfully if subpoenaed by a court of competent jurisdiction or
governmental agency;

         (b) shall immediately return to the Company all Company equipment,
computers, and other Company property, and any copies thereof, including but not
limited to, credit cards, keys, policy manuals, price lists, marketing materials
and plans, compensation information, business contracts, and any other
confidential information relating to processes, plans, production, methods of
doing business, or special needs of the Company, its employees or customers;
provided, that the Company shall retain possession for a period of three (3)
years from the Effective Date of Employee's

Company ______             (Initial Here)

Employee ______


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memorandum and correspondence files, copies of which shall be made available to
Employee for necessary and appropriate business use upon reasonable notice to
the Company;

         (c) shall not make any disparaging statements about the Company
(including its officers, directors, employees, agents, shareholders,
administrators, accountants, attorneys and other representatives), except that
this provision does not limit or restrict Employee from answering questions or
testifying truthfully if subpoenaed by a court of competent jurisdiction or
governmental agency; and

         (d) until October 27, 1999, Employee will not, directly or indirectly,
either for himself or any other person or entity, (i) induce or attempt to
induce any employee of the Company to leave the employ of the Company, (ii) in
any way interfere with the relationship between the Company and any employee of
the Company, (iii) employ any person (with the exception of hourly employees at
the restaurant level) who has been an employee of Employer unless that person
has ceased to be an employee of Employer for at least six months without the
Company's prior written consent, (iv) induce or attempt to induce any customer,
supplier, licensee, franchisee or business relation of the Company to cease
doing business with the Company, or in any way interfere with the relationship
between any customer, supplier, licensee, franchisee, or business relation of
the Company. Employee also agrees that, in the event he directly and knowingly
breaches this paragraph 9(d), Employee will forfeit his right to receive further
payment under paragraph 2 and will pay expenses incurred by the Company in
enforcing this paragraph 9(d).

10. As a further condition of the Company's performance of its obligations
arising under this Agreement, Employee covenants and agrees that, for a period
of one (1) year from the Effective Date, he will not engage in, own, manage,
operate, control, or participate in any food service business that conducts or
franchises activities which are the same as or similar to the restaurant
concepts and operations of the Company as an employer, employee, principal,
partner, director, agent, or otherwise, directly or indirectly, anywhere in the
United States of America. Notwithstanding the foregoing, the Company agrees that
Employee's participation in any food service business sold or otherwise disposed
of by the Company following the date of this Agreement shall not violate this
covenant not to compete. Employee understands and acknowledges that his
violation of this covenant not to compete would cause irreparable harm to the
Company, and the Company would be entitled to seek an injunction by any court of
competent jurisdiction enjoining and restraining Employee and each and every
other person concerned from any employment, service, or other act prohibited by
this Agreement. Employee and the Company recognize and acknowledge that the area
and time limitations contained in this Agreement are reasonable. In addition,
Employee and the Company recognize and acknowledge that the area and time
limitations are properly required for the protection of the business interests
of the Company due to Employee's status and reputation in the industry and the
knowledge acquired by Employee through his association with the Company's
business and the public's close identification of Employee with the Company and
the Company with Employee. The parties agree that nothing in this Agreement
shall be construed as prohibiting the Company from pursuing any other remedies
available to it for any breach or threatened breach of this covenant not to
compete, including without limitation, the recovery of damages from Employee or
any other

Company ______             (Initial Here)

Employee ______

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person or entity acting in concert with Employee. Employee also agrees that, in
the event he breaches this covenant not to compete, Employee will pay reasonable
attorney's fees and expenses incurred by the Company in enforcing this covenant
not to compete. If any part of this covenant not to compete is found to be
unreasonable, then it may be amended by appropriate order of a court of
competent jurisdiction to the extent deemed reasonable. The Company shall
receive injunctive relief without the necessity of posting bond or other
security, such bond or other security being hereby waived by Employee.

11. In connection with the execution of this Agreement, the Company may issue a
press release announcing the subject matter hereof . The Company will provide a
copy of any such release to Employee at least 24 hours in advance of its
intended release and consult with Employee in respect of its content. Such press
release shall be in form and substance reasonably satisfactory to Employee.

12. The Company agrees that it will not, and will direct its directors and
officers not to, make any disparaging statement about the Employee, except that
this provision does not limit or restrict the Company or its employees from
answering questions or testifying truthfully if subpoenaed by a court of
competent jurisdiction or governmental agency.

13. Employee, in consideration for the agreements of the Company set forth
herein, on behalf of himself, his heirs, executors and assigns, does hereby
release the Company, its subsidiaries, affiliates and successors, and all of its
officers, directors, employees and agents, and agrees to hold them, and each of
them, harmless from any and all claims or causes of action that Employee may now
have or know about, or hereafter may learn about, arising from or during his
employment or resulting from the termination of his employment with the Company.
Employee agrees that he will not seek reinstatement or reemployment, either
directly or indirectly, with the Company, and that he will not file any claim,
charge, or lawsuit for the purpose of obtaining any monetary awards above and
beyond the amount provided for in this Agreement, including without limitation,
any claim for unemployment compensation benefits, or for any equitable relief.

         Employee acknowledges that the foregoing release includes, but is not
limited to, all claims arising under any federal, state or local law, or
ordinance, or any administrative regulations prohibiting employment
discrimination and all claims based on any legal restrictions on the Company's
right to terminate its employees at will including, but not limited to, any
claim based on any actual or implied contract of employment or alleged breach of
any covenant of good faith and fair dealing. The foregoing release specifically
encompasses all claims of employment discrimination based on race, color,
religion, sex, and national origin, as provided under Title VII of the Civil
Rights Act of 1964, as amended, or any executive order, all claims of
discrimination based on age under the Age Discrimination in Employment Act of
1967, as amended, all claims of discrimination based on handicap or disability
under the Americans with Disabilities Act, and all claims of employment
discrimination under any state or local statute, law or ordinance.


Company ______             (Initial Here)

Employee ______


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14. The Company shall indemnify Employee to the maximum extent permitted, and in
the manner provided, by the Tennessee Business Corporation Act against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including any action by or in the
right of the Company) by reason of the fact that he is or was serving as an
officer or employee of the Company or is or was serving at the request of the
Company as an officer of the Company or any partnership, joint venture, trust or
other enterprise.

15. Employee agrees that if he breaches this Agreement or if he files any claim
or lawsuit against the Company seeking equitable relief, except any lawsuit to
enforce the terms of this Agreement, all payments and benefits provided herein
shall cease except as provided by law or applicable benefit plan, and Employee
or his estate shall be required to reimburse the Company for all payments and
benefits Employee received under this Agreement prior to such time.

16. The provisions of this Agreement are severable, and if any part of it is
found to be unenforceable, the other paragraphs shall remain fully valid and
enforceable.

17. This Agreement represents the entire agreement between the parties and
supersedes the Employment Agreement and all other agreements or understandings,
written or oral, between the parties. This Agreement may not be changed except
by an instrument in writing signed by the parties.

18. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Tennessee applicable to contracts made
and to be performed therein, without giving effect to the principles thereof
relating to the conflict of laws.

19. This Agreement will not become effective until the 8th day following the
date on which Employee signs this Agreement as indicated below, and no payments
shall be due, owing or paid by the Company unless and until this Agreement
becomes effective, it being understood that Employee has seven (7) days from the
date on which he signs this Agreement to revoke such Agreement.

20. All notices and other communications provided for under or pursuant to this
Agreement shall be in writing (including facsimile communication) and addressed
as follows:

    If to the Company:                             If to the Employee:

    Shoney's, Inc.                                 ROBERT M. LANGFORD
    Attention:  Secretary                          141 Lake Valley
    1727 Elm Hill Pike                             Hendersonville, TN 37075
    Nashville, Tennessee  37217
    facsimile number:  (615) 231-2734




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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.



WITNESSED BY:                            SHONEY'S, INC.


                                         By: /s/ F.E. McDaniel, Sr.
                                             ----------------------------------
/s/ Grace N. Burdette                    Title: Chief Administrative Officer
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                                                -------------------------------



/s/ Grace N. Burdette                    /s/ Robert M. Langford
---------------------------------        ---------------------------------------
                                         Robert M. Langford






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                            ACKNOWLEDGMENT OF RECEIPT

         I acknowledge that this Severance Agreement and Release (the
"Agreement") was given to me by the Company on the date set forth below, and
that I have twenty-one (21) days from such date to decide whether to sign this
Agreement. I understand that if I elect not to sign the Agreement, I will
receive no severance pay from the Company because of the termination of my
employment. I have been advised by the Company to consult with an attorney of my
choice before signing this Agreement. I understand that by signing this
Acknowledgment, I am not agreeing to any terms of the Agreement or giving up any
rights that I may have.

         DATED this 7 day of April, 1998.



                                         /s/ Robert M. Langford
                                         ---------------------------------------
                                         Robert M. Langford







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