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                                                                   EXHIBIT 3(ii)


                                RESTATED BY-LAWS

                                       OF

                                 SHONEY'S, INC.

                                    ARTICLE I

                                     OFFICES

         The executive offices of the Corporation shall be in Davidson County,
Tennessee, but the Corporation may have other offices at such places as the
Board of Directors may from time to time decide or as the business of the
Corporation may require.

                                   ARTICLE II

                            MEETINGS OF SHAREHOLDERS

         Section 1.   Annual Meeting.  The annual meeting of the shareholders 
shall be held at the call of the Board of Directors on a date and at a time and
place, either within or without the State of Tennessee, as may be selected by
the Board of Directors.

         Section 2.   Special Meeting. Special Meetings of the shareholders may 
be called at any time by the Chairman of the Board or the Board of Directors,
and shall be called by the Board of Directors if the holders of at least ten
percent (10%) of all the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting sign, date and deliver to the
Corporation's Secretary one (1) or more written demands for the meeting
describing the purpose or purposes for which it is to be held. The special
meeting shall be held at such time and place, either within or without the State
of Tennessee, as is designated in the call of the meeting by the Chairman of the
Board or the Board of Directors. The Board of Directors shall fix the record
date (which shall be a future date) for a special meeting. If the meeting is to
be called by the Board of Directors pursuant to demands delivered by the holders
of at least ten percent (10%) of all votes entitled to be cast on any issue
proposed to be considered at the proposed special meeting, then, within 20 days
after the date on which such demands are received, the Board of Directors shall
fix the record date. If no record date has been fixed by the Board of Directors
within 20 days of the date on which such demands are received, the record date
for the special meeting shall be the thirtieth day after the date on which such
demands were received.

         Any shareholder of record seeking to join with other shareholders in 
demanding a special meeting shall, by written notice to the Secretary, request
the Board of Directors to fix a record date to determine the shareholders
entitled to demand a special meeting. The Board of


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Directors shall promptly, but in all events within 15 days after the date on
which such a request is received, adopt a resolution fixing the record date to
determine the shareholders entitled to demand a special meeting, which record
date shall not exceed 30 days from the date on which the request was received.
If no record date has been fixed by the Board of Directors within 15 days of the
date on which such a request is received, the record date for the determination
of shareholders entitled to demand a special meeting shall be the thirtieth day
after the date on which such request was received.

         Section 3.   Notice of Meeting. Written notice stating the place, day 
and hour of annual and special meetings of shareholders shall be given to each
shareholder, either personally or by mail to his last address of record with the
Corporation, not less than ten (10) nor more than sixty (60) days before the
date of the meeting. Notice of any special meeting of shareholders shall state
the purpose or purposes for which the meeting is called and person or persons
calling the meeting, and, if the meeting is being called pursuant to demands
delivered by the holders of at least ten percent (10%) of all the votes entitled
to be cast on any issue proposed to be considered at the proposed special
meeting, that the meeting is being so called. Notice of any meeting so called
shall be given within one month after the date the demands were delivered to the
Corporation's Secretary. Only such business shall be conducted at a special
meeting of shareholders as shall have been brought before the meeting pursuant
to the notice of meeting.

         Section 4.   Voting. At all meetings of shareholders, all shareholders 
of record shall be entitled to one vote for each share of stock standing in
their name and may vote either in person or by proxy. Proxies shall be filed
with the Secretary of the meeting before being voted or counted for the purpose
of determining the presence of a quorum.

         Section 5.   Quorum. At all meetings of shareholders, a majority of the
outstanding shares of stock entitled to vote, represented in person or by proxy,
shall constitute a quorum for the transaction of business. Unless a greater vote
specifically is required by the Tennessee Business Corporation Act or the
Corporation's charter or By-laws, if a quorum is present at a meeting of the
Corporation's shareholders, a matter that may come before the meeting is adopted
if the number of votes cast in favor of the matter exceeds the number of votes
cast against the proposal. If, however, such majority shall not be present or
represented by proxy at any meeting of the shareholders, the presiding officer
or a majority of the shares so represented may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until the requisite
number of shares shall be represented so that any business may be transacted
which might have been transacted at the meeting as provided in the original
notice.

         Section 6.   Action by Consent. Whenever the shareholders of the
Corporation are required or permitted to take any action by vote, such action
may be taken without a meeting on written consent, setting forth the action so
taken, signed by all of the persons or entities entitled to vote thereon.

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         Section 7.   Advance Notice of Shareholder Proposals. At any annual or
special meeting of shareholders, proposals by shareholders and persons nominated
for election as Directors by shareholders shall be considered only if advance
notice thereof has been timely given as provided herein and such proposals or
nominations are otherwise proper for consideration under applicable law and the
Charter and By-Laws of the Corporation. Notice of any proposal to be presented
by any shareholder or of the name of any person to be nominated by any
shareholder for election as a Director of the Corporation at any meeting of
shareholders shall be delivered to the Secretary of the Corporation at its
principal executive office not less than 60 nor more than 90 days prior to the
date of the meeting; provided, however, that if the date of the meeting is first
publicly announced or disclosed (in a public filing or otherwise) less than 70
days prior to the date of the meeting, such notice shall be given not more than
ten days after such date is first so announced or disclosed. Public notice shall
be deemed to have been given more than 70 days in advance of the annual meeting
if the Corporation shall have previously disclosed, in these ByLaws or
otherwise, that the annual meeting in each year is to be held on a determinable
date, unless and until the Board determines to hold the meeting on a different
date. Any shareholder who gives notice of any such proposal shall deliver
therewith the text of the proposal to be presented and a brief written statement
of the reasons why such shareholder favors the proposal and setting forth such
shareholder's name and address, the number and class of all shares of each class
of stock of the Corporation beneficially owned by such shareholder and any
material interest of such shareholder in the proposal (other than as a
shareholder). Any shareholder desiring to nominate any person for election as a
Director of the Corporation shall deliver with such notice a statement in
writing setting forth the name of the person to be nominated, the number and
class of all shares of each class of stock of the Corporation beneficially owned
by such person, the information regarding such person required by paragraphs
(a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and
Exchange Commission (or the corresponding provisions of any regulation
subsequently adopted by the Securities and Exchange Commission applicable to the
Corporation), such person's signed consent to serve as a Director of the
Corporation if elected, such shareholder's name and address and the number and
class of all shares of each class of stock of the Corporation beneficially owned
by such shareholder. As used herein, shares "beneficially owned" shall mean all
shares as to which such person, together with such person's affiliates and
associates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934),
may be deemed to beneficially own pursuant to Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, as well as all shares as to which such person,
together with such person's affiliates and associates, has the right to become
the beneficial owner pursuant to any agreement or understanding, or upon the
exercise of warrants, options or rights to convert or exchange (whether such
rights are exercisable immediately or only after the passage of time or the
occurrence of conditions). The person presiding at the meeting, in addition to
making any other determinations that may be appropriate to the conduct of the
meeting, shall determine whether such notice has been duly given and shall
direct that proposals and nominees not be considered if such notice has not been
given.

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         Section 8.   Inspectors of Election; Opening and Closing the Polls. The
Board of Directors by resolution shall appoint one or more inspectors, which
inspector or inspectors may include individuals who serve the Corporation in
other capacities, including, without limitation, as officers, employees, agents
or representatives, to act at the meetings of shareholders and make a written
report thereof. One or more persons may be designated as alternate inspectors to
replace any inspector who fails to act. If no inspector or alternate has been
appointed to act or is able to act at a meeting of shareholders, the Chairman of
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before discharging his or her duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspectors shall have the
duties prescribed by law.

         The Chairman of the meeting shall fix and announce at the meeting the
date and time of the opening and the closing of the polls for each matter upon
which the shareholders will vote at a meeting.

                                   ARTICLE III

                                    DIRECTORS

         Section 1.   Number and Qualifications. The business and affairs of the
Corporation shall be managed and controlled by a Board of Directors consisting
of twelve directors. Directors need not be shareholders of the Corporation. In
addition to the Directors who are elected by the shareholders, the Board of
Directors, from time to time, may appoint persons as advisory directors, to
serve such terms and perform such duties as the Board of Directors shall
determine upon appointing any person as an advisory director. Advisory directors
shall not be entitled to vote on any matter to come before the Board of
Directors. Advisory directors may be removed at any time by a vote of the Board
of Directors. The provisions of Article III, Sections 2 through 12 of these
Bylaws shall not apply to advisory directors.

         Section 2.   Nominations by Shareholders. Shareholders who wish to 
nominate persons for election as Directors of the Corporation shall comply with
the requirements of ARTICLE II, Section 7 of these By-Laws.

         Section 3.   Election and Term of Office. The Directors shall be 
elected at the annual meeting of shareholders; but if any such annual meeting is
not held or if the Directors are not elected at any such annual meeting, the
Directors may be elected at any special meeting of the shareholders. Directors
shall be elected by a plurality of the votes cast. The Directors shall hold
office until the next annual meeting of shareholders and thereafter until their
respective successors have been elected and qualified.

         Section 4.   Meetings. Regular meetings of the Directors shall be held 
annually following the annual meeting of the shareholders and may be held
without notice at such other

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places and times as may be determined by the Board of Directors. In addition,
during the four month period from August 10, 1997 through and including December
10, 1997, the Board of Directors shall hold at least one regularly scheduled
meeting every month at such times as may from time to time be fixed by the Board
of Directors and the Board of Directors shall hold regular meetings every month
thereafter until such time as the Board of Directors determines that such
monthly meeting is not necessary. Special meetings of the Directors may be
called at any time by the Chairman of the Board, the Chairman of the Executive
Committee of the Board of Directors, or a majority of the Directors or by the
other persons authorized to call such a meeting pursuant to these Bylaws, on at
least one day's notice sent by any usual means of communication. Notice of any
such meeting may be waived by the person or persons entitled thereto by signing
a written waiver of notice at any time before or after the meeting is completed.
Attendance of a Director at a meeting shall constitute a waiver of notice
thereof unless such attendance is for the express purpose of objecting to such
meeting. Any meeting of the Board of Directors may be held within or without the
State of Tennessee at such place as may be determined by the person or persons
calling the meeting.

         Section 5.   Quorum. A majority of the total number of Directors then 
in office shall constitute a quorum for the transaction of business; and the
vote or action of a majority of the Directors present at any meeting at which a
quorum is had shall decide any matter that may come before the meeting and shall
be the act of the Board unless otherwise specifically required by law or by
express provision of the charter or By-laws of the Corporation.

         Section 6.   Action by Consent. Any action required or permitted to be
taken by the Directors of the Corporation may be taken without a meeting on
written consent, setting forth the action so taken, signed by all the Directors
entitled to vote thereon.

         Section 7.   Vacancies. Vacancies in the Board of Directors occurring 
for any reason, including an increase in the number of Directors, resignation,
or the removal of any Director with or without cause, may be filled by vote of a
majority of the Directors then in office although less than a quorum exists; but
if the offices of a majority of the entire Board of Directors shall be vacant at
the same time, such vacancies shall be filled only by vote of the shareholders.
A director elected to fill any vacancy shall hold office until the next annual
meeting of shareholders and thereafter until his successor has been elected and
qualified.

         Section 8.   Removal and Resignation. Any or all of the Directors may 
be removed with or without cause, at any time, by vote of the shareholders. Any
Director may resign at any time, such resignation to be made in writing and to
take effect immediately or on such later date as may be specified therein
without acceptance.

         Section 9.   Committees.

                 (a) The Executive Committee of the Board of Directors shall
         act on behalf of the Board of Directors between scheduled meetings of
         the Board of Directors and

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         exercise all powers of the Board of Directors and the powers granted to
         the Chairman of the Board of Directors by Article IV, Section 3 of
         these Bylaws, including, without limitation, the power to call meetings
         of the Board of Directors and to set the agenda for meetings of the
         Board of Directors; provided, however, that the Executive Committee
         shall not have the authority to take any action that is prohibited by
         the Tennessee Business Corporation Act. The Chairman of the Executive
         Committee shall have the power to call meetings of the Board of
         Directors or the Executive Committee and, from and after the date that
         B. Franklin Skinner is no longer the Chairman of the Executive
         Committee, any two members of the Executive Committee acting together
         shall be entitled to call meetings of the Board of Directors or the
         Executive Committee on at least one day's notice sent by any usual
         means of communication. Each member of the Executive Committee shall
         have the right to add items to the agenda of meetings of the Board of
         Directors or the Executive Committee. The quorum for all meetings of
         the Executive Committee shall be three, at least one of whom shall be a
         Committee Nominee (as defined in the Agreement dated as of August 10,
         1997 (the "Agreement"), as the same shall be amended from time to time,
         among the Company, Raymond D. Schoenbaum and Betty J. Schoenbaum (the
         Schoenbaums being collectively referred to as the "Shareholders
         Committee")), and the act of a majority of those present at a meeting
         of the Executive Committee at which a quorum is present shall be the
         act of the committee.

                  (b) The Operations Committee of the Board of Directors shall
         consist of four members and shall review and make recommendations to
         the Board of Directors concerning all aspects of the Company's business
         and its current and future business and financial strategies,
         transactional opportunities and the enhancement of shareholder value.
         In addition, the Operations Committee shall have oversight
         responsibility with respect to all aspects of the day-to-day operations
         of the Company, including the marketing, capital expenditure and budget
         plans for the Company, and shall review and make recommendations
         regarding the debt structure and capital structure of the Company. The
         Operations Committee shall hold meetings as often as the Operations
         Committee believes necessary but in any event for the first two months
         after August 10, 1997 the Operations Committee shall meet no less than
         every two weeks. Each member of the Operations Committee shall have,
         and management of the Company shall ensure that each member of the
         Operations Committee shall have, access to all such information
         regarding the Company and all contacts with such employees and
         franchisees as such member shall request. The Operations Committee
         shall make a report to the Board on a monthly basis (or more often, if
         necessary or appropriate) and the agenda of each Board meeting shall
         provide for the making by the Operations Committee of such report. The
         members of the Operations Committee shall receive the information set
         forth on Annex I hereto in accordance with the time frames set forth in
         such Annex I. The quorum for all meetings of the Operations Committee
         shall be two members, at least one of whom shall be a Committee Nominee
         and one of whom shall be a person other than a Committee Nominee. The
         act of a majority of those present at

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         a meeting of  the Operations Committee at which a quorum is present 
         shall be the act of such committee.

                  (c) From time to time, a majority of the entire Board of
         Directors may by resolution appoint any other committee or committees
         for the purpose or purposes to the extent permitted by law, which
         committee or committees shall have such powers as shall be specified in
         the resolution of appointment.

         Section 10.  Participation in Meetings. The members of the Board of
Directors, or any committee appointed by the Board, may participate in a meeting
of the Board or of such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to such
means shall constitute presence in person at such meeting. The Directors shall
be promptly furnished a copy of the minutes of the Board of Directors' meetings.

         Section 11.  Compensation. The Directors shall receive compensation or
salary for their services as Directors, said sum to be fixed by proper
resolution of the Board of Directors, and said salary and compensation may
include a fixed sum for expenses of attending the meetings of the Board of
Directors. A Director may serve the Corporation in a capacity other than that of
a Director and receive compensation for services rendered in such other
capacity.

         Section 12.  Access to Information.  Each member of the Board of 
Directors shall be entitled to receive promptly upon request all information
regarding the Corporation which such director requests.

                                   ARTICLE IV

                                    OFFICERS

         Section 1.   Designation. The officers of the Corporation shall be a
Chairman Emeritus of the Board (which office shall be optional with the Board of
Directors), a Chairman of the Board, a President, one or more Division
Presidents, one or more Vice Presidents, a Secretary and a Treasurer and such
other officers, agents and employees as may from time to time be elected, chosen
or appointed by the Board of Directors. Any Vice President may be designated as
Executive Vice President or Senior Vice President or such other title as the
Board may determine. Any two or more of such offices may be held by the same
person except the offices of President and Secretary.

         Section 2.   Chairman Emeritus. The Chairman Emeritus of the Board 
shall be an honorary and optional position. The Chairman Emeritus shall be an
Advisory director of the Corporation pursuant to Article III of these Bylaws. In
addition, the Chairman Emeritus shall

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have such duties with regard to the general and active management of the
Corporation as may be prescribed from time to time by the Board of Directors or
by the By-laws.

         Section 3. Chairman of the Board of Directors. The Chairman of the
Board of Directors shall preside at all meetings of the shareholders and the
Board of Directors, and he shall call regular and special meetings of the
shareholders and Board of Directors in accordance with these By-laws. He shall
perform such other duties as may be prescribed by the Board. The Board may
designate the Chairman chief executive officer of the Corporation.

         Section 4. President. The President shall have general supervision of
the affairs and property of the Corporation, subject to the direction of the
Board of Directors and the Chairman of the Board. He shall manage and control
the regular business of the Corporation; and he may appoint agents and employees
of the Corporation, other than officers elected or appointed by the Board,
subject to the approval of the Board. In the absence of the Chairman of the
Board, the President shall preside at any meeting of the shareholders or the
Board of Directors. He shall perform such other duties as may from time to time
be prescribed by the Board.

         Section 5. Division President. The Division President or Division
Presidents shall assist the President in the management of the Corporation,
shall have general supervision of the affairs and property of that division of
the Corporation over which he is President, and shall have such other duties as
may from time to time be prescribed by the Board, the Chairman of the Board, or
President. In the absence, disqualification or incapacity of the President, the
senior Division President, if senior to the senior Vice President, shall perform
the duties and exercise the powers of the President.

         Section 6. Vice President. The Vice President or Vice Presidents shall
assist the President in the management of the Corporation and shall have such
other powers and perform such other duties as may from time to time be
prescribed by the Board, or President. In the absence, disqualification or
incapacity of the President, the senior Vice President shall perform the duties
and exercise the powers of the President.

         Section 7. Secretary. The Secretary shall keep the minutes of all
meetings of the shareholders and the Board of Directors in appropriate books,
and he shall attend to the giving of all notices for the Corporation. He shall
have charge of the seal and stock books of the Corporation and such other books
and papers as the Board may direct, and he shall in general perform all duties
incident to the office of Secretary of the Corporation. He shall perform such
other duties as may from time to time be prescribed by the Board, the Chairman
of the Board, or President.

         Section 8. Treasurer. The Treasurer shall have the care and custody of 
all funds and securities of the Corporation, and he shall in general perform all
duties incident to the office of

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Treasurer of the Corporation. He shall perform such other duties as may from
time to time be prescribed by the Board, the Chairman of the Board, or
President.

         Section 9.  Other Officers. The Board of Directors may appoint, or may
authorize the Chairman of the Board or President to appoint, assistant
secretaries and assistant treasurers and such other officers as the Board may
from time to time decide, who shall have such authority and perform such duties
as may from time to time be prescribed by the Board or designated by the
President.

         Section 10. Election and Term of Office. The officers shall be elected
or appointed at the regular meeting of the Board of Directors following the
annual meeting of shareholders, provided that any vacancy or newly created
office may be filled at a special meeting or other regular meeting of the Board.
Unless otherwise determined by the Board, each officer shall hold office until
the next regular meeting of the Board following the annual meeting of
shareholders and thereafter until his successor has been elected or appointed
and qualified.

         Section 11. Compensation. The Board of Directors, or one of its duly
appointed committees, shall fix the salaries of the officers of the Corporation.
The compensation of other agents and employees of the Corporation may be fixed
by the Board of Directors or by an officer or officers for whom that function
has been delegated by the Board.

                                    ARTICLE V

                                     SHARES

         Section 1.  Certificates. The shares of the Corporation shall be
represented by certificates in such form as the Board of Directors may from time
to time prescribe. Such certificates shall be numbered consecutively in the
order in which they are issued, which numbering system may be separated by class
or series if there shall be more than one class or series of shares. The
certificates shall be signed by the Chairman of the Board and Secretary unless
the Board of Directors shall otherwise designate any two officers of the
Corporation for such purpose.

         Section 2.  Record. The name and address of all persons to whom the 
shares of the Corporation are issued, the number of shares, and the date of
issue shall be entered on the books of the Corporation. It shall be the duty of
each shareholder to notify the Corporation of his address.

         Section 3.  Transfers. The shares of the Corporation are transferable 
only on the books of the Corporation by the registered holder thereof, either in
person or by power of attorney, and upon delivery and surrender of the
certificate representing such shares properly

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endorsed for transfer. Certificates exchanged or surrendered shall be canceled
by the Secretary and placed in the corporate records.

         Section 4.  Loss of Certificates. In case of the loss, mutilation or
destruction of a certificate representing shares of the Corporation, a duplicate
certificate may be issued on such terms as the Board of Directors shall
prescribe.

         Section 5.  Transfer Agent, Registrar. The Board of Directors may 
appoint a transfer agent or agents and/or a registrar, and a dividend disbursing
agent for the Corporation.

                                   ARTICLE VI

                                      SEAL

         Section 1.  Authority to Adopt. The Corporation may have a seal in such
form as the Board of Directors may adopt, and the Board of Directors may from
time to time change the form of the seal of the Corporation.

         Section 2.  Scroll Seal. In the event the Board shall not have adopted 
a seal or if it is inconvenient to use the adopted seal at any time, an
authorized signature made in the name of and on behalf of the Corporation
followed by the word "Seal" enclosed in parentheses or scroll shall be deemed
the seal of the Corporation.

                                   ARTICLE VII

                                   FISCAL YEAR

         The fiscal year of the Corporation shall end on the last Sunday of
October of each year, but the Board of Directors may from time to time change
the fiscal year of the Corporation.

                                  ARTICLE VIII

                         DIVIDENDS, SURPLUS AND RESERVES

         Section 1.  Dividends. The Board of Directors may declare dividends 
from the Corporation's net earnings, or from the surplus of its assets over its
liabilities, including capital, but not otherwise. The Board of Directors may
issue stock dividends, provided the Corporation has a surplus equal in value, at
a fair valuation, to such stock issued as a

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dividend; and provided, further, that the surplus of the Corporation is reduced
in an amount equal to the value of the stock issued as a stock dividend.

         Section 2.  Surplus and Reserves. Before making any distribution of
proceeds, there may be set aside out of the net proceeds of the Corporation such
sums for maintaining any property of the Corporation, or for any other purpose,
and any profits of any year not distributed as dividends shall be deemed to have
been thus set aside until otherwise disposed of by the Board of Directors, and
the Board of Directors may abolish any such reserve in its absolute discretion.

                                   ARTICLE IX

                                    INDEMNITY

         Any person who was or is a party or is threatened to be made a party to
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 Corporation) by reason of the fact that he is or was serving as an
officer or director or employee of the Corporation or is or was serving at the
request of the Corporation as a Director or officer of the Corporation,
partnership, joint venture, trust or other enterprise, shall be indemnified by
the Corporation against expenses (including reasonable attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith for a purpose which he reasonably believed to be in the best interest of
the corporation, and, in criminal proceedings, in addition, had no reasonable
cause to believe that his conduct was unlawful, to the maximum extent permitted
by, and in the manner provided by, the Tennessee Business Corporation Act. In
the event of a settlement, however, the indemnification herein shall apply only
when the Board of Directors approves such settlement and reimbursement as being
in the best interest of the Corporation. The foregoing right of indemnification
shall be in addition to and not exclusive of all rights to which said Directors,
officers or employees may be entitled.

                                    ARTICLE X

                                   AMENDMENTS

         The shareholders of the Corporation may adopt new Bylaws and may amend 
or repeal any or all of these Bylaws at any annual or special meeting provided,
however, that notice of intention to amend shall have been contained in the
notice of any special meeting called for that purpose; and also the Board of
Directors may adopt new Bylaws and may amend or repeal these Bylaws by the vote
of a majority of the entire Board, and provided further that any bylaw adopted
by the Board may be amended or repealed by the shareholders. Notwithstanding

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the foregoing, until June 30, 1998 the Board of Directors will not amend the
provisions of the first sentence of Section 1, Sections 4, 9(a), 9(b), 9(c) or
12 of Article III, this Article X, or Article XI of these Bylaws, or adopt any
new bylaw which is inconsistent in any manner with such provisions, without the
affirmative vote of at least 75% of the members of the Board of Directors. The
Board of Directors may amend Bylaws adopted by the shareholders, provided that
shareholders may from time to time specify particular provisions of these Bylaws
which shall not be amended by the Board of Directors.

                                   ARTICLE XI

                            SIGNIFICANT TRANSACTIONS

         No Significant Transaction (as defined below) shall be undertaken
without the specific approval of the Board of Directors of such Significant
Transaction. Significant Transaction shall mean (i) the sale, lease, exchange or
other disposition of all or substantially all of the business operations or
assets of the Company in a single transaction or in a series of transactions,
(ii) the sale, lease or exchange or other disposition of (A) the Shoney's
division, the Captain D's division or any individual asset or group of related
assets of the Company in a single transaction or in a series of related
transactions involving more than $5 million (except that transactions shall not
be considered to be related solely because they are adopted by the Board as part
of a common plan), (B) assets in a single transaction or in a series of
transactions to a single purchaser involving more than $5 million (C) any asset
or group of related assets to any current or former officer, director, or
employee of the Company, any person who has an ongoing material business or
financial relationship with any such current or former officer, director or
employee of the Company, any Affiliate or Associate (each as defined in Rule
12b- 2 under the Securities Exchange Act of 1934 and shall include persons who
become Affiliates or Associates of any person subsequent to August 10, 1997) of
the foregoing, or any entity owned in whole or in part by any of the foregoing
(other than an entity whose securities are publicly traded and in which the
foregoing own less than 5% of the outstanding equity interests of such entity),
(iii) the acquisition of (A) any restaurant or restaurants in a single
transaction or series of related transactions involving more than $5 million or
(B) business operations or assets in a single transaction or series of related
transactions involving more than $5 million other than, in the case of this
clause (B), those acquisitions contained in the capital budget plan of the
Company previously approved by the Board, (iv) the authorization of the
dissolution of the Company or the winding up or seeking of voluntary bankruptcy
or voluntary insolvency protection, (v) the consent by the Company to a
third-party seeking an order authorizing the involuntary dissolution or
involuntary bankruptcy of the Company, (vi) the authorization of any merger,
consolidation, reorganization or other business combination (other than any
merger in which both (A) the Company is the surviving ultimate parent entity and
(B) the holders of the voting securities of the Company prior to such
transaction continue to hold at least 85% of the equity interests and voting
power of the Company after the transaction), (vii) the declaration of any
dividend or authorization of any distribution in excess of regular and

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customary dividends, or (viii) the approval of any restructuring of indebtedness
of the Company or any of its subsidiaries involving amounts in excess of $25
million, or the material modification of the terms of any indebtedness or
obligation of the Company or any of its subsidiaries for borrowed money
involving amounts in excess of $25 million.


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