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                                                                   Exhibit 10.1

                                AMENDMENT NO. 5
                                      TO
                               LICENSE AGREEMENT

         THIS AMENDMENT NO. 5 TO LICENSE AGREEMENT (the "Amendment") is entered
into this 25th day of October, 1996, by and between SHONEY'S INVESTMENTS, INC.,
a Nevada corporation with offices at Suite 1400, 300 South Fourth Street, Las
Vegas, Nevada 89101 ("Licensor"), and SHOLODGE FRANCHISE SYSTEMS, INC.
(formerly known as Shoney's Lodging, Inc.), a Tennessee corporation with
offices at 217 West Main Street, Gallatin, Tennessee 37066 ("Licensee").
SHOLODGE, INC. (formerly known as Gulf Coast Development, Inc.), a Tennessee
corporation with offices at 217 West Main Street, Gallatin, Tennessee 37066 and
the parent corporation of Licensee ("ShoLodge"), is executing this Amendment
for the purposes set forth in the Existing License Agreement (as hereinafter
defined) as amended hereby.

                              W I T N E S S E T H:

         WHEREAS, Licensor and Licensee entered into that certain License
Agreement on October 25, 1991 (the "Original License Agreement") pursuant to
which Licensor granted to Licensee a license to use the service mark SHONEY'S
INN (and design) which was registered on February 16, 1982 with the United
States Patent and Trademark Office (the "USPTO") at Registration No. 1,190,289;
and

         WHEREAS, Licensor and Licensee entered into that certain Amendment No.
1 to License Agreement on September 16, 1992 (the "First Amendment") pursuant
to which Licensor added the service mark SHONEY'S INN (block letters) which was
registered by Licensor on August 4, 1992 with the USPTO at Registration No.
1,705,676 to be licensed to Licensee pursuant to the terms and conditions of
the Original License Agreement; and

         WHEREAS, Licensor and Licensee entered into that certain Amendment No.
2 to License Agreement on March 18, 1994 (the "Second Amendment") pursuant to
which certain Tennessee counties were added to the "Territory" covered by the
Original License Agreement; and

         WHEREAS, Licensor and Licensee entered into that certain Amendment No.
3 to License Agreement on March 31, 1995 (the "Third Amendment") pursuant to
which Licensor added the service mark


                                     


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SHONEY'S SUITES (block letters) for which an intent-to-use application was
filed with the USPTO on January 23, 1995 and the service mark SHONEY'S INN &
SUITES (block letters) for which an intent-to-use application was filed with
the USPTO on February 6, 1995 to be licensed to Licensee pursuant to the terms
and conditions of the Original License Agreement; and

         WHEREAS, Licensor and Licensee entered into that certain
Amendment No. 4 to License Agreement on June 26, 1996 (the "Fourth Amendment")
(the Original License Agreement as amended by the First Amendment, the Second
Amendment, the Third Amendment and the Fourth Amendment is hereinafter referred
to as the "Existing License Agreement") pursuant to which, among other things,
the parties revised certain provisions of Section 4.5(d) of the Original
License Agreement regarding the provision of food items to guests at Motels
operated or licensed by Licensee;

         WHEREAS, the parties hereto desire to modify and amend the Existing
License Agreement in certain other respects as set forth herein;

         NOW, THEREFORE, in consideration of the premises and covenants
contained herein and in the Existing License Agreement, the payment by Licensee
to Licensor of the sum of Five Million Two Hundred Fifty Thousand and No/100
Dollars ($5,250,000) on even date herewith, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Licensor and Licensee agree as follows:

         1.       The Existing License Agreement is hereby amended by:

                  (a)      deleting the existing Section 1.5 in its entirety.

                  (b)      deleting the existing Section 4.1 in its entirety.

                  (c)      deleting the existing Section 4.2 in its entirety.

                  (d)      deleting the text of existing Section 4.4(a) in its
                           entirety and inserting in lieu thereof the
                           following:

                                            (a) Licensee shall display and
                                    shall require that its franchisees display
                                    the Licensed Mark only in the styles,
                                    shapes, 

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                                    colors and forms set forth in
                                    Schedule 1, attached hereto and
                                    incorporated herein by reference, in all
                                    signs, literature, packages, labels,
                                    artwork, advertising or promotional
                                    materials prepared by or for Licensee or
                                    its franchisees. Any alteration or
                                    deviation from the displays set forth in
                                    Schedule 1 must be approved in advance by
                                    Licensor. Licensor shall have thirty (30)
                                    days to approve or disapprove such
                                    alterations or deviations. If Licensor
                                    fails to notify Licensee in writing of its
                                    objection to such alterations or deviations
                                    within such thirty (30) day period, such
                                    alterations or deviations shall be deemed
                                    to have been approved. Licensee shall
                                    require that each of its franchisees agree
                                    to allow Licensor or its authorized
                                    representative at any time to enter upon
                                    the premises of any Motel and remove any
                                    signs or advertising materials that display
                                    the mark in a manner that has not been
                                    approved. Licensee agrees to refrain, and
                                    to require its franchisees to refrain, from
                                    using the Licensed Mark in any fashion
                                    which would cast disfavor upon the
                                    Licensor. Licensee will permit, and require
                                    its franchisees to permit, Licensor or its
                                    authorized representatives to inspect the
                                    premises of all Motels during business
                                    hours for the purpose of ascertaining or
                                    determining compliance with the terms of
                                    the Agreement.

                  (e)      deleting the existing Section 4.4(b) in its
                           entirety.

                  (f)      deleting the existing Section 4.4(c) in its
                           entirety.


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                  (g)      deleting the phrase "subject to the limitations set
                           forth below" as it appears in the second sentence
                           of Section 4.4(d).

                  (h)      deleting the fourth sentence of Section 4.4(d) in
                           its entirety and inserting the following in lieu
                           thereof:

                                    Licensor shall not object to a form of
                                    agreement, offering circular or other
                                    promotional items because of the fees,
                                    royalties, advertising fees or similar
                                    financial obligations proposed to be
                                    charged thereunder.

                  (i)      inserting the words "Upon Licensor's request" at
                           the beginning of the first sentence in Section
                           4.5(a).

                  (j)      deleting the words "their execution" as they appear
                           in the first sentence of Section 4.5(a) and
                           inserting in lieu thereof the words "such request."

                  (k)      deleting the second, third, fourth and fifth
                           sentences of Section 4.5(a).

                  (l)      deleting the words "no more than three (3)
                           breakfast `breads' such as donuts, bagels, muffins,
                           sweet rolls, danish and similar items and one bowl
                           containing one type of fresh whole fruit, and (iii)
                           so long as Licensee or its franchisee (as
                           applicable) shall have first offered the catering
                           work to the adjacent `Shoney's Restaurant' operator,
                           if any," as they appear in the second sentence of
                           Section 4.5(d) and inserting the following language
                           in lieu thereof:

                                    "hot or cold continental breakfast foods
                                    consisting of breads, fruits, cereals,
                                    waffles, pancakes, poptarts and other items
                                    popularly known as `continental breakfast'
                                    foods; provided, however, that, except as
                                    provided above, in no event shall the term
                                    `continental
   
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                                    breakfast foods' be deemed to include any
                                    other hot breakfast foods including, 
                                    without limitation: (a) any meat or meat 
                                    products (including pork and pork
                                    products); and (b) eggs, and (iii)"

                  (m)      deleting the third sentence in Section 4.5(d) in
                           its entirety and inserting in lieu thereof the
                           following:

                                    No food products showing brand names (such
                                    as Dunkin' Donuts) shall be allowed,
                                    although brand name products may be used as
                                    long as the brand name itself is not
                                    displayed.

                  (n)      deleting the fifth sentence in Section 4.5(d) in
                           its entirety and inserting in lieu thereof the
                           following:

                                    Licensee agrees, and shall require its
                                    franchisees to agree, to place menus for
                                    the adjacent "Shoney's Restaurant," if any,
                                    (which must be approved by Licensor and any
                                    expense borne by the adjacent restaurant
                                    operator) in each guest room of all Motels
                                    and shall not allow any other restaurant or
                                    food service organization to place
                                    promotional material in the guest rooms of
                                    any Motels adjacent to a "Shoney's
                                    Restaurant" without the prior written
                                    consent of Licensor. For purposes of this
                                    Section 4.5(d) the term "adjacent to" shall
                                    mean within a one mile radius."

                  (o)      deleting the text of existing Section 4.10 in its
                           entirety and inserting in lieu thereof the
                           following:

                           Section 4.10.  Assignment.

                                            (a) Licensee shall not sublicense
                                    (except to a franchisee as permitted
   

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                                    herein), sell, assign, transfer, convey or
                                    encumber its rights and obligations
                                    hereunder or suffer or permit any such
                                    assignment, transfer or encumbrance to
                                    occur by operation of law without the prior
                                    express written consent of Licensor. In the
                                    event Licensee is a corporation, limited
                                    partnership, business trust, partnership or
                                    similar association, the shareholders,
                                    limited partners, beneficiaries, partners
                                    or investors, as the case may be, may not
                                    sell, assign or otherwise transfer their
                                    shares or interests in such corporation,
                                    limited partnership, business trust,
                                    partnership or similar association, without
                                    the prior written consent of Licensor. In
                                    the event Licensee is a corporation, all
                                    stock certificates shall have conspicuously
                                    endorsed upon them a legend in
                                    substantially the following form:

                                            "A transfer of this stock is
                                            subject to the terms and
                                            conditions of a License
                                            Agreement between Shoney's
                                            Investments, Inc. and ShoLodge
                                            Franchise Systems, Inc. (then
                                            known as Shoney's Lodging,
                                            Inc.) dated the 25th day of
                                            October, 1991, as amended.

                                    Licensor agrees that it will not
                                    unreasonably withhold its consent to a
                                    sale, assignment, transfer or conveyance
                                    contemplated by this paragraph to a person
                                    or entity who has experience in the
                                    operation of motels and who is, in the sole
                                    judgment of Licensor, of good character and
                                    reputation and capable, financially and
                                    otherwise, of performing the duties and
                                    obligations of Licensee hereunder. Any
                                    approval by Licensor of



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                                    such transfer or assignment shall be
                                    subject to the assignee's agreement in
                                    writing to assume and perform all of the
                                    transferor's duties and obligations
                                    hereunder.

                                            (b) In the event of the death of
                                    the Licensee or if the Licensee is a
                                    corporation or similar entity, then in the
                                    event of the death of any stockholder,
                                    investor or similar person of Licensee,
                                    Licensor shall not unreasonably withhold
                                    its consent to a transfer or assignment of
                                    Licensee's interest herein, or if Licensee
                                    is a corporation, the transfer of the
                                    deceased stockholder's stock in such
                                    corporation to a descendant, heir or
                                    legatee of the decedent, who shall in the
                                    sole judgment of Licensor be capable of
                                    performing the duties and obligations of
                                    Licensee hereunder, or to a responsible
                                    bona fide purchaser acceptable to Licensor.
                                    Any approval by Licensor of such transfer
                                    or assignment shall be subject to the
                                    assignee's agreement in writing to assume
                                    and perform all of the transferor's duties
                                    and obligations hereunder.

                                            (c) In the event that a sale, 
                                    assignment, transfer or conveyance of the 
                                    stock of Licensee by the shareholder of 
                                    Licensee is approved in accordance with 
                                    Section 4.10(a) above, Licensor will (i)
                                    amend this Agreement to delete (A) the
                                    provisions of Section 7.2 hereof pertaining
                                    to defaults caused by Gulf (now known as 
                                    ShoLodge, Inc.) and (B) all other references
                                    to Gulf, including, without limitation,
                                    those in Sections 6.1, 6.2, 6.4, 6.6, and 
                                    7.3 hereof, and to make conforming 
                                    amendments in connection with such 
                                    deletions, and (ii) terminate and cancel 
                                    the Guaranty Agreement except for 
                                    obligations guaranteed by Gulf thereunder
                                    relating to events occurring


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                                    prior to the effective date of such sale,
                                    assignment, transfer or conveyance.

                  (p)      deleting the phrase "that consent may be given by
                           any of Licensor's representatives to the board of
                           directors of Gulf or Licensee" as it appears in
                           Section 4.11(b) and inserting in lieu thereof the
                           words "a request for consent shall be made by
                           Licensee in writing addressed to the Secretary of
                           Licensor's parent corporation Shoney's, Inc. and 
                           written approval may be given by the Secretary,
                           Treasurer or Chief Financial Officer of Licensor's
                           parent corporation Shoney's, Inc."

                  (q)      deleting the existing Section 5.1 in its entirety.

                  (r)      deleting the date "October 27, 1991" as it appears
                           in Section 5.2 and inserting in lieu thereof the
                           date "October 25, 1996."

                  (s)      inserting the words ", as amended" immediately
                           following the words "attached hereto" as they appear
                           in the second line of Section 5.3.

                  (t)      deleting the existing Section 5.4 in its entirety.

                  (u)      deleting the existing Section 5.5 in its entirety.

                  (v)      inserting the words "subject to the provisions of
                           Section 4.10" immediately before the words "Gulf
                           will continue" as they appear in the third line of
                           Section 6.1 and deleting the parenthetical "(except
                           any security interests granted to Licensor herein)"
                           as it appears in the sixth and seventh lines of
                           Section 6.1.

                  (w)      deleting the second and third sentences of Section
                           6.3.

                  (x)      deleting Section 6.5 in its entirety.

                  (aa)     deleting the words ", as modified by Section 5.1
                           hereof" as they appear in the last line of Section
                           6.6.



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                  (bb)     deleting the words "(except for the payment of any
                           royalty fees) or any other agreement between
                           Licensor and Licensee (including, without
                           limitation, the Security Agreement) executed
                           contemporaneously with the execution of this
                           Agreement" as they appear in Section 7.1(a).

                  (cc)     deleting the existing Section 7.1(f) in its
                           entirety.

                  (dd)     deleting the existing Section 7.1(g) in its
                           entirety.

                  (ee)     deleting the word "report" as it appears in Section
                           7.1(h) and inserting in lieu thereof the word
                           "document."

                  (ff)     deleting the term "ten (10)" as it appears in
                           Section 7.1(j) and inserting the term "thirty (30)"
                           in lieu thereof.

                  (gg)     deleting the words "and the Stock Pledge Agreement"
                           as they appear in the parenthetical in the fourth
                           line of Section 7.2(a).

                  (hh)     deleting the existing Section 7.2(f) in its
                           entirety.

                  (ii)     deleting the existing Section 7.2(g) in its
                           entirety.

                  (jj)     deleting the term "ten (10)" as it appears in
                           Section 7.2(i) and inserting the term "thirty (30)"
                           in lieu thereof.

                  (kk)     deleting the parenthetical "(with the exception of
                           those set forth in Section 7.4(f) hereof)" as it
                           appears in the third and fourth lines of Section
                           7.4(a).

                  (ll)     deleting the words "assignment of all agreements
                           then existing between Licensee and any franchisee,
                           assignment of any leases for Motels in existence on
                           the date hereof and" as they appear in the

   
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                           parenthetical in the last sentence of Section
                           7.4(a).

                  (mm)     deleting the existing Section 7.4(c) in its
                           entirety.

                  (nn)     deleting the existing Section 7.4(d) in its
                           entirety.

                  (oo)     deleting the existing Section 7.4(f) in its
                           entirety.

                  (pp)     deleting the address for Licensor as it appears in
                           Section 8.6 and inserting the following address in
                           lieu thereof:

                                    Shoney's Investments, Inc.
                                    Suite 1400
                                    300 South Fourth Street
                                    Las Vegas, Nevada  89101

         2. Except as herein specifically amended, all terms and
provisions of the Existing License Agreement shall remain in full
force and effect.

         3. This Amendment may be executed simultaneously in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         4. The terms of this Amendment shall be interpreted and
construed in accordance with the laws of the State of Nevada.

         5. The parties hereto agree that the termination of the royalty
payment obligation created by this Amendment pertains only to future royalties
accruing after the date of this Amendment and that Licensee and ShoLodge shall
be liable for the payment of all royalties accrued through and including
October 25, 1996 in accordance with the terms of the Existing License
Agreement. Licensee shall pay such royalties to Licensor in such amounts, at
such times and otherwise in accordance with the terms of the Existing License
Agreement.

                     [SIGNATURES APPEAR ON FOLLOWING PAGE]


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         IN WITNESS WHEREOF, the undersigned have executed this Amendment all
as of the day and date first above written.

                                      LICENSOR:

                                      SHONEY'S INVESTMENTS, INC.

 

                                      By: /s/ John H. Mowbray
                                          ---------------------------
                                          John H. Mowbray

                                      Title: Assistant Secretary

 

                                      LICENSEE:

                                      SHOLODGE FRANCHISE SYSTEMS, INC.

                                      By: /s/ Leon Moore
                                          ---------------------------

                                      Title: President
                                             ------------------------


                                      SHOLODGE, INC.

                                      By: /s/ Leon Moore
                                          ---------------------------
                                           
                                      Title: President
                                             ------------------------



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