EMPLOYMENT AGREEMENT


      THIS AGREEMENT, made this 17th day of June, 1998, by and between John F.
Ripley, a resident of Round Hill, Virginia (the "Executive"), and Precision Auto
Care, Inc., a Virginia corporation (the "Company").

                              W I T N E S S E T H:

      WHEREAS, the Executive desires to provide his services to the Company and
the Company desires to employ the Executive upon the terms and conditions
hereinafter set forth.

      NOW, THEREFORE, in consideration of the premises and the mutual promises,
covenants and agreements contained herein, and intending to be legally bound,
the parties hereby agree as follows:

      1.    Employment and Term.

      The Company will employ the Executive, and the Executive hereby accepts
employment with the Company, for an initial term commencing on July 1, 1998, and
continuing for a period of three (3) years until and including June 30, 2001
(the "Initial Term"), unless such employment is earlier terminated as provided
herein. After expiration of the Initial Term, the Executive's employment under
this Agreement shall continue until terminated as provided herein.

      2.    Duties.

      The Executive shall serve in the capacity of President and Chief Executive
Officer. He shall also be elected and serve as a member of the Company's Board
of Directors. During the term of his employment hereunder, the Executive shall
devote his full business time and attention to the performance of his duties for
the Company.

      3.    Compensation.

            (a) Base Salary. The Company shall pay the Executive, and the
Executive shall accept, as full compensation for all services rendered
hereunder, a basic salary (the "Base Salary") and the other compensation and
benefits provided hereunder. The Executive's Base Salary effective July 1, 1998,
shall be at an annual rate of Two Hundred Fifty Thousand Dollars ($250,000),
payable in approximately equal installments at such intervals as are consistent
with the Company's pay periods for salaried executive employees. The Executive's
Base Salary shall be reviewed by the Board of Directors no less frequently than
once in any twelve-month period and may be increased, but not decreased
regardless of any change in or diminution of the Executive's duties owed to the
Company.


                                       1


<PAGE>


            (b) Performance Bonus. The Executive shall participate in the Senior
Management Incentive Bonus Plan, and shall be entitled to receive bonuses
thereunder, as approved by the Board of Directors.

            (c)   Benefits.

                        (i)   The Executive shall be eligible to participate
in retirement, group insurance, medical, dental, vacation and any other plans or
programs of substantially similar character as are made generally available to
executive employees of the Company which do not duplicate the benefits otherwise
specifically provided in this Agreement. All such benefits are to be provided by
the Company, subject to the terms of any welfare or pension plan sponsored by
the Company.

                        (ii)  Pursuant to the terms of the Company's 1998
Employee Stock Purchase Plan, the Executive shall be granted a non-qualified
stock option to purchase 75,000 shares of Common Stock of the Company. The
option shall vest in equal installments of one-third of the total shares granted
on the first three anniversaries of the grant date, which shall be June 17,
1998. The exercise price shall be equal to the closing price of the Common Stock
as of June 17, 1998, and the term of the option shall be ten years.

                        (iii) The Company shall reimburse the Executive for
the cost of monthly dues at Stoneleigh Golf Club.

                        (iv) The Company shall reimburse the Executive for
the cost of the Executive's participation in the Young President's Organization.
Such reimbursement shall be limited to Executive's expenses for International,
Chapter and Forum dues only, and shall not include any activities or other fees.

                        (v)   The Company shall reimburse the Executive for
all expenses incurred by him in the performance of his duties pursuant to
this Agreement.

                        (vi) Executive shall receive such other benefits
and/or allowances as are permitted to him from time to time by the Board of
Directors.

            (d) Restructuring of Payments. Notwithstanding anything in this
Agreement to the contrary, in the event that, in the opinion of the Company's
auditors, any payments of compensation to be made hereunder would be treated as
"excess parachute payments" within the meaning of section 280G of the Internal
Revenue Code as amended, the Company and the Executive shall use their best
efforts to restructure any of the payments so as to avoid the imposition of
excise tax upon the Executive and the loss of deduction for such payments by the
Company.


                                       2


<PAGE>


      4.    Confidentiality.

      While employed by the Company under this Agreement and at all times
thereafter, the Executive shall not, without the prior written consent of the
Company, divulge to any third party or use for his own benefit or the benefit of
any third party, or for any purpose other than the exclusive benefit of the
Company, any confidential or proprietary business or technical information
revealed, obtained or developed in the course of his employment with the Company
or his duties performed for the Company or which is otherwise the property of
the Company or any of its subsidiaries or affiliated companies; provided that,
nothing contained herein shall restrict the Executive's use or disclosure of
such information (i) in the proper course of conduct of the Company's business,
(ii) known generally to the public (other than that which he may have disclosed
in breach of this Agreement) or (iii) as required by law so long as the
Executive gives the Company prior notice of such required disclosure unless
precluded from doing so by legal authority.

      5.    Covenant Not to Compete.

            (a) The Executive shall not, within any geographical area while
employed by the Company or while performing duties for the Company hereunder,
and within the United States of America for two (2) years thereafter, directly
or indirectly engage or become interested in (as owner, stockholder, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any
business that engages in the auto care industry, except that the Executive may
hold as a passive investment not more than five percent (5%) of the outstanding
securities of any class of any publicly-held entity that engages in the auto
care industry.

            (b) It is the desire and the intent of the parties that the
provisions of this Section 5 shall be enforceable to the fullest extent
permissible under applicable law and public policy. Accordingly, if this Section
5 or any portion thereof shall be adjudicated to be invalid or unenforceable,
the length and scope of this Section 5 shall be reduced to the extent necessary
so that this covenant may be enforced to the fullest extent possible under
applicable law.

      6.    Enforcement.

            (a) Injunctive Relief. The parties recognize that, in the event of
any breach by the Executive of any of the provisions of Section 4 or 5 hereof,
the Company will suffer continuing and irreparable harm for which the Company
will not have an adequate remedy at law. The Executive hereby waives any and all
right to assert any claim or defense that the Company has an adequate remedy at
law for any such breach. In recognition thereof, the Company and the Executive
hereby agree that, in the event of any such breach, the Company will be entitled
to seek injunctive relief or any other appropriate remedy to enforce such
provisions. The parties further agree that this Section 6 shall not in any way
limit remedies at law or in equity otherwise available to the Company. In the
event the Company seeks injunctive relief and is unsuccessful on the merits, or
terminates such action prior to entry of a judgment or other ruling on the
merits, other than a termination of such action due to a settlement agreement
between the Company and the Executive, the Company shall reimburse the Executive
for his reasonable attorneys' fees.


                                       3

<PAGE>


            (b) Arbitration. In the event of any dispute between the parties
under or relating to this Agreement or relating to the Executive's employment by
the Company, such dispute shall be submitted to and settled by arbitration in
the Commonwealth of Virginia in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association then in effect, by an
arbitrator or arbitrators selected in accordance with said rules. The
arbitrator(s) shall have the right and authority to determine how their award or
decision as to each issue and matter in dispute may be implemented or enforced.
Any decision or award shall be final and conclusive on the parties; there shall
be no appeal therefrom other than for claimed bias, fraud or misconduct by the
arbitrator(s); judgment upon any award or decision may be entered in any court
of competent jurisdiction in the Commonwealth of Virginia or elsewhere; and the
parties hereto consent to the application by any party in interest to any court
of competent jurisdiction for confirmation or enforcement of such award. The
party against whom a decision or award is made shall pay the fees of the
American Arbitration Association. Notwithstanding the foregoing, the Company, at
its sole option, shall be entitled to enforce its rights, as contemplated by
Section 6(a) hereof, to injunctive and other equitable relief in the event of
breach of Section 4 or 5 hereof by arbitration pursuant to this Section 6(b) or
directly in any court of competent jurisdiction.

      7.    Termination of Employment.

            (a) Death. The Executive's employment hereunder shall terminate in
the event of Executive's death. Except for any salary and benefits accrued,
vested and unpaid as of the date of any such termination and except for any
benefits to which the Executive or his heirs or personal representatives may be
entitled under and in accordance with the terms of any employee benefit plan,
policy or program maintained by the Company, the Company shall be under no
further obligation hereunder to the Executive or his heirs or personal
representatives, and the Executive or his heirs and personal representatives no
longer shall be entitled to receive any payments or any other rights or benefits
under this Agreement.

            (b) Disability. The Company may terminate the Executive's employment
hereunder for "Disability," if an independent physician mutually selected by the
Executive or his representative and the Board of Directors or its designee has
determined that the Executive has been substantially unable to render to the
Company services of the character contemplated by Section 2 of this Agreement,
by reason of a physical or mental illness or other condition continuing for more
than one hundred and eight (180) consecutive days or for shorter periods
aggregating more than two hundred and twenty (220) days in any period of twelve
(12) consecutive months (excluding in each case days on which the Executive was
on vacation). In the event of such Disability, the Executive shall be entitled
to receive any salary and benefits accrued, vested and unpaid as of the date of
any such termination and any benefits to which the Executive may be entitled
under and in accordance with the terms of any employee benefit plan, policy or
program maintained by the Company. The Company shall be under no further
obligation hereunder to the Executive, and the Executive no longer shall be
entitled to receive any other payments, rights or benefits under this Agreement.


                                       4

<PAGE>


            (c) Termination by the Company for Cause. The Company may terminate
the Executive's employment hereunder for "Cause." For purposes of this
Agreement, "Cause" shall mean any of the following:

                     (i) The Executive's repeated willful misconduct or gross
negligence;

                    (ii) The Executive's repeated conscious disregard of his
obligations hereunder;

                   (iii) The Executive's repeated conscious violation of any
provision of the Company's by-laws or of its other stated policies, standards or
regulations;

                    (iv) A determination that the Executive has demonstrated a
dependence upon any addictive substance, including alcohol, controlled
substances, narcotics or barbiturates;

provided, however, that if the Board of Directors of the Company desires to
terminate the Executive for any of the reasons set forth in clauses (i), (ii) or
(iii) of this Section 7(c), the Company within the sixty (60) day period
immediately following each alleged commission of a proscribed act or omission,
shall have furnished to the Executive a written description of the allegedly
proscribed act or omission and a statement advising him that the Company views
such conduct as being of the type that could lead to a termination of the
Executive for Cause and, provided further, that if the Board of Directors of the
Company desires to terminate the Executive on the basis of clause (iii) of this
Section 7(c), it must be able to demonstrate that the Executive has been
furnished with a copy of the by-law provision, policy, standard or regulation,
the violation of which the Executive is being accused, at a time prior to the
alleged commission of the violation.

      In the event that the Company terminates the Executive's employment for
Cause, the Executive shall be entitled to receive a severance benefit of two (2)
months' Base Salary in effect at the time of termination. The Executive shall
not be entitled to receive any other payments or any other rights or benefits
under this Agreement (except for any salary and benefits accrued, vested and
unpaid as of the date of any such termination); the Company shall be under no
further obligation hereunder to the Executive, and the Company shall have such
rights and remedies as may be available to it for any breach of this Agreement
or otherwise.

            (d) Termination by the Company other than for Cause. The Company may
terminate the Executive's employment hereunder at any time for any other reason,
provided that the Company has given the Executive ninety (90) days' written
notice of termination, termination being effective upon expiration of the notice
period. In the event of such termination, the Executive shall be entitled to
receive a severance benefit equal to Base Salary at the rate in effect at the
time of termination for the remainder of the Initial Term or for eighteen (18)
months, whichever is the greater, and shall also be entitled to receive any
salary and benefits accrued, vested and unpaid as of the date of any such
termination and any benefits to which the Executive


                                       5

<PAGE>


may be entitled under and in accordance with the terms of any employee benefit
plan, policy or program maintained by the Company; and upon the Executive's
receipt of such severance benefit, salary and benefits, the Company shall be
under no further obligation hereunder to the Executive and the Executive no
longer shall be entitled to receive any payments or any other rights or benefits
under this Agreement.

            (e) Termination by the Executive for Good Reason. Notwithstanding
anything herein to the contrary, the Executive shall be entitled to terminate
his employment hereunder for "Good Reason" without breach of this Agreement. For
purposes of this Agreement, "Good Reason" shall exist in the event of any of the
following:

                     (i) A change in the Executive's place of employment outside
of a 100-mile radius of Loudoun County, Virginia;

                    (ii) A material change in title or a substantial elimination
of the duties and responsibilities of the Executive;

                   (iii) A failure of the Executive to be elected to the
Company's Board of Directors, or, once elected, his removal therefrom other than
in connection with a termination of his employment hereunder;

                    (iv) A material breach by the Company of its obligations
hereunder.

                     (v) A change in control of the Company; provided that, for
purposes of this Section 7(e)(v), a "change in control of the Company" shall
mean (A) the acquisition, directly or indirectly, by any "person" (as such term
is defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934 as
in effect on the date hereof), of voting power over voting shares of the Company
that would be entitle holders thereof to cast at least twenty percent (20%) of
the votes that all shareholders would be entitled to cast in the election of
directors of the Company; or (B) during any period of two consecutive years
during the Initial Term of this Agreement, individuals who at the beginning of
such period constitute the Company Board of Directors cease for any reason to
constitute at least a majority thereof, unless the election of each director who
is not a director at the beginning of such period shall have been approved in
advance by directors representing at least three fourths of the directors then
in office who are directors at the beginning of such period.

      In the event of such termination by the Executive, the Executive shall
nonetheless be entitled to receive a severance benefit equal to Base Salary at
the rate in effect at the time of termination for the remainder of the Initial
Term or for eighteen (18) months, whichever is the greater. Except for such
severance benefit and except for any salary and benefits accrued, vested and
unpaid as of the date of such termination, the Executive no longer shall be
entitled to receive any payments or any other rights or benefits under this
Agreement, and the Company shall have no further obligation hereunder to the
Executive following any such termination.


                                       6

<PAGE>


            (f) Termination by the Executive for other than Good Reason. The
Executive may terminate his employment hereunder at any time for any other
reason, provided the Executive has given the Company one hundred eighty (180)
days' written notice of termination, termination being effective upon expiration
of the notice period. In the event of such termination, the Executive shall be
entitled to receive any salary and benefits accrued, vested and unpaid as of the
date of any such termination and any benefits to which the Executive may be
entitled under and in accordance with the terms of any employee benefit plan,
policy or program maintained by the Company. The Company shall be under no
further obligation hereunder to the Executive and the Executive no longer shall
be entitled to receive any other payments, rights or benefits under this
Agreement.

            (g) Pro-Rata Bonus. Whenever, pursuant to this Section 7, the
Executive is entitled, upon the termination of his employment, to receive
"salary...accrued, vested and unpaid as of the date of any such termination",
the amount due him shall include a pro-rata performance bonus, determined in
accordance with the provisions of the Senior Management Incentive Bonus Plan.

      8. Place of Employment. The Company agrees that the principal location at
which the Executive is to render his services hereunder will be within a
100-mile radius of Loudoun County, Virginia.

      9. Withholding. Anything to the contrary herein notwithstanding, all
payments required to be made hereunder by the Company to the Executive, or his
estate or beneficiaries, shall be subject to the withholding of such amounts as
the Company may reasonably determine it should withhold pursuant to any
applicable law or regulation.

      10. Survival. The Agreement shall survive any termination of the
Executive's employment hereunder unless otherwise provided herein.

      11.   Miscellaneous.

            (a) Successors and Assigns. The Company may assign this Agreement
to, and only to, an entity which is owned more than fifty percent (50%),
directly or indirectly, by the Company, and any person or entity which acquires
all or substantially all of the Company's business, and, subject to the
foregoing, upon such assignment this Agreement shall inure to the benefit of and
be binding upon such entity. This Agreement shall not be assignable by the
Executive and shall inure to the benefit of and be binding upon him and his
personal representative and other legal representatives. It is understood that
this Section 11(a) shall not affect the right of the Executive to terminate his
employment for "Good Reason" pursuant to Section 7(e) hereof.

            (b) Notice. Any notice or communication required or permitted under
this Agreement shall be made in writing or sent by certified or registered mail,
return receipt requested and postage prepaid, addressed as follows:


                                       7

<PAGE>


            If to the Executive:

                  John F. Ripley
                  35481 Troon Court
                  Round Hill, Virginia 20141

            If to the Company:

                  Precision Auto Care, Inc.
                  748 Miller Drive, S.E.
                  P.O. Box 5000
                  Leesburg, Virginia  22075
                  Attention: Arnold Janofsky, Esq.

or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above. Notice shall be
deemed given when received by the other party, including by his or its agent.

            (c) Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding of the parties relating to the subject matter hereof
and supersedes all prior discussions, agreements and understandings relating
thereto between them. This Agreement may not be changed or modified, except by
an agreement in writing executed by the Company, with the approval of its Board
of Directors or its designee, and by the Executive.

            (d) Waiver. The waiver of a breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.

            (e) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement, and the performance
of the obligations imposed by this Agreement, shall be governed by the laws of
the Commonwealth of Virginia applicable to contracts made and wholly to be
performed in such state, without regard to choice of law principles.

            (f) Severability. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable, in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of the Agreement. Such
invalid, illegal or unenforceable provision(s) shall be deemed modified to the
extent necessary to make it (them) valid, legal and enforceable.

            (g) Indemnification. The Executive shall be entitled to the benefit
of the indemnification provided by Article 7 of the Bylaws of the Company;
provided that the Company shall be permitted to amend such provision from time
to time so long as the Executive, to the extent permitted by applicable law, is
afforded indemnification at least as favorable as that provided by Such Article
7 as in effect on the date hereof.


                                       8

<PAGE>


            (h) Captions. All captions and section headings used herein are for
convenient reference only and do not form a part of this Agreement.

            (i) Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute one and the same Agreement.

            (j) Computation of Time. In computing any period of time pursuant to
this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday, Sunday,
or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday, or legal holiday. Likewise, if the period of
time concludes on a Saturday, Sunday or a legal holiday, the period shall run
until the end of the next day thereafter which is not a Saturday, Sunday, or
legal holiday.

            (k) Pronouns and Plurals. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular, or plural
as the identity of the person or persons may require.

      12. Executive's Legal Fees. The Company shall reimburse Executive for the
reasonable legal fees incurred by him in connection with the transaction which
is the subject of this Agreement.

      IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day and year first above written.

                                       PRECISION AUTO CARE, INC.


                                       By:
                                            ________________________________

                                       Name:   Lynn E. Caruthers
                                       Title:  Chairman of the Board


                                       _____________________________________
                                       John F. Ripley