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                           NEW YORK BAGEL ENTERPRISES, INC.

                         UNIFORM FRANCHISE OFFERING CIRCULAR
                             FOR PROSPECTIVE FRANCHISEES


                   Information for Prospective Franchisees Required
                             by Federal Trade Commission

                                      **********

To protect you, we've required your franchisor to give you this information.  WE
HAVEN'T CHECKED IT, AND DON'T KNOW IF IT'S CORRECT.  It should help you make up
your mind.  Study it carefully.  While it includes some information about your
contract, don't rely on it alone to understand your contract.  Read all of your
contract carefully.  Buying a franchise is a complicated investment.  Take your
time to decide.  If possible, show your contract and this information to an
advisor, like a lawyer or an accountant.  If you find anything you think may be
wrong or anything important that's been left out, you should let us know about
it.  It may be against the law.

There may also be laws on franchising in your state.  Ask your state agencies
about them.


                                                      Federal Trade Commission.

                                                        WASHINGTON, D.C. 20580

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                             FRANCHISE OFFERING CIRCULAR

     New York Bagel Enterprises, Inc.
     A Kansas Corporation
     250 N. Water
     Wichita, Kansas 67202
     (316) 267-7373

     The franchisee will operate a delicatessen type restaurant featuring
freshly baked bagels and certain other food products and beverages.

     The initial franchise fee to operate a restaurant with a bakery (a "Bakery
Restaurant") is $21,000 and to operate a restaurant without a bakery (a
"Satellite Restaurant") is $12,000.  The estimated initial investment for a
Bakery Restaurant ranges from $195,000 to $293,500 and for a Satellite
Restaurant ranges from $104,500 to $175,000.  These ranges exclude real estate
costs.  The initial development fee will generally be the sum of $7,000 times
the number of Bakery Restaurants and $4,000 times the number of Satellite
Restaurants to be developed.  If we grant a franchise under a Development
Agreement, you will pay an additional development fee of $14,000 for each Bakery
Restaurant and $8,000 for each Satellite Restaurant in lieu of the entire
initial franchise fee described above.

Risk Factors:

1.   THE FRANCHISE AGREEMENT AND THE DEVELOPMENT AGREEMENT PERMIT THE FRANCHISEE
     OR DEVELOPER TO SUE OR ARBITRATE WITH US ONLY IN THE STATE OF KANSAS.  OUT
     OF STATE LITIGATION OR ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE
     SETTLEMENT FOR DISPUTES.  IT MAY ALSO COST YOU MORE TO SUE OR ARBITRATE
     WITH US IN KANSAS THAN IN YOUR HOME STATE.

2.   THE FRANCHISE AGREEMENT AND THE DEVELOPMENT AGREEMENT STATE THAT KANSAS LAW
     GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS
     AND BENEFITS AS LOCAL LAW.  YOU MAY WANT TO COMPARE THESE LAWS.

3.   THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

          Information comparing franchisors is available at your public library.

          If you learn that anything in the Offering Circular is untrue, contact
the Federal Trade Commission.


                            Effective Date: March 27, 1997

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                              TABLE OF CONTENTS

ITEM                               HEADING                             PAGE
----                               -------                             ----

 1   The Franchisor, its Predecessors and Affiliates. . . . . . . . . .  1

 2   Business Experience. . . . . . . . . . . . . . . . . . . . . . . .  2

 3   Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

 4   Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

 5   Initial Franchise Fee. . . . . . . . . . . . . . . . . . . . . . .  6

 6   Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

 7   Initial Investment . . . . . . . . . . . . . . . . . . . . . . . . 11

 8   Restrictions on Sources of Products and Services . . . . . . . . . 14

 9   Franchisee's Obligations . . . . . . . . . . . . . . . . . . . . . 15

10   Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

11   Franchisor's Obligations . . . . . . . . . . . . . . . . . . . . . 18

12   Territory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

13   Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

14   Patents, Copyrights and Proprietary Information. . . . . . . . . . 32

15   Obligation to Participate in the Actual Operation of the 
      Franchise Business. . . . . . . . . . . . . . . . . . . . . . . . 33

16   Restrictions on What the Franchisee May Sell . . . . . . . . . . . 34

17   Renewal, Termination, Transfer and Dispute Resolution. . . . . . . 35

18   Public Figures . . . . . . . . . . . . . . . . . . . . . . . . . . 41


                                    -i-

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19   Earnings Claims. . . . . . . . . . . . . . . . . . . . . . . . . . 41

20   List of Outlets. . . . . . . . . . . . . . . . . . . . . . . . . . 42

21   Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 49

22   Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

23   Receipt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50



EXHIBITS

     A.   Development Agreement

     B.   Franchise Agreement

     C.   Guaranty (of Franchise Agreement)

     D.   Guaranty (of Development Agreement)

     E.   Covenant Agreement

     F.   Confidentiality Agreement

     G.   Addendum to Lease Agreement

     H.   Financial Statements



                                    -ii-

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                                        ITEM 1

                   THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES


     To simplify the language in this Offering Circular "we", "us", and "NYBE"
mean New York Bagel Enterprises, Inc., the franchisor, but do not include the
corporation's officers, directors, or shareholders.  "You" means the person that
buys the franchise, and if you are a corporation, partnership, or limited
liability company, certain provisions of the Franchise Agreement and the
Development Agreement will include your owners.  NYBE is a Kansas corporation
which was incorporated on December 27, 1995.  NYBE is the successor by merger to
New York Bagel Enterprises, Inc., an Oklahoma corporation which was
incorporated on May 24, 1990 ("NYBE-Oklahoma").  NYBE does not currently do
business under another name.  NYBE's (and NYBE-Oklahoma's) principal business
address is 250 N. Water, Wichita, Kansas 67202.

     We franchise the right to operate a quick service bakery and delicatessen
type restaurant featuring freshly made bagels and deli-style sandwiches, under
the name "NEW YORK BAGEL CAFE & DELI."  These restaurants operate under a unique
system developed by us for the efficient management and operation of clean,
attractive, and distinctive restaurants and for the production and sale of high
quality food products at these restaurants under a uniform method of operation.
Our system includes special recipes and menu items; distinctive design, decor,
color scheme, and furnishings; standards, specifications, and procedures for
operations; procedures for quality control; training and assistance; and
advertising and promotional programs (the "System").  The System is identified
by means of certain trade names, service marks, and trademarks, including the
marks "NEW YORK BAGEL CAFE & DELI" and "NYB", and any other trade names, service
marks, and trademarks as we may designate for System identification (the
"Marks"). 

     We offer a development agreement (the "Development Agreement") in the form
attached as Exhibit A.  The Development Agreement grants the right and
obligation to establish and operate a certain number of New York Bagel Cafe and
Delicatessen restaurants (collectively, the "Restaurants"; individually, a
"Restaurant") in a specified area (the "Assigned Area") at specific locations to
be designated in separate franchise agreements.  You will establish each
Restaurant under the development schedule in the Development Agreement.  The
Development Agreement provides exclusivity and a right of first refusal to you
for additional Restaurants within the Assigned Area.  As a condition to
exercising the development right for each Restaurant, you must secure a location
approved by us.  After we approve the location for the Restaurant, you must sign
a franchise agreement (the "Franchise Agreement") in the form attached as
Exhibit B for each right to develop a Restaurant exercised under the Development
Agreement.  The Franchise Agreement governs the construction and operation of
the Restaurant at the approved location and provides an area of exclusivity
within a radius of the approved location (the "Assigned Territory").  In certain
areas, we may offer individual Franchise Agreements for the 


                                    -1-

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establishment and operation of one Restaurant at a specified location.  You 
will pay separate fees for the Development Agreement and the Franchise 
Agreement.  The franchise offered is for the establishment and operation of a 
Restaurant under the Franchise Agreement.

     Typically, franchisees open a Bakery Restaurant first. Later, franchisees
may operate Satellite Restaurants located within a short distance from the
Bakery Restaurant under separate Franchise Agreements for each Satellite
Restaurant entered into under the Development Agreement.  The initial franchise
fee and the total initial investment for a Satellite Restaurant is significantly
lower than that of a Bakery Restaurant.  A Satellite Restaurant sells bagels and
bakery items prepared at a Bakery Restaurant and does not have the substantial
investment in ovens and other equipment.  We are not obligated to grant a
franchise for a Satellite Restaurant, except under the terms of the Development
Agreement.

     Customers of NEW YORK BAGEL CAFE & DELI Restaurants are typically consumers
in need of quick service meals for breakfast or lunch.  Competitors include
major fast food chains who serve both breakfast and lunch, doughnut shops,
delicatessens, and sandwich shops.

     There are no regulations specific to the quick food service industry,
although you must comply with all local, state, and federal health and
sanitation laws in the operation of your Restaurant.  Other laws may be
applicable to your business and we urge you to make inquiries about these laws.

     The first NEW YORK BAGEL CAFE & DELI was opened in Stillwater, Oklahoma 
in 1986 by New York Bagel Shop, Inc., an Oklahoma corporation.  In 1990, 
NYBE-Oklahoma was formed to begin franchising NEW YORK BAGEL CAFE & DELI 
restaurants and it acquired the rights to trade names, service marks, and 
trade secrets from New York Bagel Shop, Inc.  NYBE-Oklahoma began offering 
franchises for Restaurants in January, 1993.  NYBE-Oklahoma was merged into 
NYBE on December 28, 1995.  New York Bagel Shop, Inc., has not offered 
franchises for restaurants or any other type of business, nor has NYBE nor 
NYBE-Oklahoma offered franchises for any other type of business.

                                        ITEM 2

                                 BUSINESS EXPERIENCE


PRESIDENT AND CHIEF EXECUTIVE 
OFFICER/DIRECTOR: ROBERT J. GERESI

     Mr. Geresi was employed as either president or vice-president of New York
Bagel Shop, Inc. (1985), New York Bagel Shop & Delicatessen, Inc. (1992), VPR,
Incorporated (1988), 


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Bagel Boss, Inc. (1990), and Bagels of Norman, Inc. (1994) from the bracketed 
dates.  Each of these corporations was based in Stillwater, Oklahoma, except 
for New York Bagel Shop & Delicatessen, Inc., which was based in Wichita, 
Kansas.  Each of these corporations merged into NYBE-Oklahoma on December 28, 
1995.  Mr. Geresi's chief duties for each of these corporations included 
financial management, quality control, and inventory management.  Mr. Geresi 
was also a director of and employed by NYBE-Oklahoma since May 24, 1990, 
where his duties included financial management, franchise marketing, 
training, and service.  Mr. Geresi's duties at NYBE include financial 
management, franchise marketing, training, and service.

VICE PRESIDENT/DIRECTOR: PAUL T. SORRENTINO

     Since 1986, Mr. Sorrentino has been employed as either president or
vice-president of New York Bagel Shop, Inc. (1985), New York Bagel Shop &
Delicatessen, Inc. (1992), VPR, Incorporated (1988), Bagel Boss, Inc. (1990),
and Bagels of Norman, Inc. (1994) from the bracketed dates.  Each of these
corporations was based in Stillwater, Oklahoma, except for New York Bagel Shop &
Delicatessen, Inc., which was based in Wichita, Kansas.  Each of these
corporations merged into NYBE-Oklahoma on December 28, 1995.  Mr. Sorrentino's
chief duties for each of these corporations included marketing, lease
negotiations, and expansion plans.  Mr. Sorrentino was also a director of and
was employed by NYBE-Oklahoma since May 24, 1990, where his duties included
franchise marketing, training, and service.  Mr. Sorrentino's  duties at NYBE
include franchise marketing, training, and service.

VICE PRESIDENT/DIRECTOR: VINCENT VRANA

     In 1986, Mr. Vrana was employed as the manager of the first New York Bagel
Shop & Delicatessen in Stillwater, Oklahoma, which was and is owned by New York
Bagel Shop, Inc. (1985).  Mr. Vrana's duties included supervision of employees,
inventory management, and bookkeeping.  Since 1988, Mr. Vrana has been employed
as president or vice-president of VPR, Incorporated (1988), Bagel Boss, Inc.
(1990), New York Bagel Shop & Delicatessen, Inc. (1992), and Bagels of Norman,
Inc. (1994) from the bracketed dates.  Each of these corporations was based in
Stillwater, Oklahoma, except for New York Bagel Shop & Delicatessen, Inc., which
was based in Wichita, Kansas.  Each of these corporations merged into 
NYBE-Oklahoma on December 28, 1995.  Mr. Vrana's chief duties for each of these
corporations included purchasing, baking production, and employee relations. 
Mr. Vrana was a director of and was employed by NYBE-Oklahoma since May 24, 
1990, where his chief duty was operations management.  Mr. Vrana's chief duty 
at NYBE is operations management.


                                    -3-

<PAGE>

VICE PRESIDENT/DIRECTOR: PAUL R. HOOVER

     Mr. Hoover purchased a franchise to operate a New York Bagel & Delicatessen
satellite restaurant in March of 1994.  Mr. Hoover joined NYBE-Oklahoma and NYBE
as a Director and Vice President effective as of July 1, 1994.  His principal
duties at NYBE-Oklahoma and NYBE include franchise marketing and administration.
Since 1984, Mr. Hoover has been a director and stockholder of West-Kan Foods,
Inc., a Wendy's franchisee.  Since 1990, Mr. Hoover has also been the owner of
Paul R. Hoover Real Estate Company.


DIRECTOR: DAVID L. MURFIN

     Mr. Murfin joined NYBE-Oklahoma as a Director effective as of July 1, 1994.
Since January, 1990, Mr. Murfin has been president of Murfin Drilling Company,
Wichita, Kansas.


DIRECTOR: WILLIAM S. ATHERTON

     Mr. Atherton joined NYBE as a Director in January of 1996.  Since 1986, Mr.
Atherton has been a partner of Atherton & Murphy Investment Company, an
investment partnership located in Tulsa, Oklahoma.


DIRECTOR: WILLIAM J. WALSH, JR. 

     Mr. Walsh joined NYBE as a Director in December of 1996.  Since 1978, Mr.
Walsh has served as President and Chief Operating Officer of Daland Corporation,
a multi-unit, multi-state Pizza Hut franchisee based in Wichita, Kansas.


DIRECTOR: STANLEY K. CLARK.

     Mr. Clark Joined NYBE as a Director in December of 1996.  Since 1975, Mr.
Clark has served as the Chief Executive Officer of Stan Clark Companies, a
restaurant company based in Stillwater, Oklahoma.


CHIEF FINANCIAL OFFICER, SECRETARY, AND TREASURER: JON H. CRAMER.  

     Mr. Cramer joined NYBE in December, 1996 as Chief Financial Officer,
Secretary, and Treasurer.  From July, 1988 to December, 1996, Mr. Cramer was
employed by KPMG Peat Marwick LLP, most recently as a Senior Audit Manager, in
its Wichita, Kansas offices. 


                                    -4-

<PAGE>

DIRECTOR OF FRANCHISE DEVELOPMENT: MARKUS K. SCHOLLER

     Mr. Scholler joined NYBE-Oklahoma in October, 1994.  His principal duties
include providing operational support, training, and development for
franchisees.  From November 5, 1990 to October 2, 1994, Mr. Scholler was
training general manager for J.S. Ventures, Inc., a franchisee of Applebees
Neighborhood Grill & Bar, Wichita, Kansas.  From September, 1986 to September,
1990, Mr. Scholler was manager/managing partner of Midco Foods, Inc., a
franchisee of T.J. Cinnamons Bakery, Wichita, Kansas.

FRANCHISE BROKER: DOUGLAS W. BURFORD.

     Mr. Burford became a franchise broker for NYBE for a portion of the State
of Florida in December of 1996.  Since 1985, Mr. Burford has been President of
Burford Enterprises, Inc., a real estate/investment/development company, of Ft.
Myers, Florida.

FRANCHISE BROKER: DIRK ATHERTON.

     Mr. Atherton became a franchise broker for NYBE for a portion of the State
of Florida in December of 1996. Since 1990, Mr. Atherton has owned and operated
Iguana Mia, a restaurant in Cape Coral, Florida.


                                        ITEM 3

                                      LITIGATION

     MICHAEL VARENHORST AND DEBORAH A. VARENHORST V. PAUL R. HOOVER, CHERI M.
HOOVER, MIDWEST PEST CONTROL, WILLIAM P. VEATCH, SR. D/B/A QUALITY BUILDING
INSPECTION SERVICE, BECK ROOFING & CONSTRUCTION, LAWRENCE BECK, J.P. WEIGAND &
SONS, INC., SALLY VOLBRECHT, AND DONNA BEARD D/B/A DONNA BEARD REAL ESTATE (Case
No. 95 C 2540 in the Eighteenth Judicial District, Sedgwick County, Kansas) was
filed on November 22, 1995.  The plaintiffs contracted to purchase a house from
Mr. Hoover and his wife in October 1993.  Plaintiffs now allege that the
property had termite or carpenter ant damage, a roof problem, a breakdown in
some heating and cooling equipment and related defects.  Plaintiffs allege that
(i) Hoovers negligently or intentionally failed to disclose the alleged defects
in the property, (ii) the real estate agent and broker who represented
plaintiffs in the purchase breached their fiduciary duties by negligently or
intentionally failing to discover or disclose the alleged defects, (iii) the
real estate broker who listed the property for Hoovers negligently failed to
disclose or fraudulently concealed the alleged defects, (iv) the pest inspector
hired by plaintiffs negligently or intentionally failed to 


                                    -5-

<PAGE>

discover and disclose insect damage, (v) the building inspector hired by 
plaintiffs breached his contract to competently inspect the property and 
negligently failed to discover and disclose the alleged defects, and (vi) the 
roofer misrepresented to plaintiffs that the roof he had installed on the 
property during Hoovers' ownership was "first class" and a "twenty-year 
roof".  Plaintiffs seek to recover money damages allegedly in excess of 
$50,000.  Hoovers have denied all material allegations of the plaintiffs' 
petition and are vigorously defending the action.

     Except for this action, no litigation is required to be disclosed in this
Offering Circular.


                                        ITEM 4

                                      BANKRUPTCY

     No person previously identified in Items 1 or 2 of this Offering Circular
has been involved as a debtor in proceedings under the U.S. Bankruptcy Code
required to be disclosed in this Item.


                                        ITEM 5

                                INITIAL FRANCHISE FEE

     We offer a Development Agreement to establish more than one Restaurant
under a development schedule.  We also offer in certain geographical areas a
Franchise Agreement to establish one Restaurant.

     Under the Development Agreement, you must pay us an initial fee of $7,000
per Bakery Restaurant and $4,000 per Satellite Restaurant required to be
developed in the Assigned Area.  The number of Restaurants is determined by
agreement between you and us before the Development Agreement is signed.  In
addition to establishing the number of Restaurants you must develop in the
Assigned Area, the development schedule in the Development Agreement will also
specify when each of the Restaurants must be constructed and opened.  You must
pay the entire amount of the initial development fee in a lump sum to us at the
time the Development Agreement is signed.  The development fee is nonrefundable.

     You must pay an initial franchise fee of $21,000 for a Bakery Restaurant or
$12,000 for a Satellite Restaurant when you sign a Franchise Agreement for the
Restaurant.  You must operate each Restaurant under a separate Franchise
Agreement, and this fee must be paid in a lump sum to us when each Franchise
Agreement is signed.  The initial franchise fee is nonrefundable.  However, if
you sign a Franchise Agreement under a Development Agreement, you will pay an
additional development fee of $14,000 for a Bakery Restaurant or $8,000 for 


                                    -6-

<PAGE>

a Satellite Restaurant in lieu of the entire initial franchise fee described 
above.  Consequently, if you are developing a single Restaurant, you will pay 
a single initial franchise fee per Restaurant, and if you are signing a 
Development Agreement, you will pay an initial development fee of $7,000 
multiplied by the number of Bakery Restaurants to be developed and $4,000 
multiplied by the number of Satellite Restaurants to be developed when you 
sign the Development Agreement, plus an additional development fee of $14,000 
per Bakery Restaurant ($21,000 less $7,000) or $8,000 per Satellite 
Restaurant ($12,000 less $4,000) when you sign the Franchise Agreement for 
each Restaurant.

                                        ITEM 6

                                      OTHER FEES

<TABLE>
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  NAME OF FEE(1)                AMOUNT                DUE DATE                                REMARKS
--------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                        <C>                     <C>
 Royalty               4% of Gross Receipts       Payable monthly         Gross Receipts means all gross revenue during each   
                                                  on the 15th day         month of every kind or nature related to the NYBE    
                                                  of the next months      Restaurant, including all restaurant revenue posted  
                                                                          whether it is collected or remains uncollected, all  
                                                                          charges for other products, services, and facilities 
                                                                          and vending machine receipts, but excluding sales    
                                                                          taxes or other taxes collected by you from customers 
                                                                          for transmittal to appropriate taxing authorities.   
                                                                          See also Item 9.
--------------------------------------------------------------------------------------------------------------------------------
 Marketing and         Maximum - 2% of monthly    Upon establish-         We can establish and administer a Marketing and
 Advertising Fund(2)   Gross Receipts             ment of a Marketing     Advertising Fund which would be used to pay for the
                                                  and Advertising Fund,   costs of developing and preparing advertising
                                                  payable monthly on      materials for use within the System. See also Items
                                                  the 15th day of the     8, 9, and 11.
                                                  next month
--------------------------------------------------------------------------------------------------------------------------------
 Cooperative           Maximum - 2% of            Upon establish-         We can designate geographic areas for purposes of
 Advertising(3)        monthly Gross              ment of an              establishing local or regional advertising
                       Receipts                   Advertising             cooperatives for the System. See also Items 8, 9, 
                                                  Cooperative,            and 11.
                                                  payable monthly
                                                  on the 15th day
                                                  of the next month
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                                    -7-

<PAGE>
--------------------------------------------------------------------------------------------------------------------------------
  NAME OF FEE(1)                AMOUNT                DUE DATE                                REMARKS
--------------------------------------------------------------------------------------------------------------------------------
 Additional            Daily Training Fee            Upon demand          We will provide initial training at no cost to you
 Training              at NYBE's                                          although you must pay your employees' travel,
                       standard rate,                                     lodging, and food expenses. You must reimburse us for
                       which is currently                                 training replacement personnel and other required or
                       $75 per day, plus                                  optional training we may provide your employees. See
                       out of pocket                                      also Items 9 and 11.
                       expenses.
--------------------------------------------------------------------------------------------------------------------------------
 New Product/          Costs of inspection           Upon demand          We may inspect and test samples of items you desire
 Service Testing       and testing                                        to purchase or lease from a source not previously
                                                                          approved by us in writing. You or the proposed source
                                                                          must pay the reasonable expenses of the testing or
                                                                          inspection. See also Item 8.
--------------------------------------------------------------------------------------------------------------------------------
 Additional            Daily Training Fee            Upon demand          We will provide initial on-site assistance for the
 Assistance            at NYBE's standard                                 opening of your first Restaurant at no cost to you.
                       rate, which is currently                           You must pay a reasonable daily assistance fee and
                       $75 per day, plus out of                           expenses for travel, lodging, and meals for each
                       pocket expenses.                                   member of NYBE personnel providing any other
                                                                          assistance to you. See also Items 9 and 11.        
--------------------------------------------------------------------------------------------------------------------------------
 Audit Expenses        Costs of audit,               Upon demand          Payable if audit shows an under-statement of at 
                       including travel,                                  least 2% of reported Gross Receipts for any month.
                       lodging, and fees or                               Also payable if you fail to file required financial
                       wages of personnel of                              reports. See also Item 9.
                       NYBE or third parties
                       required to conduct 
                       the audit. 
--------------------------------------------------------------------------------------------------------------------------------
 Transfer              $2,500                        Before               Payable when you transfer an interest in the
                                                     consummation of      Franchise Agreement or the Development Agreement or
                                                     transfer             when a controlling interest in you is transferred if
                                                                          transfer satisfies other conditions specified in the
                                                                          Development Agreement and the Franchise Agreement. No
                                                                          transfer fee is payable if you transfer the interest
                                                                          to us or to an entity you formed for convenience of
                                                                          ownership and not involving a change of beneficial
                                                                          ownership if the transfer satisfies other conditions
                                                                          specified in the Franchise Agreement. See also 
                                                                          Item 9.
--------------------------------------------------------------------------------------------------------------------------------


                                     -8-

<PAGE>
--------------------------------------------------------------------------------------------------------------------------------
  NAME OF FEE(1)                AMOUNT                DUE DATE                                REMARKS
--------------------------------------------------------------------------------------------------------------------------------
 Public Offering       $20,000                       As incurred          If our costs and expenses exceed $20,000, you must    
 Fee                                                                      pay us an additional amount to fully reimburse us for 
                                                                          our reasonable costs and expenses associated with
                                                                          reviewing the proposed offering, including legal and
                                                                          accounting fees. See also Item 9.
-----------------------------------------------------------------------------------------------------------------------------
 Renewal Fee           Amount equal to               Upon signing of      The renewal fee for a Bakery Restaurant is $10,500
                       one-half of initial           new Franchise        and for a Satellite Restaurant is $6,000. See 
                       franchise fee.                Agreement befor      also Item 9.
                                                     expiration of
                                                     initial term of
                                                     Francise Agreement.
-----------------------------------------------------------------------------------------------------------------------------
 Interest              1.5% per month or as          Upon demand          Payable on overdue amounts owed to us. Interest
                       allowed by law                                     begins from the date of the underpayment. See also
                                                                          Item 9.
-----------------------------------------------------------------------------------------------------------------------------
 Costs and             Will vary under the           As incurred          Payable if incurred by us in obtaining injunctive or
 Attorneys Fees        circumstances                                      other relief for the enforcement of any term in the
                                                                          Development Agreement or Franchise Agreement. See
                                                                          also Item 9.
-----------------------------------------------------------------------------------------------------------------------------
 Indemnification       Will vary under the           As incurred          You must reimburse us for claims arising from your
                       circumstances                                      Restaurant's operations or any occurrence at your
                                                                          Restaurant. See also Item 9.
-----------------------------------------------------------------------------------------------------------------------------
 Termination Fee(4)    Will vary under the           Upon termination     Amount due equals the sum of all franchise fees,
                       circumstances                 of the Franchise     royalty fees, and marketing and advertising fees for
                                                     Agreement when       the 18 calendar months of operation at the Restaurant
                                                     we terminate after   preceding your default. See also Item 9.
                                                     your default
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTES:

     (1)  Except for Cooperative Advertising, all fees and charges are imposed 
by and are payable to us.  All fees are nonrefundable.  At our option, you must
give us authorization to debit your bank operating account for the amount due.

     (2)  As of the date of the Offering Circular, the required Marketing and
Advertising Fund payment is one-half of one percent of Gross Receipts per month
and we reserve the right to increase the Marketing Fund payment to a maximum of
two percent per month.  You must spend a minimum of 4% of Gross Receipts per
year for media advertising and promotional materials.  We consider your
contributions to a Marketing and Advertising Fund a portion of the minimum
required advertising expenditure.


                                     -9-

<PAGE>

     (3)  We and our affiliates will participate in any cooperative 
established for geographic regions that include Restaurants owned by us or 
our affiliates.  No advertising cooperatives have yet been established.  
Whether our or our affiliates' Restaurants will have controlling voting power 
in any advertising cooperative will depend on the geographic region included 
in the cooperative. We own 26 Restaurants in Kansas, Missouri, New Mexico, 
Oklahoma, Tennessee and Texas.  You must spend a minimum of 4% of Gross 
Receipts per year for media advertising and promotional materials.  We 
consider your contributions to local or regional advertising cooperatives a 
portion of the minimum required advertising expenditure.

     (4)  If your Restaurant has been in operation for less than 18 months, 
the termination fee will be based on the period your Restaurant has been in 
operation and projected on an 18 calendar month basis.













                                     -10-

<PAGE>
                                       
                                    ITEM 7

                              INITIAL INVESTMENT

                      YOUR ESTIMATED INITIAL INVESTMENT


<TABLE>
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
                                     Amount
                           -------------------------
                             Bakery       Satellite                                    
      Description          Restaurant     Restaurant         Method of Payment         
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
<S>                        <C>            <C>             <C>
Initial Franchise Fee (1)   $21,000        $12,000        Lump sum with portion paid   
                                                          in advance under             
                                                          Development Agreement, if    
                                                          applicable.                  
---------------------------------------------------------------------------------------
Site Evaluation Expenses    $1,000 to      $1,000 to      As incurred                  
                            $2,500         $2,500                                      
---------------------------------------------------------------------------------------
Travel and Living           $2,500 to      $500 to        As incurred                  
Expenses While Training     $5,000         $2,500                                      
---------------------------------------------------------------------------------------
Leasehold                   $25,000 to     $15,000 to     Lump sum                     
Improvements (2)            $85,000        $50,000
---------------------------------------------------------------------------------------
Real Estate (2)             (Note 2)       (Note 2)       (Note 2)                     
---------------------------------------------------------------------------------------
Equipment and               $85,000 to     $35,000 to     Lump sum                     
Furniture (3)               $110,000       $65,000
---------------------------------------------------------------------------------------
Signs                       $2,000 to      $2,000 to      Lump sum                     
                            $5,000         $5,000
---------------------------------------------------------------------------------------
Miscellaneous Opening       $10,000        $10,000        As incurred                  
Costs (4)                                                                              
---------------------------------------------------------------------------------------

<CAPTION>
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
                                                       Whether         To Whom Payment      
      Description                 When Due            Refundable        is to be Made       
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
<S>                        <C>                        <C>             <C>
Initial Franchise Fee (1)  On signing Franchise          No           NYBE                  
                           Agreement or, partially on                                       
                           signing Development                                              
                           Agreement.                                                       
---------------------------------------------------------------------------------------
Site Evaluation Expenses   Before opening                No           Airlines, hotels,     
                                                                      restaurants           
---------------------------------------------------------------------------------------
Travel and Living          During training               No           Airlines, hotels,     
Expenses While Training                                               restaurants           
---------------------------------------------------------------------------------------
Leasehold                  Before opening                No           Vendors               
Improvements (2)                                                                            
---------------------------------------------------------------------------------------
Real Estate (2)            (Note 2)                      (Note 2)     (Note 2)              
---------------------------------------------------------------------------------------
Equipment and              Before opening                No           Vendors               
Furniture (3)                                                                               
---------------------------------------------------------------------------------------
Signs                      Before opening                No           Vendors               
---------------------------------------------------------------------------------------
Miscellaneous Opening      As incurred                   No           Suppliers, utilities, 
Costs (4)                                                             etc.                  
---------------------------------------------------------------------------------------
</TABLE>

                                      -11-
<PAGE>

<TABLE>
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
                                     Amount
                           -------------------------
                             Bakery       Satellite                                    
      Description          Restaurant     Restaurant         Method of Payment         
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>             <C>
Opening Inventory (5)       $6,000 to      $3,000         Lump sum                     
                            $10,000
---------------------------------------------------------------------------------------------------------
Advertising -               $2,500 to      $2,500 to      As incurred                  
3 months (6)                $5,000         $5,000                                      
---------------------------------------------------------------------------------------------------------
Additional Funds -          $40,000        $20,000        As incurred                  
3 months (7)                                                                           
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
   TOTAL ESTIMATED          $195,000 to    $104,500 to
INITIAL INVESTMENT          $293,500 (8)   $175,000 (8)   (THESE TOTALS DO NOT INCLUDE REAL ESTATE COSTS)
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------

<CAPTION>
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
                                                       Whether         To Whom Payment     
      Description                When Due            Refundable        is to be Made       
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
<S>                        <C>                       <C>              <C>
Opening Inventory (5)      Before opening                No           Vendors              
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Advertising -              As incurred                   No           Radio stations,      
3 months (6)                                                          newspapers           
-------------------------------------------------------------------------------------------
Additional Funds -         As incurred                   No           Employees,           
3 months (7)                                                          suppliers, utilities 
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
</TABLE>


NOTES: 


   (1) FRANCHISE FEE/DEVELOPMENT FEE.  If we grant the franchise under a 
Development Agreement, you must pay a development fee equal to one-third of 
the initial franchise fee upon your signing the Development Agreement.  We do 
not finance any portion of the fee.

   (2) REAL ESTATE AND IMPROVEMENTS.  Your land acquisition costs will vary 
depending upon a multitude of factors including whether the property is 
purchased or leased, the size and location of the property, and the 
availability of financing on commercially reasonable terms.  The typical 
Bakery Restaurant has 2,200 to 3,000 square feet.  The typical Satellite 
Restaurant has 1,500 to 2,500 square feet.  The Restaurant location will most 
likely be one accessible to vehicular traffic.  In addition, site improvement 
costs may vary based upon soil and environmental conditions, availability of 
utilities to the site, the topography of the site, the size of the parcel, 
local zoning, and other building requirements.  If you elect to purchase the 
site, we anticipate that the range of cost of the property plus the site 
improvements would be between $200,000 and $600,000 depending upon location 
and whether the Restaurant is a Bakery Restaurant or a Satellite Restaurant.  
Acquisition costs may exceed this range in certain cases or localities.  Most 
franchisees lease retail space for their Restaurant in strip shopping 
centers, malls, or in downtown areas.  Rent varies widely from location to 
location, but we estimate the rent to range from $25,000 to $60,000 per year 
depending upon the size, condition, and location of the leased premises.  A 
one month security deposit is also generally required.  The cost of 
remodeling the leased premises to meet our design specifications for 
leasehold improvements depends upon the condition and configuration of the 
existing retail space.

   (3) EQUIPMENT AND FURNITURE.  The dining area of the typical Restaurant 
has a seating capacity for approximately 40 to 70 persons.  Cost of furniture 
will vary based upon seating capacity.  Equipment cost includes all equipment 
necessary to operate the Restaurant including standard fixtures and equipment 
(including ovens, mixers, and other baking 

                                      -12-
<PAGE>

equipment if a Bakery Restaurant), refrigerators, serving line equipment, 
cash registers, point of sale computer systems, decor, and furniture 
(including retail equipment like beverage dispensers, coffee makers, cup 
dispensers, product display cases, etc.).

   (4) MISCELLANEOUS OPENING COSTS.  Includes security deposits for items 
other than real estate, utility costs, business permits, and prepaid expenses.

   (5) OPENING INVENTORY.  This amount represents the cost of baking 
ingredients (if a Bakery Restaurant), baked goods, deli-style meats and 
cheeses, chips, beverages, other assorted food products, paper products, and 
promotional items necessary to operate for approximately one week.

   (6) ADVERTISING.  You must conduct a grand opening advertising and 
promotional program for the Restaurant during the period commencing 7 days 
before and ending 90 days after its opening and to expend at least $2,500.  
You will be able to utilize the marketing and public relations and media 
materials we have developed or approved.  The cost of initial grand opening 
advertising is between $2,500 and $5,000 and depends greatly upon the market, 
media buying power, and the number of Restaurants in the existing market.  
This amount includes the estimated cost of newspaper and radio advertising, 
circulars, and coupons for the grand opening and the first three months of 
business.  It does not include the Marketing and Advertising Fund 
contribution of up to 2% of your monthly Gross Receipts which you must pay at 
our discretion, or contributions to any applicable advertising cooperatives 
of up to 2% of your monthly Gross Receipts.

   (7) ADDITIONAL FUNDS.  This amount represents an estimate of the funds 
needed to cover pre-opening expenses, initial employee wages, utility 
deposits, insurance premiums, licenses, permit costs, uniforms, recruitment, 
in-store training expense, various kitchen small wares, and additional 
opening capital for other variable costs (e.g., electricity, telephone, heat, 
etc.), paper, cleaning, and other supplies.  These figures are estimates and 
we cannot guarantee that you will not have additional expenses starting the 
business. Your costs will depend on various factors, including: how carefully 
you follow our methods and procedures for food preparation and operation; 
your management skill, experience, and business acumen; local economic 
conditions; your location; the local market for bagels; competition; the 
prevailing wage rate; and the sales level reached during the initial period.

   (8) TOTAL ESTIMATED INITIAL INVESTMENT.  This total estimated initial 
investment does not include any real estate costs.  We relied on our nine 
years of experience in the bakery and delicatessen business to compile these 
estimates.  You should review these figures carefully with a business advisor 
before purchasing the franchise.  We do not offer direct or indirect 
financing to franchisees for any items.  The availability and terms of 
financing will depend on several factors including the availability of 
financing generally, your creditworthiness, your available collateral, and 
lending policies of financial institutions.  The estimate does not include 
any finance charge, interest, or debt service obligation.

                                     -13-
<PAGE>

                                        ITEM 8

                              RESTRICTIONS ON SOURCES OF
                                PRODUCTS AND SERVICES


     We do not currently offer, for purchase or lease, any goods, services,
supplies, fixtures, equipment, inventory, computer hardware or software, or real
estate to franchisees.  You must purchase particular brands of deli-style meats
and cheeses only from a designated supplier to assure the quality of food
products and the health and safety of customers.  You must purchase a particular
brand of flour but we do not require you to make that purchase from a specific
supplier.  You must purchase particular types of equipment but we do not require
you to purchase a particular brand or purchase from a designated supplier.  You
must purchase only the types and/or brands of other food products, beverages,
ingredients, flavoring, garnishes, cartons, bags, boxes, napkins, containers,
and packaging supplies approved by us.  We do not require you to purchase these
items from a designated source.

     Mandatory specifications and quality standards are contained in the NYBE
Confidential Operating Manual (the "NYBE Manual") or in policy and procedure
statements otherwise communicated to franchisees in writing.  We may modify
these specifications and standards and you must comply with all of our
modifications.

     If you would like to sell any food products or beverage or use any
ingredients, flavorings, garnishes, containers, or packaging supplies of a type
not previously approved by us, you must notify us in writing and submit to us
whatever information, specifications, or samples that we request.  Within a
reasonable time (our goal is 30 days), we will notify you if the item meets our
specifications and quality standards.  You or the proposed supplier must
reimburse us for our reasonable expenses for inspection and testing.  We will
also base our decision upon review of the suppliers's business reputation,
delivery performance, credit rating, and liability insurance coverage.  For food
products, the quality of the product is of paramount importance to our decision
to approve a product.

     All items used in the operation of your Restaurant which require our
approval or which must meet our specifications which you will purchase or lease
from independent third party vendors.  The goods, equipment, supplies, and
ingredients which you must purchase from approved suppliers or under our
specifications represent 90% of your total purchases for the establishment of
your Restaurant.  Our criteria for supplier approval is generally not available
to our franchisees.  You do not receive any material benefits like renewal or
granting of additional franchises based upon your use of designated or approved
sources.

     Neither we nor our affiliates derive any revenue, rebates, or other
material consideration as a result of any purchases we require you to make.  We,
our affiliates, and you do, however, benefit from discounts from certain food
product suppliers as a result of our group purchasing 


                                    -14-

<PAGE>

power.  These discounts are the same for us, our affiliates, and our 
franchisees.  At this time, there are no organized purchasing or distribution 
cooperatives although local or regional advertising cooperatives may be 
formed in the future.  Item 11 of this Offering Circular describes 
advertising cooperatives in more detail.  We have negotiated national chain 
account purchase agreements with Pepsi and Frito Lay, which have agreed to 
make products available for purchase by franchisees at national chain account 
pricing.

     All your marketing and promotion in any manner or medium must be factual,
ethical, and in good taste in our judgment and must conform to our specified
standards and requirements.  You must submit to us (by mail, return receipt
requested), for our prior written approval (except for prices to be charged),
samples of all advertising or promotional plans and materials that you desire to
use and that have not been prepared or previously approved by us.  If you do not
receive written disapproval within 15 days from our receipt of your plans and
materials, we will be deemed to have approved.  You may not use any marketing or
promotional materials that we have not prepared or approved.  See Item 11 of
this Offering Circular for more information concerning advertising and
promotional requirements.

     You must construct or remodel your Restaurant in accordance with our
specifications.  You must also purchase or lease and use only the fixtures,
equipment, furniture, and signs as we may specify in the NYBE Manual or
otherwise approve.  We must approve in writing any alterations to our
specifications you propose to make before any work is begun on the proposed
alteration.

     You must furnish us copies of certain insurance policies required by the
Franchise Agreement and other evidence of insurance coverage and payment of
premiums as we may request.


                                        ITEM 9

                               FRANCHISEE'S OBLIGATIONS

THIS TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE FRANCHISE AND OTHER
AGREEMENTS.  IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR
OBLIGATIONS IN THESE AGREEMENTS AND IN OTHER ITEMS OF THIS OFFERING CIRCULAR.

<TABLE>
-----------------------------------------------------------------------------------------------------------------
                                                                                         ITEM IN OFFERING 
                 OBLIGATION(1)                     SECTION IN AGREEMENT                       CIRCULAR
-----------------------------------------------------------------------------------------------------------------
<S>   <C>                                  <C>                                             <C>
 a.   Site selection and acquisition/      Sections 2.2, 5.1, and 5.2 of Franchise         Items 5, 6, 7, and 11
      lease                                Agreement and Sections I and III of 
                                           Development Agreement
-----------------------------------------------------------------------------------------------------------------


                                    -15-

<PAGE>
-----------------------------------------------------------------------------------------------------------------
                                                                                             ITEM IN OFFERING 
                 OBLIGATION(1)                     SECTION IN AGREEMENT                           CIRCULAR
-----------------------------------------------------------------------------------------------------------------
 b.   Pre-opening purchases/leases         Section 5.5 of Franchise Agreement and          Items 7 and 8 
                                           Section III of Development Agreement
--------------------------------------------------------------------------------------------------------------
 c.   Site development and other           Sections 5.2, 5.6, 5.7, and 7.1 of              Items 6, 7, and 11
      pre-opening requirements             Franchise Agreement and Section III of 
                                           Development Agreement
--------------------------------------------------------------------------------------------------------------
 d.   Initial and ongoing training         Sections 5.7 and 7.2 of Franchise Agreement     Items 6, 7, 11, 
                                                                                           and 15
--------------------------------------------------------------------------------------------------------------
 e.   Opening                              Section 5.7 of Franchise Agreement              Items 7 and 11
--------------------------------------------------------------------------------------------------------------
 f.   Fees                                 Sections 4.1, 4.2, 4.3, 6.5, 9.3, 9.4, 10.3,    Items 5, 6, 7, and 11
                                           13.3, 13.7, and 15.11 of Franchise Agreement 
                                           and Sections II and VII of Development 
                                           Agreement
--------------------------------------------------------------------------------------------------------------
 g.   Compliance with standards and        Sections 5.5, 7.3, 7.5, 8.1 and 8.3 of          Items 8, 11, and 16
      policies/Operating manual            Franchise Agreement
--------------------------------------------------------------------------------------------------------------
 h.   Trademarks and proprietary           Sections 2.6, 11.1, 11.2, 11.3, 11.4, 11.6,     Items 13 and 14
      information(2)                       15.2, and 15.7 of Franchise Agreement; 
                                           Section V of Development Agreement; Sections 
                                           1 and 2 of Confidentiality Agreement; and 
                                           Section 2 of Covenant Agreement(3)
--------------------------------------------------------------------------------------------------------------
 i.   Restrictions on products/            Sections 7.4, 8.1, and 8.2 of Franchise         Item 16
      services offered                     Agreement
--------------------------------------------------------------------------------------------------------------
 j.   Warranty and customer service        None
      requirements

--------------------------------------------------------------------------------------------------------------
 k.   Territorial development and          Sections III and IV of Development Agreement    Items 1 and 12
      sales quota
--------------------------------------------------------------------------------------------------------------
 l.   Ongoing product/service              Section 8.1 of Franchise Agreement              Item 8
      purchases
--------------------------------------------------------------------------------------------------------------
 m.   Maintenance, appearance, and         Section 7.6 of Franchise Agreement              Items 8 and 11
      remodeling requirements
--------------------------------------------------------------------------------------------------------------
 n.   Insurance                            Sections 12.1, 12.2, and 12.3 of Franchise      Items 6, 8, and 11
                                           Agreement
--------------------------------------------------------------------------------------------------------------
 o.   Advertising                          Sections 5.7, 8.6, 9.1, 9.2, 9.3, 9.4,          Items 6, 7, 8, and 11
                                           and 15.5 of Franchise Agreement
--------------------------------------------------------------------------------------------------------------
 p.   Indemnification                      Section 12.4 of Franchise Agreement and         Item 6
                                           Section X of Development Agreement
--------------------------------------------------------------------------------------------------------------


                                    -16-

<PAGE>

-----------------------------------------------------------------------------------------------------------------
                                                                                             ITEM IN OFFERING 
                 OBLIGATION(1)                     SECTION IN AGREEMENT                           CIRCULAR
-----------------------------------------------------------------------------------------------------------------
 q.   Owner's participation/               Sections 7.2, 11.9, and 16.1 of Franchise       Items 11 and 15
      management/staffing                  Agreement
--------------------------------------------------------------------------------------------------------------


 r.   Records/reports                      Sections 7.7, 10.1, 10.2, and 15.12 of          Items 6 and 11    
                                           Franchise Agreement
--------------------------------------------------------------------------------------------------------------
 s.   Inspections/audits                   Sections 8.4 and 10.3 of Franchise              Items 6 and 11
                                           Agreement
--------------------------------------------------------------------------------------------------------------
 t.   Transfer(4)                          Sections 13.1, 13.2, 13.3, 13.5, 13.6, 13.7,    Items 6, 15, and 17
                                           and 13.8 of Franchise Agreement and Section 
                                           VII of Development Agreement
--------------------------------------------------------------------------------------------------------------
 u.   Renewal                              Section 3.2 of Franchise Agreement              Items 6 and 17
--------------------------------------------------------------------------------------------------------------
 v.   Post-termination obligations(2)      Sections 11.2, 11.4, 15.1, 15.2, 15.3, 15.4,    Items 6, 11, 14, and 17
                                           15.5, 15.6, 15.7, 15.8, 15.9, 15.10, 15.11, 
                                           and 15.12 of Franchise Agreement; Section VI 
                                           of Development Agreement; and Section 2 of 
                                           Covenant Agreement(3)
--------------------------------------------------------------------------------------------------------------
 w.   Non-competition covenants(2)         Sections 11.5, 11.6, 11.7, 11.8, 11.9, and      Item 17
                                           11.10 of Franchise Agreement; Section VIII 
                                           of Development Agreement; and Section 2 of 
                                           Covenant Agreement(3)
--------------------------------------------------------------------------------------------------------------
 x.   Dispute resolution(5)                Sections 12.5, 19.1, 19.2, 19.3, 21.11, and     Item 17
                                           21.12 of Franchise Agreement and Section XV 
                                           of Development Agreement
--------------------------------------------------------------------------------------------------------------
</TABLE>

NOTES:

     (1)  Your owners must guarantee all of your obligations in the Franchise
Agreement and the Development Agreement.

     (2)  All of your partners, owners, officers, directors, managers, and 
members must honor all of your obligations in Article 11 of the Franchise 
Agreement.  

     (3)  Upon our request, you must have your officers, directors, partners,
members, managers, and owners sign a Covenant Agreement in the form attached to
this Offering Circular as Exhibit E.

     (4)  These obligations are also imposed on your owners.

     (5)  The obligations to engage in mediation and arbitration are also 
imposed on your officers, directors, partners, members, managers, and owners.


                                    -17-

<PAGE>

                                       ITEM 10

                                      FINANCING

     NYBE does not offer direct or indirect financing.  NYBE does not guarantee
your note, lease, or obligation.



                                       ITEM 11

                               FRANCHISOR'S OBLIGATIONS

     Except as listed below, we need not provide any assistance to you.  Before
you open your business, we will:

1.   Grant you rights to establish a specific number of Restaurants within an
     Assigned Area.  (Development Agreement - Section I.A)

 2.  Loan you a Development Manual containing site selection guidelines,
     prototype plans, and specifications (not for construction) for a Bakery
     Restaurant and a Satellite Restaurant (Development Agreement - Section
     V.A), or provide a set of then-current prototype plans and specifications
     (not for construction) for a typical Restaurant.  (Franchise Agreement -
     Section 6.2)  Provide you with site layout plans and specifications which
     adapt our prototype plans to your Restaurant site.  (Franchise Agreement -
     Section 6.3)  You may have to have "as-built" plans or blueprints prepared
     at your expense depending upon the location and local ordinances.

 3.  Provide on-site evaluation of your site if we deem it necessary after we
     receive your market feasibility study for the site.  (Development Agreement
     - Section V.A)

 4.  Approve or disapprove the site for the Restaurant and determine your
     Assigned Territory for the Restaurant.  (Development Agreement - Section
     III.B and Franchise Agreement - Sections 2.2, 2.4, and 5.1)  A discussion
     of the selection of your site for the Restaurant appears later in this Item
     11 under the caption "SITE SELECTION".

 5.  Not unreasonably withhold our approval of the lease terms or purchase
     contract for the site of the Restaurant.  (Development Agreement - Section
     III.B and Franchise Agreement - Sections 5.2 and 5.3)

 6.  Approve your evidence of insurance naming us as an additional insured and
     approve your evidence that all necessary permits, licenses, and
     certifications for the construction and 



                                    -18-

<PAGE>

     operation of the Restaurant have been obtained.  (Franchise Agreement - 
     Sections 5.2 and 5.3)

 7.  Loan you one copy of the NYBE Manual. (Franchise Agreement - Section 6.6) 
     As of the effective date of this Offering Circular, the NYBE Manual has 126
     pages and its table of contents is as follows:

                                  TABLE OF CONTENTS

I.        INTRODUCTION                                                 PAGE
          ------------                                                 ----

          Use of this Manual . . . . . . . . . . . . . . . . . . . . . I, 1
          Material confidentiality . . . . . . . . . . . . . . . . . . I, 1
          Manual revisions . . . . . . . . . . . . . . . . . . . . . . I, 1
          History of New York Bagel Cafe & Deli. . . . . . . . . . . . I, 2
          Your responsibilities as franchisee. . . . . . . . . . . . . I, 3
          How New York Bagel is different among our competitors. . . . I, 4
          Front-of-House defined . . . . . . . . . . . . . . . . . . . I, 5
          Back-of-House defined. . . . . . . . . . . . . . . . . . . . I, 5
          Executive and Support Staff. . . . . . . . . . . . . . . . . I, 6

II.       STANDARDS

          Consistency among operations . . . . . . . . . . . . . . . .II, 1
          NYB Visitation Report. . . . . . . . . . . . . . . . . . . .II, 2
          NYB Restaurant Opening Inspection (NYBROI) . . . . . . . . .II, 4
          Customer Service . . . . . . . . . . . . . . . . . . . . . .II, 6


III.      SUPPORT (SUMMARY OF CONTENT)

          * OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . III, 1
          * EMPLOYEE POLICIES. . . . . . . . . . . . . . . . . . . . III, 2
          * RECIPES. . . . . . . . . . . . . . . . . . . . . . . . . III, 3
          * ITEM PREP & PRESENTATION . . . . . . . . . . . . . . . . III, 4
          * KITCHEN ADMINISTRATION . . . . . . . . . . . . . . . . . III, 5
          * NYBROI DESCRIPTOR. . . . . . . . . . . . . . . . . . . . III, 6
          * FRANCHISE OPENING CHECKLIST. . . . . . . . . . . . . . . III, 7
          * TRAINING GUIDELINES. . . . . . . . . . . . . . . . . . . III, 8
          * QUIZZES/QUIZ KEY . . . . . . . . . . . . . . . . . . . . III, 9
          * NYB MARKETING/MERCHANDISING. . . . . . . . . . . . . . . III, 10
          * REAL ESTATE DATA PACKAGE . . . . . . . . . . . . . . . . III, 11
          * UNIT S.O.P. (Standard Operating Procedures). . . . . . . III, 12


                                    -19-

<PAGE>


IV.       OPERATIONS/PERSONNEL FORMS

          Personnel Forms:

          * NYB Application. . . . . . . . . . . . . . . . . . . . .  IV, 1
          * Reference check. . . . . . . . . . . . . . . . . . . . .  IV, 2
          * Employment Eligibility Verification (I-9). . . . . . . .  IV, 3
          * Employee Status Report w/ W-4. . . . . . . . . . . . . .  IV, 4
          * Orientation checklist. . . . . . . . . . . . . . . . . .  IV, 5
          * Uniform agreement. . . . . . . . . . . . . . . . . . . .  IV, 6
          * Schedule of Availability/Request . . . . . . . . . . . .  IV, 7
          * File Maintenance Sheet . . . . . . . . . . . . . . . . .  IV, 8
          * Job Description. . . . . . . . . . . . . . . . . . . . .  IV, 9
          * Attendance Controller. . . . . . . . . . . . . . . . . .  IV, 10
          * Employee Warning Notice. . . . . . . . . . . . . . . . .  IV, 11
          * Positive Performance Report. . . . . . . . . . . . . . .  IV, 12
          * Employment Review & Performance Evaluation . . . . . . .  IV, 13
          * Exit Interview . . . . . . . . . . . . . . . . . . . . .  IV, 14

          Operation & Financial Forms:

          * Daily Sales Worksheet. . . . . . . . . . . . . . . . . .  IV, 15
          * Daily Prep List. . . . . . . . . . . . . . . . . . . . .  IV, 16
          * Weekly Sales Recap . . . . . . . . . . . . . . . . . . .  IV, 17
          * Inventory Worksheet. . . . . . . . . . . . . . . . . . .  IV, 18
          * Waste Control. . . . . . . . . . . . . . . . . . . . . .  IV, 19
          * Purchase Recap . . . . . . . . . . . . . . . . . . . . .  IV, 20
          * Inter-Unit Transfer. . . . . . . . . . . . . . . . . . .  IV, 21
          * P & L Worksheet. . . . . . . . . . . . . . . . . . . . .  IV, 23
          * Sales Comparison . . . . . . . . . . . . . . . . . . . .  IV, 24
          * Incident Report. . . . . . . . . . . . . . . . . . . . .  IV, 25
          * Personnel Tracking . . . . . . . . . . . . . . . . . . .  IV, 26
          * Purveyor Phone List. . . . . . . . . . . . . . . . . . .  IV, 27
          * Coupon Tracking. . . . . . . . . . . . . . . . . . . . .  IV, 28

V.        APPROVED VENDORS & LABELS

          Bakery ingredients . . . . . . . . . . . . . . . . . . . . . V, 1
          Beverages. . . . . . . . . . . . . . . . . . . . . . . . . . V, 3
          Breads & Bakery other. . . . . . . . . . . . . . . . . . . . V, 4
          Cream Cheese . . . . . . . . . . . . . . . . . . . . . . . . V, 5
          Dairy. . . . . . . . . . . . . . . . . . . . . . . . . . . . V, 6
          Food other . . . . . . . . . . . . . . . . . . . . . . . . . V, 7
          Produce. . . . . . . . . . . . . . . . . . . . . . . . . . . V, 9
          Uniforms . . . . . . . . . . . . . . . . . . . . . . . . . . V, 10



                                    -20-

<PAGE>

          Clothing novelty . . . . . . . . . . . . . . . . . . . . . . V, 11
          Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . V, 12

VI.       ROLE DEFINITIONS

          Duties and responsibilities. . . . . . . . . . . . . . . . . VI, 1
          Methods. . . . . . . . . . . . . . . . . . . . . . . . . . . VI, 4
          Management practices . . . . . . . . . . . . . . . . . . . . VI, 6
          Management - Leading by example. . . . . . . . . . . . . . . VI, 8

VII.      SITUATION GUIDELINES

          Guest relations. . . . . . . . . . . . . . . . . . . . . .  VII, 1
          Handling complaints. . . . . . . . . . . . . . . . . . . .  VII, 3
          Employee confrontations. . . . . . . . . . . . . . . . . .  VII, 5
          Vendors. . . . . . . . . . . . . . . . . . . . . . . . . .  VII, 8
          Intruders. . . . . . . . . . . . . . . . . . . . . . . . .  VII, 9

VIII.     EMPLOYEE RELATIONS

          Hiring . . . . . . . . . . . . . . . . . . . . . . . . . . VIII, 1
          Orientation. . . . . . . . . . . . . . . . . . . . . . . . VIII, 3
          Training . . . . . . . . . . . . . . . . . . . . . . . . . VIII, 5
          Listening techniques . . . . . . . . . . . . . . . . . . . VIII, 8
          Motivation . . . . . . . . . . . . . . . . . . . . . . . . VIII, 10
          Monthly staff meetings . . . . . . . . . . . . . . . . . . VIII, 12
          Counseling
          a.   Praise Sessions . . . . . . . . . . . . . . . . . . . VIII, 13
          b.   Conducting evaluations. . . . . . . . . . . . . . . . VIII, 14
          c.   Discipline sessions . . . . . . . . . . . . . . . . . VIII, 16
          d.   Documentation . . . . . . . . . . . . . . . . . . . . VIII, 17
          e.   Executing reprimand . . . . . . . . . . . . . . . . . VIII, 18
          f.   Terminations. . . . . . . . . . . . . . . . . . . . . VIII, 19


 8.  Provide you with specifications and/or names of suppliers for all required
     equipment, inventory, and supplies.  We do not deliver or install any of
     these items.  (Franchise Agreement - Section 8.1)

 9.  Provide a pre-opening training program for you or your general manager and
     other personnel designated in the NYBE Manual, unless you already operate a
     Restaurant and we conclude pre-opening training is not required. 
     (Franchise Agreement - Section 6.4)  


                                    -21-

<PAGE>

     A description of our training program appears later in this Item 11 under
     the caption "TRAINING PROGRAMS".

 10. Provide initial on-site assistance before opening of your Restaurant if it
     is your first Restaurant.  (Franchise Agreement - Sections 6.1 and 6.5)

 11. Perform an on-site inspection and investigation as we deem appropriate to
     become satisfied that you have complied with all requirements necessary for
     opening the Restaurant.  (Franchise Agreement - Section 5.7)

     During the operation of the franchised business, we will:

 1.  Provide initial on-site assistance after the opening of your Restaurant, if
     this is your first Restaurant.  Our initial on-site assistance before and
     after the opening of your first Restaurant is limited in the aggregate to
     approximately ten days.  (Franchise Agreement - Section 6.5)

 2.  Provide additional assistance to you after the opening of your Restaurant
     upon your reasonable request and subject to the availability of our
     personnel for your payment of a daily assistance fee and related expenses. 
     See Item 6.  (Franchise Agreement - Section 6.5)

 3.  Modify and add to the NYBE Manual as we deem appropriate to reflect changes
     in the business, authorized products or services, or specifications for
     authorized products and services, equipment requirements, quality
     standards, and operating procedures.  (Franchise Agreement - Section 6.6)

 4.  Provide additional optional or required training programs or seminars as we
     deem appropriate in consideration of your payment of an additional training
     fee as described in Item 6.  (Franchise Agreement - Sections 6.4 and 7.2) 
     A description of our additional training appears later in this Item 11
     under the caption "TRAINING PROGRAMS".

 5.  Maintain and administer a marketing and advertising fund to pay for
     developing and preparing advertising materials, if we decide, in our sole
     discretion, to establish a marketing and advertising fund.  (Franchise
     Agreement - Section 9.3)  A discussion of the marketing and advertising
     fund appears later in this Item 11 under the caption "MARKETING AND
     ADVERTISING FUND".

 6.  Approve or disapprove all advertising and promotional plans and other
     materials displaying our Marks which you desire to use which we have not
     prepared or previously approved.  (Franchise Agreement - Section 9.1) 
     Additional advertising information appears later in this Item 11 under the
     caption "OTHER ADVERTISING INFORMATION".


                                    -22-

<PAGE>

 7.  Designate geographic areas for advertising cooperatives if we decide, in
     our sole discretion, to establish local or regional advertising
     cooperatives.  (Franchise Agreement - Section 9.4)  A discussion of
     advertising cooperatives appears later in this Item 11 under the caption
     "LOCAL AND REGIONAL ADVERTISING COOPERATIVES".

 8.  Suggest prices for goods and services you offer.  Our suggested prices are
     recommendations only and are not mandatory.  (Franchise Agreement - Section
     8.8)

 9.  Provide you with written notice of your right to purchase from us any
     restaurants we have acquired in your Assigned Territory under the Franchise
     Agreement or your Assigned Area under the Development Agreement which
     operate under proprietary marks other than those used for the System. 
     (Development Agreement - Section I.C and Franchise Agreement - Section 2.5)

 10. Not unreasonably withhold our approval of the relocation of your Restaurant
     within your Assigned Territory.  (Franchise Agreement - Section 2.3)


     MARKETING AND ADVERTISING FUND.  The Marketing and Advertising Fund (the
"Marketing Fund"), is accounted for separately from our other funds.  We will
not use the Marketing Fund to defray any of our general operating expenses,
except for reasonable salaries, administrative costs, travel expenses, and
overhead as we may incur in activities related to the administration of the
Marketing Fund and all costs of development and preparing national, regional,
point of sale, and local advertising materials for use within the System.  We
determine, in our sole discretion, the nature, theme, and timing of advertising
and the kind and quality of advertising materials to be provided to you through
the Marketing Fund.  The advertising may be disseminated via radio, television,
newspaper, or magazines.  You are currently required to contribute one-half of
one percent of your Gross Receipts to the Marketing Fund.  Your maximum monthly
contribution to the Marketing Fund may not exceed 2% of your Gross Receipts. 
The franchisees of franchises which we sold before January 1, 1995 and our
affiliates must contribute only a maximum of 1.5% of their Gross Receipts to the
Marketing Fund.  We contribute to the Marketing Fund at the same percentage of
Gross Receipts required of franchisees within the System.  We will direct
through an in-house advertising department, or our designee, a national or
regional advertising agency, will direct, all advertising and promotional
programs and activities, with sole discretion over the concepts, materials, and
media used in these programs and activities and their placement and allocation.
We may spend, on behalf of the Marketing Fund, in any fiscal year an amount
greater or less than the aggregate contribution of all Restaurants to the
Marketing Fund in that year, and the Marketing Fund may borrow from us or others
to cover deficits or invest any surplus for future use.  We will use all
interest earned on monies contributed to the Marketing Fund to pay advertising
costs before we expend other assets of the Advertising Fund.  Marketing Fund
contributions will not be principally used to sell additional franchises.  We
will prepare an annual unaudited statement of 


                                    -23-

<PAGE>

monies collected and costs incurred by the Marketing Fund and furnish it to 
you upon written request. (Franchise Agreement - Section 9.3)

     Expenditures by the Marketing Fund may not be proportionate or equivalent
to contributions to the Marketing Fund by Restaurants operating in that
geographic area.  You or your Restaurant may not benefit directly or in
proportion to your contribution to the Marketing Fund.  Neither we nor the
Marketing Fund shall be liable to you for the maintenance, direction, or
administration of the Marketing Fund, including for contributions, expenditures,
investments, or borrowings, except for acts constituting willful misconduct. 
The funds collected by the Marketing Fund, and any earnings thereon, are not and
shall not be an asset of us or any franchisee.  (Franchise Agreement - Section
9.3)

     LOCAL AND REGIONAL ADVERTISING COOPERATIVES.  We can designate geographical
areas to establish local or regional advertising cooperatives ("Cooperatives")
for the System.  Each Cooperative shall be organized for the exclusive purpose
of administering local and regional advertising programs and developing, subject
to our approval, promotional materials for use by members in local advertising. 
No Cooperatives have yet been established.  Each Cooperative will be organized
and governed in a form and manner as we shall approve.  Cooperatives will
operate under written governing documents which will be available for review by
any member of the Cooperative.  These governing documents may not be modified
without our prior consent.  The party responsible for administration of the
Cooperatives may vary from Cooperative to Cooperative, and may be NYBE.  NYBE
has the power to require Cooperatives to be formed, changed, dissolved, and
merged.  Cooperatives will prepare an annual unaudited statement of monies
collected and costs incurred by the Cooperative and will furnish it to its
members upon request.  You must contribute to any Cooperative of which you are a
member the amounts determined by the membership of the Cooperative, up to 2% of
your Gross Receipts.  We will, for each of our company-owned Restaurants, make
contributions to any applicable Cooperative at the same percentage of Gross
Receipts as is required of franchisees within the Cooperative.  (Franchise
Agreement - Section 9.4)

     OTHER ADVERTISING INFORMATION.  In addition to the Marketing Fund and
Cooperatives, you must do certain local advertising which includes grand opening
advertising in a minimum amount of $2,500 and spend a minimum of 4% of Gross
Receipts per year for media advertising and promotional materials, including
contributions to the Marketing Fund and Cooperatives.  You must submit to us for
approval all advertising materials that we have not prepared or approved.  You
must at all times comply with our instructions regarding the use of advertising
materials, including modifying or ceasing to use these materials, whether or not
we previously prepared or approved the materials.  You must also submit periodic
reports verifying your local marketing expenditures as requested by us.  No
advertising council has yet been established.  (Franchise Agreement - Section
9.1)  See also Items 6, 8, and 9.


                                    -24-

<PAGE>

     CASH REGISTERS/COMPUTER SYSTEMS.  You must keep books and business records
according to our formats.  (Franchise Agreement - Section 10.1)  In addition,
you must buy or use a Panasonic 5000 (or equivalent) point of sale system, which
is available from third party vendors.  (Franchise Agreement - Section 10.1) 
The Panasonic 5000 point of sale system features a continuous sealed tape with
non-resettable totals, management report capability, security controls, and
preset pricing capability.

     SITE SELECTION.  The Development Agreement grants you an Assigned Area
within which to establish and operate Restaurants at specific locations, each to
be designated in a separate Franchise Agreement.  You must timely complete the
development schedule in the Development Agreement, but otherwise there is no
specified time limit in which you must locate your site for the Restaurant. 
Before the acquisition by lease or purchase of any site for a Restaurant, you
must submit to us, in the form we specify, a description of the site, a market
feasibility study for the site, and other information and materials as we may
reasonably require, together with evidence satisfactory to us which confirms
your favorable prospects for obtaining a site.  We will have 15 days after the
receipt of this information from you to approve or disapprove, in our sole
discretion, the site as the location for the Restaurant.  If we do not
disapprove the site within the 15 days, the site will be deemed approved by us.
Within 45 days after site approval by us, you must (i) sign a lease (if the
premises are to be leased) after our prior written approval of the lease terms,
which approval will not be unreasonably withheld, or a binding agreement to
purchase the site, and (ii) sign a Franchise Agreement for the approved site. 
(Development Agreement - Section III.B)  Our approval of the site (and the lease
or purchase agreement for the site) does not in any way guarantee that the site
will become a profitable Restaurant.

     If the site is disapproved or is otherwise not feasible, you may elect to
submit a second site proposal within 90 days after the receipt of our
disapproval of the site on the same terms and conditions as the first site
approval request.  If you fail to submit a site proposal which we find to be
feasible, we will not refund any amounts paid to us.  The factors we consider in
approving or disapproving a proposed site will include, without limitation, the
general location and neighborhood, visibility and access from major traffic
arteries, available parking, physical characteristics of existing buildings,
competing businesses, lease terms, and proximity to shopping centers and other
commercial activities.

     TIME FROM AGREEMENT TO FIRST OPENING.  You must request and receive our
approval of the proposed site and layout before commencing construction on the
Restaurant.  You must construct and open the Restaurant under the time sequence
specified in the Franchise Agreement.  (Franchise Agreement - Sections 5.1, 5.2,
5.3, 5.6, and 5.7)  During the past fiscal year, the approximate length of time
required for site approval was 45 to 90 days.  You must diligently pursue the
completion of the Restaurant premises in accordance with the plans and
specifications in order for the Restaurant to be ready to open for business
within 90 days after you receive possession of the Restaurant site.


                                    -25-

<PAGE>

     After signing the Franchise Agreement, you must complete construction,
order and install furniture, furnishings, and interior decor, hire and train
personnel, and have a general manager complete our training program.  We
estimate that the length of time from the signing a Franchise Agreement to the
opening of the Restaurant will generally be 120 days to 210 days.  These
estimated time schedules will not be uniform for all franchisees.  The time in
which these steps are to be accomplished may vary based on the location of the
Restaurant, negotiations between us concerning the schedule to be established,
and other matters, including the ability to obtain a lease, financing, or
building permits, zoning and local ordinances, weather conditions, shortages, or
delayed delivery or installation of equipment, fixtures, and signs.


     TRAINING PROGRAMS.  We will provide a pre-opening training program for your
general manager and the other personnel employed by you in positions designated
in the NYBE Manual.  The instructional material used in the pre-opening training
program is the NYBE Manual.  Our pre-opening training program is described in
the following table and explanatory notes. 

<TABLE>
-------------------------------------------------------------------------------------------------
                                             Hours of 
                                            Classroom      Hours of On The 
       Subject(1)           Time Begun(2)   Training(3)    Job Training(2)     Instructor(4)     
-------------------------------------------------------------------------------------------------
<S>                         <C>             <C>            <C>               <C>
-------------------------------------------------------------------------------------------------
 Introduction               Note 2            None             16            Franchisee Trainer  
-------------------------------------------------------------------------------------------------
 Food Preparation and       Note 2            None            120            Restaurant Manager
 Baking
-------------------------------------------------------------------------------------------------
 Purchasing                 Note 2            None             16            Restaurant Manager
-------------------------------------------------------------------------------------------------
 Inventory Management       Note 2            None             24            Franchisee Trainer
-------------------------------------------------------------------------------------------------
 Cost Management            Note 2            None             16            Franchisee Trainer
-------------------------------------------------------------------------------------------------
 Equipment Operation and    Note 2            None            100            Restaurant Manager
 Maintenance
-------------------------------------------------------------------------------------------------
 Staffing and Scheduling    Note 2            None             16            Franchisee Trainer
-------------------------------------------------------------------------------------------------
 Human Resources            Note 2            None             16            Franchisee Trainer
-------------------------------------------------------------------------------------------------
 Accounting and Reporting   Note 2            None             24            Franchisee Trainer
-------------------------------------------------------------------------------------------------
 Sanitation                 Note 2            None             16            Franchisee Trainer
-------------------------------------------------------------------------------------------------
 Safety                     Note 2            None             16            Franchisee Trainer
-------------------------------------------------------------------------------------------------
 Basic Management           Note 2            None             24            Franchisee Trainer
 Techniques
-------------------------------------------------------------------------------------------------


                                    -26-

<PAGE>
-------------------------------------------------------------------------------------------------
                                             Hours of 
                                            Classroom      Hours of On The 
       Subject(1)           Time Begun(2)   Training(3)    Job Training(2)     Instructor(4)     
-------------------------------------------------------------------------------------------------
 Review                     Note 2            None             40            Franchisee Trainer
-------------------------------------------------------------------------------------------------
</TABLE>

NOTES:

     (1)  We may elect not to provide initial training to some or all of your
personnel if you already operate a Restaurant and we conclude that the training
is not required.  (Franchise Agreement - Section 6.4)  For approximately 60 full
business days, your personnel will receive instruction in the operation of a
Restaurant at one of our Restaurants in Kansas or Oklahoma as specified by us.
(Franchise Agreement - Section 7.2)

     (2)  It is the nature of the restaurant business that all aspects of 
training are integrated, that is, there are no definitive starting and 
stopping times. The amount of time spent in each area will also depend upon 
the background and abilities of your personnel.

     (3)  Our program does not include any classroom training.

     (4)  The instructors will be the manager of the Restaurant in which your 
manager and other personnel are training and our franchisee trainer, Markus 
K. Scholler. Mr. Scholler's experience is set forth in Item 2 of this 
Offering Circular.

     We do not charge for this training or service, but you must pay the travel
and living expenses for your manager and other personnel.  (Franchise Agreement
- Section 7.1)  Confidentiality agreements may be required as a condition of
attending our training.  The training program must be completed to our
satisfaction before opening your Restaurant but there is no specified time by
which you must complete your training.  If your general manager or other
employees, in our reasonable determination, do not meet our standard for
knowledge and performance, or do not pursue or complete our training program to
our satisfaction, we reserve the right to request that the general manager or
employee(s) be retrained, or that another person be trained and perform the
functions of the category of employee for which the training was offered.  We
plan to be flexible in scheduling training to accommodate our personnel, you,
and your personnel.  There currently are no fixed training schedules.

     We will also provide on-site pre-opening assistance and training.  We will
provide the on-site training immediately before the opening of the Restaurant
and after the start of Restaurant operations for an aggregate total of
approximately three to seven days.  We will provide the initial on-site training
program to you free of charge.

     We may, but are not obligated to, provide training programs for your other
employees.  We also may make available other required or optional training
courses, programs, conferences, seminars, and materials.  If we require
additional training, you must require your employees to successfully complete
the training.  Any additional courses, programs, conferences, and seminars 


                                    -27-

<PAGE>

may be conducted in Wichita, Kansas, Stillwater, Oklahoma, or another 
location as we may designate.  We may contract with other persons or firms to 
provide your training.

     We will provide and pay for instructors and facilities for initial
training.  You must pay for travel, lodging, and meals for any person attending
training and any wages due your employees during time spent in training.  We may
charge a daily training fee at our standard rate, which currently is $75 per
day, for instruction and course materials for training programs other than
initial training.  We may require confidentiality agreements from your employees
as a condition of attending our training.


                                       ITEM 12

                                      TERRITORY

     The Development Agreement grants you an Assigned Area within which we will
not establish, nor franchise anyone other than you to establish, any Restaurants
before the expiration of the development schedule if you comply with all the
terms and conditions of the Development Agreement.  We will generally identify
the Assigned Area by one or more Designated Market Areas on the current Nielsen
Wall Map published by the A.C. Nielsen Company, or as a state, city, county, or
other political subdivision.  The description of the territory will vary from
area to area depending upon population densities, demographic trends, and other
factors affecting a specific franchise area.  Before signing the Development
Agreement, we will describe the Assigned Area by attaching a description of the
area as an exhibit to the Development Agreement.

     The territorial exclusivity we grant to you does not depend upon the
achievement of a certain sales volume, market penetration, or any other
contingency, except as stated in the next paragraph.  The next paragraph
describes the only circumstances under which the Assigned Area granted to you
may be altered before the expiration or termination of the Development
Agreement.

     Upon any default by you under the Development Agreement, at our option, we
(in addition to other remedies) may reduce the number of options for Restaurants
granted to you, reduce the size of the Assigned Area, or terminate the
territorial exclusivity granted to you.

     The Franchise Agreement will grant an Assigned Territory where we will not
establish another franchised or company-owned Restaurant under the System.  The
Assigned Territory will generally be identified by a radius from a specific
location (typically two and one-half miles), a particular standard metropolitan
statistical area, or a city, county, or other political subdivision.  The radius
or other description of the territory may vary from Restaurant to Restaurant
depending upon population densities, business districts, demographic trends, and


                                    -28-

<PAGE>

other factors affecting a specific franchise location.  Before signing the
Franchise Agreement, we will describe the Assigned Territory by inserting a
description of the approved franchise location and exclusive area in the
Franchise Agreement.  Relocation of a Restaurant requires our consent.

     You must use the Restaurant premises solely for the operation of a NEW YORK
BAGEL CAFE & DELI Restaurant.  We condition your territorial exclusivity upon
maintaining in effect the Franchise Agreement by complying with its terms and
not committing a default, but it does not depend upon achievement of a certain
sales volume, market penetration, or other contingency.

     You do not receive the right to acquire additional franchises within your
Assigned Territory or otherwise.  You may, however, apply to purchase an
additional franchise within your Assigned Territory to operate another
Restaurant.  You can solicit customers and accept orders from outside your
Assigned Territory.  Likewise, we, our affiliates, and other franchisees can
solicit customers and accept orders within your Assigned Territory.  However,
you may only make over-the-counter sales at retail to the ultimate consumer of
the products you offer for sale at your Restaurant.

     We have not established or franchised another to establish restaurants in
your Assigned Area or your Assigned Territory, nor do we have the right under
the Development Agreement or Franchise Agreement to establish restaurants or
franchise another to establish restaurants within your Assigned Area or your
Assigned Territory.  While we have no current plans to do so, neither the
Franchise Agreement nor the Development Agreement restrict our ability to
establish another channel of distribution for the products sold at your
Restaurant, which may be sold using the Marks or any other trademark.

     We have no present plans to do so, but the Development Agreement and
Franchise Agreement contemplate the possibility that we may acquire (by
purchase, merger, or otherwise) the stock or assets of a business enterprise
which, directly or through franchisees, operates restaurants under proprietary
marks other than those used in the System selling the same, similar, or
different products and services with your Assigned Area or your Assigned
Territory (whether one or more, "Non-System Restaurants").  These acquisitions
are permitted, and the Development Agreement and Franchise Agreement provide
that we may own and operate acquired Non-System Restaurants within your Assigned
Area or your Assigned Territory, subject to certain rights of first refusal in
your favor for Non-System Restaurants over which we acquire actual ownership and
the right to sell under applicable law.

     You shall have the right and option, exercisable within 30 days after
receipt of written notification, to provide written notice to us that you desire
to purchase all of the Non-System Restaurants in your Assigned Area or your
Assigned Territory and to convert the Non-System Restaurants to Restaurants
under the Systems.  If you elect to purchase and convert the Non-System
Restaurants, you must complete the purchase and sign our then-current form of
Franchise 


                                    -29-

<PAGE>

Agreement (which shall require payment of the then-current initial franchise 
fee) within 60 days from the date of notice to us or your election to 
purchase and convert.  Your purchase price for the Non-System Restaurants 
shall be the cash equivalent of our cost for each of the Non-System 
Restaurants, as we determine in our sole discretion.

     If you do not elect to purchase and convert the Non-System Restaurants as
described above, we may sell the Non-System Restaurants to a third party and/or
continue to operate the Non-System Restaurants under proprietary marks other
than those used in the System.  When the Development Agreement expires, we may
convert the Non-System Restaurants to Restaurants under the System, subject to
any contrary provisions contained in any applicable Franchise Agreement between
you and us.  Under the Franchise Agreement, if you do not elect to purchase and
convert the Non-System Restaurants as described above, we may sell the
restaurants to a third party and/or continue to operate the Non-System
Restaurants under proprietary marks other than those used in the System.


                                       ITEM 13

                                      TRADEMARKS

     NYBE grants you the right to operate a restaurant under the name "NEW YORK
BAGEL CAFE & DELI".  You may also use our other current or future trademarks to
identify your Restaurant and the services and products related to the System. 
By "trademark", we mean trade names, trademarks, advertising, or other
commercial symbols, service marks, and logos used to identify your Restaurant. 
Our principal trademarks are:


    "LIKE BREAD, WITH AN -Registered Trademark-              [LOGO]
            ATTITUDE"




     "Registered Mark"                                     "NYB Mark"

The Registered Mark and the NYB Mark are collectively referred to as the
"Principal Marks."  Only the Registered Mark is currently registered with the
United States Patent and Trademark Office.  By not having a Principal Register
federal registration for any of our trademarks other than the Registered Mark,
we do not have certain presumptive legal rights granted by a registration.  We
filed an application to register a similar prior version of the NYB Mark in
1995, and an Office Action of the United States Patent and Trademark Office
issued in response to our prior application would have required us to disclaim
any exclusive right to use "NYB," 


                                    -30-

<PAGE>

"New York," and "Bagel Shop & Delicatessen" apart from the mark as shown as a 
condition to registration of the prior mark on the Principal Register of the 
United States Patent and Trademark Office. Because we decided to make changes 
to the prior mark, we abandoned the prior registration. We do not plan to 
register the NYB Mark at this time, because we anticipate that in response to 
an application for registration of the NYB Mark, we would receive a similar 
Office Action which would require us to disclaim any exclusive right to use 
"NYB," "New York," and "Bagel Shop & Cafe" apart from the mark as shown as a 
condition to registration of the NYB Mark on the Principal Register of the 
United States Patent and Trademark Office.  Unless and until the NYB Mark is 
filed and registered with the United States Patent and Trademark Office, 
others are permitted to establish rights to use the NYB Mark.  This will not 
be in areas where our franchises are operating or advertising under the 
trademark prior to the establishment of any rights by filing.  If others 
establish rights to use the NYB Mark, we may not be able to expand into these 
areas using the NYB Mark.

     The Registered Mark was placed on the Principal Register of the United
States Patent and Trademark Office on April 23, 1996, Reg. No. 1,969,972.  We
have filed all required affidavits.

     There are no other currently effective material determinations of the
Patent and Trademark Office, the Trademark Trial and Appeal Board, the trademark
administrator of any state or any court, nor is there any pending material
litigation involving our Principal Marks.

     We claim common-law rights to the service marks "New York Bagel Cafe &
Deli", "New York Bagel Shop & Delicatessen," "NYB", "The City's Best Bagel",
"Where Yeast Meets West," and "Like Bread, With An Attitude," but there have not
been judicial determinations of the existence, validity, or extent of our
rights.  We claim and intend to rely on common-law trade secret and unfair
competition protection of materials and information you are granted the right to
use under the Franchise Agreement.  However, there are and will be many
restaurants and other businesses nationwide that use the words "New York",
"Bagel Shop", "Cafe", "Delicatessen" and/or other similar words and phrases. 
Given this, legal challenges could be made to your use of the "New York Bagel
Cafe & Deli" name, and if successful, these challenges could render you liable
for damages and require that you stop using the name.  You might also be unable
to prevent use of the name by others.

     There are no agreements currently in effect that significantly limit our
rights to use or license the use of the Principal Marks in any manner material
to the franchise.  You must follow our rules when you use our trademarks.  You
cannot use our name or trademarks as part of a corporate name or with modifying
words, designs, or symbols.  You may not use our trademarks for the sale of an
unauthorized product or service or in a manner not authorized in writing by us.

     We intend to take reasonable steps to preserve and protect our ownership of
the Registered Marks and its validity.  We are not obligated to protect any
rights granted to you to 


                                    -31-

<PAGE>

use the trademarks or to protect you against claims of infringement or unfair 
competition regarding the trademarks.  Nevertheless, it may be in our best 
interest to do so.

     You must notify us immediately when you learn about an infringement of or
challenge to your use of the trademarks.  NYBE will take the action we think is
appropriate.  You must cooperate fully in prosecuting, defending, or settling
any litigation involving the trademarks, including being named as a party in the
action at our request.  We will undertake the defense of the litigation and will
bear the costs of the litigation, except for the costs of any legal counsel
separately retained by you.

     We do not know of any infringing uses that could materially affect your use
of our Principal Marks.  You must modify or discontinue the use of a trademark
if we modify or discontinue the use of a trademark as a result of a proceeding
or settlement.  You also must not directly or indirectly contest our right to
our trademarks, trade secrets, or business techniques that are part of our
business.  You must maintain the confidentiality of the NYBE Manual and any
other manuals created for or approved for use in the operation of the
Restaurant, and the information contained in the manuals.


                                       ITEM 14

                   PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

     There are no patents that are material to the franchise.  We claim
copyright protection of our NYBE Manual, and advertisement and promotional
materials although these materials have not been registered with the United
States Registrar of Copyrights.  These materials contain secret recipes, methods
of preparation and service of our food products, and other information relevant
to the operation of a Restaurant.  We consider this information proprietary and
confidential and we consider it to be our property and you may use it only as
provided in the Franchise Agreement.  You must implement our procedures to
prevent the unauthorized use and disclosure of our proprietary information and
to notify us immediately if there is any unauthorized use or disclosure of our
proprietary information.

     There currently are no effective determinations of the Copyright Office
(Library of Congress) or any court regarding any of the copyrighted materials. 
There are no agreements in effect which significantly limit our right to use or
license the copyrighted materials.  Finally, there are no infringing uses
actually known to us which could materially affect your use of the copyrighted
materials in any state.  We are not required by any agreement to protect or
defend copyrights.

     We will disclose to you confidential or proprietary information and trade
secrets.  You must sign a Confidentiality Agreement attached to this Offering
Circular as Exhibit F (the 


                                    -32-

<PAGE>

"Confidentiality Agreement") before your review of our confidential and 
proprietary information to evaluate whether to purchase a franchise.  Except 
as necessary for operation of the Restaurant and as we approve, neither you 
nor your officers, directors, partners, members, managers, or owners may, 
during the term or at any time after the expiration or termination of the 
Franchise Agreement, regardless of the cause of termination, directly or 
indirectly, use for your own benefit or communicate or divulge to, or use for 
the benefit of any other person or entity, any trade secrets, confidential 
information, knowledge or know-how concerning the recipes, food products, 
advertising, marketing, designs, plans, or methods of operation of the 
Restaurant or the System.  Upon our request, you must have your officers, 
directors, partners, members, managers, or owners sign a Covenant Agreement 
attached to this Offering Circular as Exhibit E (the "Covenant Agreement"). 
You may disclose to your employees only the confidential, proprietary, or 
trade secret information necessary to operate the business and then only 
while the Franchise Agreement is in effect.  All information and knowledge, 
including drawings, materials, equipment, marketing, recipes, and other data, 
which we designate as secret or confidential will be deemed secret and 
confidential under the Franchise Agreement and the Covenant Agreement.

                                       ITEM 15

                  OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION
                              OF THE FRANCHISE BUSINESS

     We will grant the Franchise Agreement to you in reliance on your and your
principals' personal and collective business skills and financial capacity, and
your rights and obligations may not be transferred without our written consent.
You must remain ultimately responsible for the operation of the Restaurant in
compliance with the Franchise Agreement and should exercise oversight and be
informed about the operations of the franchise, but you (or your chief operating
officer, managing partner, or principal manager) are not required to take any
specific role in day-to-day operations or to participate personally in direct
operations on the premises, if you designate a general manager, who may be your
employee, who shall devote full time and attention to the management and
operation of the Restaurant.  The general manager may be any qualified
individual who attends and successfully completes our initial training program.
The individual need not be one of your owners if you are a corporation,
partnership, or limited liability company.  If, at any time for any reason, the
general manager or managing owner no longer qualifies, you must promptly
designate another general manager or managing owner subject to the same
qualifications listed above and notify us.

     Management responsibility includes, without limitation, presence of a
manager during all business hours; maintaining the highest standards of product
quality and consistency; maintaining the Restaurant in the highest condition of
sanitation, cleanliness, and appearance; and supervising employees to ensure
that the highest standard of service is provided and to 


                                    -33-

<PAGE>

insure that your employees deal with customers, suppliers, us, and all other 
persons in a courteous and polite manner.

     If you are a corporation, partnership, or limited liability company, your
owners must personally guarantee your obligations under the Franchise Agreement
and Development Agreement.  In addition, your partners, owners, officers,
directors, managers, and members must also agree to be personally bound by, and
personally liable for the confidentiality and non-competition provisions of the
Franchise Agreement and/or Development Agreement and sign the Covenant
Agreement, all as described in Item 14 and Item 17.  Your owners must also agree
to certain restrictions on the transfer of their ownership interests.


                                       ITEM 16

                                 RESTRICTIONS ON WHAT
                               THE FRANCHISEE MAY SELL

     You must operate the Restaurant in conformance with our standard
specifications and techniques as contained in the NYBE Manual, as amended by us
in our sole discretion from time to time.  As described in Items 8, 9, and 12,
in order to promote substantial uniformity of quality and shared identity at all
Restaurants, you must not offer for sale any product or service or purchase,
lease, install, or use any equipment, fixtures, furnishings, concept, supply,
vending machine, building design or layout, color schemes or other item or
service unless approved in writing by us as being in compliance with our
standards and specifications and the franchise System.  You must offer all of
the food products and services that we designate as required for all
franchisees.  We can change the types of authorized food items and services that
you must offer for sale.  There are no limits on our right to do so.  You must
use the premises of the Restaurant solely for the purpose of operating a NEW
YORK BAGEL CAFE & DELI Restaurant and to refrain from using the premises for any
other purpose or activity.  Restrictions on goods and services offered may also
arise from Franchise Agreement requirements that you comply with our high
standards of quality and service, to refrain from deviating from our standards,
or to otherwise operate in any manner adversely affecting the System, the Marks,
and the goodwill associated with the System and the Marks, and to comply with
the highest health standards and ratings applicable to the franchise restaurant.
You are not restricted regarding the customers you may solicit, but you may only
make sales over-the-counter at retail to the ultimate consumers of the products
to be offered for sale by your Restaurant.



                                    -34-

<PAGE>
                                       
                                    ITEM 17

                         RENEWAL, TERMINATION, TRANSFER
                            AND DISPUTE RESOLUTION

THIS TABLE LISTS IMPORTANT PROVISIONS OF THE FRANCHISE AGREEMENT.  YOU SHOULD 
READ THESE PROVISIONS IN THE FRANCHISE AGREEMENT ATTACHED TO THIS OFFERING 
CIRCULAR.

<TABLE>
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
                                 Section in
                                  Franchise
        Provision(1)              Agreement                                   Summary
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
<S>                         <C>                  <C>
a.   Term of the franchise  Section 3.1          Term is equal to 10 years.
--------------------------------------------------------------------------------------------------------------
b.   Renewal or extension   Section 3.2          Ten-year renewal if you meet certain requirements.
     of the term
--------------------------------------------------------------------------------------------------------------
c.   Requirements for you   Section 3.2          Give notice, remodel, not be in default, have paid all 
     to renew or extend                          amounts owed us in timely manner, sign new Franchise 
                                                 Agreement, pay fee, sign release, and comply with 
                                                 training requirements.
--------------------------------------------------------------------------------------------------------------
d.   Termination by you     Section 14.1.F       Upon 90 days' written notice if, you are a person and 
                                                 die or become mentally incompetent and are unable or 
                                                 elect not to transfer your interest in the franchise, if you 
                                                 are the general manager and become disabled and elect 
                                                 not to employ a new general manager, or you are unable 
                                                 to operate the Restaurant at a profit after using 
                                                 reasonable and diligent efforts.
--------------------------------------------------------------------------------------------------------------
e.   Termination by NYBE    None
     without cause
--------------------------------------------------------------------------------------------------------------
f.   Termination by NYBE    Sections 14.1.C,     We can terminate only if you default.
     with cause             14.1.D, and 
                            14.1.E
--------------------------------------------------------------------------------------------------------------
g.   "Cause" defined -      Sections 14.1.D      You generally have 30 days to cure: nonpayment of 
     which defaults which   and 14.1.E           fees; failure to submit reports, provide information, or 
     can be cured                                maintain our standards; or any other default not 
                                                 specified in Section 14.1.C.
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -35-
<PAGE>

<TABLE>
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
                                 Section in
                                  Franchise
        Provision(1)              Agreement                                   Summary
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
<S>                         <C>                  <C>
h.   "Cause" defined -      Section 14.1.C       Non-curable defaults: failure to timely open the 
     defaults which cannot                       Restaurant, cease operating or abandon the Restaurant, 
     be cured                                    forfeit the right to do business where the Restaurant is 
                                                 located, conviction of felony, unapproved transfers, 
                                                 improper use or disclosure of confidential information, 
                                                 false reporting or submissions to us, under-reporting 
                                                 Gross Revenue, repeated defaults even if cured, entry of 
                                                 judgment against you which remains unsatisfied for 30 
                                                 days, levy against your business or property, action 
                                                 brought to foreclose lien or mortgage against the 
                                                 Restaurant premises or equipment which is not 
                                                 dismissed in 30 days, or you become insolvent, a 
                                                 receiver is appointed to take possession of your business 
                                                 or property, or you make a general assignment for the 
                                                 benefit of your creditors.
--------------------------------------------------------------------------------------------------------------
i.   Your obligations on    Sections 15.1,       Cease operating the Restaurant, discontinue use of the 
     termination/non-       15.2, 15.3, 15.4,    Marks and advertising, complete deidentification as our 
     renewal                15.5, 15.6, 15.7,    franchisee, transfer telephone numbers and listing to us, 
                            15.8, 15.9,          deliver all materials and documents for the Restaurant to 
                            15.10, 15.11,        us, modification and alteration of Restaurant, cease 
                            and 15.12            using the System and NYBE Manual, sell to us at your 
                                                 cost all your usable materials bearing the marks, sell 
                                                 your office equipment, furniture, fixtures, and movable 
                                                 signs to us at their fair market value, promptly pay all 
                                                 amounts due us including the liquidated damages set 
                                                 forth in Section 15.11, and maintain and preserve your 
                                                 financial and other records and make them available for 
                                                 our inspection.
--------------------------------------------------------------------------------------------------------------
j.   Assignment of          Section 13.1         No restriction on our right to assign.
     contract 
     by NYBE
--------------------------------------------------------------------------------------------------------------
k.   "Transfer" by you -    Section 13.2         Includes transfer of any interest in contract or assets, 
     definition                                  or any ownership change.
--------------------------------------------------------------------------------------------------------------
l.   NYBE's approval of     Sections 13.2 and    We have the right to approve all transfers, except that if 
     transfer by            13.8                 you are a corporation, partnership, or limited liability 
     franchisee                                  company, you may transfer an aggregate up to 25% of 
                                                 your outstanding voting ownership interests to your 
                                                 employees who are actively engaged in the operations of 
                                                 the Restaurant without our approval if the proposed 
                                                 transfer alone or together with other transfers will not 
                                                 have the effect of transferring a controlling ownership 
                                                 interest in you.
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -36-
<PAGE>

<TABLE>
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
                                 Section in
                                  Franchise
        Provision(1)              Agreement                                   Summary
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
<S>                         <C>                  <C>
m.   Conditions for NYBE    Section 13.3         You have paid all amounts owed to us and others, you 
     approval of                                 are not in default under the Franchise Agreement or any 
                                                 other agreement with us, you have signed a release, you 
                                                 and the new franchisee enter into a satisfactory 
                                                 assignment and assumption agreement providing that the 
                                                 new franchisee will honor all of your obligations under 
                                                 the agreement, the new franchisee qualifies, the new 
                                                 franchisee signs our then-current form of Franchise 
                                                 Agreement, you remain liable for all your obligations, 
                                                 the new franchisee completes our training program, and 
                                                 we receive payment of the $2,500 transfer fee.
--------------------------------------------------------------------------------------------------------------
n.   NYBE's right of first  Section 13.2         We can match any offer for any interest in your 
     refusal to acquire                          Franchise Agreement, the Restaurant, or you.
     your 
     business
--------------------------------------------------------------------------------------------------------------
o.   NYBE's option to       Section 15.8         Upon termination of the Franchise Agreement for any 
     purchase your                               reason, we have the option for 60 days following the 
     business                                    termination to purchase at your cost all your usable 
                                                 materials bearing the Marks and/or to purchase your 
                                                 office equipment, furniture, fixtures, and moveable 
                                                 signs at their fair market value.
--------------------------------------------------------------------------------------------------------------
p.   Your death or          Section 13.6         Upon the death or mental incompetency of any person 
     disability                                  with an interest in the franchise or in you, if you are a 
                                                 corporation, partnership, or limited liability company, 
                                                 the person's personal representative must transfer the 
                                                 interest within six months after the death or mental 
                                                 incompetency.  We must approve all transfers, including 
                                                 transfers by will or inheritance (also see m above). If 
                                                 the person's heirs or beneficiaries are unable to satisfy 
                                                 the conditions of the agreement, the personal 
                                                 representative will have a reasonable time to dispose of 
                                                 the interest.  If the interest is not disposed of in a 
                                                 reasonable time, we may terminate the Franchise 
                                                 Agreement and purchase certain of your assets (also see 
                                                 o above).
--------------------------------------------------------------------------------------------------------------
q.   Non-competition        Section 11.5         No involvement in competing business anywhere.
     covenants during the 
     term of the
     franchise(2)
--------------------------------------------------------------------------------------------------------------
r.   Non-competition        Section 11.5         No competing business for 2 years after assignment or 
     covenants after the                         termination within your Assigned Territory, the then-
     franchise is                                current Designated Market Area or Areas (DMA) in 
     terminated                                  which your Assigned Territory is located, or the DMA 
     or expires(2)                               of any other NYBE Restaurant then existing.
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                     -37-
<PAGE>

<TABLE>
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
                                 Section in
                                  Franchise
        Provision(1)              Agreement                                   Summary
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
<S>                         <C>                  <C>
s.   Modification of the    Article 20           No modifications generally unless in writing signed by 
     agreement                                   you and one of our officers but NYBE Manual subject 
                                                 to change.
--------------------------------------------------------------------------------------------------------------
t.   Integration/merger     Article 20,          Only the terms of the Franchise Agreement are binding 
     clause                 Sections 21.1 and    (subject to state law). Any other promises may not be 
                            22.2                 enforceable.
--------------------------------------------------------------------------------------------------------------
u.   Dispute resolution by  Sections 19.1,       All disputes must be mediated and then arbitrated in 
     arbitration or         19.2, and 19.3       Wichita, Kansas. The mediation and arbitration 
     mediation(3)                                proceedings are governed by rules of the American 
                                                 Arbitration Association.
--------------------------------------------------------------------------------------------------------------
v.   Choice of forum        Section 21.11        Litigation in Sedgwick County, Kansas.
--------------------------------------------------------------------------------------------------------------
w.   Choice of law          Section 21.2         Kansas law applies.
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
</TABLE>


NOTES:

   (1) Your owners must guarantee all of your obligations in the Franchise 
Agreement and the Development Agreement.

   (2) All of your partners, owners, officers, directors, managers, and 
members must also honor all of your obligations in Article 11 of the 
Franchise Agreement.  Upon our request, you must have your officers, 
directors, partners, members, managers, and owners sign a Covenant Agreement 
which includes similar non-competition covenants.

   (3) We also impose the obligations to engage in mediation and arbitration 
on your officers, directors, partners, members, managers, and owners.



THIS TABLE LISTS IMPORTANT PROVISIONS OF THE DEVELOPMENT AGREEMENT.  YOU 
SHOULD READ THESE PROVISIONS IN THE AGREEMENT ATTACHED TO THIS OFFERING 
CIRCULAR.

<TABLE>
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
                             Section in
                              Franchise
        Provision(1)          Agreement                                Summary
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
<S>                         <C>             <C>
a.   Term of the franchise  Section IV.A    The date of our signing a franchise agreement for the 
                                            last Restaurant to be established under your development 
                                            schedule.
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                     -38-
<PAGE>

<TABLE>
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
                             Section in
                              Franchise
        Provision(1)          Agreement                                Summary
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
<S>                         <C>             <C>
b.   Renewal or extension   Section IV.B    If we determine that it would be desirable to establish 
     of the term                            additional Restaurants in your Assigned Area, you will 
                                            have a right of first refusal to purchase options to 
                                            establish these new Restaurants.
--------------------------------------------------------------------------------------------------------------
c.   Requirements for you   Section IV.B    Successful completion of your development schedule, 
     to renew or extend                     current compliance with all your franchise agreements, 
                                            sign and return a new development agreement containing 
                                            our then-current terms and conditions within 60 days of 
                                            your receipt of the agreement from us, and pay 
                                            development fee.
--------------------------------------------------------------------------------------------------------------
d.   Termination by you     None
--------------------------------------------------------------------------------------------------------------
e.   Termination by NYBE    None
     without cause
--------------------------------------------------------------------------------------------------------------
f.   Termination by NYBE    Section VI      We can terminate only if you commit one of several 
     with cause                             listed violations.
--------------------------------------------------------------------------------------------------------------
g.   "Cause" defined -      None
     which defaults which 
     can be cured
--------------------------------------------------------------------------------------------------------------
h.   "Cause" defined -      Section VI      Failure to comply with development schedule, any 
     defaults which cannot                  franchise agreement, or any other agreement between 
     be cured                               us, or make an improper transfer. You are adjudicated a 
                                            bankrupt or become insolvent, a receiver is appointed 
                                            and takes over your substantially all of your property, 
                                            you make a general assignment for the benefit of 
                                            creditors, or you are the subject of a bankruptcy petition 
                                            which is not dismissed within 90 days.
--------------------------------------------------------------------------------------------------------------
i.   Your obligations on    Section VI.D    No continued right to develop Restaurants in your 
     termination/non-                       Assigned Area.  Continued compliance with franchise 
     renewal                                agreements for existing Restaurants.
--------------------------------------------------------------------------------------------------------------
j.   Assignment of          Section VII.A   No restriction on our right to assign.
     contract 
     by NYBE
--------------------------------------------------------------------------------------------------------------
k.   "Transfer" by you -    Section VII.B   Governed by same terms as Franchise Agreement.
     definition
--------------------------------------------------------------------------------------------------------------
l.   NYBE's approval of     Section VII.B   Governed by same terms as Franchise Agreement.
     transfer by
     franchisee
--------------------------------------------------------------------------------------------------------------
m.   Conditions for NYBE    Section VII.B   Governed by same terms as Franchise Agreement.
     approval of
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                     -39-
<PAGE>

<TABLE>
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
                             Section in
                              Franchise
        Provision(1)          Agreement                                Summary
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
<S>                         <C>             <C>
n.   NYBE's right of first  Section VII.B   Governed by same terms as Franchise Agreement.
     refusal to acquire
     your 
     business
--------------------------------------------------------------------------------------------------------------
o.   NYBE's option to       None
     purchase your
     business
--------------------------------------------------------------------------------------------------------------
p.   Your death or          Section VII.B   Governed by same terms as Franchise Agreement.
     disability
--------------------------------------------------------------------------------------------------------------
q.   Non-competition        Section VIII    No involvement in competing business anywhere.
     covenants during the 
     term of the
     franchise(2)
--------------------------------------------------------------------------------------------------------------
r.   Non-competition        Section VIII    No competing business for 2 years after any transfer or 
     covenants after the                    termination of the Development Agreement within your 
     franchise is                           Assigned Area, the then-current Designated Market 
     terminated                             Area or Areas (DMA) in which your Assigned Area is 
     or expires(2)                          located, or the DMA of any other NYBE Restaurant 
                                            then existing.
--------------------------------------------------------------------------------------------------------------
s.   Modification of the    Section XIV     No modifications unless in writing signed by you and 
     agreement                              one of our authorized officers.
--------------------------------------------------------------------------------------------------------------
t.   Integration/merger     Section XIV     Only the terms of the Development Agreement are 
     clause                                 binding (subject to state law). Any other promises may 
                                            not be enforceable.
--------------------------------------------------------------------------------------------------------------
u.   Dispute resolution by  Section XV      All disputes must be mediated and then arbitrated in 
     arbitration or                         Wichita, Kansas. The mediation and arbitration 
     mediation(3)                           proceedings are governed by rules of the American 
                                            Arbitration Association.
--------------------------------------------------------------------------------------------------------------
v.   Choice of forum        Section XV      Litigation in Sedgwick County, Kansas.
--------------------------------------------------------------------------------------------------------------
w.   Choice of law          Section XV      Kansas law applies.
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
</TABLE>


NOTES:

   (1) Your owners must guarantee all of your obligations in the Franchise 
Agreement and the Development Agreement.

   (2) All of your partners, owners, officers, directors, managers, and 
members must also honor all of your obligations in Article 11 of the 
Franchise Agreement.  Upon our request, you must have your officers, 
directors, partners, members, managers, and owners sign a Covenant Agreement 
which includes similar non-competition covenants.

                                      -40-
<PAGE>

   (3) The obligations to engage in mediation and arbitration are also 
imposed on your officers, directors, partners, members, managers, and owners.

     These states have statutes which may supersede the franchise agreement 
in your relationship with the franchisor including the areas of termination 
and renewal of your franchise: ARKANSAS [Stat. Section 70-807], CALIFORNIA 
[Bus. & Prof. Code Sections 20000-20043], CONNECTICUT [Gen. Stat. Section 
42-133e et seq.], DELAWARE [Code, tit.], HAWAII [Rev. Stat. Section 482E-1], 
ILLINOIS [Rev. Stat. Chapter 121 1/2 PARA 1719-1720], INDIANA [Stat. Section 
23-2-2.7],IOWA [Code Sections 523H.1-523H.17], MICHIGAN [Stat. Section 
19.854(27)], MINNESOTA [Stat. Section 80C.14], MISSISSIPPI [Code Section 
75-24-51],MISSOURI [Stat. Section 407.400], NEBRASKA [Rev. Stat. Section 
87-401], NEW JERSEY [Stat. Section 56:10-1], SOUTH DAKOTA [Codified Laws 
Section 37-5A-51],VIRGINIA [Code 13.1-557-574-13.1-564], WASHINGTON [Code 
Section 19.100.180],WISCONSIN [Stat. Section 135.03].  These and other 
states may have court decisions which may supersede the franchise agreement 
in your relationship with the franchisor including the areas of termination 
and renewal of your franchise.

                                    ITEM 18

                                 PUBLIC FIGURES

     NYBE does not use any public figure to promote its franchise.




                                    ITEM 19

                 REPRESENTATIONS REGARDING EARNINGS CAPABILITY

     WE DO NOT FURNISH OR AUTHORIZE OUR SALESPERSONS TO FURNISH ANY ORAL OR 
WRITTEN INFORMATION CONCERNING THE ACTUAL OR POTENTIAL SALES, COSTS, INCOME, 
OR PROFITS OF A NYBE RESTAURANT.  ACTUAL RESULTS VARY FROM RESTAURANT TO 
RESTAURANT AND WE CANNOT ESTIMATE THE RESULTS OF ANY PARTICULAR FRANCHISE.


                                     -41-
<PAGE>

                                       ITEM 20

                                   LIST OF OUTLETS

                         FRANCHISED RESTAURANT STATUS SUMMARY
                              FOR YEARS 1994/1995/1996(1)


<TABLE>
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Franchises
                               Canceled or                 Reacquired By    Left the System   Total From Left    Operating At
      STATE        Transfers    Terminated    Not Renewed       NYBE             Other            Columns(2)       Year End
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>          <C>           <C>           <C>              <C>              <C>                <C>
 Alabama             0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            0/0/1
------------------------------------------------------------------------------------------------------------------------------
 Arizona             0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            0/1/2
------------------------------------------------------------------------------------------------------------------------------
 Arkansas            0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            1/1/3
------------------------------------------------------------------------------------------------------------------------------
 Colorado            0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            0/1/4
------------------------------------------------------------------------------------------------------------------------------
 Florida             0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            0/1/1
------------------------------------------------------------------------------------------------------------------------------
 Kansas              0/0/0        0/0/1          0/0/0         0/1/0             0/0/0             0/1/1            2/1/0
------------------------------------------------------------------------------------------------------------------------------
 Louisiana           0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            0/0/1
------------------------------------------------------------------------------------------------------------------------------
 Missouri            0/0/0        0/0/1          0/0/0         0/0/0             0/0/0             0/0/1            1/1/0
------------------------------------------------------------------------------------------------------------------------------
 Nebraska            0/1/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/1            1/2/4
------------------------------------------------------------------------------------------------------------------------------
 New Mexico          0/0/0        0/0/0          0/0/0         0/0/1             0/0/0             0/0/1            0/1/0
------------------------------------------------------------------------------------------------------------------------------
 North Dakota        0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            0/1/1
------------------------------------------------------------------------------------------------------------------------------
 Oklahoma            0/0/0        0/0/0          0/0/0         0/0/0             0/1/0             0/1/0            1/0/0
------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                         -42-

<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Franchises
                               Canceled or                 Reacquired By    Left the System   Total From Left    Operating At
      STATE        Transfers    Terminated    Not Renewed       NYBE             Other            Columns(2)       Year End
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>          <C>           <C>           <C>              <C>              <C>                <C>
 South Carolina      0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            0/1/2
------------------------------------------------------------------------------------------------------------------------------
 Tennessee           0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            1/2/2
------------------------------------------------------------------------------------------------------------------------------
 Texas               0/0/1        0/0/3          0/0/0         0/0/0             0/0/0             0/0/4           2/11/11
------------------------------------------------------------------------------------------------------------------------------
 Washington          0/0/0        0/0/0          0/0/0         0/0/0             0/0/0             0/0/0            0/1/1
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
 TOTALS              0/1/1        0/0/5          0/0/0         0/1/1             0/1/0             0/0/8           9/25/33
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTES:

  (1) All numbers are as of December 31 for each year.

  (2) The numbers in the "Total" column may exceed the numbers for Restaurants
      affected because several events may have affected the same Restaurant. For
      example, the same Restaurant may have had multiple owners.



                                                      -43-

<PAGE>




                         STATUS OF COMPANY OWNED RESTAURANTS
                              FOR YEARS 1994/1995/1996(1)

<TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                                           Total Restaurants
               Restaurants Closed   Restaurants Opened   Operating at Year End
    State         During Year          During Year
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<S>                <C>                 <C>                     <C>
 Kansas              0/0/0                0/0/0                  2/3/3
--------------------------------------------------------------------------------
 Missouri            0/0/0                0/0/1                  0/0/1
--------------------------------------------------------------------------------
 New Mexico          0/0/0                0/0/0                  0/0/1
--------------------------------------------------------------------------------
 Oklahoma            0/0/0                2/2/4                10/11/15
--------------------------------------------------------------------------------
 Tennessee           0/0/0                0/0/3                  0/1/4
--------------------------------------------------------------------------------
 Texas               0/0/0                0/0/2                  0/0/2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 TOTALS              0/0/0                2/2/10               12/15/26
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>

NOTES:

  (1) All numbers are as of December 31 for each year.  Prior to December 28,
      1995, all of the Company owned Restaurants were owned by affiliates of 
      NYBE which were merged into NYBE on December 28, 1995.









                                          -44-


<PAGE>



                           NEW YORK BAGEL ENTERPRISES, INC.
                                FRANCHISED RESTAURANTS
                                    AS OF 12/31/96

<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
      State               Franchisee           Our Unit Nos.                Address                Telephone No.   Number of Units
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                          <C>            <C>                                 <C>                <C>
 Alabama          Brian Kelleher                    134       801 20th Street South, Birmingham,  (205) 326-6927          1
                  Jennifer Bouille                            Alabama 35205
-----------------------------------------------------------------------------------------------------------------------------------
 Arizona          Andy and Marilyn Camarata         110       6165 E. Broadway Blvd.              (520) 748-1408          1
                                                              Tucson, Arizona 85711
-----------------------------------------------------------------------------------------------------------------------------------
 Arizona          Andy and Marilyn Camarata         131       7090 N. Oracle, Suite 148           (520) 797-9700          1
                                                              Tucson, Arizona 85704
-----------------------------------------------------------------------------------------------------------------------------------
 Arkansas         Jay Ramsey                        109       9101 W. Markham #28                 (501) 954-8000          1
                                                              Little Rock, Arkansas 72205
-----------------------------------------------------------------------------------------------------------------------------------
 Arkansas         Bill Eichorn                      136       523 Center                          (501) 375-6969          1
                                                              Little Rock, Arkansas 72205
-----------------------------------------------------------------------------------------------------------------------------------
 Arkansas         Brian Colton                      141       4507 Fairway Avenue                 (501) 791-2484          1
                                                              Little Rock, Arkansas 72116
-----------------------------------------------------------------------------------------------------------------------------------
 Colorado         Danny Cowan                       113       8055 W. Bowles Ave., 2A-1           (303) 932-2435          1
                  Joey Gentry                                 Littleton, Colorado 80123
-----------------------------------------------------------------------------------------------------------------------------------
 Colorado         Danny Cowan                       138       2764 S. Wadsworth Blvd.             (303) 793-8860          1
                  Joey Gentry                                 Denver, Colorado 80227
-----------------------------------------------------------------------------------------------------------------------------------
 Colorado         Bill Manning                      135       14004 E. Mississippi Avenue         (303) 751-9909          1
                                                              Aurora, Colorado 80112
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                             -45-

<PAGE>


<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
      State               Franchisee           Our Unit Nos.                Address                Telephone No.   Number of Units
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                          <C>            <C>                                 <C>                <C>
 Colorado         Bill Manning                      133       5996 S. Holly Street                (303) 804-0706          1
                                                              Englewood, Colorado 80111
-----------------------------------------------------------------------------------------------------------------------------------
 Florida          Brian Sanders                     121       14394 N. Dale Mabry Hwy.            (813) 962-5957          1
                                                              Tampa, Florida 33616
-----------------------------------------------------------------------------------------------------------------------------------
 Louisiana        Jason Edwards                     129       4201 Veteran's Blvd., Suite C       (504) 454-7517          1
                  John Bouilette                              Metairie, Louisiana 70006
-----------------------------------------------------------------------------------------------------------------------------------
 Nebraska         Larry Heinrich                    102       2925 S. 108th                       (402) 397-1010          1
                                                              Omaha, Nebraska 68114
-----------------------------------------------------------------------------------------------------------------------------------
 Nebraska         Larry Heinrich                    111       1650 Farnam, #110                   (402) 342-2700          1
                                                              Omaha, Nebraska 68102
-----------------------------------------------------------------------------------------------------------------------------------
 Nebraska         Larry Heinrich                    128       10393 Pacific Street                (402) 392-1060          1
                                                              Omaha, Nebraska 67114
-----------------------------------------------------------------------------------------------------------------------------------
 Nebraska         Larry Heinrich                    137       245 N. 13th Street                  (402) 438-0088          1
                                                              Lincoln, Nebraska 68508
-----------------------------------------------------------------------------------------------------------------------------------
 North Dakota     Jerry Bunk                        123       505 E. Bismarck Expressway          (701) 222-4222          1
                                                              Bismarck, North Dakota 58504
-----------------------------------------------------------------------------------------------------------------------------------
 South Carolina   Brian Vrana                       120       817 Harden Street                   (803) 252-6969          1
                  John Overbeck                               Columbia, South Carolina 29205
-----------------------------------------------------------------------------------------------------------------------------------
 South Carolina   John Overbeck                     140       1473 Sumter St.                     (803) 252-5195          1
                                                              Columbia, South Carolina 29201
-----------------------------------------------------------------------------------------------------------------------------------
 Tennessee        Steve Bethel                      103       4622 Kingston Pike                  (423) 588-1364          1
                  David Wann                                  Knoxville, Tennessee 37919 
-----------------------------------------------------------------------------------------------------------------------------------
 Tennessee        Marc Crosler                      117       710 S. Gay Street                   (423) 546-7777          1
                                                              Knoxville, Tennessee 37902
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Amarillo Bagel, Inc.              116       2802 Soncy Road                     (806) 355-6299          1
                                                              Amarillo, Texas 79121
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                         -46-


<PAGE>

<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
      State               Franchisee           Our Unit Nos.                Address                Telephone No.   Number of Units
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                          <C>            <C>                                 <C>                <C>
 Texas            Amarillo Bagel, Inc.              127       2646 W. 34th                        (806) 355-1588          1
                                                              Amarillo, Texas 79016
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Quinpar, Inc.                     106       4304 Lemmon Avenue                  (214) 521-8141          1
                                                              Dallas, Texas 75219
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Quinpar, Inc.                     115       101 Preston Royal                   (214) 368-3354          1
                                                              Dallas, Texas 75230
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Steve and Andrea Gass             114       3020 Legacy Drive                   (214) 491-0342          1
                                                              Plano, Texas 75023
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Steve and Andrea Gass             130       7750 N. MacArthur, #115             (214) 409-9977          1
                                                              Irving, Texas 75063
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Bart and Sandra Younger           124       606 Embassy Oaks #400               (210) 495-5548          1
                  Mike and Jan Moslenor                       San Antonio, Texas 78216
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Bart and Sandra Younger           132       5146 Broadway                       (210) 824-6927          1
                  Mike and Jan Moslenor                       San Antonio, Texas 78209
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Kyle Shipley                      108       9070 Research Blvd., Suite 303      (512) 467-1700          1
                                                              Austin, Texas 78758
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Paul Murphy                       125       13450 Research Blvd.                (512) 258-6969          1
                  Andrew Lee                                  Austin, Texas 78750
-----------------------------------------------------------------------------------------------------------------------------------
 Texas            Steve Rubin                       139       3800 N. Mesa, C2                    (915) 532-7070          1
                  Norman Pulver                               El Paso, Texas 79902
-----------------------------------------------------------------------------------------------------------------------------------
 Washington       Wayne Gresseth                    118       1304 Ocean Beach Hwy.               (360) 414-4100          1
                  Troy Gresseth                               Longview, Washington 98832
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
 TOTAL                                                                                                                    33
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>




                                                       -47-


<PAGE>

                                  PROJECTED OPENINGS
                               AS OF DECEMBER 31, 1996

<TABLE>
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
                   Franchise Agreements     Projected Franchised     Projected Company
                   Signed but Restaurant   New Restaurants in the   Openings in the Next
      State              Not Open(1)          Next Fiscal Year          Fiscal Year
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
<S>                <C>                     <C>                      <C>
 Alabama                     0                       1                       7
----------------------------------------------------------------------------------------
 Arizona                     0                       0                       0
----------------------------------------------------------------------------------------
 Arkansas                    2                       3                       0
----------------------------------------------------------------------------------------
 Colorado                    0                       2                       0
----------------------------------------------------------------------------------------
 Florida                     1                       2                       0
----------------------------------------------------------------------------------------
 Georgia                     0                       0                       4
----------------------------------------------------------------------------------------
 Kansas                      0                       0                       3
----------------------------------------------------------------------------------------
 Kentucky                    0                       0                       0
----------------------------------------------------------------------------------------
 Louisiana                   0                       0                       0
----------------------------------------------------------------------------------------
 Missouri                    0                       1                       1
----------------------------------------------------------------------------------------
 Nebraska                    0                       0                       0
----------------------------------------------------------------------------------------
 Oklahoma                    0                       0                       3
----------------------------------------------------------------------------------------
 New Mexico                  0                       0                       1
----------------------------------------------------------------------------------------
 North Dakota                0                       0                       0
----------------------------------------------------------------------------------------
 South Carolina              0                       0                       0
----------------------------------------------------------------------------------------
 Tennessee                   0                       4                       1
----------------------------------------------------------------------------------------
 Texas                       1                       2                       6
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
          TOTALS             4                      15                      26
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
</TABLE>


NOTES:

   (1)  As of December 31, 1996.


     We expect to enter into five Development Agreements in fiscal year 1997 
which will cover territories in the following states: Florida, Tennessee, 
Georgia, and Missouri.

                                     -48-
<PAGE>

     One franchised Restaurant located in Hurst, Texas was voluntarily closed 
in 1996 by its owner, Randa Warren. Ms. Warren's home address and telephone 
number are 2158 E. 27th Street, Tulsa, Oklahoma 74114, 918-625-7003.  Two 
franchised Restaurants, one located in Olathe, Kansas and one in Kansas City, 
Missouri were voluntarily closed in 1996 by their owner Alex Meitzner.  Alex 
Meitzner's address and phone number are 120 S. Market, Wichita, Kansas 67202, 
316-262-4955. Two franchised Restaurants located in Houston, Texas, were 
voluntarily closed in 1996 by their owner, Rick McElhaney.  Mr. McElhaney's 
address and phone number are 7458 Rivergarden Drive, Houston, Texas 77065, 
713-463-9901.  One franchised Restaurant located in Dallas, Texas was 
voluntarily closed in March, 1997 by Jim Quinlan, its owner, who still 
operates a franchised Restaurant in Dallas, Texas. Mr. Quinlan's address and 
telephone number are 4304 Lemmon Avenue #106, Dallas, Texas 75219, 
214-521-8141. Except for these Restaurants, no NYBE franchisees have had any 
outlets terminated, canceled, not renewed, or otherwise voluntarily ceased to 
do business during our most recently completed fiscal year (January 1, 1996 - 
December 31, 1996), or have not communicated with us within ten weeks of the 
date of this Offering Circular.


                                    ITEM 21

                              FINANCIAL STATEMENTS

     This Offering Circular includes our audited financial statements for the 
periods ended December 29, 1996, December 31, 1995, and December 31, 1994.


                                    ITEM 22

                                   CONTRACTS

     The following agreements are attached to this Offering Circular:

               Exhibit A - Development Agreement
               Exhibit B - Franchise Agreement
               Exhibit C - Guaranty (of Franchise Agreement)
               Exhibit D - Guaranty (of Development Agreement)
               Exhibit E - Covenant Agreement
               Exhibit F - Confidentiality Agreement
               Exhibit G - Addendum to Lease Agreement
               Exhibit H - Financial Statements

                                     -49-
<PAGE>

                                    ITEM 23

                                    RECEIPT


This Offering Circular summarizes provisions of the Franchise Agreement and 
other information in plain language.  Read this Offering Circular and all 
agreements carefully.

If New York Bagel Enterprises, Inc. ("NYBE") offers you a franchise, NYBE 
must provide this Offering Circular to you by the earliest of:

     (1)  The first personal meeting to discuss our franchise; or

     (2)  Ten business days before the signing of a binding agreement; or

     (3)  Ten business days before a payment to NYBE.

You must also receive a Franchise Agreement containing all material terms at 
least five business days before you sign a Franchise Agreement.

If NYBE does not deliver this Offering Circular on time or if it contains a 
false or misleading statement, or a material omission, a violation of federal 
and state law may have occurred and should be reported to the Federal Trade 
Commission, Washington, D.C. 20580.

I have received a Uniform Franchise Offering Circular dated March 27, 1997.

We have not engaged a franchise broker to offer the franchise in your state.

This offering circular included the following Exhibits:

A.  Development Agreement                    E.  Covenant Agreement

B.  Franchise Agreement                      F.  Confidentiality Agreement

C.  Guaranty (of Franchise Agreement)        G.  Addendum to Lease Agreement

D.  Guaranty (of Development Agreement)      H.  Financial Statements



--------------------                    ---------------------------------------
Date                                    Franchisee

     A DETACHABLE COPY OF THIS RECEIPT FOLLOWS THE EXHIBITS TO THIS OFFERING 
CIRCULAR.  PLEASE ACKNOWLEDGE YOUR RECEIPT OF THIS OFFERING CIRCULAR BY 
SIGNING THE COPY OF THE RECEIPT AND RETURNING IT TO US.

                                     -50-
<PAGE>











                           NEW YORK BAGEL ENTERPRISES, INC.

                                DEVELOPMENT AGREEMENT



























                                      Exhibit A

<PAGE>

                           NEW YORK BAGEL ENTERPRISES, INC.

                                DEVELOPMENT AGREEMENT


                                  TABLE OF CONTENTS

<TABLE>
SECTION                                                                          PAGE
-------                                                                          ----
<S>       <C>                                                                   <C>
I.        Grant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

II.       Development Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

III.      Development Schedule and Manner of Exercising Options. . . . . . . . . . .3

IV.       Term and Right of First Refusal. . . . . . . . . . . . . . . . . . . . . .5

V.        Duties of the Parties. . . . . . . . . . . . . . . . . . . . . . . . . . .5

VI.       Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

VII.      Transferability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

VIII.     Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

IX.       Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

X.        Independent Contractor and Indemnification . . . . . . . . . . . . . . . 10

XI.       Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

XII.      Non-Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

XIII.     Severability and Construction. . . . . . . . . . . . . . . . . . . . . . 11

XIV.      Entire Agreement - Applicable Law. . . . . . . . . . . . . . . . . . . . 12

XV.       Remedies and Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . 12

XVI.      Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
Attachment "A" (Development Schedule)
Attachment "B" (Franchise Agreement)


<PAGE>

                           NEW YORK BAGEL ENTERPRISES, INC.

                                DEVELOPMENT AGREEMENT


     This Development Agreement, by and between New York Bagel Enterprises,
Inc., a Kansas corporation having its chief executive offices at 250 North
Water, Wichita, Kansas 67202 (hereinafter referred to as "Franchisor"), and ____
_________________________________________________________________ (hereinafter
referred to as "Developer"), is entered into, on the date of execution by
Franchisor, as indicated below.


     W I T N E S S E T H:  That;


     WHEREAS, Franchisor, as a result of the expenditure of time, skill, effort,
and money has developed and owns a unique and distinctive system (hereinafter
"System") relating to the design, establishment, and operation of  restaurants
under the name "New York Bagel Cafe & Deli-TM-" (such name and such other trade
names, service marks, trademarks, logos, emblems, and other indicia of origin as
are now designated or may in the future be designated by Franchisor in writing
as part of the System, hereinafter "Proprietary Marks"), which feature bagels
made fresh daily, sandwiches, salads, soups, beverages, and dessert products;
and


     WHEREAS, Developer wishes to obtain certain options for the development of
New York Bagel Cafe & Deli restaurants in the area described in this Development
Agreement.


     NOW, THEREFORE, the parties, in consideration of the undertakings and
commitments of each party to the other set forth herein, mutually agree a
follows:


                                      SECTION I.

                                        GRANT


     A.   Franchisor hereby grants to Developer, pursuant to the terms and
conditions of this Agreement, options to obtain franchises to establish and
operate _______ New York Bagel Cafe & Deli restaurants with bakeries ("Bakery
Restaurants") and _____  New York Bagel Cafe & Deli restaurants without bakeries
("Satellite Restaurants," and together with the Bakery 



                                      -1-

<PAGE>

Restaurants, collectively "Restaurants") within the area described in 
Attachment "C" to this Agreement (hereinafter "Assigned Area").

     B.   Except as otherwise provided in this Agreement or in any applicable
Franchise Agreement, Franchisor shall not establish, nor franchise another to
establish, a Restaurant under the System in the Assigned Area prior to the
expiration of the development schedule set forth in Attachment "A" hereto (the
"Development Schedule").  Prior to the expiration of the Development Schedule,
subject to Developer's right of first refusal described in Section I.C.,
Franchisor retains the right to acquire restaurants and/or to acquire a
franchisor with franchisees which operate restaurants (but not to establish
restaurants or to franchise another to establish restaurants) at any location
within the Assigned Area, which operate under proprietary marks other than those
used in connection with the System for the sale of the same, similar, or
different products and services, on any terms and conditions Franchisor may deem
advisable.


     C.    Franchisor shall provide written notice to Developer within a
reasonable time upon Franchisor's acquisition prior to the expiration of the
Development Schedule of any restaurants which operate under proprietary marks
other than those used in connection with the System for the sale of the same,
similar, or different products and services which are located in the Assigned
Area (hereinafter, whether one or more, "Non-System Restaurants").  Such notice
shall provide Developer with a right of first refusal to acquire such Non-System
Restaurants from Franchisor on the terms provided below if the sale by
Franchisor of such restaurants to Developer is allowed by applicable law. 
Subject to the foregoing, Developer shall have the right and option, exercisable
within 30 days after receipt of such written notification, to provide written
notice to Franchisor that Developer desires to purchase the Non-System
Restaurants and to convert all of such restaurants to Restaurants under the
System.  In the event Developer elects to purchase and convert the Non-System
Restaurants, Developer must close on such purchase and execute a Franchise
Agreement in the form attached hereto as Attachment "B" (which shall require
payment of the initial franchise fee) within 60 days from the date of notice to
Franchisor of Developer's election to purchase and convert.  The purchase price
to be paid by Developer for the Non-System Restaurants shall be the cash
equivalent of Franchisor's cost for each of the Non-System Restaurants, as
determined by Franchisor in Franchisor's sole discretion.  In the event
Developer does not elect to purchase and convert the Non-System Restaurants as
provided in this Section I.C., Developer shall have no further right or option
to acquire such Non-System Restaurants, and Franchisor may sell such restaurants
to a third party and/or continue to operate the Non-System Restaurants under
proprietary marks other than those used in connection with the System.  Upon the
expiration of the Development Schedule, Franchisor may convert the Non-System
Restaurants to Restaurants under the System, subject to any contrary provisions
contained in any applicable Franchise Agreement between Developer and
Franchisor.


                                      -2-

<PAGE>


                                   SECTION II.

                                DEVELOPMENT FEE


     In consideration of the development rights granted herein, Developer shall
pay to Franchisor upon execution of this Agreement a Development Fee of
$________________, plus an additional $14,000 to be paid for each Bakery
Restaurant opening and $8,000 to be paid for each Satellite Restaurant opening
at the time the Franchise Agreement is executed for each Restaurant (as
described in Section III.B. below), which fees shall be fully earned by
Franchisor upon execution of this Agreement, for administrative and other
expenses incurred by Franchisor and for the development opportunities lost or
deferred as a result of Franchisor's entering into this Agreement with
Developer.  Upon payment of the additional $14,000 for a Bakery Restaurant or
$8,000 for a Satellite Restaurant by Developer the initial franchise fee for the
Restaurant set forth in Section 4.1.A of the Franchise Agreement shall be deemed
paid in full.


                                  SECTION III.

             DEVELOPMENT SCHEDULE AND MANNER OF EXERCISING OPTIONS


     A.   Developer shall exercise each development option granted hereunder by
entering into a Franchise Agreement, in the form attached hereto as Attachment
"B", with Franchisor for the construction and establishment of a Restaurant at a
location approved by Franchisor.  Recognizing that time is of the essence,
Developer agrees to exercise its options in accordance with the Development
Schedule set forth in Attachment "A" hereto.  Failure by Developer to have
exercised its options within the time specified in the Development Schedule
shall constitute a default under this Agreement.


     B.   Prior to the acquisition by lease or purchase of any site for a
Restaurant in the Assigned Area, Developer shall submit to Franchisor in the
form specified by Franchisor a description of the site, a market feasibility
study for the site, and such other information or materials as Franchisor may
reasonably require, together with a letter of intent or other evidence
satisfactory to Franchisor which confirms Developer's favorable prospects for
obtaining the site.  Franchisor shall have 15 days after receipt of such
information and materials from Developer to approve or disapprove, in its sole
discretion, the site as the location for the Restaurant.  In the event
Franchisor does not disapprove the site by written notice to Developer within
the 15 days, such site shall be deemed approved by Franchisor.  Within 45 days
of site approval by 


                                      -3-

<PAGE>

Franchisor (or within such additional period as may be agreed upon between 
the parties hereto in the event that, after diligent good faith efforts, 
Developer is unable to complete the requirements of this Section on a timely 
basis due to events beyond Developer's reasonable control), Developer shall 
execute a lease (if the premises are to be leased) after obtaining 
Franchisor's prior written approval of the lease terms, which approval shall 
not be unreasonably withheld, or a binding agreement to purchase the site, 
and a franchise agreement relating to the approved site.  No extension to 
such 45 day requirement shall extend the time periods specified in the 
Development Schedule for the exercise of options by Developer. The lease, if 
any, must contain the following conditions in order to be approved by 
Franchisor:

          1.   That Franchisor shall have the right to enter the premises during
     reasonable business hours to make any modification necessary to protect
     Franchisor's Proprietary Marks; 

          2.   That in the event a notice of default or termination is delivered
     to Developer with respect to the lease, a copy of such notice shall be
     delivered concurrently to Franchisor; and

          3.   That Franchisor shall have the right, but not the duty, to assume
     the lease if Developer is in default under the terms and provisions of the
     lease or the lease is terminated and/or the franchise agreement expires or
     is terminated; and

          4.   That the term shall be at least ten years including option
     periods in favor of Developer.


Developer acknowledges that Franchisor's approval of the site (and the lease or
purchase agreement for the site) does not in any way guarantee that the site
will become a profitable Restaurant.  Developer expressly acknowledges that
Franchisor's approval of the site (and the lease or purchase agreement of the
site) shall not be deemed to be or construed as a warranty or guarantee, express
or implied, as to the potential volume, profits, or success of the Restaurant to
be located on the site.


                                      -4-

<PAGE>


                                  SECTION IV.

                       TERM AND RIGHT OF FIRST REFUSAL


     A.   Unless sooner terminated in accordance with the terms of this
Agreement, the term of this Agreement and all rights granted hereunder (except
for the right of first refusal provided in Section IV.B below) shall expire on
the date of Franchisor's acceptance and execution of a Franchise Agreement for
the last of the Restaurants to be established pursuant to the Development
Schedule.


     B.   If at any time following Developer's successful completion of the
Development Schedule, Franchisor determines that it is desirable to establish
additional Restaurants under the System in the Assigned Area, and Developer is
then in compliance with all terms and conditions of all Franchise Agreements
between Developer and Franchisor, Developer shall have a right of first refusal
to purchase the options to establish such additional Restaurants upon
Franchisor's then-current terms and conditions.  In that event, Franchisor shall
submit to Developer a development agreement offering such options, which
agreement shall supersede in all respects this Agreement, and Developer shall
have 60 days after receipt to execute and return the agreement to Franchisor. 
In the event that Developer does not exercise this right of first refusal,
Franchisor may thereafter elect to establish additional Restaurants itself or
grant options to others to do so in the assigned area.


                                 SECTION V.

                           DUTIES OF THE PARTIES


     A.   Franchisor shall furnish to Developer the following:

          1.   A Development Manual, on loan, setting forth site selection
     guidelines, and containing a set of prototype plans and specifications (not
     for construction) for a Bakery Restaurant and a Satellite Restaurant.

          2.   On-site evaluation as Franchisor deems advisable in response to
     Developer's request for site approval; provided, however, the Franchisor
     shall not provide on-site evaluation for any proposed site prior to its
     receipt from Developer of a market feasibility study for such site prepared
     by Developer pursuant to Section III.B. hereof.


                                      -5-

<PAGE>


     B.   Developer accepts the following obligations:

          1.   Developer shall comply with all terms and conditions set forth in
     this Agreement.

          2.   Developer shall at all times preserve in confidence the
     Development Manual and any and all materials and information furnished or
     disclosed to Developer by Franchisor and designated by Franchisor as
     confidential, and Developer shall disclose such information or materials
     only to such of its employees or agents who must have access to it in
     connection with their employment.  Developer shall not at any time, without
     Franchisor's prior written consent, copy, duplicate, record, or otherwise
     reproduce the Development Manual or other materials or information, in
     whole or in part, nor otherwise make the same available to any unauthorized
     person.

          3.   Developer shall comply with all requirements of federal, state,
     and local laws, rules, and regulations.


                                  SECTION VI.

                                    DEFAULT


     A.   The options and territorial rights granted to Developer in this
Agreement have been granted in reliance on Developer's representations and
assurances, among others, that the schedule of development set forth in
Attachment "A" to this Development Agreement will be met by Developer in a
timely manner.


     B.   Developer shall be deemed in default under this Agreement, and all
rights granted herein shall automatically terminate without notice, if Developer
is adjudicated a bankrupt, becomes insolvent, suffers temporary or permanent
count-appointed receivership of substantially all of Developer's property, makes
a general assignment for the benefit of creditors or suffers the filing of a
voluntary or involuntary bankruptcy petition which is not dismissed within 90
days after filing.


     C.   If Developer fails to comply with the Development Schedule, fails to
comply with any other terms and conditions of any individual Franchise
Agreement, Development Agreement, or any other agreement between Developer and
Franchisor, or makes or attempts to make a 


                                      -6-

<PAGE>

transfer or assignment in violation of Section VII.B. hereof, such action 
shall constitute a default under this Development Agreement.  Upon such 
default, Franchisor, in its discretion, may, without giving Developer prior 
notice or the right to cure any such default, do any one or more of the 
following:

          1.   Terminate this Agreement and all rights granted hereunder without
     affording Developer any opportunity to cure the default, effective
     immediately upon Developer's receipt of written notice from Franchisor;

          2.   Reduce the number of options granted Developer in Section I.A. of
     this Agreement;

          3.   Reduce the territory described in Section I.A. of this Agreement;

          4.   Terminate the territorial exclusivity granted Developer in
     Section I.B. of this Agreement.


     D.   Upon termination of this Agreement by Developer's default, all
remaining options shall be null and void.  Developer shall have no right to
establish or operate any Restaurant for which a Franchise Agreement has not been
executed by Franchisor.  No default under this Development Agreement shall
constitute a default under any Franchise Agreement between the parties hereto.


     E.   No right or remedy herein conferred upon or reserved to Franchisor is
exclusive of any other right or remedy provided or permitted by law or equity.


                                SECTION VII.

                              TRANSFERABILITY


     A.   Franchisor shall have the right to transfer all or any part of its
rights or obligations herein to any person or legal entity.


     B.   Developer understands and acknowledges that the rights and duties set
forth in this Development Agreement are personal to Developer and are granted in
reliance upon the personal qualifications of Developer.  Developer has
represented to Franchisor that Developer is entering 


                                      -7-

<PAGE>

into this Development Agreement with the intention of complying with its 
terms and conditions and not for the purpose of resale of the developmental 
rights hereunder.  Neither Developer nor any partner, member, or shareholder 
thereof shall, without Franchisor's prior written consent, directly or 
indirectly, sell, assign, transfer, convey, give away, pledge, mortgage, or 
otherwise encumber any interest in this Development Agreement or in 
Developer.  Any such proposed assignment occurring by operation of law or 
otherwise, including any assignment by the trustee in bankruptcy, without 
Franchisor's prior written consent shall be a material default of this 
Agreement.  Franchisor's consent to a transfer of any interest in this 
Development Agreement or in Developer shall be subject to the terms and 
conditions set forth in Article 13 of the Franchise Agreement (Attachment "B" 
hereto), including, without limitation, the right of first refusal provisions 
in favor of Franchisor contained therein; provided, however, if a proposed 
transfer hereunder would trigger the requirements of Section 13.3 of the 
Franchise Agreement, the transferee, in lieu of complying with subsections F 
through I of Section 13.3 of the Franchise Agreement, shall execute this 
Agreement and any ancillary agreements and pay to Franchisor a transfer fee 
of $2,500.  Notwithstanding any provision to the contrary contained in this 
Section VII, Developer may transfer not more than an aggregate of 25% of the 
outstanding voting shares or ownership interest of a Developer operating as a 
corporation, partnership, or limited liability company to employees of 
Developer who are actively engaged in Developer's Restaurant operations, if 
such transfers, alone or together with other previous, simultaneous, or 
proposed transfers, do not have the effect of transferring a controlling 
interest (as reasonably determined by Franchisor) in the Developer.  The 
ownership of such shares or ownership interest by such employees will be 
subject to all of the terms and conditions set forth in this Agreement and 
the Franchise Agreement, including, without limitation, Articles 11 and 13 of 
the Franchise Agreement. Developer shall provide Franchisor with written 
notice of any such proposed transfer and all pertinent information regarding 
the same not later than thirty (30) days prior to the proposed date of 
transfer.  

                               SECTION VIII.

                                 COVENANTS


     Developer covenants that, except as otherwise approved in writing by
Franchisor, Developer shall not do or engage in any act prohibited by Article 11
of the Franchise Agreement (Attachment "B").  Developer further covenants that
during the term hereof Developer shall not compete, or be associated, directly
or indirectly as an owner, officer, director, employee, consultant, or
otherwise, in any business in competition with the System, and, for a period of
two years after any transfer or termination of this Agreement for any reason,
Developer shall not compete, or be associated, directly or indirectly as an
owner, officer, director, employee, consultant, or otherwise, in any business in
competition with the System which is located within 


                                      -8-

<PAGE>

(i) the Assigned Area, (ii) the Designated Market Area or Areas identified by 
the then-current Nielson Wall Map published by the A.C. Nielson Company 
("DMA"), in which the Assigned Area is located, or (iii) the DMA of any other 
System Restaurant then existing; provided, however, that passive ownership of 
less than five percent (5%) of the outstanding voting securities of a 
publicly held corporation (which for purposes of this Agreement means a 
corporation registered under the Securities Exchange Act of 1934) shall not 
be deemed a violation of this Section.  In the event the A.C. Nielson Company 
discontinues the publication of Nielson Wall Maps for any reason, Franchisor 
shall have the right to designate an alternate generally recognized market 
identification resource for use in connection with this Section.  Unless the 
context otherwise requires, the term "developer" as used in this Section 
shall include, individually and collectively, all partners, officers, 
directors, and holders, directly or indirectly (and any partners, officers or 
directors of any such holder), of any beneficial interest in the development 
rights granted hereunder, and any immediate family members of any of such 
persons.

                                SECTION IX.

                                  NOTICES

     Any and all notices required or permitted under this Agreement shall be in
writing and shall be personally delivered or mailed by certified mail, return
receipt requested, to the respective parties at the following addresses unless
and until a different address has been designated by written notice to the other
party:

     Notices to Franchisor:   New York Bagel Enterprises, Inc.
                              250 N. Water
                              Wichita, Kansas 67202
                              Attn:  Franchise Department


     Notices to Developer:    
                              ------------------------------------
                              ------------------------------------
                              ------------------------------------
                              Attn:
                                   -------------------------------


     Any notice by certified mail shall be deemed to have been given at the date
and time of mailing.



                                      -9-
<PAGE>
                                       
                                   SECTION X.

                   INDEPENDENT CONTRACTOR AND INDEMNIFICATION

     A.   It is understood and agreed by the parties hereto that this 
Agreement does not create a fiduciary relationship between them, that nothing 
in this Development Agreement is intended to constitute either party an 
agent, legal representative, subsidiary, joint venturer, partner, employee, 
or servant of the other for any purpose whatsoever.  Each party to this 
Agreement is an independent contractor, and neither shall be responsible for 
the debts or liabilities incurred by the other.

     B.   Developer shall hold itself out to the public to be an independent 
contractor operating pursuant to this Agreement.  Developer agrees to take 
such reasonable actions as shall be necessary to that end.

     C.   Developer understands and agrees that nothing in this Development 
Agreement authorizes Developer to make any contract, agreement, warranty or 
representation on Franchisor's behalf, or to incur any debt or other 
obligation in Franchisor's name; and that Franchisor assumes no liability 
for, nor shall be deemed liable by reason of, any act or omission of 
Developer in Developer's conduct under this Development Agreement, or any 
claim or judgment arising therefrom.  Developer shall indemnify and hold 
Franchisor harmless against any and all such claims directly or indirectly 
from, as a result of, or in connection with Developer's operations hereunder, 
as well as the costs, including attorneys' fees, of defending against them.


                                  SECTION XI.

                                   APPROVALS

     A.   Whenever this Development Agreement requires the prior approval or 
consent of Franchisor, Developer shall make a timely written request to 
Franchisor therefor; and, except as otherwise provided herein, any approval 
or consent granted shall be in writing.

     B.   Franchisor makes no warranties or guarantees upon which Developer 
may rely and assumes no liability or obligation to Developer or any third 
party to which it would not 

                                     -10-
<PAGE>

otherwise be subject, by providing any waiver, approval, advice, consent, or 
services to Developer in connection with this Development Agreement, or by 
reason of any neglect, delay, or denial of any request therefor.


                                  SECTION XII.

                                   NON-WAIVER

     No failure of Franchisor to exercise any power reserved to it in this 
Agreement or to insist upon compliance by Developer with any obligation or 
condition in this Development Agreement, and no custom or practice of the 
parties at variance with the terms hereof, shall constitute a waiver of 
Franchisor's rights to demand exact compliance with the terms of this 
Agreement. Waiver by Franchisor of any particular default shall not affect or 
impair Franchisor's right in respect to any subsequent default of the same or 
of a different nature, nor shall any delay, forbearance, or omission of 
Franchisor to exercise any power or right arising out of any breach or 
default by Developer of any of the terms, provisions, or covenants of this 
Agreement, affect or impair Franchisor's rights, not shall such constitute a 
waiver by Franchisor of any rights hereunder or rights to declare any 
subsequent breach or default.


                                 SECTION XIII.

                         SEVERABILITY AND CONSTRUCTION

     A.   The provisions of this Agreement shall be deemed severable.

     B.   Nothing in this Agreement shall confer upon any person or legal 
entity other than Franchisor or Developer and such of their respective 
successors and assigns as may be contemplated by Section VII. hereof, any 
rights or remedies under or by reason of this Agreement.

     C.   All captions in this Agreement are intended solely for the 
convenience of the parties, and none shall be deemed to affect the meaning or 
construction of any provision hereof.  Time is of the essence of this 
Agreement in all respects.

                                     -11-
<PAGE>

     D.   All references herein to gender and number shall be construed to 
include such other gender and number as the context may require, and all 
acknowledgments, promises, covenants, agreements and obligations herein made 
or undertaken by Developer shall be deemed jointly and severally undertaken 
by all those executing this Agreement on behalf of Developer.

     E.   This Agreement may be executed in several parts, and each copy so 
executed shall be deemed an original.


                                  SECTION XIV.

                       ENTIRE AGREEMENT - APPLICABLE LAW

     This Agreement, the documents referred to herein, and the Attachments 
attached hereto constitute the entire, full, and complete agreement between 
Franchisor and Developer concerning the subject matter hereof and supersede 
any and all prior agreements.  No amendment, change, or variance from this 
Agreement shall be binding on either party unless executed in writing.  This 
Agreement shall be governed by the laws of the State of Kansas.


                                  SECTION XV.

                             REMEDIES AND DISPUTES

     A.   Developer and Franchisor agree to submit, prior to arbitration, all 
unsettled claims, disputes, controversies, and other matters in question 
between them arising out of or relating to this Agreement (including but not 
limited to any claim that the Agreement or any of its provisions is invalid, 
illegal, or otherwise voidable or void), the dealings or relationship between 
Developer and Franchisor, or Developer's development of any Restaurant 
("Disputes") to mediation in Wichita, Kansas and in accordance with the 
Commercial Mediation Rules of the American Arbitration Association currently 
in effect.  Demand for mediation shall be made within a reasonable time after 
cessation of negotiations.

          1.   Mediation shall be private, voluntary, and nonbinding.  Any party
     may withdraw from the mediation at any time before signing a settlement
     agreement upon written notice to each other party and to the mediator.  The
     mediator shall be neutral and impartial.  The mediator's fees shall be
     shared equally by the parties.  The mediator shall 

                                      -12-
<PAGE>

     be disqualified as a witness, consultant, expert, or counsel for either 
     party with respect to the matters in Dispute and any related matters.

          2.   Unless the parties agree otherwise, the entire mediation process
     shall be confidential and without prejudice.  The parties and the mediator
     shall not disclose any information, documents, statements, positions, or
     terms of settlement.  Nothing said or done or provided by the parties in
     the course of mediation shall be reported or recorded or, except as ordered
     by a court of competent jurisdiction, placed in any legal proceeding or
     construed for any purpose as an admission against interest.  Nevertheless,
     evidence otherwise discoverable or admissible is not excluded from
     discovery or admission as a result of its use in mediation.

If a Dispute cannot be resolved through mediation, the parties agree to 
submit the Dispute to arbitration, subject to the terms and conditions of 
this Section XV.

     B.   Subject to subsection A above, all Disputes between Developer and 
Franchisor will be submitted for binding arbitration to the American 
Arbitration Association on demand of either party. Such arbitration 
proceeding will be conducted in Wichita, Kansas and, except as otherwise 
provided in this Agreement, will be heard by one arbitrator in accordance 
with the Commercial Arbitration Rules of the American Arbitration Association 
then in effect.  All matters relating to arbitration will be governed by the 
federal Arbitration Act (9 U.S.C. Sections 1 ET.SEQ.) and not by any state 
arbitration law.

          1.   The arbitrator will have the right to award or include in his
     award any relief which he deems proper under the circumstances, including,
     without limitation, money damages (with interest on unpaid amounts from the
     date due), specific performance, injunctive relief, and attorneys' fees and
     costs, provided that the arbitrator will not have the right to declare any
     of Franchisor's proprietary marks generic or otherwise invalid or to award
     exemplary or punitive damages.  The award and decision of the arbitrator
     will be conclusive and binding upon all parties hereto, and judgment upon
     the award may be entered in any court of competent jurisdiction.

          2.   Developer and Franchisor agree to be bound by the provisions of
     any limitation on the period of time in which claims must be brought under
     applicable law.  Developer and Franchisor further agree that, in connection
     with any such arbitration proceeding, each must submit or file any claim
     which would constitute a compulsory counterclaim (as defined by Rule 13 of
     the Federal Rules of Civil Procedure) within the same proceeding as the
     claim to which it relates.  Any such claim which is not submitted or filed
     as described above will be forever barred.

                                      -13-
<PAGE>

          3.   Developer and Franchisor agree that arbitration will be conducted
     on an individual, not a class-wide, basis, and that an arbitration
     proceeding between Developer and Franchisor may not be consolidated with
     any other arbitration proceeding involving Developer or Franchisor and
     another party.

     C.   Notwithstanding anything to the contrary contained in this Section 
XV, Developer and Franchisor each have the right in a proper case to obtain 
temporary restraining orders and temporary or preliminary injunctive relief 
from a court of competent jurisdiction; provided, however, that Developer and 
Franchisor must contemporaneously submit the Dispute for non-binding 
mediation under subsection A above and then for arbitration under subsection 
B above on the merits as provided herein if such Dispute cannot be resolved 
through mediation.  Developer acknowledges that a proper case to obtain 
temporary restraining orders and temporary or permanent injunctive relief 
from a court of competent jurisdiction contemporaneously with submitting the 
Dispute to mediation and then to arbitration shall include, but not be 
limited to, the following:

          1.   Any Dispute involving actual or threatened disclosure or misuse
     of the contents of the Development Manual or any other confidential
     information or trade secrets of Franchisor; 

          2.   Any Dispute involving the ownership, validity, use of, or right
     to use or license Franchisor's marks;

          3.   Any action by Franchisor to enforce the covenants set forth in
     Section VII and Section VIII of the Agreement; and

          4.   Any action by Franchisor to stop or prevent any threat or danger
     to public health or safety resulting from the construction of a Restaurant.


The provisions of subsections A and B above are intended to benefit and bind 
certain third party non-signatories and will continue in full force and 
effect subsequent to and notwithstanding the expiration or termination of 
this Agreement.

     D.   In the event that Developer commences any action against Franchisor 
with respect to any Dispute, such action shall be brought only in a federal 
or state court sitting within Sedgwick County, Kansas.  Developer consents to 
the exercise of jurisdiction by courts within Sedgwick County, Kansas over 
any claims or counterclaims against Developer.

                                     -14-
<PAGE>

     E.   In the event Franchisor incurs legal fees or costs or other 
expenses to enforce any obligation of Developer hereunder, or to defend 
against any claim, demand, action or proceeding by reason of Developer's 
failure to perform or observe any obligation imposed upon Developer by this 
Agreement, then Franchisor shall be entitled to recover from Developer the 
amount of all legal fees, costs and expenses, including reasonable attorneys' 
fees, whether incurred prior to, or in preparation for or contemplation of 
the filing of any claim, demand, action, or proceeding to enforce any 
obligation of Developer hereunder or thereafter or otherwise.

     F.   Nothing contained in this Section XV shall bar Franchisor's right 
to obtain injunctive relief against threatened conduct that will cause it 
loss or damage, under the usual equity rules, including the applicable rules 
for obtaining restraining orders and preliminary injunctions


                                  SECTION XVI.

                                   DISCLAIMER

     A.   Developer acknowledges that the success of the business venture 
contemplated by this Agreement involves substantial business risks and will 
be largely dependent upon the ability of Developer as an independent 
businessman. Franchisor expressly disclaims the making of, and Developer 
acknowledges Developer has not received, any warranty or guarantee, express 
or implied, as to the potential volume, profits, or success of the business 
venture contemplated by this Agreement.

     B.   Developer acknowledges that Developer received a copy of the New 
York Bagel Enterprises, Inc. Development Agreement, the attachments thereto, 
if any, and agreements relating thereto, if any at least five business days 
prior to the date this Agreement was executed; and that Franchisor has 
accorded Developer ample time and opportunity to consult with advisors of 
Developer's own choosing about the potential benefits and risks of entering 
into this Agreement. Developer further acknowledged that Developer has 
received a copy of Franchisor's Uniform Franchise Offering Circular at least 
ten business days prior to the date this Agreement was executed.

                                     -15-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have fully executed, sealed, and 
delivered this Agreement to be effective on the date and year executed by 
Franchisor below.

ATTEST:                                NEW YORK BAGEL ENTERPRISES, INC.

                                       By
--------------------------------         -------------------------------------
            Witness                    Title:
                                             ---------------------------------
                                       Date:
                                            ----------------------------------


                                                    "Franchisor"




ATTEST:                                
                                       ---------------------------------------

                                       By
--------------------------------         -------------------------------------
            Witness                    Title:
                                             ---------------------------------
                                       Date:
                                            ----------------------------------


                                                     "Developer"




                                     -16-
<PAGE>

                                   GUARANTY

     As an inducement to New York Bagel Enterprises, Inc. to enter into the 
foregoing Development Agreement, which it is unwilling to do but for this 
Guaranty, the undersigned individually and, if more than one Guarantor, 
jointly and severally guarantee the payment and performance of all 
obligations of the Developer under the Agreement.  This shall be an 
unconditional, irrevocable, and continuing guaranty for the entire term of 
this Agreement, including any renewal terms.

     The undersigned agree that they are willing to remain fully bound by 
this Guaranty notwithstanding any action or inaction of the Franchisor and 
Developer in connection with the Agreement, and that their obligation shall 
not be modified, waived, or released by any modification, amendment, or 
departure from the terms of the Agreement, or by any forbearance, extension 
of time, waiver, or release granted by Franchisor to Developer or any 
Guarantor or with respect to any security held by Franchisor.  The 
undersigned expressly waive any notice of all such matters and agree to pay 
and perform the obligations of Developer without notice or demand from the 
Franchisor and without any requirement that Franchisor first proceed against 
Developer or any other Guarantor.

     IN WITNESS WHEREOF, each of the undersigned has executed this Guaranty 
as of the date of the Development Agreement.


                                         -------------------------------------

ATTEST:


-----------------------------------


                                         -------------------------------------
   
ATTEST:                                               "Guarantor"
                                           

-----------------------------------


                                      -17-
<PAGE>

                        NEW YORK BAGEL ENTERPRISES, INC.
                             DEVELOPMENT AGREEMENT



                             DEVELOPMENT SCHEDULE



         Number of Bakery Restaurants         Number of Satellite Restaurants
Date     To Be Established and in Operation   To Be Established and in Operation
----     ----------------------------------   ----------------------------------

-------  ------------------------------       ------------------------------

-------  ------------------------------       ------------------------------

-------  ------------------------------       ------------------------------











                                 Attachment "A"

<PAGE>

                        NEW YORK BAGEL ENTERPRISES, INC.

                             DEVELOPMENT AGREEMENT


                              FRANCHISE AGREEMENT



     The form of Franchise Agreement currently offered by Franchisor is 
attached.

(Refer to Section III.A. Development Agreement.)

















                                    Attachment "B"
<PAGE>








                        NEW YORK BAGEL ENTERPRISES, INC.


                              FRANCHISE AGREEMENT











                                   Exhibit B

<PAGE>

                        NEW YORK BAGEL ENTERPRISES, INC.

                              FRANCHISE AGREEMENT


                               TABLE OF CONTENTS

                                                                        Page No.
Article 1   Acknowledgments and Representations. . . . . . . . . . . . . .  2
Article 2   Grant of Franchise . . . . . . . . . . . . . . . . . . . . . .  3
Article 3   Term and Renewal . . . . . . . . . . . . . . . . . . . . . . .  5
Article 4   Fees and Royalties . . . . . . . . . . . . . . . . . . . . . .  6
Article 5   Restaurant Construction and Opening. . . . . . . . . . . . . .  7
Article 6   Duties of NYBE . . . . . . . . . . . . . . . . . . . . . . . . 10
Article 7   Duties of Franchisee . . . . . . . . . . . . . . . . . . . . . 12
Article 8   Quality Control and Supervision. . . . . . . . . . . . . . . . 16
Article 9   Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . 18
Article 10  Financial Reporting. . . . . . . . . . . . . . . . . . . . . . 21
Article 11  Proprietary Marks and Trade Secrets; Competition . . . . . . . 23
Article 12  Insurance and Indemnity. . . . . . . . . . . . . . . . . . . . 27
Article 13  Transfer of Interest . . . . . . . . . . . . . . . . . . . . . 29
Article 14  Default and Termination. . . . . . . . . . . . . . . . . . . . 34
Article 15  Obligations upon Termination . . . . . . . . . . . . . . . . . 36
Article 16  Additional Covenants . . . . . . . . . . . . . . . . . . . . . 39
Article 17  Approvals and Waivers. . . . . . . . . . . . . . . . . . . . . 40
Article 18  Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Article 19  Alternative Dispute Resolution . . . . . . . . . . . . . . . . 41
Article 20  Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 43
Article 21  Construction and Modification. . . . . . . . . . . . . . . . . 44
Article 22  Execution of Agreement . . . . . . . . . . . . . . . . . . . . 46
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Exhibit A   (Owners of Franchisee)
Exhibit B   (Covenant Agreement)

<PAGE>

                        NEW YORK BAGEL ENTERPRISES, INC.

                              FRANCHISE AGREEMENT



     THIS FRANCHISE AGREEMENT (the "Agreement") made and entered into at 
Wichita, Kansas this _____ day of _____________________, 19__, by and between 
NEW YORK BAGEL ENTERPRISES, INC. ("NYBE" or "Franchisor"), a Kansas 
corporation, having its chief executive offices at 250 N. Water, Wichita, 
Kansas 67202, and ________________________________________________________ 
(hereinafter referred to as "Franchisee"), whose principal business address 
is ____________________________________.


                                    RECITALS

     A.   NYBE has developed and owns a distinctive system (hereinafter 
"System") for the design, establishment, and operation of restaurants under 
the name "New York Bagel Cafe & Deli" (such name, the service mark "Like 
Bread, With An Attitude", and any other trade names, service marks, 
trademarks, logos, emblems, or other indication of origin as are now or 
hereafter designated by NYBE as part of the system are hereinafter referred 
to as "Proprietary Marks") utilizing certain Trade Secrets (as hereinafter 
defined) in connection with the retail sale of bagels made fresh daily, 
sandwiches, salads, soups, beverages, and dessert products. 

     B.   The System has been developed as a uniform method and philosophy of 
operation, customer service, marketing, advertising, promotion, publicity, 
and technical knowledge relative to the bakery and delicatessen business. 
Franchisee recognizes the benefits to be derived from being identified with 
and licensed to use the System and understands that it is necessary to 
prescribe and maintain the conditions of operation of the franchise so that 
the public will come to expect a high measure of excellence and uniform 
quality from each franchise for the benefit of NYBE and its franchisees.

     C.   Franchisee desires a franchise to establish and operate a NEW YORK 
BAGEL CAFE & DELI Restaurant ("NYB Restaurant") and NYBE is willing to grant 
such a franchise on the terms and conditions hereafter stated.

                                      -1-
<PAGE>

ARTICLE 1.     ACKNOWLEDGMENTS AND REPRESENTATIONS. 

     Franchisee acknowledges and represents to NYBE, in order to induce NYBE 
to enter this Agreement, as follows:

          A.   NYBE makes no representations or warranties and hereby disclaims
     any warranties with regard to whether any of the Proprietary Marks are
     protectable or registerable and with regard to whether any of the
     Proprietary Marks infringe upon the rights of others; 

          B.   Franchisee has read this Agreement and NYBE's Franchise
     Disclosure Document and understands and accepts the terms, conditions, and
     covenants contained in this Agreement as being reasonably necessary to
     maintain NYBE's standards of quality and service and the uniformity of
     those standards at each NYB Restaurant in order to protect and preserve the
     goodwill of the Proprietary Marks;

          C.   Franchisee has conducted an independent investigation of the
     business contemplated by this Agreement.  Franchisee recognizes that the
     nature of the business conducted by NYBE may evolve and change over time;
     that an investment in a NYB Restaurant involves business risks; and that
     the success of the venture depends primarily upon Franchisee's business
     ability and efforts;

          D.   Franchisee has not received or relied upon any guarantee,
     expressed or implied, about the revenues, profits, or success of the
     business venture contemplated by this Agreement;

          E.   No representations have been made by NYBE, or by its officers,
     directors, shareholders, employees, or agents, that are contrary to the
     statements made in the Franchise Disclosure Document heretofore received by
     Franchisee or to the terms contained in this Agreement;

          F.   In all of their dealings with Franchisee, the officers,
     directors, employees, and agents of NYBE act only in a representative
     capacity, not in an individual capacity, and that this Agreement and all
     business dealings between Franchisee and such individuals as a result of
     this Agreement are solely between Franchisee and NYBE; and

          G.   The application made by Franchisee to NYBE is true and correct. 
     Franchisee has made no incorrect statement in the application or failed to
     make 

                                      -2-
<PAGE>

     any statement that would be necessary to make the statements in the
     application not misleading.

ARTICLE 2.     GRANT OF FRANCHISE.

     2.1. Subject to the terms and conditions hereof, and to the continuous 
compliance by Franchisee therewith, NYBE hereby grants to Franchisee the 
right to operate [check the following as applicable]:

     ____ an NYB Restaurant with a bagel bakery (a "Bakery Restaurant"); or 

     ____ an NYB Restaurant without a bagel bakery (a "Satellite Restaurant");

and to use the System and the Proprietary Marks in connection therewith.  The 
Bakery Restaurant or the Satellite Restaurant shall be referred to herein as 
the "NYB Restaurant" or "franchised business." 

     2.2. Franchisee shall operate the NYB Restaurant at, and only at, the 
following location: ____________________________________________ (hereinafter 
the "Approved Location").

     2.3. Franchisee shall not relocate the NYB Restaurant without the prior 
written approval of NYBE which approval shall not be unreasonably withheld 
provided:

          A.   The relocation is within the Assigned Territory (as defined in
     Section 2.4 hereof) and does not infringe upon the territory of another NYB
     Restaurant;

          B.   Franchisee's lease, if any, for the new location complies with
     NYBE's then-current requirements; and

          C.   Franchisee complies with NYBE's then-current requirements for
     furnishing the NYB Restaurant at the new location.

                                      -3-
<PAGE>

     Franchisee agrees that the Assigned Territory shall not be modified as a 
result of any relocation of the NYB Restaurant.

     2.4. Except as otherwise provided in this Agreement, during the term 
hereof, NYBE shall not establish, nor franchise another to establish, a NYB 
Restaurant within a radius of ___ miles of the Approved Location (hereinafter 
the "Assigned Territory").  However, subject to Franchisee's right of first 
refusal described in Section 2.5 hereof, NYBE retains the right to acquire 
restaurants and/or to acquire a franchisor with franchisees which operate 
restaurants (but not to establish restaurants or to franchise another to 
establish restaurants) at any location within the Assigned Territory which 
operate under proprietary marks other than those used in connection with the 
System for the sale of the same, similar, or different products and services, 
on any terms and conditions NYBE may deem advisable.

     2.5. NYBE shall provide written notice to Franchisee within a reasonable 
time upon NYBE's acquisition during the term hereof of any restaurants which 
operate under proprietary marks other than those used in connection with the 
System for the sale of the same, similar, or different products and services 
and which are located in the Assigned Territory (hereinafter, whether one or 
more, "Non-System Restaurants").  Such notice shall provide Franchisee with a 
right of first refusal to acquire such Non-System Restaurants from NYBE on 
the terms provided below if the sale by NYBE of such restaurants to 
Franchisee is allowed by applicable law.  Subject to the foregoing, 
Franchisee shall have the right and option, exercisable within 30 days after 
receipt of such written notification, to provide written notice to NYBE that 
Franchisee desires to purchase all of the Non-System Restaurants and to 
convert such restaurants to NYB Restaurants under the System.  In the event 
Franchisee elects to purchase and convert the Non-System Restaurants, 
Franchisee must close on such purchase and execute NYBE's then-current form 
of NYBE Franchise Agreement (which shall require payment of the then-current 
initial franchise fee) within 60 days from the date of notice to NYBE of 
Franchisee's election to purchase and convert. The purchase price to be paid 
by Franchisee for the Non-System Restaurants shall be the cash equivalent of 
NYBE's restaurant cost for each Non-System Restaurants, as determined by NYBE 
in NYBE's sole discretion.  In the event Franchisee does not elect to 
purchase and convert the Non-System Restaurants as provided in this Section, 
Franchisee shall have no further right or option to acquire such Non-System 
Restaurants, and NYBE may sell such Non-System Restaurants to a third party 
and/or NYBE may continue to operate the Non-System Restaurants under 
proprietary marks other than those used in connection with the System.

     2.6. The license granted hereby to use the Proprietary Marks is 
nonexclusive, and Franchisee acknowledges and agrees that such Proprietary 
Marks are and shall remain the 

                                      -4-
<PAGE>

property of NYBE and shall not be contested as to ownership or validity by 
Franchisee, and that NYBE makes no representations or warranties and hereby 
disclaims any warranties with regard to whether any of the Proprietary Marks 
are protectable or registerable and with regard to whether any of the 
Proprietary Marks infringe upon the rights of others.  Franchisee understands 
and agrees that the license to use the marks is conditioned upon Franchisee's 
agreement that: (i) the Proprietary Marks shall be used only in connection 
with the franchised business and only in the manner authorized by NYBE; (ii) 
Franchisee will not use the Proprietary Marks as part of its corporate or 
other legal name, will identify itself as a franchisee, and will comply with 
all fictitious name and other statutes in connection with its use of the 
Proprietary Marks; (iii) Franchisee will cooperate with NYBE in protecting 
and defending the Proprietary Marks; and (iv) Franchisee will comply with 
NYBE's designations of additions, deletions, and changes in the Proprietary 
Marks.

ARTICLE 3.     TERM AND RENEWAL.

     3.1. Unless sooner terminated or modified as hereinafter provided, the 
term of this Franchise shall be ten years from the date of this Agreement.

     3.2. Franchisee is granted the option to renew this Agreement for one 
additional consecutive term of ten years, provided Franchisee complies with 
the following conditions prior to renewal:

          A.   Franchisee shall give NYBE written notice of its election to
     renew not less than 12 months nor more than 18 months prior to the end of
     the initial term;

          B.   NYBE may inspect the franchised premises at least six months
     prior to expiration of the initial term and Franchisee shall complete to
     NYBE's satisfaction all maintenance, refurnishing, renovating, and
     remodeling of the premises as NYBE shall reasonably require no later than
     60 days prior to the end of the initial term;

          C.   Franchisee shall not be in default of any provision of this
     Agreement, any amendment hereof, or successor hereto, or any other
     agreement between Franchisee and NYBE or any subsidiary or affiliate of
     NYBE, and shall have substantially complied with all of the terms and
     conditions of such agreements during the terms thereof;

                                      -5-
<PAGE>

          D.   Franchisee shall have satisfied all monetary obligations owed by
     Franchisee to NYBE and its subsidiaries and affiliates and shall have
     timely met those obligations throughout the term of this Agreement;

          E.   Franchisee shall execute, for the renewal term, NYBE's 
     then-current form of renewal franchise agreement, which agreement shall
     supersede this Agreement in all respects, and the terms of which may differ
     from the terms of this Agreement, including, without limitation, higher
     rates for continuing fees; provided, however, that Franchisee shall pay, in
     lieu of an initial franchise fee, a renewal fee equal to one-half of the
     initial franchise fee set forth in Section 4.1;

          F.   Franchisee shall execute a general release, in a form prescribed
     by NYBE, of any and all claims against NYBE, its subsidiaries and
     affiliates, and the officers, directors, agents, and employees of NYBE and
     each of its subsidiaries and affiliates; provided, however, that all rights
     enjoyed by the Franchisee and any causes of action arising in its favor
     from the provisions of any applicable franchise laws and regulations shall
     remain in force; it being the intent of this proviso that any non-waiver
     provisions of such laws be satisfied; and

          G.   Franchisee's managers and other employees shall comply with
     NYBE's then-current qualification and training requirements.

ARTICLE 4.     FEES AND ROYALTIES.

     4.1. In consideration of the rights and franchise granted herein, 
Franchisee shall pay NYBE the following:

          A.   If the NYB Restaurant is a Bakery Restaurant, as defined in
     Section 2.1, a franchise fee of $21,000, and if the NYB Restaurant is a
     Satellite Restaurant, as defined in Section 2.1, a franchise fee of
     $12,000.  Franchisee acknowledges and agrees that such fee has been fully
     earned and is nonrefundable in consideration of expenses incurred, rights
     granted, services rendered, and other valuable consideration, the receipt
     and sufficiency of which is acknowledged by Franchisee.

          B.   A monthly royalty fee continuing throughout the initial term of
     this Agreement in an amount equal to four percent of the Franchisee's gross
     receipts.

                                      -6-
<PAGE>

          C.   In the event that NYBE later decides to establish a marketing and
     advertising fund for the System, and upon Franchisee's receipt of 30 days'
     written notice from NYBE announcing such decision, Franchisee shall
     thereafter pay to NYBE monthly fees continuing throughout the initial term
     of this Agreement in an amount specified by NYBE from time to time, not to
     exceed two percent (2%) of Franchisee's monthly gross receipts for use by
     the NYBE for advertising and marketing purposes, as set forth in Section
     9.3 of this Agreement.

     4.2. All monthly payments required by Sections 4.1.B and 4.1.C shall be 
due to NYBE by the 15th day after the end of the month in which such gross 
receipts were received by Franchisee, and shall be submitted to NYBE together 
with any report required under Article 10 hereof.  Any payment or report not 
actually received by NYBE on or before such date shall be deemed overdue 
unless postmarked at least five days prior to the date it was due.  If any 
payment is overdue, Franchisee shall pay to NYBE immediately upon demand the 
overdue amount together with interest on such amount from the date it was due 
until paid, at the lesser of one and one-half percent (1.5%) per month, or 
the maximum rate permitted by law.  Franchisee acknowledges that nothing 
contained in this Section shall constitute an agreement by NYBE to accept 
such payments after the same are due or a commitment by NYBE to extend credit 
to, or otherwise finance Franchisee's operation of, the NYB Restaurant.  
Franchisee acknowledges that Franchisee's failure to pay all such amounts 
when due shall constitute grounds for termination of this Agreement, as 
provided in Article 14 of this Agreement, notwithstanding the provisions of 
this Section.  The foregoing shall be in addition to any other remedies NYBE 
may have.

     4.3. As used in this Agreement, "gross receipts" shall mean all gross 
revenue during each month of every kind or nature related to the NYB 
Restaurant, including without limitation all restaurant revenue posted 
whether it is collected or remains uncollected, all charges for other 
products, services, and facilities and vending machine receipts, but 
excluding sales taxes or other taxes collected by Franchisee from customers 
for transmittal to appropriate taxing authorities.  "Gross receipts" shall be 
determined in accordance with the accounting procedures set forth in the 
Confidential NYBE Manual (the "NYBE Manual").

ARTICLE 5.     RESTAURANT CONSTRUCTION AND OPENING.

     5.1. Prior to commencing construction of the NYB Restaurant under this 
Agreement, Franchisee shall have (i) requested and received written approval 
of NYBE of the proposed site for the NYB Restaurant, (ii) provided Franchisor 
with blueprints for the proposed 

                                      -7-
<PAGE>

site adequate for use by Franchisor in preparing site layout plans, and (iii) 
received the site layout plans and specifications from Franchisor described 
in Section 6.3 hereof.

     5.2. At least 30 days prior to commencing construction of tenant 
improvements for the NYB Restaurant (or, where applicable, the building for 
the NYB Restaurant) under this Agreement, Franchisee shall have requested and 
received approval of NYBE of each of the following:

          A.   The lease or purchase agreement for the proposed site, which must
     not contain any provision that is inconsistent with or interferes with the
     performance of any provision of this Agreement (which in the case of leases
     will require provisions in the lease or addendum to lease in form and
     substance acceptable to NYBE (i) authorizing NYBE to enter the premises and
     make any modifications necessary to protect the proprietary marks, (ii)
     granting to NYBE the right (but not the duty) to assume the lease if
     Franchisee is in default under the terms and provisions of the lease and/or
     if this Agreement expires or is terminated, (iii) requiring concurrent
     notice from lessor to NYBE of any lease default or termination, and (iv)
     providing for a term of at least 10 years including option periods in favor
     of Franchisee);

          B.   Plans and specifications adapted to the proposed site;

          C.   Satisfactory evidence that all permits, licenses, and
     certifications required for the lawful construction and operation of the
     proposed NYB Restaurant, including, without limitation, all applicable
     building permits, zoning access, sign and fire requirements, have been
     obtained;

          D.   Evidence of insurance naming NYBE as additional insured subject
     to the provisions of Section 12.1 of this Agreement; and

          E.   Such other information as NYBE may reasonably request.

     5.3. Within 30 days of the submission of the foregoing items, the NYBE 
will approve or disapprove and provide written notice of such action, to the 
Franchisee.

     5.4. NYBE's provision of site layout plans and specifications and its 
exercise of its rights to inspect construction of the NYB Restaurant shall be 
solely for the purpose of assuring compliance with the terms and conditions 
of this Agreement, and NYBE shall have no 

                                      -8-
<PAGE>

liability or obligation to Franchisee or any other person with respect to 
construction of the NYB Restaurant.

     5.5. Franchisee shall order, purchase and/or lease and install all 
fixtures, equipment, furnishing, furniture, signs, supplies and other items 
necessary for completion and opening of the NYB Restaurant as specified in 
the NYBE Manual.

     5.6. Franchisee shall diligently and continuously pursue the completion 
of the NYB Restaurant premises in accordance with the plans and 
specifications in order for the NYB Restaurant to be ready to open for 
business not later than 90 days after Franchisee receives possession of the 
NYB Restaurant site.

     5.7. The NYB Restaurant shall be opened for business immediately upon 
satisfaction of the following requirements:

          A.   All furnishings, furniture, equipment, signs, supplies and other
     items required for the opening of the NYB Restaurant in accordance with the
     Agreement and the standards of NYBE shall have been installed, and
     Franchisee shall have submitted to NYBE a certificate of occupancy or
     equivalent certificate from appropriate regulatory authorities;

          B.   Franchisee (or a qualified general manager employed by
     Franchisee) has completed to NYBE's satisfaction a training program
     conducted by NYBE, and Franchisee has employed qualified personnel
     sufficient to operate the NYB Restaurant;

          C.   Franchisee has paid all sums due NYBE, its parent, subsidiaries,
     or affiliated companies;

          D.   Franchisee is not in default under any existing franchise
     agreement or other agreement with NYBE;

          E.   Franchisee has certified in writing to NYBE that all terms and
     conditions relating to the opening of the NYB Restaurant have been
     satisfied and the NYB Restaurant is ready to open for business as a NYB
     Restaurant; 

          F.   NYBE shall be satisfied as to Franchisee's compliance with
     requirements necessary for opening the NYB Restaurant by such on-site

                                      -9-
<PAGE>

     inspection and investigation as NYBE deems appropriate, which shall be made
     and completed within 15 days of receipt of the certificate of Franchisee
     pursuant to subsection (E) of this Section; and 

          G.   Franchisee shall conduct a grand opening advertising and
     promotional program in accordance with the grand opening advertising and
     promotional guidelines set forth in the NYBE Manual during the period
     commencing seven days before and ending 90 days after the opening of the
     NYB Restaurant and to expend not less than $2,500 on such program.

ARTICLE 6.     DUTIES OF NYBE.

     In addition to the other obligations and duties set forth in this 
Agreement, NYBE agrees as follows:

     6.1. NYBE shall provide initial on-site assistance by a NYBE 
representative immediately prior to opening and after the commencement of 
operations, as set forth in Section 6.5, for an aggregate total of 
approximately ten days.

     6.2. NYBE shall provide a set of then-current prototype plans and 
specifications (not for construction) for a typical NYB Restaurant.

     6.3. Within 30 days following the later of (i) NYBE's approval of the 
proposed site in accordance with Article 5 hereof, or (ii) the delivery by 
Franchisee to NYBE of blueprints for the unfinished leased premises for the 
Restaurant which are adequate for use in preparing site layout plans, NYBE 
will furnish to Franchisee site layout plans and specifications which adapt 
NYBE's prototype plans and specifications to Franchisee's specific location 
based upon the blueprints furnished by Franchisee (Franchisor will not make 
any field visits to the proposed Restaurant to verify the information 
contained in such blueprints).  Franchisee shall be responsible for the 
preparation of any necessary "as-built" site plans.

     6.4. NYBE shall provide an initial training program for Franchisee or 
Franchisee's general manager and the other personnel designated in the NYBE 
Manual; provided, however, if Franchisee currently operates one or more 
franchised NYB Restaurants in addition to the NYB Restaurant franchised 
hereunder, NYBE may elect not to provide initial 

                                     -10-
<PAGE>

training to some or all of Franchisee's personnel if, in NYBE's judgment, 
such training is not required. NYBE shall make available such other training 
programs or seminars as NYBE deems appropriate.  All training provided by 
NYBE shall be subject to the terms and conditions set forth in Section 7.2 of 
this Agreement.

     6.5. If the NYB Restaurant franchised hereunder is the first NYB 
Restaurant operated by Franchisee under the System, NYBE shall provide 
Franchisee initial on-site assistance prior to opening and after the 
commencement of NYB Restaurant operations for an aggregate total of 
approximately ten days.  Thereafter, NYBE shall provide assistance, 
consultation, and counseling to Franchisee upon Franchisee's reasonable 
request and subject to (as to timing) the availability of personnel.  In 
connection with on-site assistance or consultation other than initial on-site 
assistance and other than NYBE-initiated inspections, NYBE may charge for 
each of NYBE's personnel involved therewith, a reasonable daily assistance 
fee and reasonable expenses for travel and room and board.

     6.6. NYBE shall provide Franchisee on loan one copy of the NYBE Manual 
setting forth standards of operation for Franchisee's System and standards of 
quality, cleanliness, and service for the NYB Restaurant.  NYBE shall have 
the right to add to and otherwise modify the NYBE Manual from time to time to 
reflect changes in the business, authorized products or services (or 
specifications therefor), equipment requirements, quality standards, and 
operating procedures of the NYB Restaurant as determined by NYBE from time to 
time. 

     6.7. Franchisee acknowledges and agrees that NYBE may establish, 
maintain and administer a Marketing and Advertising Fund for the System 
subject to the provisions of Article 9 of this Agreement.  NYBE shall review 
all other advertising materials which Franchisee proposes to use in 
accordance with the procedures prescribed in Section 9.1 hereof.

     6.8. NYBE will seek to maintain the high standards of quality, 
cleanliness, appearance, and service of the System, and to that end shall 
conduct, as it deems advisable, inspections of the NYB Restaurant and 
evaluations of the services rendered therein, and interviews of Franchisee's 
employees, agents, and customers.

     6.9. Franchisee acknowledges and agrees that any duty or obligation 
imposed on NYBE by this Agreement may be performed by a designee, employee, 
or agent of NYBE, as NYBE may direct.

                                      -11-
<PAGE>

ARTICLE 7.     DUTIES OF FRANCHISEE.

     In addition to the other obligations and duties set forth in this
Agreement, Franchisee agrees as follows:

     7.1. Franchisee covenants and agrees to commence, diligently pursue, and
complete construction of the NYB Restaurant and open for business in
accordance with Article 5 hereof.

     7.2. Franchisee shall serve as general manager or shall employ a
qualified general manager whose responsibilities shall include those
prescribed in the NYBE Manual and the Franchisee shall also employ such other
personnel as NYBE may reasonably specify from time to time in the NYBE
Manual.  Franchisee or Franchisee's general manager and the other personnel
employed by Franchisee in the positions designated in the NYBE Manual shall,
prior to assuming their positions, attend and complete to NYBE's reasonable
satisfaction the initial training program conducted by NYBE at such time and
place and for such duration as NYBE may prescribe.  NYBE shall provide, with
respect to the initial training of those personnel, training instructors,
facilities, and training materials. All other expenses, including, without
limitation, the expenses of Franchisee's employees for travel, room, board,
and wages, shall be borne by Franchisee. Each person subsequently employed by
Franchisee to fill a position for which initial training is required by NYBE
must also satisfactorily complete an adequate training program satisfactory
to NYBE prior to assuming that position; provided that, if a new general
manager is hired in an emergency situation without having an opportunity to
complete the training course, NYBE may give written permission for such
person to attend a training course within 60 days of employment with the
Franchisee.  Franchisee shall pay to NYBE a training fee at the then-current
rate imposed by NYBE for the initial training of any replacement personnel
and for such other training programs as NYBE may require or offer as optional
training for Franchisee's employees, which fee shall be in addition to any
other training costs to be borne by Franchisee as provided herein.

     7.3. Franchisee expressly acknowledges that adherence to each and every
provision of the System is reasonable, necessary, and essential to maintain
the uniform image and favorable reputation of each NYB Restaurant and the
success of NYBE's franchise program.  Accordingly, Franchisee expressly
agrees to comply with each and every requirement of the System during the
term hereof, as the same may be modified or changed from time to time by NYBE
in its sole discretion.  Franchisee shall operate the franchised business
strictly in conformity with such standards, techniques, and procedures as
NYBE may from time to time

                                     -12-
<PAGE>

prescribe in the NYBE Manual or otherwise in writing, and shall refrain from
deviating therefrom without NYBE's prior written consent.  Franchisee shall
not operate the franchised business in any manner which reflects adversely on
the System, the Proprietary Marks, the goodwill associated therewith or
NYBE's rights therein.

     7.4. If the NYB Restaurant is a Satellite Restaurant, Franchisee shall
not bake bagels of any kind at the NYB Restaurant.  Franchisee shall use the
NYB Restaurant premises solely for the operation of the franchised business
and shall not use or allow the use of the premises for any other purpose or
activity at any time without the prior written consent of NYBE, which may be
granted or withheld in NYBE's sole discretion.

     7.5. The NYB Restaurant and everything located on the NYB Restaurant
premises shall be maintained in first class condition and repair and shall be
kept neat, clean, and sanitary in accordance with NYBE's standards as
specified in the NYBE Manual, and consistent with the image of a NYB
Restaurant as a clean, sanitary, attractive, and efficiently operated store
offering high quality food and beverages and courteous service.  The NYB
Restaurant shall be constructed, maintained, and operated in compliance with
all applicable fire, safety, health, and sanitation laws, ordinances, and
regulations.  Franchisee shall place or display at the NYB Restaurant
(interior or exterior) only such signs, emblems, lettering, logos and display
only such advertising that materials are from time to time approved in
writing by NYBE.  Franchisee shall not install or have installed any vending
machines, video games or similar devices without the prior written approval
of NYBE.

     7.6. Franchisee shall perform such maintenance of the NYB Restaurant and
the Approved Location as is required by NYBE from time to time to maintain
such condition, appearance, and efficient operation, including, without
limitation:

          A.   Continuous and thorough cleaning and sanitation of the interior
     and exterior of the NYB Restaurant;

          B.   Interior and exterior repair of the NYB Restaurant;

          C.   Maintenance of equipment at peak performance;

          D.   Replacement of worn out or obsolete improvements, fixtures,
     furnishings, equipment and signs with approved improvements, fixtures,
     furnishings, equipment and signs; and

                                     -13-
<PAGE>

          E.   Periodic painting and decorating.

     At NYBE's request, which shall not be more often than once every five
years, Franchisee shall upgrade the NYB Restaurant at Franchisee's expense to
conform to the building decor and trade dress consistent with NYBE's
then-current public image, including, without limitation, such structural
changes, remodeling, and redecoration and such modifications to existing
improvements as may be deemed necessary by NYBE. Except as described above,
Franchisee shall make no additions, alterations, or replacements to the NYB
Restaurant or anything located on the NYB Restaurant premises without the
prior written consent of NYBE.

     7.7. Franchisee shall acquire and maintain at its cost a computerized
cash register meeting NYBE's specifications.  If requested by NYBE,
Franchisee will acquire and maintain at its cost computer equipment and
software meeting NYBE's specifications which may be connected with NYBE's
computer equipment via normal telephone lines, and which may be used to
transmit data and other information electronically between NYBE or its
designee and Franchisee.

     7.8. Franchisee shall, at Franchisee's expense, comply with all federal,
state, and local laws, rules, and regulations, and shall timely obtain, and
keep in force as required throughout the term of this Agreement, any and all
permits, certificates, licenses, and approvals necessary for the full and
proper conduct of the business franchised hereunder.

     7.9. Franchisee shall notify NYBE in writing within five days of the
commencement of any action, suit, or proceeding, and of the issuance of any
inquiry, subpoena, order, writ, injunction, award, or decree of any court,
agency, or other governmental instrumentality, arising out of, concerning, or
which may affect the operation or financial condition of the franchised
business, including, without limitation, any criminal action or proceeding
brought by Franchisee against employees, customers, or other persons.

     7.10.     Franchisee shall pay when due all taxes levied or assessed in
connection with the possession, ownership, or operation of the NYB Restaurant
and all taxes payable on royalties and other payments made to NYBE or to any
of its affiliates (excluding income taxes payable by NYBE).  In the event of
any BONA FIDE dispute respecting any tax assessed against Franchisee, the NYB
Restaurant, any personal property located therein, or any payments due to
NYBE, Franchisee may contest the validity or amount of the tax in accordance
with procedures of the taxing authority; provided, however, that Franchisee
shall act with all due

                                     -14-
<PAGE>

diligence and shall in no event permit a tax sale or seizure against the NYB
Restaurant or any equipment, goods, or property located therein, or any
impoundment of payments due to NYBE.

     7.11.     If the Franchisee is at any time a corporation, limited
liability company, or partnership, Franchisee agrees and represents that:

          A.   Franchisee has the authority to execute and deliver this
     Agreement and to perform its obligations thereunder and is duly organized
     or formed and validly existing in good standing under the laws of the state
     of its formation or organization;

          B.   Franchisee's organizational documents or partnership agreement
     will recite that the issuance and transfer of the ownership interests of
     Franchisee are restricted by the terms and conditions of this Agreement,
     and all certificates and other documents representing an ownership interest
     in Franchisee will bear a legend referring to the restrictions of this
     Agreement;

          C.   Exhibit A to this Agreement will completely and accurately
     describe all of the owners of Franchisee and their interests in Franchisee;
     and

          D.   Each of the owners of Franchisee at any time during the term of
     this Agreement will sign an agreement in the form that NYBE prescribes
     undertaking to be bound jointly and severally by all provisions of this
     Agreement and any ancillary agreements between NYBE or its affiliates and
     Franchisee, and a material breach of such agreement shall be deemed a
     material breach of this Agreement.  Franchisee and its owners agree to sign
     and deliver to NYBE such revised Exhibits A as may be necessary to reflect
     any changes in the information contained therein and to furnish such other
     information about Franchisee's organization or formation as NYBE may
     request.

          E.   Franchisee shall furnish NYBE with its articles or certificate of
     incorporation, bylaws, and partnership or limited liability documentation
     or similar organization documents, and any other documents NYBE may
     reasonably request, and any amendments thereto.

          F.   Franchisee shall confine its activities, and shall at all times
     provide that its activities are confined, exclusively to operating the
     franchised business.

                                     -15-
<PAGE>

ARTICLE 8.     QUALITY CONTROL AND SUPERVISION.

     8.1. Franchisee agrees that substantial uniformity of quality at all NYB
Restaurants is necessary and desirable for purposes of establishing and
protecting the shared identity, reputation, and goodwill associated
therewith. In order to better accomplish these objectives, Franchisee agrees
that:

          A.   The NYB Restaurant shall offer for sale only the products and
     services, and shall only purchase, lease, install, and use the types
     and/or brands of food products, beverages, ingredients, flavorings, and
     garnishes used to prepare food products, cartons, bags, boxes, napkins,
     other containers, paper and plastic goods, packaging supplies, equipment,
     fixtures, furnishings, concept, supply, building design or layout, color
     schemes, concepts, and other items or services specified in this Agreement
     and the NYBE Manual, or approved in writing by NYBE as being consistent
     with NYBE's standards and specifications and with the System.

          B.   NYBE may from time to time designate approved suppliers of
     products and services, which may include NYBE.  If Franchisee (i) desires
     to purchase or lease products or services from sources not previously
     approved in writing by NYBE for such items, or (ii) proposes to sell any
     food product or beverage or use any ingredients, flavorings, garnishes, or
     containers, cartons, bags, boxes, paper or plastic goods, packaging
     supplies or other materials, of a type not previously approved by NYBE,
     Franchisee shall submit to NYBE a written request for approval and provide
     to NYBE such information and  specifications as NYBE requests.  NYBE may
     require, as a condition of its approval, that samples of the item be
     submitted to NYBE for inspection and testing, and Franchisee or the
     proposed source shall pay the reasonable expenses of such inspection and
     testing.  NYBE may also require submission of evidence that the proposed
     source carries insurance sufficient to reasonably protect NYBE and
     Franchisee from liability arising out of the use or sale of the product or
     service.  Provided that the foregoing conditions are satisfied, and the
     products or services meet NYBE's standards and specifications and are
     consistent with the System, NYBE's approval will not be unreasonably
     withheld.

          C.   Franchisee agrees that it shall purchase and offer for sale all
     products which NYBE may uniformly designate for all System franchisees to
     purchase and offer for sale in accordance with the NYBE Manual.

                                     -16-
<PAGE>

     8.2. Franchisee shall only make sales over-the-counter at retail to the
ultimate consumer of the products to be offered for sale by the NYB
Restaurant.

     8.3. The franchised business shall be conducted in accordance with the
NYBE Manual, as updated, supplemented, and modified from time to time,
receipt of one current copy of which is hereby acknowledged.  Franchisee
further acknowledges that establishing, maintaining, and protecting the good
will, reputation, and uniformity of the System requires strict adherence to
this Agreement and the NYBE Manual in all respects, it being agreed that
every detail is significant and material.

     8.4. Franchisee hereby grants to NYBE and its agents the right to enter
upon the premises of the NYB Restaurant at any reasonable time for the
purpose of conducting inspections.  Franchisee agrees to take such steps as
may be reasonably necessary to correct any deficiencies detected during such
an inspection, upon the written request of NYBE or its agents, within such
reasonable time as may be specified therein.

     8.5. If Franchisee develops any products, services, procedures, or
inventions deemed by NYBE to be appropriate for use in other System NYB
Restaurants, it is understood and agreed that NYBE may use such products,
services, procedures, or inventions in other System NYB Restaurants without
obligation to compensate Franchisee, it being understood and agreed that the
benefit to the Franchisee from the overall enhancement of the System is
sufficient consideration for granting this right to NYBE.

     8.6. All marketing and promotion by Franchisee shall be factual,
ethical, and in good taste in the judgment of NYBE and shall be subject to
NYBE's approval as provided in Section 9.1.  Franchisee shall in all dealings
with its customers, suppliers, NYBE, and the public adhere to the highest
standards of honesty, integrity, fair dealing, and ethical conduct.
Franchisee agrees to refrain from any business or advertising practice which,
in the subjective opinion of NYBE, may be injurious to the business of NYBE
and the goodwill associated with the Proprietary Marks and other NYB
Restaurants.

     8.7. Within seven days of the receipt by Franchisee of any report from
any health department or other comparable agency, Franchisee shall mail a
complete copy of such report to NYBE.  Franchisee shall notify NYBE in
writing within five days of the commencement of any action, suit, or
proceeding, and of the issuance of any order, writ, injunction, award or
decree of any court, agency, or other governmental instrumentality, which

                                     -17-
<PAGE>

may adversely affect the operation or financial condition of Franchisee or
the NYB Restaurant or of any notice of violation of any law, ordinance, or
regulation relating to health or sanitation.

     8.8. NYBE may from time to time suggest prices for the goods and
services offered by Franchisee.  NYBE and Franchisee agree that the prices
suggested by NYBE are recommendations only and are not mandatory.  Nothing
contained in this Agreement shall be deemed a representation or warranty by
NYBE that the use of NYBE's suggested prices shall produce, increase, or
optimize profits.

ARTICLE 9.     ADVERTISING.

     Franchisee and NYBE recognize the value of advertising and the
importance of the standardization of advertising programs to the furtherance
of the goodwill and public image of the System.  In order to better
accomplish these objectives, the parties agree as follows:

     9.1. Franchisee agrees to spend a minimum of four percent (4%) of gross
receipts per year for media advertising and promotional materials,
contributions to a Marketing Fund pursuant to Section 9.3, and contributions
to local or regional advertising cooperatives pursuant to Section 9.4.  All
advertising by Franchisee in any medium shall be conducted in such manner,
and shall conform to such standards and requirements, as NYBE may specify.
Franchisee shall submit to NYBE (by mail, return receipt requested), for its
prior written approval (except with respect to prices to be charged), samples
of all advertising and promotional plans and materials and all other
materials displaying the Proprietary Marks that Franchisee desires to use
which have not been prepared or previously approved by NYBE.  If written
disapproval thereof is not received by Franchisee within 15 days from the
date of receipt by NYBE of such plans and materials, NYBE shall be deemed to
have given the required approval.

     9.2. Franchisee shall obtain listings at Franchisee's expense in the
yellow and white pages of local telephone directories.  Franchisee shall also
pay its share of the cost of any multiple-NYB Restaurant local telephone book
advertising, to be apportioned equally among all NYB Restaurants listed in
such advertising.  All expenditures made by Franchisee pursuant to this
paragraph shall be considered a portion of the minimum required advertising
expenditure set forth in Section 9.1.

                                     -18-
<PAGE>

     9.3. NYBE may later decide to establish and administer a Marketing and
Advertising Fund ("Marketing Fund"), which, if established, would be used by
NYBE to meet any and all costs of developing and preparing national,
regional, point of sale, and local advertising materials for use within the
System, including, without limitation, costs associated with developing,
preparing, directing, administering, maintaining, and disseminating
advertising, marketing, promotional, and public relations materials;
conducting marketing research; maintaining a sales and marketing staff and
related expenses; and preparing, producing, broadcasting, and disseminating
advertising and promotions, including, without limitation, radio, television,
newspaper, and magazine advertising, market surveys, public relations
activities, and employment of advertising agencies.  If the Marketing Fund is
established, NYBE shall choose and determine, in its sole discretion, the
nature, theme, and timing of advertising and the kind and quality of
advertising materials to be provided to franchisees through the Marketing
Fund.  All payments, plus income earned therefrom, would be used exclusively
for the above-stated purposes, would be maintained in an account separate
from NYBE's other funds, and would not be used to defray any of NYBE's other
expenses.  If the Marketing Fund is established, NYBE shall, for each of its
company-owned NYB Restaurants, make contributions to the Marketing Fund at
the same percentage of gross receipts required of franchisees within the
System.  If the Marketing Fund is established, NYBE or its designee would
direct all advertising and promotional programs and activities, with sole
discretion over the concepts, materials, and media used in such programs and
activities and the placement and allocation thereof. Franchisee acknowledges
that the intent of the Marketing Fund, if established, would be to maximize
general public recognition and acceptance of the Proprietary Marks for the
benefit of the System, and NYBE or its designee would have no obligation, in
administering the Marketing Fund, to make expenditures for Franchisee which
are equivalent or proportionate to any payments by Franchisee or to ensure
that any particular franchisee or any particular franchised location benefits
directly or PRO RATA from advertising or promotion conducted under the
Marketing Fund.

     9.4. NYBE shall have the right, in its sole discretion, to designate
geographic areas for purposes of establishing local or regional advertising
cooperatives ("Cooperatives").  If the NYB Restaurant is within the territory
of an existing Cooperative at the time the NYB Restaurant opens for business,
Franchisee shall immediately become a member of the Cooperative.  If a
Cooperative applicable to the NYB Restaurant is established during the term
of this Agreement, Franchisee shall become a member no later than 30 days
after the date approved by NYBE for the Cooperative to commence operation.
NYBE or its affiliates shall participate in any Cooperatives established for
geographic regions that include NYB Restaurants owned by NYBE or its
affiliates.  The following provisions shall apply to each Cooperative:

          A.   Each Cooperative shall be organized and governed in a form and
     manner, and shall commence operations on a date, approved in advance by
     NYBE

                                     -19-
<PAGE>

     in writing.  No changes in the bylaws or other governing documents of a
     Cooperative shall be made without NYBE's prior written consent.

          B.   Each Cooperative shall be organized for the exclusive purpose of
     administering local and regional advertising programs and developing,
     subject to NYBE's approval, promotional materials for use by the members in
     local advertising.

          C.   No advertising or promotional plans or materials may be used by a
     Cooperative or furnished to its members without prior approval of NYBE
     pursuant to Section 9.4.E below.

          D.   Franchisee and each member of the Cooperative shall contribute to
     the Cooperative, commencing on the 15th day of the first month after the
     Cooperative commences operations, the amount determined by the membership.
     Said amount shall not exceed two percent (2%) of Franchisee's gross
     receipts.  Franchisee's obligation to make local advertising expenditures
     under Section 9.1 above shall be reduced by the amount of Franchisee's
     contributions to the Cooperative.  Each required contribution shall be
     based on gross receipts for the immediately preceding month, and shall be
     submitted together with such statements or reports as may be required by
     NYBE, or by the Cooperative with NYBE's prior written approval.

          E.   All advertising and promotion by Cooperatives shall be in such
     media and of such type and format as NYBE may approve and shall conform to
     such standards and requirements as NYBE may specify.  The Cooperative shall
     submit to NYBE (by mail, return receipt requested), for its prior written
     approval (except with respect to prices to be charged), samples of all
     advertising and promotional plans and materials and all other materials
     displaying the Proprietary Marks that the Cooperative desires to use which
     have not been prepared or previously approved by NYBE.  If written
     disapproval thereof is not received by the Cooperative within 15 days from
     the date of receipt by NYBE of such plans and materials, NYBE shall be
     deemed to have given the required approval.

          F.  Upon the designation of geographic areas for Cooperatives, NYBE
     shall have the right, in its sole discretion, to require the prospective
     members of any Cooperative to take all necessary action to form the
     Cooperative.  NYBE shall also have the right, in its sole discretion, to
     require the members of any Cooperative to cause any Cooperative to: (i)
     change the bylaws or other governing documents of the Cooperative; (ii) to
     dissolve the Cooperative; and (iii) merge with another Cooperative.  NYBE
     shall also have the right to redesignate

                                     -20-
<PAGE>

     geographic areas for any Cooperatives and in connection with such
     redesignation to require the members of any Cooperative to cause the
     Cooperative to take any of the actions set forth above in this Section
     9.4.F.

ARTICLE 10.    FINANCIAL REPORTING.

     10.1.     Franchisee shall keep complete records of the franchised
business and the sale of all goods and services therein at the NYB
Restaurant. Franchisee shall record all sales at the NYB Restaurant in a cash
register meeting NYBE's specifications. Franchisee shall retain at the NYB
Restaurant for a period of at least 24 months, all sales and purchase records
(including daily cash register tapes and vendor invoices), books of account,
business and payroll records and vendor financial information relating to the
franchised business, any corporation, partnership or other business
association owning the franchise.

     10.2.     On a weekly basis during the term hereof, Franchisee shall
supply NYBE, at NYBE's request, with a telephonic report of all sales of
goods and services at the NYB Restaurant during the preceding calendar week
and, if available, information respecting the comparable period during the
preceding year.  On or before the 15th day of each month, Franchisee shall
furnish NYBE with a written sales report and statement of Gross Revenues in
the format prescribed by NYBE for all sales made and services provided during
the preceding month.   Franchisee shall also submit to NYBE (i) within 30
days following the month for which such statement is compiled, a monthly
profit and loss statement and a cumulative profit and loss statement from the
beginning of Franchisee's fiscal year to the end of such month, together with
such other financial, operating, marketing, and other information as NYBE may
require, and (ii) within 30 days after each fiscal quarter of Franchisee, an
unaudited quarterly balance sheet.  On or before March 31 of each calendar
year, Franchisee shall submit to NYBE a profit and loss statement, a balance
sheet, and a statement of Gross Revenues reflecting Gross Revenues and the
results of operations for the preceding calendar year.  All such profit and
loss statements and balance sheets shall comply with any format prescribed by
NYBE, shall be prepared in accordance with generally accepted accounting
principles consistently applied and shall be signed and verified as true and
correct by Franchisee or, if Franchisee is a corporation, partnership, or
other business association, by its duly authorized chief financial officer.
In addition, at NYBE's request, Franchisee shall submit to NYBE true copies
of all state sales tax returns relating to sales made at the NYB Restaurant
licensed herein at the same time the returns are filed with state
authorities, and such other records as NYBE may reasonably request from time
to time, including, without limitation, state and federal income tax returns
of Franchisee.

                                     -21-
<PAGE>

     10.3.     NYBE or its representatives, at NYBE's expense, shall at all
reasonable times have the right to inspect or audit the books, accounts,
records and returns of Franchisee or of any corporation, partnership or other
business association which owns the Franchise.  The foregoing records may
include, but are not limited to, state and federal income tax returns, credit
card or any other third party charge account statements, and any bank,
savings and loan, or financial checking money market, or savings account used
for the franchised business.  Franchisee shall fully cooperate with NYBE and
its representatives or agents conducting such inspections or audits and, upon
request, Franchisee shall submit a written response to any issues raised in
connection with said audits. In the event a discrepancy between reported
Gross Revenues and actual Gross Revenues is uncovered in any audit conducted
pursuant to this Section for any reporting period (weekly, monthly or
annual), Franchisee shall promptly pay the amount determined to be owing and,
if the discrepancy exceeds two percent (2%) of reported Gross Revenues,
Franchisee shall reimburse NYBE for all costs of the audit, including travel,
lodging, and wages of personnel of NYBE or third parties required to conduct
such audit.  Franchisee shall also promptly reimburse NYBE for the cost of
any audit (including salaries, travel, and living expenses) necessitated by
Franchisee's failure to file any financial report due hereunder and any
deficiency in royalties or advertising contributions disclosed by such audit.
At NYBE's option, Franchisee shall also immediately pay to NYBE interest on
the understated amount due from the date such amount was due until paid at
the lesser of one and one-half percent (1-1/2%) per month or the maximum rate
permitted by applicable law.  In addition, NYBE shall have the right to
require Franchisee to provide for each subsequent fiscal year, within 120
days after the end of each year, audited financial statements certified by
independent certified public accountants selected by Franchisee and approved
by NYBE.  The foregoing remedies shall be in addition to any other remedies
NYBE may have.  Submission by Franchisee of more than two written statements
of Gross Revenues which under-report Gross Revenues for any reporting period
by two percent (2%) or more (regardless of any subsequent cure) shall
constitute a material breach of this Agreement entitling NYBE, at its option,
the right to terminate this Agreement pursuant to Section 14.1.C.

     10.4.     Franchisee hereby authorizes all banks and/or other financial
institutions with which Franchisee does business to disclose to NYBE any
requested financial information in their possession relating to the NYB
Restaurant licensed herein, and hereby authorizes NYBE to release to
Franchisee's lenders or prospective lenders, financial and operational
information relating to the NYB Restaurant licensed herein.  Franchisee
further authorizes NYBE to disclose such information to prospective
Franchisees and state regulatory agencies, provided that such information is
not identified as relating to Franchisee's NYB Restaurant unless required by
law or regulation and then only if NYBE requests that such identification be
held in confidence.

                                     -22-
<PAGE>

ARTICLE 11.    PROPRIETARY MARKS AND TRADE SECRETS; COMPETITION.

     11.1.     Franchisee acknowledges that ownership of all right, title,
and interest in the System, the Proprietary Marks, and in the design, decor,
and image of all NYB Restaurant restaurants is and shall remain vested solely
in NYBE.  Franchisee expressly disclaims any right, title, or interest
therein or in any goodwill derived therefrom.  Franchisee's license to use
the Proprietary Marks is personal to Franchisee, and Franchisee shall not
license, sublicense, or allow the Proprietary Marks to be used by any other
person, firm, or business association without NYBE's prior written approval.
All uses of the Proprietary Marks by Franchisee inure to the benefit of NYBE.

     11.2.     Franchisee shall not, directly or indirectly, at any time
during the term of this Agreement or thereafter, do, cause or suffer to be
done any act or thing disputing, attacking or in any way impairing or tending
to impair the right, title, or interest of NYBE in the Proprietary Marks or
the System. Franchisee shall immediately notify NYBE in writing of all
infringements or imitations of the Proprietary Marks, and NYBE shall exercise
absolute discretion in deciding what action, if any, should be taken.
Franchisee shall fully cooperate with NYBE in the prosecution of any action
to prevent the infringement, imitation, or illegal use of the Proprietary
Marks and agrees to be named as a party in any such action at NYBE's request.
NYBE shall bear any and all legal expenses incident to Franchisee's
participation, at NYBE's request, in any action to prevent the infringement
or illegal use of the Proprietary Marks, except for the cost of any legal
counsel separately retained by Franchisee.  Except as expressed in this
Section, NYBE shall not be liable to Franchisee for any damages, costs,
expenses, loss of profits or business opportunities, or incidental or
consequential damages of any kind or nature whatsoever relating to any action
involving the Proprietary Marks.

     11.3.     Franchisee shall use the Proprietary Marks as the sole
identification of the NYB Restaurant; provided, however, that in all public
records and in his relationship with other persons, on stationery, business
forms, checks, or as otherwise required by NYBE, Franchisee shall indicate
Franchisee's independent ownership of the NYB Restaurant.  In no event shall
Franchisee use the Proprietary Marks in connection with the sale of any
product or service not authorized for sale at the NYB Restaurant.  The
Franchisee shall not license, sublicense, or allow the Proprietary Marks to
be used by any other person or business entity without NYBE's prior written
approval.  In adopting any corporate, proprietorship, or partnership name,
Franchisee shall not use the Proprietary Marks or any variation or
abbreviation thereof, or any words confusingly similar thereto.  Franchisee
has no right to register any of the Proprietary Marks.  If it becomes
advisable at any time in NYBE's sole discretion for NYBE and/or Franchisee to
modify or discontinue use of the Proprietary Marks, and/or use one or more

                                     -23-
<PAGE>

additional or substitute trade or service Proprietary Marks, Franchisee
agrees to comply therewith within a reasonable time after written notice
thereof by NYBE.

     11.4.     Franchisee further acknowledges and agrees as follows:

          A.   NYBE possesses certain confidential information consisting of
     secret recipes, methods of preparation, and service of food products sold
     at NYB Restaurants, knowledge of sales and profit performance at any one or
     more NYB Restaurants, knowledge of test programs, concepts or results
     relating to new menu items, and advertising and promotional programs,
     sources of food products and suppliers of equipment, advertising, promotion
     and marketing techniques, the selection and training of store managers and,
     in general, methods, techniques, formulas, formats, specifications,
     procedures, information systems and knowledge, in the operation and
     franchising of NYB Restaurants.  All of the foregoing are hereinafter
     referred to as the "Trade Secrets".

          B.   NYBE will disclose the Trade Secrets to Franchisee in furnishing
     Franchisee with standard plans for the NYB Restaurant, in the NYBE Manual
     and any temporary operating manuals, by providing training to Franchisee
     hereunder, and in the performance of the NYBE's other obligations and the
     exercise of its other rights under this Agreement.  Franchisee hereby
     agrees that all materials lent or otherwise made available to Franchisee by
     NYBE and all disclosures made to Franchisee hereunder including, without
     limitation, the NYBE Manual and other confidential commercial information
     identified as such by NYBE are trade secrets of NYBE and shall be kept
     confidential and used by Franchisee only in the operation of the NYB
     Restaurant.  Franchisee will not, nor permit anyone else to, reproduce,
     copy, or exhibit any portion of the NYBE Manual or any other confidential
     or proprietary information received from NYBE.  Franchisee shall not
     divulge any such Trade Secrets to any person other than Franchisee's
     employees and then only to the extent necessary for the operation of the
     NYB Restaurant.

          C.   Franchisee shall acquire no interest in the Trade Secrets, other
     than the right to utilize them in the development and operation of the NYB
     Restaurant during the term of this Agreement.  The use or duplication of
     the Trade Secrets in any other business will constitute an unfair method of
     competition.  The Trade Secrets are proprietary and are disclosed to
     Franchisee in confidence and solely on the condition that Franchisee
     agrees, and Franchisee hereby agrees that Franchisee (i) will not use the
     Trade Secrets in any other business or capacity; (ii) will maintain the
     absolute confidentiality of the Trade Secrets during and after

                                     -24-
<PAGE>

     the term of this Agreement; (iii) will not make unauthorized copies of any
     portions of the Trade Secrets disclosed in written form, including, without
     limitation, any plans, the NYBE Manual, bulletins or supplements and
     additions thereto; and (iv) will operate and implement all reasonable
     procedures prescribed from time to time by NYBE to prevent the unauthorized
     use and disclosure of the Trade Secrets.  Franchisee shall immediately
     notify NYBE of any unauthorized use of disclosure of the NYBE Manual or any
     of the Trade Secrets or if the NYBE Manual or any other manuals or
     materials containing any Trade Secrets are lost or stolen.

          D.   The foregoing restrictions on Franchisee's disclosure and use of
     Trade Secrets shall not apply to information, processes, or techniques that
     are or become generally known and used by other similar restaurants, other
     than through disclosure (whether deliberate or inadvertent) by Franchisee,
     and disclosure of Trade Secrets in judicial or administrative proceedings
     to the extent that Franchisee is legally compelled to disclose such
     information, provided, Franchisee shall have used his best efforts, and
     shall have afforded NYBE the opportunity, to obtain an appropriate
     protective order or other assurance satisfactory to NYBE of confidential
     treatment for the information required to be so disclosed.

     11.5.     During the term hereof Franchisee shall not compete, or be
associated, directly or indirectly as an owner, officer, director, employee,
consultant, or otherwise, in any business in competition with the System,
and, for a period of two years after any transfer or termination of this
Agreement for any reason, Franchisee shall not compete, or be associated,
directly or indirectly as an owner, officer, director, employee, consultant,
or otherwise, in any business in competition with the System which is located
within (i) the Assigned Territory, (ii) the Designated Market Area or Areas
identified by the then-current Nielsen Wall Map published by the A.C. Nielson
Company ("DMA"), in which the Assigned Territory is located, or (iii) the DMA
of any other NYB Restaurant then existing; provided, however, that passive
ownership of less than five percent (5%) of the outstanding voting securities
of a publicly held corporation (which for purposes of this Agreement means a
corporation registered under the Securities Exchange Act of 1934) shall not
be deemed a violation of this Section.  In the event the A.C. Nielson Company
discontinues the publication of Nielson Wall Maps for any reason, NYBE shall
have the right to designate an alternate generally recognized market
identification resource for use in connection with this Section.

     11.6.     Unless the context otherwise requires, the term "Franchisee"
as used in this Article shall include, individually and collectively, all
partners, officers, directors,

                                      -25-
<PAGE>

managers, members, and holders, directly or indirectly (and any partners,
officers, or directors of any such holder), of any beneficial interest in the
franchise granted hereunder, and any immediate family members of any of such
persons.

     11.7.     At NYBE's request, Franchisee shall require and obtain execution
of a covenant agreement in the form substantially similar to that attached
hereto as Exhibit B, except for reasonable changes as may be necessary to comply
with applicable law, from time to time (including a covenant agreement
applicable upon the termination of a person's relationship with Franchisee) from
any or all of the following persons:  (i) all officers, directors, and holders
of a beneficial interest of five percent (5%) or more of the securities of
Franchisee, and of any corporation directly or indirectly controlling
Franchisee, if Franchisee is a corporation; (ii) the general partners and any
limited partners (including any corporation or other entity, and the officers,
directors, and holders of a beneficial interest of five percent (5%) or more of
the securities of any corporation or other entity which controls, directly or
indirectly, any general or limited partner), if Franchisee is a partnership; and
(iii) the managers and members (including any corporation or other entity, and
the officers, directors, and holders of a beneficial interest of five percent
(5%) or more of the securities of any corporation or other entity which
controls, directly or indirectly, any member or manager), if Franchisee is a
limited liability company.  Failure by Franchisee to obtain execution of the
covenant agreement required by this Section, or to deliver such covenant
agreement to NYBE, shall constitute a material breach of this Agreement.


     11.8.     Franchisee shall require every person employed as general manager
of the NYB Restaurant to devote full time to such employment and to agree to be
bound by the restrictions set forth in this Article 11.  Franchisee shall also
take all reasonable steps to require other employees to be bound by the
confidentiality provisions of this Article 11, and, if requested by NYBE, to be
bound by the noncompetition provisions hereof.  Upon NYBE's request, Franchisee
shall promptly provide copies of  all such agreements to NYBE.


     11.9.     Franchisee shall not employ or seek to employ any person who is
or was within the immediate past six months employed by NYBE or any other System
franchisee or induce or seek to induce any such person to leave his or her
employment without the consent of such employee's current employer.  NYBE shall
not employ or seek to employ any person who is or was within the immediate past
six months employed by Franchisee or induce or seek to induce any such person to
leave his or her employment.  Any party violating the provisions of this Section
shall pay to the former employer as liquidated damages (which the parties agree
are difficult of ascertainment) an amount equal to two times the annual salary
of the employee involved, plus all costs and attorneys fees incurred by the
former employer in connection with


                                     -26-

<PAGE>


such default.  The parties hereto agree that each current and future franchisee
in the System shall be a third party beneficiary of the provisions of this
Section, and shall be entitled to enforce the provisions hereof.  NYBE shall
have no obligation to enforce the provisions of this Section for the benefit of
any current or future franchisee in the System.


     11.10.    In the event any provision of this Article 11 is deemed by a
court of competent jurisdiction to be more restrictive than permissible at law
or equity, then Franchisee agrees that the provisions hereof may be reformed and
modified and enforced by such court to the maximum extent permissible under
applicable law and principles of equity.  Franchisee agrees that specific
performance and injunctive relief are necessary and appropriate remedies for
violations of this Article and agrees to the enforcement of such remedies, but
without prejudice to the right of NYBE to recover money damages, which are in no
event a full and adequate remedy for such violations.


ARTICLE 12.  INSURANCE AND INDEMNITY.


     12.1.     Franchisee shall procure, prior to the commencement of any
operations under this Agreement, and maintain in full force and effect during
the term of this Agreement, at Franchisee's expense, in form and with insurers
having a Best's rating of "A" or better, and in compliance with the terms of any
mortgage or lease covering the NYB Restaurant premises:

          A.   Fire, vandalism, and extended coverage insurance for the full
     replacement value of the NYB Restaurant, all improvements on the NYB
     Restaurant premises, and all furniture, furnishings, fixtures, and
     equipment.

          B.   Comprehensive general liability insurance, including product
     liability, completed operations, and independent contractors coverage, and
     comprehensive automobile liability coverage for both owned and non-owned
     vehicles, and hired automobiles in the amount of $1,000,000, and naming
     NYBE, its officers, directors, and employees (collectively, "Indemnitees")
     as additional insureds in each such policy or policies.

          C.   Workers' compensation and employer's liability insurance, as well
     as such other insurance as may be required by statute or rule of the state
     in which the franchised business is located.

          D.   During any significant construction at the NYB Restaurant,
     Franchisee will maintain or cause the general contractor to maintain with a
     reputable insurer comprehensive general liability insurance (with
     comprehensive automobile liability coverage for both owned and nonowned
     vehicles, builder's risk, product liability, completed operations, and
     independent contractors coverage) in at least the amount of $1,000,000 with
     Indemnitees named as additional insureds, and workers' compensation and
     employer's liability insurance and any other insurance as may be required
     by law.


                                     -27-

<PAGE>

     12.2.     The insurance policies required by subparts (b) and (d) of
Section 12.1 hereof shall (i) be endorsed to be primary to and non-contributory
with any insurance maintained by Indemnitees, (ii) contain a waiver of any
rights of subrogation against Indemnitees, and (iii) contain a severability of
interest provision in favor of Indemnitees.  Upon obtaining the insurance
required by this Agreement and on each policy renewal date thereafter,
Franchisee shall promptly submit evidence of satisfactory insurance and proof of
payment therefor to NYBE, and, if requested by NYBE, copies of all policies and
policy amendments.  The evidence of insurance shall include a statement by the
insurer that the policy or policies will not be canceled or materially altered
without at least 30 days prior written notice to NYBE.  NYBE may increase the
minimum protection or coverage requirements of any policy required under Section
12.1, as of its renewal date, and may require different or additional kinds of
insurance at any time to reflect inflation, identification of special risks,
changes in law or standards of liability, higher damage awards or other relevant
changes in circumstances.


     12.3.     If Franchisee does not obtain and maintain the insurance coverage
required by this Agreement, as revised from time to time by the NYBE Manual or
otherwise in writing, NYBE may, but shall not be obligated to, procure such
insurance, and the cost or expense thereof, together with a reasonable fee for
NYBE's expenses in so acting, shall be payable by Franchisee immediately upon
demand.


     12.4.     Franchisee shall indemnify and hold NYBE harmless from and
against any and all actual or threatened claims, penalties, assessments,
regulatory proceedings, and litigation, including, without limitation all costs
and expenses and reasonable attorneys' fees incurred by NYBE in connection
therewith, arising from or out of the operation of the NYB Restaurant or any
occurrence at the NYB Restaurant premises, including, without limitation,
claims, penalties, assessments, regulatory proceedings, and litigation arising
in whole or in part out of the negligence of NYBE or its agents, employees,
directors, officers, or representatives (collectively, the "Claims").  NYBE
shall have the option, at its sole discretion, to request Franchisee to
undertake, in NYBE's name, the defense of any action relating to such Claims
wherein NYBE is named as a defendant or otherwise made a party or to assume such
defense with counsel satisfactory to NYBE.  In either case, Franchisee shall
remain responsible for


                                     -28-

<PAGE>

paying NYBE's costs of defense and of any judgment or settlement in any such
action.  Franchisee's obligations to indemnify and hold NYBE harmless shall
not be limited in any way by reason of any insurance which may be maintained
by NYBE, nor shall Franchisee's performance of the obligation to maintain
insurance relieve Franchisee of liability under this indemnity provision or
be construed to be a limitation on the amount of Franchisee's indemnity
obligations.  NYBE's right to indemnity under this Agreement shall arise
notwithstanding that joint or concurrent liability may be imposed on NYBE by
statute, ordinance, regulation, or other law.  Notwithstanding any provisions
of this Section to the contrary, NYBE shall have no right to indemnification
for Claims arising solely out of NYBE's gross negligence.

     12.5.     Franchisee shall notify NYBE in writing within five days of
receipt of notice or knowledge of any claim, dispute, loss or damage, real or
alleged, arising from Franchisee's activities in, at or around the NYB
Restaurant, whether or not such claim names NYBE.  Franchisee has no authority
to, and shall not, accept any service of process on behalf of NYBE or its
affiliates.


ARTICLE 13.    TRANSFER OF INTEREST.

     13.1.     NYBE shall have the right to transfer or assign all or any part
of its rights or obligations herein to any person or legal entity.

     13.2.     Before any interest in this franchise or the Franchisee may be
sold to a third party, it must first be offered for sale to the NYBE by written
notice delivered to NYBE in accordance with this Agreement by Franchisee, such
notice to specify the price and terms of any such sale.  At any time within 30
days after the service of such notice, NYBE may elect to purchase such interest
on similar terms and conditions by notifying Franchisee in writing of its
election to purchase the same.  If NYBE does not elect to purchase such interest
in the foregoing manner, Franchisee may, subject to Franchisee's compliance with
the provisions of this Article 13 and the other provisions of the Agreement,
sell such interest to a third-party at a price that is not less than the price
specified in said written notice and upon terms not substantially different from
the terms specified in said written notice.  If such sale is not effected within
six months following the expiration of the 30-day option period set out above,
the such interest in this franchise or the Franchisee may not be sold to any
third-party at any price without again complying with the aforesaid procedure,
in the same manner as if such interest had never before been offered for sale to
the NYBE.  The provisions of this Section shall not apply to a transfer to a
corporation, partnership, or limited liability company formed by the Franchisee
for the convenience of ownership and not involving a change of beneficial
ownership, which transfer


                                     -29-

<PAGE>

meets the conditions set forth in Section 13.5, and transfers to Franchisee's
employees which meet the conditions set forth in Section 13.8.

     13.3.     The rights and duties set forth in this Agreement are personal to
Franchisee and are granted in reliance on the individual and collective business
skill, financial capacity, and personal character of Franchisee and its
principals.  Accordingly, neither Franchisee nor any immediate or remote
successor to any part of Franchisee's interest in this franchise, nor any
individual, partnership, corporation, or other legal entity which directly or
indirectly owns any interest in such entity, in the franchise or in the
Franchisee, shall sell, assign, transfer, convey, give away, pledge, mortgage,
or otherwise encumber any interest in this franchise or in Franchisee without
the prior written consent of NYBE, which consent NYBE may grant or withhold in
its sole discretion based solely upon what NYBE deems is in its best interests.
Any purported assignment or transfer, by operation of law or otherwise, not
having the written consent of NYBE required by this Section shall be null and
void and shall constitute a material breach of this Agreement, for which NYBE
may then terminate in accordance with Section 14.1.C without opportunity to
cure.  If a transfer, alone or together with other previous, simultaneous, or
proposed transfers, would have the effect of transferring a controlling interest
(as reasonably determined by NYBE) in this franchise or in Franchisee, NYBE, in
its sole discretion, may require any or all of the following as conditions of
its approval:

          A.   All of Franchisee's accrued monetary obligations to NYBE and its
     subsidiaries and affiliates and all other outstanding obligations related
     to the franchised business shall have been satisfied;

          B.   Franchisee shall not be in default of any provision of this
     Agreement, any amendment hereof or successor hereto, or any other agreement
     between Franchisee and NYBE, or its subsidiaries and affiliates;

          C.   The transferor shall have executed a general release, in a form
     prescribed by NYBE, of any and all claims against NYBE and its officers,
     directors, shareholders, and employees, in their corporate and individual
     capacities, including, without limitation, claims arising under federal,
     state and local laws, rules, and ordinances; provided, however, that all
     rights enjoyed by the Franchisee and any causes of action arising in its
     favor from the provisions of any applicable franchise laws and regulations
     shall remain in force; it being the intent of this proviso that any non-
     waiver provisions of such laws be satisfied;

          D.   The transferee (and, if transferee is other than an individual,
     such owners of a beneficial interest in the transferee as NYBE may request)
     shall enter into a written assignment and assumption agreement, in a form
     satisfactory to


                                     -30-

<PAGE>

     NYBE, assuming and agreeing to discharge all of Franchisee's obligations
     under this Agreement;

          E.   The transferee (or, if transferee is other than an individual,
     all owners of any beneficial interest in transferee) shall demonstrate to
     NYBE's satisfaction that transferee meets NYBE's educational, managerial,
     and business standards; possesses a good moral character, business
     reputation, financial capacity, and credit rating; has the aptitude and
     ability to conduct the business franchised herein (as may be evidenced by
     prior related business experience or otherwise); and has adequate financial
     resources and capital to operate the business;

          F.   The transferee (and, if transferee is other than an individual,
     such owners of a beneficial interest in the transferee as NYBE may request)
     shall execute, for a term ending on the expiration date of this Agreement
     and with such renewal term as may be provided by this Agreement, the
     standard form franchise agreement then being offered to new System
     franchisees and such other ancillary agreements as NYBE may require for the
     franchised business, which agreements shall supersede this Agreement in all
     respects, and the terms of which may differ from the terms of this
     Agreement; provided, however, that the transferee shall not be required to
     pay any initial franchise fee, the royalties and advertising fees payable
     pursuant to Section 4.1 of this Agreement shall remain the same, and the
     Assigned Territory provided for in this Agreement shall remain the same;

          G.   Franchisee shall remain liable for all of the obligations to NYBE
     in connection with the franchised business prior to the effective date of
     the transfer and shall execute any and all instruments reasonably requested
     by NYBE to evidence such liability;

          H.   At the transferee's expense, the transferee or, if requested by
     Franchisee and consented to by NYBE, the transferee's manager shall
     complete any training program then in effect for franchisees upon such
     terms and conditions as NYBE may reasonably require; and

          I.   Except in the case of (i) a transfer to a corporation,
     partnership, or limited liability company formed by the Franchisee for the
     convenience of ownership and not involving a change of beneficial
     ownership, which transfer meets the conditions set forth in Section 13.5
     hereof, or (ii) a transfer to NYBE pursuant to Section 13.2, Franchisee
     shall pay to NYBE a transfer fee in an amount equal to $2,500, to cover
     NYBE's administrative and other expenses in connection with the transfer.


                                     -31-

<PAGE>

     13.4.     Franchisee shall grant no security interest in the franchised
business or in any of its assets unless the secured party agrees that in the
event of any default by Franchisee under any documents related to the security
interest, NYBE shall have the option, but shall not be obligated, to be
substituted as obligor to the secured party and to cure any default of
Franchisee.

     13.5.     In the event that the Franchisee proposes, subsequent to the
execution of this Agreement, to transfer this franchise to a corporation,
partnership, or limited liability company formed by Franchisee, NYBE's consent
to such transfer shall be conditioned upon satisfaction of and compliance with
Section 7.11 of this Agreement and to the following additional requirements:

          A.   Franchisee shall be the owner of all of the voting stock,
     interests, or units of the corporation, partnership, or limited liability
     company; and, if Franchisee is more than one individual, each individual
     shall have the same proportionate ownership interest in the corporation or
     limited liability company as he had in Franchisee prior to the transfer.

          B.   All transferors shall execute a written agreement personally
     guaranteeing the full payment and performance of Franchisee's obligations
     to NYBE from the date of transfer and agreeing to be bound by all the terms
     and conditions of this Agreement.

          C.   Transferee shall comply with all of the terms and conditions set
     forth in Sections 13.3.A through 13.3.I hereof.

     13.6.     Upon the death or mental incompetency of any person with an
interest in this franchise or in Franchisee, the executor, administrator, or
personal representative of such person shall transfer his interest within six
months after such death or mental incompetency to a third party approved by
NYBE.  Such transfers, including, without limitation, transfers by devise or
inheritance, shall be subject to the same conditions as any INTER VIVOS
transfer.  However, in the case of transfer by devise or inheritance, if the
heirs or beneficiaries of any such person are unable to meet the conditions in
this Agreement, the personal representative of the deceased Franchisee shall
have a reasonable time to dispose of the deceased's interest in the franchise or
in Franchisee, which disposition shall be subject to all the terms and
conditions for transfers contained in this Agreement.  If the interest is not
disposed of within a reasonable time, NYBE may terminate this Agreement.


                                     -32-

<PAGE>

     13.7.     Securities, units, or other ownership interests in Franchisee may
be offered by public or private offering, or otherwise, only with the prior
written consent of NYBE (whether or not NYBE's consent is required under Section
13.3 hereof), which consent NYBE may grant or withhold in its sole discretion
based solely upon what NYBE deems is in its best interests.  All materials
required for such offering by federal or state law shall be submitted to NYBE
for review prior to their being filed with any governmental agency; and any
materials to be used in any exempt offering shall be submitted to NYBE for
review prior to their use.  No Franchisee offering shall imply (by use of the
Proprietary Marks or otherwise) that NYBE is participating in an underwriting,
issuance, or offering of Franchisee or NYBE securities, and NYBE's review of any
offering shall be limited solely to the subject of the relationship between
Franchisee and NYBE.  Franchisee and the other participants in the offering must
fully indemnify NYBE in connection with the offering.  For each proposed public
offering, Franchisee shall pay to NYBE a nonrefundable fee of Twenty Thousand
Dollars ($20,000), or such greater amount as is necessary to reimburse NYBE for
its reasonable costs and expenses associated with reviewing the proposed
offering, including, without limitation, legal and accounting fees.  For each
private offering of securities, Franchisee shall pay to NYBE a fee in a
reasonable amount determined by NYBE to reimburse NYBE for time and expense
associated with reviewing and approving or disapproving the proposed private
offering.  Franchisee shall give NYBE written notice at least 90 days prior to
the date of commencement of any offering or other transaction covered by this
Section.  Fees required by this Section are in addition to transfer fees
otherwise required by this Article 13.


     13.8.     Notwithstanding any provision to the contrary contained in this
Article 13, Franchisee may transfer not more than an aggregate of 25% of the
outstanding voting shares, units, or ownership interests of a Franchisee
operating as a corporation, partnership, or limited liability company to
employees of Franchisee who are actively engaged in the NYB Restaurant
operations, if such transfers, alone or together with other previous,
simultaneous, or proposed transfers, do not have the effect of transferring a
controlling interest (as reasonably determined by NYBE) in the Franchisee.  The
ownership of such shares, units, or ownership interests by such employees will
be subject to all of the terms and conditions of this Agreement, including,
without limitation, Articles 11 and 13 hereof.  Franchisee shall provide NYBE
with written notice of any such proposed transfer and all pertinent information
regarding the same not later than 30 days prior to the proposed date of
transfer.


     13.9.     NYBE's consent to a transfer of any interest in the franchise
granted herein shall not constitute a waiver of any claims it may have against
the transferring party, nor shall it be deemed a waiver of NYBE's right to
demand exact compliance with any of the terms of this Agreement by the
transferee.


                                     -33-

<PAGE>

ARTICLE 14.    DEFAULT AND TERMINATION.


     This Agreement may not be terminated except as provided in this Agreement.
Termination of this Agreement shall not relieve Franchisee of any unfulfilled
obligations to NYBE created hereunder unless it is so agreed by NYBE in writing.


     14.1.     This Agreement may be terminated as follows:

          A.   Upon the expiration of its term.

          B.   Upon the mutual agreement of the parties in writing to a
     termination.

          C.   At NYBE's option, effective immediately upon the giving of
     written notice to Franchisee, if Franchisee (i) fails to open the
     franchised NYB Restaurant and commence operations within the time schedule
     established under Article 5 hereof; (ii) ceases to operate the NYB
     Restaurant or otherwise abandons the business, or forfeits the legal right
     to do business in the jurisdiction where the NYB Restaurant is located;
     (iii) is convicted of a felony or other crime involving moral turpitude,
     consumer fraud, or crime or offense the NYBE believes is likely to have an
     adverse effect on the Franchisee's ability to carry out the duties imposed
     by this Agreement or to have an adverse effect on the System and the
     goodwill associated therewith; (iv) transfers (including transfers
     following death or incompetency) of any rights or obligations in violation
     of the terms of Article 13 hereof; (v) misuses or discloses confidential
     information in violation of Article 11 hereof, (vi) knowingly makes any
     false statements in any report or document submitted to NYBE; (vii) submits
     more than two written statements of Gross Revenues which under-report Gross
     Revenues for any reporting period by two percent (2%) or more; (viii)
     suffers a final judgment to remain unsatisfied or of record for 30 days or
     longer (unless supersedeas bond is filed), or has execution levied against
     Franchisee's business or property, or any suit is filed to foreclose any
     lien or mortgage against the premises or equipment and not dismissed within
     30 days; or (ix) becomes insolvent or has a receiver appointed to take
     possession of Franchisee's business or property or any part thereof or
     makes a general assignment for benefit of creditors.

          D.   At NYBE's option, without notice, in the event Franchisee shall
     become bankrupt or become subject to a proceeding under any chapter of the
     United States Bankruptcy Code, unless Franchisee shall:  (i) timely
     undertake to


                                     -34-

<PAGE>

     reaffirm the obligations under the Agreement, (ii) timely comply with
     all conditions as legally may be imposed by NYBE upon such an
     undertaking to reaffirm the Agreement, and (iii) timely comply with such
     other conditions and provide such assurance as may be legally required
     in or under relevant provisions of the United States Bankruptcy Code;
     provided, however, that the parties acknowledge that this Agreement
     constitutes a personal services contract made in reliance on the
     qualifications and personal characteristics of Franchisee and its
     directors, officers, or shareholders, as the case may be, and in the
     expectation of a material degree of personal involvement in the
     management and operation of the franchised business, and consequently,
     the parties agree that any attempt by any other party, including a
     trustee in bankruptcy or any other third party, to assume or accept a
     transfer or assignment of this Agreement shall be void, and that in no
     event shall this Agreement or any rights or duties of Franchisee
     hereunder, be transferred to any individual or entity who does not
     comply with all requirements for transfer specified in this Agreement.

          E.   At the election of NYBE, effective upon the expiration of 30 days
     after giving of written notice, in the event franchisee defaults, and does
     not cure to NYBE's reasonable satisfaction within the 30-day notice period,
     in the performance of any other covenant or provision of this Agreement,
     including without limitation, the obligation to pay when due any financial
     obligation to NYBE, the obligation to make reports and provide information
     when due hereunder, or failure to maintain any of the standards or
     procedures prescribed for the franchised business in this Agreement, the
     NYBE manual, or otherwise; provided, however, that Franchisee shall be
     entitled to notice and opportunity to cure any such default only once in
     any six-month period, and any subsequent occurrence of the same or
     substantially similar default within such six-month period shall entitle
     NYBE, at its option, to terminate this Agreement effective immediately upon
     the giving of notice and without opportunity to cure.

          F.   At the election of Franchisee, effective upon the expiration of
     90 days after written notice, if:  (i) Franchisee dies or becomes mentally
     incompetent and is unable or elects not to transfer its interest in the
     franchise as permitted by Section 13.6 of this Agreement; (ii) Franchisee
     has personally served as general manager and becomes disabled by illness or
     injury from continuing to perform such duties and elects not to employ a
     qualified general manager to perform such duties; or (iii) Franchisee,
     acting in good faith and after reasonable and diligent efforts, is unable
     to operate the franchised NYB Restaurant at a profit.


                                     -35-

<PAGE>

     14.2.     No forbearance of the NYBE from asserting any default or giving
any permitted notice of termination shall constitute a waiver of such default or
right to terminate or an estoppel against such right as to any continuing
default or subsequent occurrence of a default, whether similar or dissimilar in
nature to the prior default.  The rights of NYBE to terminate this Agreement are
in addition to, and not in lieu of, other remedies available at law or equity
for defaults by Franchisee in the payment and performance of its obligations
hereunder.


ARTICLE 15.    OBLIGATIONS UPON TERMINATION.


     Upon the termination of this Agreement for any reason, all rights granted
hereunder to Franchisee shall terminate; and


     15.1.     Franchisee shall immediately and permanently cease to operate the
franchised business, and shall not thereafter, directly or indirectly, represent
itself to the public or hold itself out as a franchisee of NYBE.


     15.2.     Franchisee shall immediately and permanently discontinue the use
of all Proprietary Marks, all similar names and marks, or any other designation
or mark indicating or tending to indicate that Franchisee is or was a
Franchisee.  Franchisee shall promptly amend or terminate any filings or
registrations with any governmental authorities containing or pertaining to the
use of NYBE's name and Proprietary Marks.  Franchisee shall not promote or
advertise the fact that it was formerly a franchisee of NYBE.


     15.3.     Franchisee shall surrender and transfer to NYBE or its designee
any and all rights to use the telephone numbers and other business listings used
by Franchisee for the franchised business.  Franchisee agrees to cooperate and
execute any and all documents required to effect transfer of the telephone
numbers and other business listings from Franchisee to NYBE or its designee.


     15.4.     Franchisee shall immediately turn over to NYBE all materials,
including, without limitation, all manuals and all customer lists, marketing
materials, instructions, and brochures, and any and all other materials relating
to the operation of the franchised business in Franchisee's possession, custody,
or control, and all copies thereof (all of which are acknowledged to be NYBE's
property), and shall retain no copy or record of the foregoing, excepting only
Franchisee's copy of this Agreement and of any correspondence between the


                                     -36-

<PAGE>

parties, and any other documents which Franchisee reasonably needs for
compliance with any provision of law.


     15.5.     Franchisee shall immediately and permanently discontinue all
advertising as a franchisee, including but not limited to removal of all signs
and other identifying marks and colors, and shall destroy or surrender to NYBE
any letterheads, forms, printed matter, and advertising containing NYBE's
Proprietary Marks and any similar or related names marks or designations tending
to indicate that Franchisee is or was an authorized Franchisee of NYBE.


     15.6.     Franchisee shall, at its expense, immediately make such
modifications or alterations as may be necessary to distinguish the NYB
Restaurant so clearly from its former appearance and from other NYB Restaurants
operated under the System as to prevent any possibility of confusion therewith
by the public, and to prevent the operation of any business at the location of
the NYB Restaurant by Franchisee or others in derogation of this Section
(including, without limitation, removal of all distinctive physical and
structural features identifying NYB Restaurant in the System and removal of all
signs and emblems, and changing of telephone numbers and other directory
listings).  Franchisee shall, at Franchisee's expense, make such specific
additional changes as NYBE may reasonably request for this purpose.  If
Franchisee fails to initiate immediately and complete such alterations when
required by hereunder, Franchisee agrees that NYBE or its designated agents may
enter the NYB Restaurant and adjacent areas, and hereby grants NYBE an
irrevocable license and permit to go upon the NYB Restaurant premises for such
purposes, at any time to make such alterations, at Franchisee's sole risk and
expense, without responsibility for any actual or consequential damages to the
property of Franchisee or others.  Franchisee acknowledges that such actions by
NYBE are authorized and permitted and shall not be deemed a violation of any
civil or criminal law or any basis for an action under such laws by Franchisee
or others.  Franchisee expressly acknowledges that its failure to make such
alterations will cause irreparable injury to NYBE, and consents to entry, at
Franchisee's expense, of an ex parte order by any court of competent
jurisdiction authorizing NYBE or its agents to take such action, if NYBE seeks
such an order.


     15.7.     Franchisee shall immediately and permanently cease using NYBE's
System, including, but not limited to the NYBE Manual, any other operating or
training manuals or aids, advertising and promotional materials, and all
confidential material delivered to Franchisee pursuant to this Agreement.


     15.8.     NYBE shall have the right, at its sole option, for a period of 60
days following termination, to purchase at Franchisee's cost  all usable
materials owned by Franchisee


                                     -37-

<PAGE>

bearing the Proprietary Marks, and/or to purchase Franchisee's office
equipment, furniture, fixtures and moveable signs used in the NYB Restaurant
or at the Approved Location at their fair market value. Franchisee shall not
during such 60 day period remove from the NYB Restaurant or the Approved
Location, transfer, assign, hypothecate, pledge, or otherwise encumber such
office equipment, furniture, fixtures, and moveable signs.

     15.9.     Franchisee shall promptly pay all sums owing to NYBE and its
subsidiaries and affiliates.  In the event of termination for any default of
Franchisee, such sums shall include payment of all damages, costs, and expenses,
including reasonable attorneys' fees, incurred by NYBE as a result of the
default, which obligation shall give rise to and remain, until paid in full, a
lien in favor of NYBE against any and all of the personal property (including,
without limitation, signs, equipment, furnishings, furniture, and supplies)
owned and used by Franchisee in connection with the NYB Restaurant at the time
of default.


     15.10.    Franchisee shall pay to NYBE all damages, costs, and expenses,
including reasonable attorneys' fees, incurred by NYBE in connection with
obtaining injunctive or other relief for the enforcement of any provisions of
this Article 15.


     15.11.    Except upon the expiration of the term of this Agreement pursuant
to Article 3 or termination by Franchisee pursuant to Section 14.1.F.,
Franchisee shall pay to NYBE a lump sum payment (as liquidated damages and not
as a penalty or in lieu of any other payments required under this Agreement)
equal to the total of all amounts required under Article 4 (franchise fees,
royalty fees, and marketing and advertising fees) for (i) the 18 calendar months
of operation of the NYB Restaurant preceding Franchisee's default, or (ii) the
period of time the NYB Restaurant has been in operation preceding the notice, if
less than 18 calendar months, projected on an 18 calendar month basis.


     15.12.    Termination of this Agreement shall not relieve Franchisee of the
obligations under Article 10 hereof to maintain and preserve financial and other
records and to make them available for inspection and audit by NYBE.


     15.13.    All covenants, obligations, and agreements of Franchisee which by
their terms or by reasonable implication are to be performed, in whole or in
part, after the termination or expiration of the term of this Agreement, shall
survive such termination or expiration.


                                     -38-

<PAGE>

ARTICLE 16.    ADDITIONAL COVENANTS.


     16.1.     Franchisee agrees and acknowledges that, prior to executing this
Agreement, Franchisee has made such investigation of the System as Franchisee
deems necessary, that Franchisee understands that the results of operations of
the franchised NYB Restaurant are dependent upon the efforts and management of
Franchisee, and Franchisee hereby assumes full responsibility for such
operations.  Franchisee shall retain and exercise management and control over
the NYB Restaurant and its operations and shall require its general manager to
devote full time and attention to the operations and business of the NYB
Restaurant.


     16.2.     It is understood and agreed by all parties hereto that this
Agreement does not create a fiduciary relationship between them; that Franchisee
shall be an independent contractor; and, that nothing in this Agreement is
intended to constitute either party an agent, legal representative, subsidiary,
joint venturer, partner, employee, or servant of the other for the purpose
whatsoever.  Nothing in this Agreement authorizes Franchisee to make any
contract, agreement, warranty, or representation on NYBE's behalf, or to incur
any debt or other obligation in NYBE's name or on NYBE's behalf; and that NYBE
shall in no event assume liability for, or be deemed liable hereunder as a
result of, any such action, or by reason of any act or omission of Franchisee in
its conduct of the franchised business, or any claim or judgment arising
therefrom against NYBE.  Franchisee shall hold itself out to the public as an
independent contractor operating the business pursuant to a franchise from NYBE.
Franchisee agrees to take such affirmative action as may be necessary to do so,
including, without limitation, exhibiting a notice of that fact in a conspicuous
place on the premises of the franchised business, and, as directed by NYBE, in
Franchisee's advertising and on Franchisee's agreements, forms, stationery, and
promotional materials.


     16.3.     All payments to NYBE hereunder shall be made payable to New York
Bagel Enterprises, Inc. and, except as provided in the next sentence, shall be
tendered to NYBE in person at the address set forth in Article 18 below, or by
making such payment by mail, postage prepaid, to that address.  At NYBE's
option, Franchisee shall give NYBE authorization in the form designated by NYBE,
to initiate debit entries and/or credit correction entries from and to the NYB
Restaurant bank operating account (the "Account") for payment of all sums due
NYBE under any of the provisions of this Agreement, including without limitation
royalties, advertising fund payments, purchases, and any interest charges due
thereon.  Franchisee agrees to make funds available in the account for
withdrawal by electronic transfer no later than the date immediately preceding
the due date therefor.  All payments received by NYBE from Franchisee shall be
applied to the oldest obligation, regardless of any contrary designation by
Franchisee.  Franchisee agrees that Franchisee will not, on grounds of the
alleged non-


                                     -39-

<PAGE>

performance by NYBE of any of its obligations hereunder, withhold payment of
any royalties, advertising contributions, amounts due to NYBE for purchases
by Franchisee, or any other amounts due NYBE.


ARTICLE 17.    APPROVALS AND WAIVERS.


     17.1.     Whenever this Agreement requires the prior approval or consent of
NYBE, Franchisee shall make a timely written request to NYBE therefor, and such
approval or consent shall be obtained in writing.  Except as otherwise expressly
provided herein, NYBE may withhold any consent or approval herein at its
discretion.


     17.2.     NYBE shall have no liability for withholding any consent or
approval or for any delay or inaction in connection therewith, and the granting
of any approval or consent shall not imply or constitute any representation,
warranty, guaranty, or endorsement of the matter approved or consented to or an
assumption of any liability in connection therewith.


     17.3.     No delay, waiver, omission, or forbearance on the part of NYBE to
exercise any right, option, duty, or power arising out of any breach or default
by Franchisee, or any other franchisee, of any of the terms, provisions,
covenants, or conditions hereof shall constitute a waiver by NYBE to enforce any
such right, option, duty, or power as against Franchisee, or as to subsequent
breach or default by Franchisee.  Subsequent acceptance by NYBE of any
obligations due to it hereunder shall not be deemed to be a waiver by NYBE of
any preceding breach by Franchisee of any terms, provisions, covenants, or
conditions of this Agreement.


ARTICLE 18.    NOTICES.


     Any and all notices required or permitted under this Agreement shall be in
writing and shall be personally delivered, mailed by certified or registered
mail, postage prepaid, return receipt requested, or sent via a nationally
recognized overnight delivery service, to the respective parties at the
following addresses unless and until a different address has been designated by
written notice to the other party:


                                     -40-

<PAGE>

     Notices to NYBE:       New York Bagel Enterprises, Inc.
                            250 N. Water
                            Wichita, Kansas  67202
                            ATTN:  Franchise Department


     Notices to Franchisee:
                           ----------------------------------
                           ----------------------------------
                           ----------------------------------
                           ATTN:
                                -----------------------------


Any notice by certified or registered mail or recognized overnight delivery
service shall be deemed to have been given at the date and time of mailing.


ARTICLE 19.    ALTERNATIVE DISPUTE RESOLUTION.


     19.1.     Franchisee and Franchisor agree to submit, prior to arbitration,
all unsettled claims, disputes, controversies, and other matters in question
between them arising out of or relating to this Agreement (including but not
limited to any claim that the Agreement or any of its provisions is invalid,
illegal, or otherwise voidable or void), the dealings or relationship between
Franchisee and Franchisor, or Franchisee's operation of the Restaurant
("Disputes") to mediation in Wichita, Kansas and in accordance with the
Commercial Mediation Rules of the American Arbitration Association currently in
effect.  Demand for mediation shall be made within a reasonable time after
cessation of negotiations.

          A.   Mediation shall be private, voluntary, and nonbinding.  Any party
     may withdraw from the mediation at any time before signing a settlement
     agreement upon written notice to each other party and to the mediator.  The
     mediator shall be neutral and impartial.  The mediator's fees shall be
     shared equally by the parties.  The mediator shall be disqualified as a
     witness, consultant, expert, or counsel for either party with respect to
     the matters in Dispute and any related matters.

          B.   Unless the parties agree otherwise, the entire mediation process
     shall be confidential and without prejudice.  The parties and the mediator
     shall not disclose any information, documents, statements, positions, or
     terms of settlement.  Nothing said or done or provided by the parties in
     the course of mediation shall be reported or recorded or, except as ordered
     by a court of


                                     -41-

<PAGE>

     competent jurisdiction, placed in any legal proceeding or construed for any
     purpose as an admission against interest.  Nevertheless, evidence otherwise
     discoverable or admissible is not excluded from discovery or admission as a
     result of its use in mediation.

If a Dispute cannot be resolved through mediation, the parties agree to submit
the Dispute to arbitration, subject to the terms and conditions of this Section
XV.


     19.2.     Subject to Section 19.1, all Disputes between Franchisee and
Franchisor will be submitted for binding arbitration to the American Arbitration
Association on demand of either party. Such arbitration proceeding will be
conducted in Wichita, Kansas and, except as otherwise provided in this
Agreement, will be heard by one arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect.  All
matters relating to arbitration will be governed by the federal Arbitration Act
(9 U.S.C. Sections 1 ET.SEQ.) and not by any state arbitration law.

          A.   The arbitrator will have the right to award or include in his
     award any relief which he deems proper under the circumstances, including,
     without limitation, money damages (with interest on unpaid amounts from the
     date due), specific performance, injunctive relief, and attorneys' fees and
     costs, provided that the arbitrator will not have the right to declare any
     Proprietary Marks generic or otherwise invalid or to award exemplary or
     punitive damages.  The award and decision of the arbitrator will be
     conclusive and binding upon all parties hereto, and judgment upon the award
     may be entered in any court of competent jurisdiction.

          B.   Franchisee and Franchisor agree to be bound by the provisions of
     any limitation on the period of time in which claims must be brought under
     applicable law.  Franchisee and Franchisor further agree that, in
     connection with any such arbitration proceeding, each must submit or file
     any claim which would constitute a compulsory counterclaim (as defined by
     Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding
     as the claim to which it relates.  Any such claim which is not submitted or
     filed as described above will be forever barred.

          C.   Franchisee and Franchisor agree that arbitration will be
     conducted on an individual, not a class-wide, basis, and that an
     arbitration proceeding between Franchisee and Franchisor may not be
     consolidated with any other arbitration proceeding involving Franchisee or
     Franchisor and another party.


                                     -42-

<PAGE>

     19.3.     Notwithstanding anything to the contrary contained in this
Section XV, Franchisee and Franchisor each have the right in a proper case to
obtain temporary restraining orders and temporary or preliminary injunctive
relief from a court of competent jurisdiction; provided, however, that
Franchisee and Franchisor must contemporaneously submit the Dispute for
non-binding mediation under Section 19.1 and then for arbitration under
Section 19.2 on the merits as provided herein if such Dispute cannot be
resolved through mediation.  Franchisee acknowledges that a proper case to
obtain temporary restraining orders and temporary or permanent injunctive
relief from a court of competent jurisdiction contemporaneously with
submitting the Dispute to mediation and then to arbitration shall include,
but not be limited to, the following:

          A.   Any Dispute involving actual or threatened disclosure or misuse
     of the contents of the NYBE Manual or any other confidential information or
     Trade Secrets of Franchisor;

          B.   Any Dispute involving the ownership, validity, use of, or right
     to use or license the Proprietary Marks;

          C.   Any action by Franchisor to enforce the covenants set forth in
     Article 11 and Article 13 of this Agreement; and

          D.   Any action by Franchisor to stop or prevent any threat or danger
     to public health or safety resulting from the construction, maintenance, or
     operation of the Restaurant.


The provisions of this Article 19 are intended to benefit and bind certain third
party non-signatories and will continue in full force and effect subsequent to
and notwithstanding the expiration or termination of this Agreement.


ARTICLE 20.    ENTIRE AGREEMENT.


     This Agreement, the documents referred to herein, and the attachments
hereto, if any, constitute the entire, full, and complete Agreement between NYBE
and Franchisee concerning the subject matter hereof, and supersede all prior
agreements.  No amendments, change, or variance from this Agreement shall be
binding on either party unless mutually agreed to by the parties and executed by
their authorized officers or agents in writing.


                                     -43-

<PAGE>

ARTICLE 21.    CONSTRUCTION AND MODIFICATION.


     21.1.     This Agreement contains the complete expression of the agreement
between the parties.  There are no promises, representations, inducements, or
agreements between them of any nature that are not contained herein.  Franchisee
acknowledges and agrees that it received ample time and opportunity to review
the Agreement and seek legal counsel with respect to the terms of this Agreement
and the franchise granted hereby and is making this Agreement based solely on
its terms and not on any collateral representation or promise, including,
without limitation, any projections of profits to be obtained by making this
Agreement, which Franchisee acknowledges have not been made, represented, or
warranted to Franchisee.


     21.2.     This Agreement is governed by and shall be construed in
accordance with the laws of the State of Kansas.


     21.3.     Should any one or more parts of this agreement be declared
invalid for any reason by a court of competent jurisdiction, such decision shall
not affect the validity of any remaining portions of the Agreement, which shall
remain in full force and effect as if the Agreement had been executed without
such invalid parts, except to the extent the absence of the provisions
invalidated would frustrate or make it impossible to achieve the purposes for
which the Agreement was made.  Should the requirements of any applicable law or
regulation change or modify the terms of this agreement or conflict with its
provisions, such change or modification shall not be applicable to this
agreement unless such change is lawfully mandated by the authority making the
same, in which case only the provisions affected by such law or regulation shall
be affected, and the agreement shall otherwise remain in full force and effect,
as modified to be consistent with such law or regulation.


     21.4.     This Agreement is made solely for the benefit of the parties
hereto and their respective successors and permitted assigns, and nothing herein
shall create any right to rely upon the terms hereof in favor of any third party
nor confer any right or remedy upon any third party, except as specifically
provided in Section 11.9 hereof.


     21.5.     All captions in this Agreement are intended solely for the
convenience of the parties, and none shall be deemed to affect the meaning or
construction of any provisions hereof.


                                     -44-

<PAGE>

     21.6.     All terms and words used in this Agreement, regardless of numbers
and genders in which they are used, shall be deemed to include singular or
plural and all genders as the context or sense of this Agreement or any
paragraph or clause herein may require.


     21.7.     All acknowledgments, promises, covenants, agreements, and
obligations herein made or undertaken by Franchisee shall be deemed jointly and
severally undertaken by all those executing this Agreement on behalf of
Franchisee.


     21.8.     Time is of the essence of this Agreement and all provisions
hereof shall be so interpreted.  Any provision of this Agreement which imposes
an obligation after termination or expiration of this Agreement shall survive
such termination or expiration.


     21.9.     No right or remedy conferred upon or reserved to NYBE or
Franchisee by this Agreement is intended to be, nor shall be deemed, exclusive
of any other right or remedy herein or by law or equity provided or permitted,
but each shall be cumulative of every other right or remedy.


     21.10.    Nothing herein contained shall bar NYBE's right to obtain
injunctive relief against threatened conduct that will cause it loss or damage,
under the usual equity rules, including the applicable rules for obtaining
restraining orders and preliminary injunctions.


     21.11.    In the event that Franchisee commences any action against NYBE
with respect to any Dispute, such action shall be brought only in a federal or
state court sitting within Sedgwick County, Kansas.  Franchisee consents to the
exercise of jurisdiction by courts within Sedgwick County, Kansas over any
claims or counterclaims against Franchisee.


     21.12.    In the event NYBE incurs legal fees or costs or other expenses to
enforce any obligation of Franchisee hereunder, or to defend against any claim,
demand, action or proceeding by reason of Franchisee's failure to perform or
observe any obligation imposed upon Franchisee by this Agreement, then NYBE
shall be entitled to recover from Franchisee the amount of all legal fees, costs
and expenses, including reasonable attorneys' fees, whether incurred prior to,
or in preparation for or contemplation of the filing of any claim, demand,
action, or proceeding to enforce any obligation of Franchisee hereunder or
thereafter or otherwise.


                                     -45-

<PAGE>


ARTICLE 22.    EXECUTION OF AGREEMENT.


     22.1.     This Agreement may be executed in counterparts, which together
shall constitute one agreement of the parties.


     22.2.     By signing this Agreement, Franchisee acknowledges that it has
received a complete copy of this Agreement, with any Exhibits referred to herein
attached, at least five business days prior to the date on which this Agreement
was executed, and further acknowledges that it has received the NYBE's Uniform
Franchise Offering Circular at least ten business days prior to the date on
which this Agreement was executed.  Franchisee further acknowledges that no
agent or employee of NYBE is authorized to make any representation or warranty
inconsistent with or in addition to the terms of this Agreement or the Franchise
Offering Circular.  By signing this Agreement, Franchisee represents and
warrants to NYBE that no such representation or warranty, including specifically
any representation as to the potential success or profitability of the
franchised business, has been made or relied upon.


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


                                   NEW YORK BAGEL ENTERPRISES, INC.
                                   a Kansas corporation



DATED:                             By:
      -----------------------         ----------------------------

                                        "NYBE" or "Franchisor"



                                   -------------------------------



DATED:                             By
      -----------------------         ----------------------------

                                        "Franchisee"






                                     -46-


<PAGE>

                                   GUARANTY



     As an inducement to New York Bagel Enterprises, Inc. to enter into the
foregoing Franchise Agreement, which it is unwilling to do but for this
Guaranty, the undersigned individually and, if more than one Guarantor, jointly
and severally guarantee the payment and performance of all obligations of the
Franchisee under the Agreement.  This shall be an unconditional, irrevocable,
and continuing guaranty for the entire term of this Agreement, including any
renewal terms.


     The undersigned agree that they are willing to remain fully bound by this
Guaranty notwithstanding any action or inaction of the Franchisor and Franchisee
in connection with the Agreement, and that their obligation shall not be
modified, waived, or released by any modification, amendment, or departure from
the terms of the Agreement, or by any forbearance, extension of time, waiver, or
release granted by Franchisor to Franchisee or any Guarantor or with respect to
any security held by Franchisor.  The undersigned expressly waive any notice of
all such matters and agree to pay and perform the obligations of Franchisee
without notice or demand from the Franchisor and without any requirement that
Franchisor first proceed against Franchisee or any other Guarantor.



     IN WITNESS WHEREOF, each of the undersigned has executed this Guaranty as
of the date of the Franchise Agreement.


                                            ---------------------------------
ATTEST:

-----------------------------------


                                            ---------------------------------
ATTEST:
                                            "Guarantor"
-----------------------------------




                                     -47-

<PAGE>

                      NEW YORK BAGEL ENTERPRISES, INC.
                            FRANCHISE AGREEMENT



                                 OWNERS OF FRANCHISEE


                                                                 Interest in
NAME OF OWNER                                                    FRANCHISEE
-------------                                                    -----------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------

---------------------------------------------------------        --------------


TOTAL                                                                 100%




                                    Exhibit "A"


<PAGE>

                        NEW YORK BAGEL ENTERPRISES, INC.

                              FRANCHISE AGREEMENT



                              COVENANT AGREEMENT



     The form of Covenant Agreement currently offered by Franchisor is attached.

(Refer to Section 11.7 of Franchise Agreement.)






























                                     Exhibit "B"

<PAGE>


                         NEW YORK BAGEL ENTERPRISES, INC.

                                COVENANT AGREEMENT



     THIS COVENANT AGREEMENT is entered into as of the ___ day of ________,
19__, by and among New York Bagel Enterprises, Inc. ("Franchisor") and
_______________________ (whether one or more "Covenantors").


     W I T N E S S E T H:  That;


     WHEREAS, Covenantors have agreed to enter into this Agreement to induce
Franchisor to enter into that certain Franchise Agreement dated __________, 19__
between Franchisor and ___________________ ("Franchisee").


     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the Covenantors covenant and agree as follows:

     1.  Capitalized terms used herein and not otherwise defined shall have the
same meaning as defined in the Franchise Agreement.


     2.  During the term of the Franchise Agreement and thereafter, except as
otherwise approved in writing by Franchisor, the Covenantors shall not, either
directly or indirectly, individually, or through or on behalf of, or in
conjunction with any person, persons, or entity:

          a.   Copy or disclose to any person other than Franchisee's employees
     (and then only to employees who have a need to know) (i) any knowledge,
     information, or know-how concerning the System, or (ii) all or any portion
     of the NYBE Manual or any other confidential materials, including without
     limitation, plans, specifications, site layouts, marketing and advertising
     materials, data, financial information, or other materials deemed
     confidential by Franchisor.  Covenantors shall at all times treat the NYBE
     Manual and the information contained therein as confidential, and shall use
     all reasonable efforts to maintain such information as secret and
     confidential and shall use the same only in the operation of the
     Restaurant.  The NYBE Manual shall at all times remain the sole property of
     Franchisor, and shall be returned to Franchisor immediately upon expiration
     or termination of this Agreement.  Any and all information, knowledge,
     know-how, and other data, which Franchisor designates as confidential shall
     be deemed confidential for purposes of this Agreement, except information
     which Covenantors can



<PAGE>


     demonstrate came to their attention prior to disclosure thereof by
     Franchisor; or which, at or after the time of disclosure by Franchisor
     to Covenantors, had become a part of the public domain, through publication
     or communication by others.

          b.  During the term of the Franchise Agreement, Covenantors shall not
     compete, or be associated, directly or indirectly as an owner, officer,
     director, employee, consultant, or otherwise, in any business in
     competition with the System, and, for a period of two years after any
     transfer or termination of the Franchise Agreement for any reason,
     Covenantors shall not compete, or be associated, directly or indirectly as
     an owner, officer, director, employee, consultant, or otherwise, in any
     business in competition with the System which is located within (i) the
     Assigned Territory, (ii) the Designated Market Area or Areas identified by
     the then-current Nielson Wall Map published by the A.C. Nielson Company
     ("DMA"), in which the Assigned Territory is located, or (iii) the DMA of
     any other System Restaurant then existing; provided, however, that passive
     ownership of less than five percent (5%) of the outstanding voting
     securities of a publicly held corporation (which for purposes of this
     Agreement means a corporation registered under the Securities Exchange Act
     of 1934) shall not be deemed a violation of this Section.  In the event the
     A.C. Nielson Company discontinues the publication of Nielson Wall Maps for
     any reason, Franchisor shall have the right to designate an alternate
     generally recognized market identification resource for use in connection
     with this Section.

          c.  Covenantors shall not employ or seek to employ any person who is
     or was within the immediate past six (6) months employed by Franchisor or
     any other System franchisee or induce or seek to induce any such person to
     leave his or her employment without the consent of such employee's current
     employer.  Franchisor shall not employ or seek to employ any person who is
     or was within the immediate past six (6) months employed by Franchisee or
     induce or seek to induce any such person to leave his or her employment.
     Any party violating the provisions of this Section 2.c shall pay to the
     former employer as liquidated damages (which the parties agree are
     difficult of ascertainment) an amount equal to two times the annual salary
     of the employee involved, plus all costs and attorneys fees incurred by the
     former employer in connection with such default.  The parties hereto agree
     that each current and future franchisee in the System shall be a third
     party beneficiary of the provisions of this Section 2.c, and shall be
     entitled to enforce the provisions hereof.  Franchisor shall have no
     obligation to enforce the provisions of this Section 2.c for the benefit of
     any current or future franchisee in the System.

          d.   In the event any provision of this Agreement is deemed by a court
     of competent jurisdiction to be more restrictive than permissible at law or
     equity, the Covenantors agree that the provisions hereof may be reformed
     and modified and enforced by such court to the maximum extent permissible
     under applicable law and principles of


                                       -2-

<PAGE>

     equity.  Covenantors agree that specific performance and injunctive relief
     are necessary and appropriate remedies for violations of this Agreement
     and agree to enforcement of such remedies, but without prejudice to the
     right of Franchisor to recover money damages, which are in no event a full
     and adequate remedy for such violations.


     3.  The Covenantors agree that the existence of any claim that any of them
may have against Franchisor shall not constitute a defense to the enforcement by
Franchisor of this Agreement or the covenants contained in Article 11 of the
Franchise Agreement.


     4.  This Agreement and the documents provided for herein contain the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior negotiations, agreements, and understandings with respect
thereto.  This Agreement may only be amended by a written document duly executed
by all parties hereto.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas.  This Agreement shall inure to
the benefit of and shall be binding upon the respective successors, heirs,
administrators, executors, personal representatives, trustees, and assigns of
the parties hereto.  This Agreement may be executed in multiple counterparts,
each considered an original, but all of which shall constitute but one
Agreement.


     IN WITNESS WHEREOF, the undersigned have executed this Agreement.


                         NEW YORK BAGEL ENTERPRISES, INC.


                         By
                           -------------------------------------

                               "Franchisor"


                         ---------------------------------------


                         ---------------------------------------


                         ---------------------------------------


                                "Covenantors"



                                       -3-

<PAGE>


                                    GUARANTY


     As an inducement to New York Bagel Enterprises, Inc. to enter into the
foregoing Development Agreement, which it is unwilling to do but for this
Guaranty, the undersigned individually and, if more than one Guarantor,
jointly and severally guarantee the payment and performance of all
obligations of the Developer under the Agreement.  This shall be an
unconditional, irrevocable, and continuing guaranty for the entire term of
this Agreement, including any renewal terms.

     The undersigned agree that they are willing to remain fully bound by
this Guaranty notwithstanding any action or inaction of the Franchisor and
Franchisee in connection with the Agreement, and that their obligation shall
not be modified, waived, or released by any modification, amendment, or
departure from the terms of the Agreement, or by any forbearance, extension
of time, waiver, or release granted by Franchisor to Developer or any
Guarantor or with respect to any security held by Franchisor.  The
undersigned expressly waive any notice of all such matters and agree to pay
and perform the obligations of Developer without notice or demand from the
Franchisor and without any requirement that Franchisor first proceed against
Developer or any other Guarantor.

     IN WITNESS WHEREOF, each of the undersigned has executed this Guaranty
as of the date of the Franchise Agreement.



                                        ---------------------------------

ATTEST:

-------------------------------------



                                        ---------------------------------

ATTEST:
                                        "Guarantor"
-------------------------------------



                                  Exhibit C

<PAGE>


                                    GUARANTY


     As an inducement to New York Bagel Enterprises, Inc. to enter into the 
foregoing Development Agreement, which it is unwilling to do but for this 
Guaranty, the undersigned individually and, if more than one Guarantor, 
jointly and severally guarantee the payment and performance of all obligations 
of the Developer under the Agreement.  This shall be an unconditional, 
irrevocable, and continuing guaranty for the entire term of this Agreement, 
including any renewal terms.

     The undersigned agree that they are willing to remain fully bound by this 
Guaranty notwithstanding any action or inaction of the Franchisor and 
Developer in connection with the Agreement, and that their obligation shall 
not be modified, waived, or released by any modification, amendment, or 
departure from the terms of the Agreement, or by any forbearance, extension of 
time, waiver, or release granted by Franchisor to Developer or any Guarantor 
or with respect to any security held by Franchisor.  The undersigned expressly 
waive any notice of all such matters and agree to pay and perform the 
obligations of Developer without notice or demand from the Franchisor and 
without any requirement that Franchisor first proceed against Developer or any 
other Guarantor.

     IN WITNESS WHEREOF, each of the undersigned has executed this Guaranty
as of the date of the Franchise Agreement.



                                        ---------------------------------

ATTEST:

-------------------------------------



                                        ---------------------------------

ATTEST:
                                        "Guarantor"
-------------------------------------



                                  Exhibit D


<PAGE>

                        NEW YORK BAGEL ENTERPRISES, INC.

                           CONFIDENTIALITY AGREEMENT



     This Confidentiality Agreement is made and entered into as of the _____
day of _______________________ , 19__, by and between _______________________
_________________________ ("Recipient"), and New York Bagel Enterprises, Inc.,
a Kansas corporation ("NYBE").


     W I T N E S S E T H:  That,


     WHEREAS, Recipient desires to review certain confidential and proprietary
information regarding New York Bagel Enterprises, Inc., its affiliates, or
franchisees (the "Proprietary Information"), for the purpose of evaluating
whether to directly or indirectly enter into a business relationship with NYBE;
and


     WHEREAS, NYBE desires to disclose certain proprietary information to
Recipient, but only pursuant to the terms of this Agreement.


     NOW, THEREFORE, in consideration of the covenants and premises herein
contained, and for other good and valuable consideration received, it is hereby
agreed as follows:


     1.  Recipient acknowledges and agrees that all Proprietary Information it
receives from NYBE, its affiliates, or franchisees is confidential and
proprietary information in which NYBE has a proprietary interest.  For purposes
of this Agreement, Proprietary Information may include, by way of example, but
without limitation, data, know-how, processes, designs, sketches, photographs,
plans, drawings, specifications, reports, financial information, customer lists,
pricing information, studies, findings, inventions, and ideas.  Recipient agrees
that any information received from NYBE, its subsidiaries, affiliates, or
franchisees (i) shall only be used for purposes of evaluating whether Recipient
desires to directly or indirectly enter into a business relationship with NYBE,
and (ii) shall not be disclosed to any third party without the prior written
consent of NYBE.  Recipient agrees to use reasonable care to prevent the
disclosure of the Proprietary Information to any third party, and further agrees
to limit the dissemination of the Proprietary Information within its own
organization to individuals whose duties justify the need to know such
information, and then only provided that there is a clear understanding by



                                   Exhibit F

<PAGE>

such individuals of their obligation to maintain the confidential status of
the Proprietary Information and to restrict its use solely to the purposes
specified herein.

     2.  Recipient acknowledges that no other right or license to use the
Proprietary Information is granted by this Agreement, and agrees that the amount
of the Proprietary Information to be disclosed to Recipient is completely within
the discretion of NYBE.  Upon completion of its review of the Proprietary
Information (or sooner upon request), Recipient agrees to return all written
materials received from NYBE, its affiliates, subsidiaries, or franchisees.


     3.  Recipient shall be under no obligation under this Agreement with
respect to any information (i) which is, at the time of the disclosure,
available to the general public; (ii) which becomes at a later date available to
the general public through no fault of the Recipient and then only after said
date; or (iii) which Recipient can demonstrate was in its possession before
receipt.


     4.  This Agreement constitutes the entire agreement and understanding among
the parties hereto, and shall not be amended except pursuant to a written
agreement executed by each of the parties hereto.  This agreement shall be
binding upon the parties hereto and their respective heirs, administrators,
successors, and assigns.


     IN WITNESS WHEREOF, the parties hereto have executed this agreement on the
day, month, and year first above written.


___________________________________     NEW YORK BAGEL ENTERPRISES, INC.



By                                      By
  ---------------------------------       -------------------------------------
Name:                                   Name:
     ------------------------------          ----------------------------------
Title:                                  Title:
      -----------------------------           ---------------------------------

         "Recipient"



                                      -2-

<PAGE>

                          ADDENDUM TO LEASE AGREEMENT


     THIS ADDENDUM TO LEASE (the "Addendum") is made as of the _____ day of
__________, 19__, by and between ___________________________________________
______________________________________________, as Lessor or Landlord
("Landlord"), and _____________________________________________________,
__________________________________________ as Lessee or Tenant ("Tenant").


                                   RECITALS


     The parties hereto acknowledge and agree that Tenant is a party to a
Franchise Agreement with New York Bagel Enterprises, Inc., a Kansas
corporation (the "Franchise Agreement").  Pursuant to the Franchise
Agreement, Tenant agreed to cause the provisions contained in this Addendum
to be made a part of the lease agreement between Tenant and Landlord, a copy
of which is attached hereto and incorporated herein by reference (the "Lease
Agreement").

    In order to induce Tenant to enter into the Lease Agreement, and for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Tenant hereby agree to the following additional
terms and provisions to the Lease Agreement, and further agree that, to the
extent that the terms and conditions of the Lease Agreement conflict with the
terms and provisions of this Addendum, the terms and provisions of this
Addendum shall control:

     1.   NOTICE OF DEFAULT.  Upon the occurrence of any default by Tenant
under the terms and provisions of the Lease Agreement, Landlord shall
concurrently give written notice of such default to Tenant at the address
specified in the Lease Agreement and to New York Bagel Enterprises, Inc., a
Kansas corporation, and its successors and assigns ("NYBE"), at 250 North
Water, Wichita, Kansas 67202, or such other address as may be designated in
writing by NYBE.

     2.   FRANCHISOR'S RIGHT TO ENTER LEASED PREMISES.  Upon the occurrence
of any default by Tenant under the terms and provisions of the Lease
Agreement and/or the Franchise Agreement, NYBE shall have the right (but not
the duty) to enter the leased premises to remove signage and to otherwise
make such modifications or alterations to the leased premises which



                                   EXHIBIT G

                                      -1-

<PAGE>

NYBE deems reasonably necessary to protect its proprietary marks and
distinguishing characteristics of NYBE locations.


     3.   ASSUMPTION OF LEASE.  Upon the occurrence of any default by the
Tenant under the terms and provisions of the Lease Agreement or the Franchise
Agreement, or upon the expiration or termination of the Franchise Agreement,
NYBE shall have the right (but not the duty) to assume Tenant's rights and
obligations under the Lease Agreement, but NYBE must exercise such right not
more than 15 business days after the later of (i) the expiration of any cure
period under the Lease Agreement or the Franchise Agreement without cure by
the Tenant, or (ii) the receipt of written notice of such default under the
Lease Agreement by NYBE.

     4.   THIRD-PARTY BENEFICIARY.  The parties hereto acknowledge and agree
that NYBE is intended to be a third-party beneficiary under the Lease
Agreement and this Addendum.

     IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of
the date first above written.

                                         -----------------------------------

                                                     "Landlord"




                                         -----------------------------------

                                                       "Tenant"

                                      -2-