February 9, 2000



PERSONAL AND CONFIDENTIAL

[Name and Address]

Dear ______________:

     This letter  agreement  replaces in its entirety the letter agreement dated
December 3, 1997 (along with the Addendum thereto) between  _______________ (the
"Executive") and Flagstar  Corporation,  a predecessor  corporation to Advantica
Restaurant Group, Inc. (the "Company"),  and is entered into as an inducement to
the Executive to continue in the employ of the Company.

         1. Leadership  Bonus. In addition to the other salary or bonus payments
and benefits to which the  Executive is otherwise  entitled in ____  capacity as
__________________,  the  Executive  shall  receive  the  payments  set forth on
Schedule A (the  "Leadership  Bonus")  provided  the  Executive  continues to be
employed  by the  Company  (or a  subsidiary  thereof)  as of the  accrual  date
indicated  on  Schedule  A. Each such  payment  shall be due and  payable to the
Executive on or before  fifteen (15) days  following the  corresponding  accrual
date.  Any unaccrued  portion of such  Leadership  Bonus shall be forfeited upon
termination of the Executive's  employment for Cause, as defined herein, or upon
the voluntary  termination  of employment by the Executive.  If the  Executive's
employment is terminated by the Company for any reason other than for Cause, the
Executive shall be entitled to receive any unaccrued  portion of such Leadership
Bonus at the  "minimum"  level for each such  unaccrued  portion as set forth on
Schedule A at the time of payment of the Severance  Payment set forth in Section
2 hereof.  For  purposes of this letter  agreement,  "Cause"  shall mean (a) the
Executive's  habitual neglect of his material duties,  (b) an act or acts by the
Executive,  or any  omission  by him,  constituting  a  felony,  for  which  the
Executive has entered a guilty plea or confession  to, or of which the Executive
has been convicted,  (c) the Executive's  failure to follow any lawful directive
of the Board or Chief Executive Officer ("CEO")  consistent with the Executive's
position and duties,  (d) an act or acts of fraud or dishonesty by the Executive
which  results or is intended  to result in  financial  or economic  harm to the
Company,  or (e) breach of a material  provision of this letter agreement by the
Executive; provided that the Company shall give the Executive (x) written notice
specifying  the nature of the alleged  Cause,  and, with respect to Clauses (a),
(c) and (e), (y) a reasonable


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opportunity  to appear before the Board or CEO to discuss the matter,  and (z) a
reasonable  opportunity  to cure any such alleged Cause.

         2.  Severance  Payment.  In the event (A) the  Company  terminates  the
Executive for any reason other than Cause, as defined in Section 1 above; or (B)
if the Executive elects to terminate his/her employment with the Company because
(i) the Company has taken an action which reduces the Executive's base salary or
which causes the Executive to no longer have the responsibilities  referenced in
Section 1 of this letter  agreement;  or (ii) the  Executive  is required by the
Company to relocate a distance  of more than 100 miles from the current  company
headquarters in Spartanburg,  SC, the Executive shall receive a single, lump sum
severance  payment,  within five (5) days of termination,  in an amount equal to
the sum of (a) 200% of the  Executive's  then current base pay (in no event less
than $300,000);  (b) 200% of the Executive's  target bonus for the year in which
the termination  occurs (provided that the amount of such target bonus shall not
be less than 65% of the  Executive's  then current base salary);  (c) a lump sum
amount  equal to the  value of 200% of the  annual  car  allowance  to which the
Executive is entitled in the year in which termination occurs (provided that the
amount of such  annual car  allowance  shall not be less than  $13,200);  (d) an
amount (grossed up at a total of 45% for federal,  state and local income taxes)
equal to (i) the  Company's  then actual  benefit  credits for an eighteen  (18)
month period and (ii) all vested  retirement  benefits  under the  non-qualified
pension plan ( the "Select Advantica Management  Supplemental Plan"); and (e) an
amount  equal  to  any  accrued  but  unused  vacation  days  (collectively  the
"Severance  Payment").  Such Severance Payment shall be made to Executive within
five (5) business days following any such  termination.  The Executive will also
be entitled to receive career  placement  advice and counseling at the Company's
expense for a period of eighteen (18) months.  Further,  should such an event of
termination of the  Executive's  employment  occur,  the Executive  shall not be
required to seek other employment to mitigate damages,  and any income earned by
the  Executive  from other  employment  or  self-employment  shall not be offset
against  any  obligations  of the  Company to the  Executive  under this  letter
agreement.

         3. Stock Options.  The Executive shall  immediately  become one hundred
percent (100%) vested in, and eligible to exercise,  all stock options that have
been  granted  to  him/her  by  the  Company  in the  event  of  (a)  actual  or
constructive termination of the Executive without Cause as described in Sections
1 and 2 above;  (b) a dissolution or  liquidation of the Company;  (c) a sale of
all or substantially all of the Company's assets;  (d) a merger or consolidation
involving the Company in which the Company is not the surviving corporation; (e)
a merger or  consolidation  involving  the  Company in which the  Company is the
surviving  corporation  but the  holders  of  shares  of  common  stock  receive
securities of another corporation and/or other property,  including cash; or (f)
a tender  offer for at least a majority of the  outstanding  common stock of the
Company. Further, the Executive shall have the right to exercise any or all such
vested options for the lesser of thirty-six (36) months or the remaining term of
such option grant.


<PAGE>


        4.  Subsidiary  Guaranties.  The Company's  payment  obligations  herein
in respect of the Retention  Bonus,  the change of Control Benefit and the
Severance Payment  shall be  unconditionally  guaranteed  by the  Company's
subsidiaries, Denny's  Inc.  and DFO,  Inc.,  such  subsidiaries  being  among
the principal operating subsidiaries receiving the benefits of the  Executive's
continuing employment with the Company.  Such subsidiary guaranties shall be
"guaranties of payment" and not "guaranties of collection."

         Nothing  herein  shall be deemed to modify in any  respect the right of
the Company to terminate the services of the  Executive in  accordance  with the
terms of the Company policies now or hereafter in effect.

         If you are in agreement with these terms,  please sign one copy of this
letter and return it to Stephen Wood.

                                   Sincerely,

                                   James B. Adamson
                                   Chairman, Chief Executive Officer
                                   And President

cc:      Rhonda J. Parish
         Stephen W. Wood

Agreed and accepted:

_____________________________      _______________________, 2000


<PAGE>



         By  authority  duly  obtained as of the date first above  written,  the
undersigned,  Denny's Inc. and DFO, Inc., indirect  subsidiaries of the Company,
hereby  jointly  and  severally  guarantee  the  payment  by the  Company to the
Executive  of the  Retention  Bonus,  the  change of  Control  Benefit,  and the
Severance  Payment as provided  above.  In providing  such  guaranty,  each such
guarantor  acknowledges  that it is receiving and will receive  substantial  and
meaningful benefits and services from the Executive's  continued employment with
the  Company.  Each such  guaranty  shall be a guaranty  of  payment  and not of
collection.

Denny's, Inc.                                                 DFO, Inc.


By: ______________________________          By: ________________________________


<PAGE>


                                   Schedule A

Recognizing  the  vital  role  you will  play in the  success  of this  enormous
strategic  undertaking,  we have implemented a new two-year  Officer  Leadership
Incentive Program that provides for generous cash awards with significant upside
potential.

Under this new program you will  receive  the  following  cash awards if you are
actively  employed  (or on an approved  leave of absence) on the award dates set
forth below.

                  Award Date                         Minimum Award Amount
                  ----------                         --------------------
                  July 31, 2000                           $  40,000
                  January 31, 2001                        $  50,000
                  July 31, 2001                           $  60,000
                  January 31, 2002                        $ 100,000
                                                          ---------
                           Total                          $ 250,000

This is the minimum amount to be paid;  there is also a large upside  potential.
You will receive the greater of the dollar  amounts  listed  above,  or the cash
value of the number of shares of the company's common stock shown below.

                  Award Date                Number of Shares of Company Stock
                  ----------                ---------------------------------
                  July 31, 2000                         20,000
                  January 31, 2001                      25,000
                  July 31, 2001                         30,000
                  January 31, 2002                      50,000

Example:          On July 31, 2000, the company's  common stock closes at $1.75.
                  You will receive the greater of $40,000 or the value of 20,000
                  shares of common stock (20,000 x $1.75 = $35,000).  This means
                  you will receive the minimum cash award of $40,000.

                  On January 31, 2001,  the stock closes at $3.00.  You
                  will  receive  the  greater  of $50,000 or the value of 25,000
                  shares of common stock  (25,000 x $3.00 = $75,000).  Since the
                  value of the stock is greater than the minimum  award  amount,
                  you will receive $75,000, the value of the stock, in cash.

                  The same  calculation  will  occur on the  final  two
                  award  dates.  Each  time we will  determine  the value of the
                  stock amounts  listed above,  and you will receive the greater
                  of the  minimum  award or the stock's  then  value.  In either
                  event the award will be paid in cash.  You will be responsible
                  for any taxes due on these awards, the awards are not eligible
                  for deferral into the 401(k) and ASSP, nor do they count under
                  the pension plan.