Document:

QUESTAR CORPORATION
                  LONG-TERM STOCK INCENTIVE PLAN
            (As Amended and Restated February 8, 2000)

Section 1.  Purpose

     The Questar Corporation Long-Term Stock Incentive Plan (the
"Plan") is designed to encourage officers and selected key employees
of and consultants to Questar Corporation and its affiliated companies
(the "Company") to acquire a proprietary interest in the Company, to
generate an increased incentive to contribute to the Company's future
growth and success, and to enhance the Company's ability to attract
and retain talented officers and employees.  Accordingly, the Company,
during the term of this Plan, may grant incentive stock options,
nonqualified stock options, stock appreciation rights, restricted
stock, performance shares, and other awards valued in whole or in part
by reference to the Company's stock.

Section 2.  Definitions

     "Affiliate" shall mean any business entity in which the Company
directly or indirectly has an equity interest deemed significant by
the Company's Board of Directors.

     "Approved Termination" shall mean any retirement under the
Company's Retirement Plan, with approval of the Board of Directors, or
any termination of service on or after age 55, with approval of the
Board.

     "Award" shall mean a grant or award under Section 6 through 10,
inclusive, of the Plan, as evidenced in a written document delivered
to a Participant as provided in Section 12(b).

     "Board" shall mean the Board of Directors of the Company.

     "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

     "Committee" shall mean the Management Performance Committee of
the Board of Directors.

     "Common Stock" or "Stock" shall mean the Common Stock, no par
value, of the Company.  The term shall also include any Common Stock
Purchase Rights attached to the Common Stock.

     "Company" shall mean Questar Corporation on a consolidated basis.

     "Designated Beneficiary" shall mean the beneficiary designated by
the Participant, in a manner determined by the Committee, to receive
amounts due the Participant in the event of the Participant's death.
In the absence of an effective designation by the Participant,
Designated Beneficiary shall mean the Participant's estate.

     "Disability" shall mean permanent and total disability within the
meaning of Section 105(d)(4) of the Code.

     "Employee" shall mean any officer or key employee of or
consultant to the Employer.

     "Employer" shall mean the Company and any Affiliate.

     "Fair Market Value" shall mean the regular closing benchmark
price of the Company's Common Stock reported on the New York Stock
Exchange on the date in question, or, if the Common Stock shall not
have been traded on such date, the closing price on the next preceding
day on which a sale occurred.

     "Family Member" shall mean the Participant's spouse, children,
grandchildren, parents, siblings, nieces and nephews.

     "Fiscal Year" shall mean the fiscal year of the Company.

     "Incentive Stock Option" shall mean a stock option granted under
Section 6 that is intended to meet the requirements of Section 422 of
the Code.

     "Nonqualified Stock Option" shall mean a stock option granted
under Section 6 that is not intended to be an Incentive Stock Option.

     "Option" shall mean an Incentive Stock Option or a Nonqualified
Stock Option.

     "Participant" shall mean an Employee who is selected by the
Committee to receive an Award under the Plan.

     "Payment Value" shall mean the dollar amount assigned to a
Performance Share which shall be equal to the Fair Market Value of the
Common Stock on the day of the Committee's determination under Section
8(c)(2) with respect to the applicable Performance Period.

     "Performance Period" or "Period" shall mean the period of years
selected by the Committee during which the performance is measured for
the purpose of determining the extent to which an Award of Performance
Shares has been earned.

     "Performance Goals" shall mean the objectives established by the
Committee for a Performance Period, for the purpose of determining the
extent to which Performance Shares that have been contingently awarded
for such Period are earned.

     "Performance Share" shall mean an Award granted pursuant to
Section 8 of the Plan expressed as a share of Common Stock.

     "Reduction in Force" shall mean an involuntary termination of
employment due to economic conditions, sale of assets, shift in focus,
or other reasons independent of the Participant's performance.

     "Restricted Period" shall mean the period of years selected by
the Committee during which a grant of Restricted Stock or Restricted
Stock Units may be forfeited to the Company.

     "Restricted Stock" shall mean shares of Common Stock contingently
granted to a Participant under Section 9 of the Plan.

     "Restricted Stock Unit" shall mean a fixed or variable dollar
denominated unit contingently awarded under Section 9 of the Plan.

     "Right" shall mean a Stock Appreciation Right granted under
Section 7.

     "Stock Unit Award" shall mean an Award of Common Stock or units
granted under Section 10.

     "Termination of Employment" shall mean the date on which a
Participant actually notifies his/her supervisor of his/her
resignation, in the case of a voluntary termination; and the date on
which the Company actually notifies the Participant of his/her
termination, in the case of an involuntary termination.  This term, as
defined, does not include termination of employment as the result of
an Approved Termination, Disability, death, or Reduction in Force.

Section 3.  Administration

     The Plan shall be administered by the Committee.  The Committee
shall have sole and complete authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the operation
of the Plan, and to interpret the terms and provisions of the Plan.
The Committee's decisions shall be binding upon all persons, including
the Company, stockholders, an Employer, Employees, Participants,
Designated Beneficiaries, and Family Members.

Section 4.  Eligibility

     Awards may only be granted to officers and key employees of or
consultants to the Company or any Affiliate who have the capacity to
contribute to the success of the Company.  When selecting Participants
and making Awards, the Committee may consider such factors as the
Employee's functions and responsibilities and the Employee's past,
present and future contributions to the Company's profitability and
growth.

     Neither the members of the Committee nor any member of the Board
who is not an Employee of the Company shall be eligible to receive
awards.

     Nothing contained in the Plan or in any individual agreement
pursuant to the terms of the Plan shall confer upon any Participant
any right to continue in the employment of the Company or to limit in
any respect the right of the Company to terminate the Participant's
employment at any time and for any reason.

Section 5.  Maximum Amount Available for Awards and Maximum Award

     The aggregate number of shares of Common Stock that may be issued
under Awards pursuant to this Plan on an annual basis shall not exceed
one percent (1%) of the issued and outstanding shares of Common Stock
as of the first day of each calendar year for which the Plan is in
effect.  Any shares available in any year using this formula that are
not granted under this Plan or other plans in which stock is awarded
to Employees would be available for use in subsequent years.  Shares
of Common Stock may be made available from the authorized but unissued
shares of the Company or from shares reacquired by the Company,
including shares purchased in the open market.  In the event that an
Option or Right expires or is terminated unexercised as to any shares
of Common Stock covered thereby, or any Award in respect of shares is
forfeited for any reason under the Plan, such shares, to the extent
not precluded by applicable law or regulation, shall be again
available for Awards pursuant to the Plan.

     In the event that the Committee shall determine that any stock
dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to
purchase Common Stock at a price substantially below fair market value
or other similar corporate event affects the Common Stock such that an
adjustment is required in order to preserve the benefits or potential
benefits intended to be made available under this Plan, then the
Committee, in its sole discretion, may take action.  The Committee may
adjust any or all of the number and kind of shares that thereafter may
be awarded or optioned and sold or made the subject of Rights under
the Plan, the number and kind of shares subject to outstanding Options
and other Awards, and the grant, exercise or conversion price with
respect to any of the foregoing and/or, if deemed appropriate, make
provision for a cash payment to a Participant or a person who has an
outstanding Option or other Award.

     There is a maximum of 300,000 shares that can be the subject of
Awards granted to any single Participant in any given fiscal year.

Section 6.  Stock Options

     (a)  Grant.  Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the Employees to
whom Options shall be granted, the number of shares to be covered by
each Option, the option price therefor and the conditions and
limitations, applicable to the exercise of the Option.  The Committee
shall have the authority to grant Incentive Stock Options,
Nonqualified Stock Options, or both types of Options.  In the case of
Incentive Stock Options, the terms and conditions of such grants shall
be subject to and comply with such rules as may be prescribed by
Section 422 of the Code and any implementing regulations.

     (b)  Option Price.  The Committee shall establish the option
price at the time each Option is granted, which price shall not be
less than 100 percent of the Fair Market Value of the Common Stock on
the date of grant.

     (c)  Exercise.  Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee, in its sole
discretion, may specify in the applicable Award or thereafter;
provided, however, that in no event may any Option granted hereunder
be exercisable earlier than six months after the date of such grant or
after the expiration of ten years from the date of such grant.  The
Committee may impose such conditions with respect to the exercise of
Options, including without limitation, any conditions relating to the
application of federal or state securities laws, as it may deem
necessary or advisable.

     No shares shall be delivered pursuant to any exercise of an
Option until payment in full of the option price is received by the
Company.  Such payment may be made in cash, or its equivalent, or, if
and to the extent permitted by the Committee, by exchanging shares of
Common Stock owned by the optionee (which are not the subject of any
pledge or other security interest), or by a combination of the
foregoing, provided that the combined value of all cash and cash
equivalents and the Fair Market Value of any such Common Stock so
tendered to the Company, valued as of the date of such tender, is at
least equal to such option price.

     (d)  Transferability.  Participants are allowed to transfer
vested Nonqualified Stock Options to Family Members or family trusts,
provided that such options were granted as of and after February 10,
1998 and provided that such transfers are made and transferred Options
are exercised in accordance with procedural rules adopted by the
Committee.

Section 7.  Stock Appreciation Rights

     (a)  The Committee may, with sole and complete authority, grant
Rights in tandem with an Option.  Rights shall not be exercisable
earlier than six months after grant, shall not be exercisable after
the expiration of ten years from the date of grant and shall have an
exercise price of not less than 100 percent of the Fair Market Value
of the Common Stock on the date of grant.

     (b)  A Right shall entitle the Participant to receive from the
Company an amount equal to the excess of the Fair Market Value of a
share of Common Stock on the exercise of the Right over the grant
price thereof.  The Committee shall determine whether such Right shall
be settled in cash, shares of Common Stock or a combination of cash
and shares of Common Stock.

Section 8.  Performance Shares

     (a)  The Committee shall have sole and complete authority to
determine the Employees who shall receive Performance Shares and the
number of such shares for each Performance Period and to determine the
duration of each Performance Period and the value of each Performance
Share.  There may be more than one Performance Period in existence at
any one time, and the duration of Performance Periods may differ from
each other.

     (b)  Once the Committee decides to use Performance Shares, it
shall establish Performance Goals for each Period on the basis of
criteria selected by it.  During any Period, the Committee may adjust
the Performance Goals for such Period as it deems equitable in
recognition of unusual or non-recurring events affecting the Company,
changes in applicable tax laws or accounting principles, or such other
factors as the Committee may determine.

     (c)  As soon as practicable after the end of a Performance
Period, the Committee shall determine the number of Performance Shares
that have been earned on the basis of performance in relation to the
established Performance Goals.  Payment Values of earned Performance
Shares shall be distributed to the Participant or as soon as
practicable after the expiration of the Performance Period and the
Committee's determination.  The Committee shall determine whether
Payment Values are to be distributed in the form of cash and/or shares
of Common Stock.

Section 9.  Restricted Stock and Restricted Stock Units

     (a)  Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employees to whom
shares of Restricted Stock and Restricted Stock Units shall be
granted, the number of shares of Restricted Stock and the number of
Restricted Stock Units to be granted to each Participant, the duration
of the Restricted Period during which and the conditions under which
the Restricted Stock and Restricted Stock Units may be forfeited to
the Company, and the other terms and conditions of such Awards.

     (b)  Shares of Restricted Stock and Restricted Stock Units may
not be sold, assigned, transferred, pledged or otherwise encumbered,
except as herein provided, during the Restricted Period.  At the
expiration of the Restricted Period, the Company shall deliver such
certificates to the Participant or the Participant's legal
representative.  Payment for Restricted Stock Units shall be made to
the Company in cash and/or shares of Common Stock, as determined at
the sole discretion of the Committee.

Section 10.  Other Stock Based Awards

     (a)  In addition to granting Options, Rights, Performance Shares,
Restricted Stock, Restricted Stock Units, the Committee shall have
authority to grant Stock Unit Awards to Participants that can be in
the form of Common Stock or units, the value of which is based, in
whole or in part, on the value of Common Stock.  Subject to the
provisions of the Plan, Stock Unit Awards shall be subject to such
terms, restrictions, conditions, vesting requirements and payment
rules as the Committee may determine in its sole and complete
discretion at the time of grant.

     (b)  Any shares of Common Stock that are part of a Stock Unit
Award may not be assigned, sold, transferred, pledged or otherwise
encumbered prior to the date on which the shares are issued or, if
later, the date provided by the Committee at the time of grant of the
Stock Unit Award.

     Stock Unit Awards may provide for the payment of cash
consideration by the person to whom such Award is granted or provide
that the Award, and any Common Stock to be issued in connection
therewith, if applicable, shall be delivered without the payment of
cash consideration, provided that for any Common Stock to be purchased
in connection with a Stock Unit Award the purchase price shall be at
least 50 percent of the Fair Market Value of such Common Stock on the
date such Award is granted.

     Stock Unit Awards may relate in whole or in part to certain
performance criteria established by the Committee at the time of
grant.  Stock Unit Awards may provide for deferred payment schedules
and/or vesting over a specified period of employment.  In such
circumstances as the Committee may deem advisable, the Committee may
waive or otherwise remove, in whole or in part, any restriction or
limitation to which a Stock Unit Award was made subject at the time of
grant.

     (c)  In the sole and complete discretion of the Committee, an
Award, whether made as a Stock Unit Award under this Section 10 or as
an Award granted pursuant to Sections 6 through 9, may provide the
Participant with dividends or dividend equivalents (payable on a
current or deferred basis) and cash payments in lieu of or in addition
to an Award.

Section 11.  Termination of Employment

     The following provisions define a Participant's status in the
event of termination of employment:

     (a)  Options and Rights.  If a Participant shall cease to be
employed by the Company or an Affiliate either directly or in a
consulting role, any Option and any Right granted to him under the
Plan shall terminate in accordance with the following rules:

          (1)  A Participant who terminates employment for any reason
other than Approved Termination, Disability, death, or Reduction in
Force shall lose the right to exercise any Options or Rights as of
Termination of Employment.  Any Options transferred to a Family Member
or family trust shall also be terminated as of the Participant's
Termination of Employment for any reason other than Approved
Termination, Disability, death or Reduction in Force.

          (2)  A Participant who terminates employment as a result of
an Approved Termination shall have a period of time specified in the
individual agreements by which Options are granted to exercise such
Options or Rights.

          (3)  A Participant who is Disabled shall have 12 months
after Termination of Employment in which to exercise an Option or
Right.

          (4)  A Participant whose employment is terminated as a
result of a Reduction in Force shall have 30 days from the date on
which he is notified of his termination to exercise any Options or
Rights that were vested as of the date of notification.

          (5)  Upon the death of a Participant during employment, the
Participant's Designated Beneficiary shall have 12 months from the
date of death to exercise the Participant's Option or Right.  Upon the
death of a Participant after an Approved Termination but within the
period specified by the Committee to exercise Options or Rights after
the Participant's Approved Termination, the Participant's Designated
Beneficiary shall have the period specified by the Committee to
exercise the Option or Right.

          (6)  The foregoing notwithstanding, a Participant or the
Participant's Designated Beneficiary shall not be permitted to
exercise an Option or Right after the expiration date and a
Participant shall forfeit any Options or Rights upon a determination
made by the Board that the Participant has accepted employment or
provided consulting services to a direct competitor of the Company.

     (b)  Restricted Stock.  If a Participant terminates employment
before the end of the Restricted Period for a reason other than death,
Approved Termination, Disability, Change of Control, or Reduction in
Force, the Participant shall forfeit all shares of Restricted Stock as
of Termination of Employment.  If a Participant terminates employment
as a result of death, Approved Termination, Change of Control, or
Reduction in Force, the Committee, in its sole discretion, shall
determine what portion, if any, of the Restricted Stock shall be freed
from restrictions.

     (c)  Performance Shares and Other Awards.  If a Participant
ceases to be an Employee before the end of any Performance Period as a
result of death, Approved Termination, Disability, or Reduction in
Force, the Committee may authorize the payment to such Participant or
his Designated Beneficiary of a pro rata portion of the amount that
would have been paid to him had he continued as an Employee to the end
of the Performance Period.  In the event a Participant terminates
employment for any other reason, any amounts for outstanding
Performance Periods shall be forfeited as of Termination of
Employment.

Section 12.  General Provisions

     (a)  Withholding.  The Employer shall have the right to deduct
from all amounts paid to a Participant in cash any taxes required by
law to be withheld in respect of Awards under this Plan.  In the case
of payments of Awards in the form of Common Stock, the Committee shall
require the Participant to pay to the Employer the amount of any taxes
required to be withheld with respect to such Common Stock, or, in lieu
thereof, the Employer shall have the right to retain (or the
Participant may be offered the opportunity to elect to tender) the
number of shares of Common Stock whose Fair Market Value equals the
amount required to be withheld.

     (b)  Awards.  Each Award shall be evidenced in writing delivered
to the Participant and shall specify the terms and conditions and any
rules applicable to such Award.

     (c)  Nontransferability.  Except as provided in Section 6(d), no
Award shall be assignable or transferable, and no right or interest of
any Participant shall be subject to any lien, obligation or liability
of the Participant, except by will or the laws of descent and
distribution.

     (d)  No Rights as Stockholder.  Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have
any rights as a stockholder with respect to any shares of Common Stock
to be distributed under the Plan until becoming the holder.
Notwithstanding the foregoing, in connection with each grant of
Restricted Stock hereunder, the applicable Award shall specify if and
to what extent the Participant shall not be entitled to the rights of
a stockholder in respect of such Restricted Stock.

     (e)  Construction of the Plan.  The validity, construction,
interpretation, administration and effect of the Plan and of its rules
and regulations, and rights relating to the Plan, shall be determined
solely in accordance with the laws of Utah.

     (f)  Effective Date.  Subject to the approval of the stockholders
of the Company, the Plan shall be effective on March 1, 1991.  No
Options or Awards may be granted under the Plan, however, until the
Plan is approved by the Company's shareholders or after May 20, 2001.

     (g)  Amendment of Plan.  The Board of Directors may amend,
suspend or terminate the Plan or any portion thereof at any time,
provided that no amendment shall be made without stockholder approval
if such approval is necessary to comply with any tax or regulatory
requirement, including for these purposes any approval requirement
that is a prerequisite for exemptive relief under Section 16(b) of the
Securities Exchange Act of 1934.

     (h)  Amendment of Award.  The Committee may amend, modify or
terminate any outstanding Award with the Participant's consent at any
time prior to payment or exercise in any manner not inconsistent with
the terms of the Plan, including without limitation, to change the
date or dates as of which an Option or Right becomes exercisable; a
Performance Share is deemed earned; Restricted Stock becomes
nonforfeitable; or to cancel and reissue an Award under such different
terms and conditions as it determines appropriate.

Section 13.  Change of Control.

     In the event of a Change of Control of the Company, all Options,
Restricted Stock, and other Awards granted under the Plan shall vest
immediately.

     A Change in Control of the Company shall be deemed to have
occurred if (i) any "Acquiring Person" (as such term is defined in the
Rights Agreement dated as of February 13, 1996, between the Company
and ChaseMellon Shareholder Services L.L.C. ("Rights Agreement")) is
or becomes the beneficial owner (as such term is used in Rule 13d-3
under the Securities Exchange Act of 1934) of securities of the
Company representing 25 percent or more of the combined voting power
of the Company; or (ii) the following individuals cease for any reason
to constitute a majority of the number of directors then serving:
individuals who, as of May 19, 1998, constitute the Company's Board of
Directors and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the
Company's stockholders was approved or recommended by a vote of at
least two-thirds of the directors then still in office who either were
directors on May 19, 1998, or whose appointment, election or
nomination for election was previously so approved or recommended; or
(iii) the Company's stockholders approve a merger or consolidation of
the Company or any direct or indirect subsidiary of the Company with
any other corporation, other than a merger or consolidation that would
result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) at least 60 percent of
the combined voting power of the securities of the Company or such
surviving entity or its parent outstanding immediately after such
merger or consolidation, or a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction)
in which no person is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 25 percent or
more of the combined voting power of the Company's then outstanding
securities; or (iv) the Company's stockholders approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the Company of
all or substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, at least 60 percent of the combined
voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as
their ownership of the Company immediately prior to such sale.  A
Change in Control, however, shall not be considered to have occurred
until all conditions precedent to the transaction, including but not
limited to, all required regulatory approvals have been obtained.STANDARD FORM

                       APPLEBEE'S NEIGHBORHOOD GRILL & BAR

                              DEVELOPMENT AGREEMENT

                       -----------------------------------
                               (Name of Developer)

                       -----------------------------------
                                     (Date)

                       -----------------------------------
                       (General Description of Territory)

                                       1

<PAGE>
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS
<S>                                                                                                     <C>
     RECITALS    ....................................................................................    E-3

      1.    GRANT OF DEVELOPMENT RIGHTS..............................................................    E-4
      2.    INITIAL DEVELOPMENT SCHEDULE.............................................................    E-5
      3.    SUBSEQUENT DEVELOPMENT SCHEDULE;
            DEVELOPMENT OBLIGATIONS GENERALLY........................................................    E-6
      4.    FRANCHISE FEE AND ROYALTY RATE...........................................................    E-7
      5.    SITE APPROVALS:  PLANS AND SPECIFICATIONS................................................    E-9
      6.    FEES AND FRANCHISE AGREEMENTS............................................................    E-10
      7.    DEVELOPER ORGANIZATION, AUTHORITY,
            FINANCIAL CONDITION AND SHAREHOLDERS.....................................................    E-10
      8.    TRANSFER.................................................................................    E-12
      9.    TERMINATION..............................................................................    E-16
     10.    PREREQUISITES TO OBTAINING FRANCHISES
            FOR INDIVIDUAL RESTAURANT UNITS..........................................................    E-17
     11.    RESTRICTIONS.............................................................................    E-19
     12.    DEVELOPMENT PROCEDURES...................................................................    E-20
     13.    NO WAIVER OF DEFAULT.....................................................................    E-22
     14.    FORCE MAJEURE............................................................................    E-22
     15.    CONSTRUCTION, SEVERABILITY, GOVERNING
            LAW AND JURISDICTION.....................................................................    E-22
     16.    MISCELLANEOUS............................................................................    E-24

APPENDIX A:             TERRITORY....................................................................    E-27

APPENDIX B:             FORM OF FRANCHISE AGREEMENT..................................................    E-28

APPENDIX C:             STATEMENT OF OWNERSHIP INTERESTS.............................................    E-29

APPENDIX D:             REVIEW AND CONSENT WITH RESPECT
                        TO TRANSFERS.................................................................    E-30

APPENDIX E:             CONFIDENTIALITY AGREEMENT AND
                        COVENANT NOT TO COMPETE......................................................    E-31

APPENDIX F:             CONFIDENTIALITY AGREEMENT....................................................    E-34

</TABLE>

                                       2
<PAGE>

                       APPLEBEE'S NEIGHBORHOOD GRILL & BAR
                              DEVELOPMENT AGREEMENT

This Agreement is made this ________ day of _____________________,  19______, by
and   between   APPLEBEE'S   INTERNATIONAL,   INC.,   a   Delaware   corporation
("FRANCHISOR"),         _____________________________________________,         a
(_______________ corporation, sole proprietorship,  _______________ partnership,
_______________    limited   partnership   [strike   inappropriate    language])
("DEVELOPER")             and             ______________________________________
______________________________  (collectively, the "PRINCIPAL SHAREHOLDERS" and,
individually, a "PRINCIPAL SHAREHOLDER" of Developer if a corporation or general
partner of Developer is a limited  partnership  having as its general  partner a
corporation) and
--------------------------------------------------------------------------------
("GENERAL PARTNER" of Developer if Developer is a limited partnership).*

       * (If  Developer is not a  corporation  or a sole  proprietorship,  or if
Developer is a limited liability  company,  the parties hereto hereby agree that
an Addendum  shall be attached to this  Agreement  so as properly to reflect the
responsibilities of the partners of any general partnership, the general partner
of any limited partnership and the shareholders of any corporate general partner
of any partnership, or the members of any limited liability company.)

WITNESSETH:

                                    RECITALS

       A.  Franchisor  owns the rights to develop and operate a unique system of
restaurants which specialize in the sale of high quality, moderately priced food
and  alcoholic  beverages  in  an  attractive,  casual  setting,  which  include
proprietary   rights  in  certain  valuable  trade  names,   service  marks  and
trademarks,  including the service mark Applebee's  Neighborhood Grill & Bar and
variations  of such  mark,  designs,  decor and  color  schemes  for  restaurant
premises,  signs,  equipment,  procedures  and formulae for  preparing  food and
beverage  products,  specifications  for  certain  food and  beverage  products,
inventory  methods,  operating  methods,  financial control  concepts,  training
facilities and teaching techniques (the "System").

       B. Franchisor has established, through its own development and operation,
and through the granting of franchises, a chain of Applebee's Neighborhood Grill
& Bar restaurants which are distinctive; which are similar in appearance, design
and decor; and which are uniform in operation and product consistency.

                                       3
<PAGE>

       C. The value of Franchisor's trade names, service marks and trademarks is
based upon: (1) the maintenance of uniform high quality  standards in connection
with the preparation and sale of Franchisor-approved food and beverage products,
(2) the uniform high standards of appearance of the individual  restaurant units
in the System, (3) the use of distinctive  trademarks,  service marks,  building
designs and advertising  signs  representing a uniformly high quality of product
and services,  and (4) the assumption by Franchisor  and its  franchisees of the
obligation  to maintain and enhance the goodwill  and public  acceptance  of the
System (and of Franchisor's trade names, service marks and trademarks) by strict
adherence to the high standards required by Franchisor.

       D. Developer desires to obtain the exclusive right to develop  restaurant
units franchised by Franchisor  within the geographic area specified in Appendix
A hereto ("Territory"),  for the period specified in Subsection 1.1, pursuant to
the terms, conditions and provisions which are set forth in this Agreement.

NOW,  THEREFORE,  in  consideration  of  Franchisor  granting to  Developer  the
exclusive  right to develop  restaurant  units  franchised by  Franchisor  which
employ the System  ("Restaurants")  in the  Territory  for such  period,  and in
consideration  of the mutual  obligations  which are provided for herein,  it is
hereby agreed as follows:

1.     GRANT OF DEVELOPMENT RIGHTS

       1.1  Franchisor   grants   Developer  the  exclusive   right  to  develop
Restaurants only in the Territory for a period commencing on the date hereof and
expiring  on  _____________________,   ________,  unless  sooner  terminated  as
hereinafter  provided.  Developer has no rights under this  Agreement to develop
Restaurants  outside of the  Territory  or to develop  restaurants  which do not
employ the System,  including the  Applebee's  Neighborhood  Grill & Bar service
mark.

       1.2 During the term of this  Agreement,  Franchisor  shall not  operate a
restaurant  utilizing  the  System  or  license  any other  person to  operate a
restaurant  utilizing  the  System in the  Territory.  However,  nothing in this
Agreement  shall  prohibit  or  infringe  upon  Franchisor's  right to operate a
restaurant  or license any other person to operate a restaurant in the Territory
which does not utilize the System or use the Applebee's Neighborhood Grill & Bar
service mark. In addition, Franchisor specifically reserves the right to operate
or license any other person to operate  restaurants  in any  location  within an
airport  (serviced by one or more public or charter  carrier),  arena,  stadium,
state or national park, or military  fort,  post or base which may be within the
boundaries of the Territory otherwise granted to Developer.  Further,  Developer
acknowledges and agrees that Franchisor or any one (1) or more of its subsidiary
or affiliated  companies or divisions shall have the right to operate or license
any other  person to operate  such other  restaurants  which may or will compete
with the  Restaurants,  under a system and  service  mark other than  Applebee's
Neighborhood Grill & Bar.

       1.3 After this Agreement expires or is terminated,  Franchisor shall have
the  complete  and  unrestricted  right to operate or license  other  persons to
operate a restaurant utilizing the System in the Territory.

                                       4
<PAGE>

2.     INITIAL DEVELOPMENT SCHEDULE

       2.1 Developer  shall develop a total of  ___________  (____)  Restaurants
franchised by Franchisor  in the Territory  during the period  commencing on the
date hereof and expiring on  ______________,  ________,  in accordance  with the
following development schedule:

               (a)1  During  the first  Initial  Development  Period  under this
       Agreement,  Developer shall develop at least _________ (____) Restaurants
       within the Territory, each of which shall be open for operation and doing
       business on  __________________,  ________  (the end of the first Initial
       Development Period under this Agreement).

               (b) During  the  second  Initial  Development  Period  under this
       Agreement,  Developer shall develop the number of Restaurants  within the
       Territory necessary to result in the existence of ___________ (____) such
       Restaurants developed by Developer which are open for operation and doing
       business  on  _____________,  ________  (the  end of the  second  Initial
       Development Period under this Agreement).

               (c)  During  the third  Initial  Development  Period  under  this
       Agreement,  Developer shall develop the number of Restaurants  within the
       Territory necessary to result in the existence of ___________ (____) such
       Restaurants developed by Developer which are open for operation and doing
       business  on  ______________,  ________  (the  end of the  third  Initial
       Development Period under this Agreement).

Each of the periods  specified in  Subparagraphs  (a) through  (____)  hereof is
sometimes referred to hereinafter as an "Initial Development Period."

       2.2 During any Initial Development  Period,  subject to the provisions of
this Agreement,  Developer is free to develop more than the total minimum number
of  Restaurants  which  Developer  is  required to develop  during that  Initial
Development Period. Any such Restaurants developed, open for operation and doing
business  during an Initial  Development  Period in excess of the minimum number
required to be developed during that Initial Development Period shall be applied
to satisfy Developer's development obligation during the next succeeding Initial
Development Period or next succeeding Subsequent  Development Period (as defined
in Section 3 hereof),  if any,  as the case may be.  Notwithstanding  the above,
Developer shall not develop more than the total number  Restaurants  approved by
Franchisor for development under this Agreement.

     1The periods specified in Subsection 2.1(a)-(c) may be revised,  deleted or
added to in order to reflect the number of Restaurants Developer is obligated to
develop  and the  time  in  which  the  Developer  is  obligated  to  open  such
Restaurants.

                                       5

<PAGE>

       2.3  Strict  compliance  with  the  development   schedule  specified  in
Subsection 2.1 hereof is of the essence of this Agreement. If Developer fails to
fulfill its specified development  obligation with respect to any of the Initial
Development  Periods  specified in Subsection 2.1 hereof,  this Agreement  shall
terminate  sixty (60) days after the end of the  Initial  Development  Period in
question,  unless  by the  end of such  sixty  (60)  day  period  Developer  has
fulfilled  the  development  obligation  relating  to such  Initial  Development
Period.

3.     SUBSEQUENT DEVELOPMENT SCHEDULE; DEVELOPMENT
       OBLIGATIONS GENERALLY

       3.1 During the  period  commencing  on  _________________,  ________  and
expiring on  _________________,  ________,  Developer shall develop and open for
business in the Territory,  from time to time in accordance with the development
schedule established under Subsection 3.2, that number of additional Restaurants
as is  required  to  achieve  at the  end of  such  period  a  total  number  of
Restaurants  open for business within the Territory  which,  after including the
Restaurants developed during the Initial Development Periods,  would be equal to
(a) one (1) Restaurant for every twenty-five thousand (25,000) households within
the Territory  having an income of  twenty-five  thousand  dollars  ($25,000) or
more,  or (b)  one (1)  Restaurant  for  every  seventy-five  thousand  (75,000)
individuals  within the  Territory  who are  between the ages of twenty (20) and
fifty-four (54) years old, whichever  computation  results in a lesser number of
Restaurants.

       3.2 (a) Each  consecutive  twelve (12) month period,  commencing with the
period beginning on  _______________,  ________,  is hereafter  referred to as a
"Subsequent  Development  Period." Each period consisting of two (2) consecutive
Subsequent  Development  Periods,   commencing  with  the  period  beginning  on
________________,  ________,  is  hereinafter  referred  to  as  a  "Calculation
Period."

                                       6
<PAGE>

               (b) Franchisor and Developer  shall agree in writing on or before
the commencement of each Calculation  Period on the number of Restaurants  which
Developer  must  develop,  each of which shall be open for  operation  and doing
business,  during each of the two (2) Subsequent Development Periods included in
such  Calculation  Period;  provided  that  such  agreement  is  subject  to the
following minimum and maximum development requirements:  (i) Minimum development
requirements:   Developer  hereby  agrees  to  develop  during  each  Subsequent
Development  Period at least that number of Restaurants,  each of which shall be
open for operation and doing business, which will be equal to one-third (1/3) of
the total number of Restaurants (rounded to the nearest whole number) which were
required to be developed by Developer  during all prior Initial  Development and
Calculation Periods; and (ii) Maximum development requirements:  Notwithstanding
the minimum development requirements, Developer shall not be required to develop
during any  Subsequent  Development  Period more than that number of Restaurants
which,  when  added to the  number of  Restaurants  which  were  required  to be
developed by Developer  during all prior  Initial  Development  and  Calculation
Periods,  would exceed the number of  Restaurants  prescribed by the formula set
forth in Subsection 3.1, if such formula had been applied to determine the total
number of Restaurants required to service the Territory immediately prior to the
Calculation  Period in  question.  No later  than  sixty  (60) days prior to the
commencement of each Calculation Period, Franchisor shall provide Developer with
census data  necessary for  Developer to ascertain,  for purposes of the maximum
development  requirements,  the number of Restaurants which would be required in
the Territory by application of the formula. Franchisor shall use census figures
provided  by  National  Decision  Systems,  or such other  generally  recognized
demographic service as Developer and Franchisor shall reasonably designate.

       3.3  Strict  compliance  with the  development  schedule  established  in
accordance with  Subsection 3.2 hereof is of the essence of this  Agreement.  If
Developer  shall fail to  fulfill  its  specified  development  obligation  with
respect to any Subsequent Development Period, this Agreement shall automatically
terminate sixty (60) days after the end of the Subsequent  Development Period in
question,  unless  by the  end of such  sixty  (60)  day  period  Developer  has
fulfilled the development  obligation  relating to such  Subsequent  Development
Period.

       3.4 If, during the term of this  Agreement,  (a)  Developer  transfers or
disposes of any Restaurant developed hereunder in accordance with the provisions
hereof,  or for any other  reason  ceases to operate  any  Restaurant  developed
hereunder,  and (b) after such  transfer or other  cessation  of  operation  the
premises no longer are utilized for the operation of a  Restaurant,  Developer's
development  obligation in the Initial or Subsequent Development Period in which
such transfer or other cessation of operations occurred shall increase,  subject
to the general limitations on Developer's  development  obligations set forth in
Section  2 and  Section  3, by the  number of  Restaurants  which  Developer  so
transferred, disposed of or which otherwise ceased to operate.

       3.5 Franchisor  represents  that it is the sole owner of the service mark
Applebee's  Neighborhood  Grill & Bar.  If  Franchisor  determines  that a third
person  has rights  under the law of any state  with  respect to such mark which
precludes  Developer from fulfilling any portion of its development  obligations
pursuant to this  Agreement,  Franchisor and Developer  shall  negotiate in good
faith for a revision of those  development  obligations,  a redefinition  of the
Territory, or such other modifications of this Agreement as may be reasonable in
the circumstances.

4.     FRANCHISE FEE AND ROYALTY RATE

       4.1 Developer shall pay Franchisor a franchise fee of $_____________ with
respect to each Restaurant which is developed  pursuant to this Agreement during
the Initial Development  Periods.  Thereafter,  Developer shall pay Franchisor a
franchise  fee in an amount  which is equal to the amount of the  franchise  fee
then in effect at the time of the issuance of the  franchise  agreement for each
additional restaurant to be opened during any Subsequent Development Period. The
amount  of the  franchise  fee  shall  be set  forth in the  franchise  offering
circular  received by the Developer from  Franchisor  immediately  preceding the
issuance of such franchise agreement.  Simultaneously with the execution of this
Agreement,  Developer shall pay to Franchisor, by certified check, the amount of
$______________  ("Franchise Fee Deposit").  Said Franchise Fee Deposit shall be
equal to the greater of (a) the franchise fee for one of the  Restaurants  to be
developed during the Initial  Development  Periods,  or (b) ten percent (10%) of
the entire franchise fees covering the _______________  (____) Restaurants to be
developed  during the first three2 (3) Initial  Development  Periods pursuant to

     2In the event  there are more or less than  three (3)  Initial  Development
Periods,  these fees are payable for each of the Restaurants provided for in the
applicable total number of Initial Development Periods.

                                       7
<PAGE>

this  Agreement  (as reduced by a credit of $6,000  based on  Developer's  prior
payment, if so paid, of a non-refundable  $6,000 application fee). The remaining
balance of the franchise fees for each of the Restaurants to be developed during
the three (3) Initial  Development  Periods shall be paid by certified  check as
follows:  one-half  (1/2) of the balance  shall be paid upon signing a franchise
agreement for that  Restaurant and the remaining  balance shall be paid fourteen
(14) days prior to the scheduled  opening of the  Restaurant.  The Franchise Fee
Deposit shall be proportionately allocated to the franchise fee due with respect
to each  Restaurant to which it applies.  The franchise fee with respect to each
Restaurant  to be  developed  during a  Subsequent  Development  Period  or with
respect to any additional  Restaurants  developed during the Initial Development
Periods shall be paid by certified check in the same manner.

       4.2 Except as provided in this  Subsection 4.2 and in Subsection  19.1 of
the form of  franchise  agreement  which  is  attached  hereto  as  Appendix  B,
Developer  shall  have  no  right  to  recover  from  Franchisor,   directly  or
indirectly,  any of the franchise fees which are prepaid  pursuant to Subsection
4.1 hereof.  If  Developer's  failure to develop the total number of Restaurants
specified in Subsection  2.1 of this Agreement is the result of the assertion of
rights by a third party as described in  Subsection  3.5 hereof,  those  prepaid
franchise  fees which  relate to the  Restaurants  which  cannot be so developed
shall be refunded to Developer in cash.

       4.3 As partial consideration for the rights granted to Developer pursuant
to the franchise  agreements  covering the Restaurants which Developer  develops
hereunder,  Developer (as franchisee under each such franchise  agreement) shall
pay Franchisor a monthly royalty fee as determined by Franchisor,  not to exceed
five percent (5%) of each calendar  month's gross sales (as that term is defined
in the form of franchise agreement which is attached hereto as Appendix B).

       4.4  Pursuant  to its  obligations  hereunder  and under  the  applicable
franchise  agreements,  Franchisor will make various  expenditures in connection
with the  development of prospective  Restaurant  sites by Developer,  including
expenditures  for  travel,   lodging,  meals,  obtaining  of  information  about
prospective sites, demographic  information,  traffic counts, and inquiries into
local laws and  ordinances.  Developer  shall  promptly  notify  Franchisor of a
decision to cease  development  of a prospective  Restaurant  site. In the event
that  Developer  fails to open a  restaurant  at any such  site,  in lieu of the
payment of the  franchise fee therefor,  Franchisor in its sole  discretion  may
require  Developer to reimburse  Franchisor for Franchisor's  expenditures  with
respect to that site. In such event,  Franchisor shall provide Developer with an
itemized  list of  Franchisor's  expenditures  with  respect to that site within
thirty (30) business days after  Franchisor  receives  notice that  Developer no
longer  intends  to  develop a  Restaurant  at that site,  and  Developer  shall
reimburse Franchisor for such costs within thirty (30) days after receiving such
list.

                                       8
<PAGE>

5.     SITE APPROVALS:  PLANS AND SPECIFICATIONS

       5.1 Developer assumes all cost, liability, expense and responsibility for
locating,  obtaining,  financing and developing sites for  Restaurants,  and for
constructing and equipping Restaurants at such sites. To assist Developer in the
site  selection   process,   Franchisor  will  provide  Developer  with  certain
demographic  information  regarding the site, will conduct an on-site inspection
and will  review any lease or contract  under  negotiation  for the  prospective
site,  such  services to be provided to Developer  at no  additional  cost.  The
development  of a  Restaurant  at any site must be  approved  by  Franchisor  in
accordance with its then-existing site approval procedure.  In connection with a
request  for  approval  of a proposed  site for a  Restaurant,  Developer  shall
provide a related contract of sale or lease agreement and such other information
and material as the Franchisor may reasonably require.  Franchisor's approval of
a prospective  Restaurant  site shall not be unreasonably  withheld.  Franchisor
shall  notify  Developer  whether it  approves a proposed  site and the  related
contract  of sale  or  lease  agreement  within  thirty  (30)  business  days of
receiving  Developer's request for approval.  Failure of Franchisor to so notify
Developer  within such thirty (30)  business day period shall be deemed to be an
approval  of such  site and the  related  contract  of sale or lease  agreement.
Developer  acknowledges that  Franchisor's  approval of a prospective site for a
Restaurant  does not  constitute  a  representation,  promise  or  guarantee  by
Franchisor  that a  Restaurant  operated  at that  site  will be  profitable  or
otherwise  successful.  Developer  shall not make any  binding  commitment  to a
prospective  vendor  or  lessor  of real  estate  with  respect  to a site for a
Restaurant   unless  Franchisor  has  approved  that  site  in  accordance  with
Franchisor's   then-existing  site  approval  procedure.  After  Franchisor  has
approved a site for a Restaurant, Developer shall provide Franchisor with a copy
of the executed  contract of sale or lease, as applicable,  relating to the site
within a reasonable period of time.

       5.2  For  each  Restaurant  which  Developer  develops  pursuant  to this
Agreement,   Franchisor   will  make   available   to   Developer   Franchisor's
specifications for a typical Restaurant. Developer will obtain architectural and
engineering services independently and at its own expense. Franchisor shall have
the  right to review  all such  architectural  and/or  engineering  plans  which
Developer  obtains  and to  prohibit  the  implementation  of any plan,  or part
thereof, which Franchisor, in its sole and absolute discretion,  believes is not
consistent  with the best interests of the System.  In the event that Franchisor
desires  to  prohibit  the  implementation  of any such plan,  or part  thereof,
Franchisor  shall so  notify  Developer  within  thirty  (30)  business  days of
receiving such  architectural  and/or  engineering plans for review.  Failure of
Franchisor  to so notify  Developer  within such thirty (30) business day period
shall be deemed to be an approval of such plans.  In the event  Franchisor  does
object to any such plan,  Franchisor  shall provide  Developer with a reasonable
detailed list of changes  necessary to make such plans acceptable to Franchisor.
Franchisor  shall,  upon  resubmission  of such  plans,  with  such  changes  as
Developer has prepared,  notify  Developer  within fifteen (15) business days of
receiving such plans whether they are acceptable. Failure to so notify Developer
within such fifteen  (15)  business day period shall be deemed to be an approval
of such amended plans.

                                       9
<PAGE>

       5.3 If Developer  acquires a leasehold interest in a site, that leasehold
interest  shall be for a term  which is at least as long as the term of the form
of  franchise  agreement  which is attached  hereto as Appendix B, and the lease
shall provide that if the applicable  franchise agreement is terminated prior to
the expiration of that term for whatever reason,  Developer may assign the lease
to Franchisor  without the lessor having any right to impose  conditions on such
assignment or to obtain any payment in connection therewith.

6.     FEES AND FRANCHISE AGREEMENTS

       Not later than  ninety  (90) days prior to the  scheduled  opening of any
Restaurant which has been developed pursuant to this Agreement,  Developer shall
deliver to Franchisor an executed franchise agreement  substantially in the form
which is attached  hereto as Appendix B,  provided  however,  that the franchise
agreement which Developer  executes shall require the payment of a franchise fee
in the  amount  described  in  Subsection  4.1,  royalty  fees as  described  in
Subsection  4.3,  and  advertising  payments  at the rates then  established  by
Franchisor with respect to new  Restaurants,  except that in no event shall such
rates  exceed five  percent  (5%) of a  Restaurant's  gross sales (as defined in
Subsection 9.3 of the form of a franchise  agreement which is attached hereto as
Appendix B).

7.     DEVELOPER ORGANIZATION, AUTHORITY, FINANCIAL
       CONDITION AND SHAREHOLDERS

       7.1 Developer and each Principal  Shareholder represent and warrant that:
(a) Developer is a corporation duly  incorporated,  validly existing and in good
standing under the laws of the state of its incorporation; (b) Developer is duly
qualified  and is authorized to do business and is in good standing as a foreign
corporation in each jurisdiction in which its business  activities or the nature
of the properties owned by it requires such qualification; (c) the execution and
delivery of this Agreement and the transactions  contemplated  hereby are within
Developer's  corporate  power;  (d) the execution and delivery of this Agreement
have been duly  authorized by the Developer;  (e) the articles of  incorporation
and by-laws of Developer delivered to Franchisor are true, complete and correct,
and there have been no changes therein since the date thereof; (f) the certified
copies of the minutes  electing the officers of Developer  and  authorizing  the
execution  and delivery of this  Agreement are true,  correct and complete,  and
there have been no changes therein since the date(s)  thereof;  (g) the specimen
stock  certificate  delivered to Franchisor  is a true  specimen of  Developer's
stock  certificate;  (h) the  financial  statement  of Developer  and  financial
statements of its Principal  Shareholders,  heretofore  delivered to Franchisor,
are true,  complete and correct,  and fairly present the financial  positions of
Developer and each Principal Shareholder,  respectively, as of the date thereof;
(i) such financial  statements  have been prepared in accordance  with generally
accepted  accounting  principles;  and (j) there have been no materially adverse
changes in the  condition,  assets or  liabilities  of  Developer  or  Principal
Shareholders since the date or dates thereof.

                                       10
<PAGE>

       7.2 Developer  and each  Principal  Shareholder  covenant that during the
term of this  Agreement:  (a) Developer  shall do or cause to be done all things
necessary to preserve and keep in full force its  corporate  existence and shall
be in good standing as a foreign  corporation in each  jurisdiction in which its
business  activities or the nature of the  properties  owned by it requires such
qualification; (b) Developer shall have the corporate authority to carry out the
terms of this Agreement; and (c) Developer shall print, in a conspicuous fashion
on all  certificates  representing  shares of its stock  when  issued,  a legend
referring to this Agreement and the restrictions on and obligations of Developer
and Principal Shareholders hereunder,  including the restrictions on transfer of
Developer's shares.

       7.3  Prior  to  development  of the  first  Restaurant  pursuant  to this
Agreement,  Developer  shall maintain an average monthly balance of five hundred
thousand  dollars  ($500,000) in liquid assets.  For purposes of this Agreement,
"liquid assets" shall consist of cash,  cash available to Developer  pursuant to
an irrevocable line of credit issued by a commercial bank in favor of Developer,
marketable  securities,  or any other  similar  asset which  Franchisor's  Chief
Financial Officer  designates in writing as a liquid asset. After development of
the first Restaurant  pursuant to this Agreement,  and at any time thereafter in
which  Developer is operating  one (1)  Restaurant in the  Territory,  Developer
shall maintain an average monthly balance of three hundred twenty-five  thousand
dollars ($325,000) in liquid assets.  After development of the second Restaurant
pursuant to this Agreement, and thereafter, so long as Developer is operating at
least two (2) Restaurants in the Territory,  Developer shall maintain an average
monthly  balance of one hundred  fifty  thousand  dollars  ($150,000)  in liquid
assets. At all times Developer shall maintain the necessary  financial resources
to satisfy its development obligations hereunder.

       7.4 In addition to its  obligations  pursuant to Subsections  7.1 and 7.3
hereof,  Developer and Principal Shareholders shall provide Franchisor with such
financial  information as Franchisor  may reasonably  request from time to time,
including,  on an  annual  basis,  copies  of the  then-most  current  financial
statements of Developer and each Principal  Shareholder,  dated as of the end of
the last preceding fiscal year of the Developer or Principal  Shareholder,  said
statements  to be delivered to  Franchisor  no later than April 15 of each year,
which  financial  statements  shall  conform  to  the  standards  set  forth  in
Subsection 7.1 hereof.

       7.5  Developer  and each  Principal  Shareholder  represent,  warrant and
covenant that all  Interests (as defined in Subsection  8.4 hereto) in Developer
are owned as set forth on Appendix C hereto,  that no Interest  has been pledged
or  hypothecated  (except in accordance with Section 8 of this  Agreement),  and
that no change will be made in the ownership of any such Interest  other than as
permitted by this Agreement, or otherwise consented to in writing by Franchisor.
Developer  and  Principal  Shareholders  agree to furnish  Franchisor  with such
evidence  as  Franchisor  may  request,  from time to time,  for the  purpose of
assuring  Franchisor that the Interests of Developer and Principal  Shareholders
remain as represented herein.

                                       11
<PAGE>

       7.6 Each Principal Shareholder,  jointly and severally, hereby personally
and  unconditionally  guarantees  each of Developer's  financial  obligations to
Franchisor  (including,  but not  limited  to, all  obligations  relating to the
payment of fees by Developer to Franchisor).  Each Principal  Shareholder agrees
that  Franchisor may resort to such Principal  Shareholder  (or any of them) for
payment of any such financial  obligation,  whether or not Franchisor shall have
proceeded  against  Developer,  any  other  Principal  Shareholder  or any other
obligor  primarily or secondarily  obligated to Franchisor  with respect to such
financial  obligation.   Each  Principal  Shareholder  hereby  expressly  waives
presentment,  demand,  notice  of  dishonor,  protest,  and  all  other  notices
whatsoever  with  respect  to  Franchisor's  enforcement  of this  guaranty.  In
addition,   each  Principal  Shareholder  agrees  that  if  the  performance  or
observance by Developer of any term or provision hereof is waived or the time of
performance  thereof  extended by  Franchisor,  or payment of any such financial
obligation is accelerated in accordance  with any agreement  between  Franchisor
and any party liable in respect  thereto or extended or renewed,  in whole or in
part, all as Franchisor  may  determine,  whether or not notice to or consent by
any Principal Shareholder or any other party liable in respect to such financial
obligations  is given or obtained,  such  actions  shall not affect or alter the
guaranty of each Principal Shareholder described in this Subsection.

8.     TRANSFER

       8.1 There  shall be no Transfer of any  Interest  of  Developer,  or of a
Principal Shareholder in Developer,  in whole or in part (whether voluntarily or
by operation of law), directly, indirectly or contingently, except in accordance
with the provisions of this Section 8.  "Transfer" and "Interest" are defined in
Subsections 8.2, 8.3 and 8.4.

       8.2 Except as  provided  in  Subsection  8.3,  "Transfer"  shall mean any
assignment,  sale,  pledge,  hypothecation,  gift or any other such event  which
would change ownership of or create a new Interest,  including,  but not limited
to:

               (a) any change in the  ownership of or rights in or to any shares
       of stock or other equity  interest in  Developer  which would result from
       the act of any shareholder of Developer ("Shareholder"),  such as a sale,
       exchange, pledge or hypothecation of shares, or any interest in or rights
       to any of  Developer's  profits,  revenues or assets,  or any such change
       which would result by operation of law; and

               (b)  any  change  in  the   percentage   interest  owned  by  any
       Shareholder  in the shares of stock of  Developer,  or  interests  in its
       profits,  revenues or assets which would result from any act of Developer
       such as a sale,  pledge or hypothecation of any Restaurant  assets (other
       than a pledge of assets to secure bona fide loans made or credit extended
       in  connection  with  acquisition  of the assets  pledged,  provided that
       immediately  before and after such  transaction  Developer  satisfies the
       applicable liquid asset  requirement  described in Subsection 7.3 of this
       Agreement);  any sale or issuance of any shares of Developer's stock; the
       retirement or redemption of any shares of Developer's  stock; or any sale
       or grant to any person of any right to  participate  in or  otherwise  to
       share or become  entitled to any part of Developer's  profits,  revenues,
       assets or equity.

                                       12

<PAGE>

       8.3  "Transfer"  shall not  include (a) a change in the  ownership  of or
rights to any shares or other equity interest in Developer  pursuant to a public
offering of Developer's  securities registered under the Securities Act of 1933,
or (b) a change in the ownership of or rights to any  securities or other equity
interest in Developer  pursuant to a private offering of Developer's  securities
exempted from  registration  under such Act,  provided that  Developer  provides
Franchisor  with a copy of its prospectus  and/or  offering  memorandum ten (10)
days  prior to its  filing  with  the  Securities  and  Exchange  Commission  or
circulation  to third parties so that  Franchisor may comment and, if necessary,
correct any information  concerning  Franchisor  and/or the System,  and further
provided  that after giving effect to any such public or private  offering,  the
Principal  Shareholders,  or any of them, "control"  Developer.  For purposes of
this Section 8, "control"  means either (1) owning legal and equitable  title to
fifty-one  percent  (51%)  or  more  of the  outstanding  voting  securities  of
Developer,  which are not  subject to a proxy  granted to or  contract  with any
other person or party  granting that party the right to vote part or all of such
securities,  or (2) having and  continually  exercising  the  contractual  power
presently to designate a majority of the directors of Developer.

       8.4  "Interest"  shall mean:  when  referring  to  interests or rights in
Developer,  any shares of Developer's  stock,  and any other  equitable or legal
right in or to any of  Developer's  stock,  revenues,  profits or  assets;  when
referring  to  rights  or  assets of  Developer,  Developer's  rights  under and
interest in this Agreement, any Restaurant and its revenues, profits and assets.

       8.5 (a) The Interest of a Principal  Shareholder  may be  transferred  to
such  Principal  Shareholder's  spouse or children or to a person  designated in
such  Principal  Shareholder's  will or  trust  (individually  and  collectively
referred  to  as  "Successor"),  upon  such  Principal  Shareholder's  death  or
permanent  incapacity,   without  Franchisor's  approval,   provided  that  such
Successor shall agree to be bound by the restrictions  contained in this Section
8,  and  the  other  agreements  and  covenants  of the  Principal  Shareholders
contained in this Agreement.

               (b)  The  Interest  of  a  Principal   Shareholder   may  not  be
transferred to another  Principal  Shareholder  without  Franchisor's  approval,
which approval will not be unreasonably withheld.

               (c) The  Interest  of a  Successor  may  only be  transferred  in
accordance with Subsection 8.5(b) or 8.8, regardless of whether such Transfer is
for consideration or by gift or will or other device.

       8.6 Until such date as Developer  has  developed and opened for operation
forty percent  (40%) of the number of  Restaurants  required by  Subsection  2.1
hereof and the number of  Restaurants  required by Subsection 3.1 hereof as said
total aggregate number is set forth on Appendix A, Developer shall have no right
to Transfer this  Agreement or any rights or obligations  under this  Agreement,
and any franchise agreements to be issued pursuant hereto shall be issued solely
to the  Developer,  which  as of the date of  issuance  of each  such  franchise
agreement   shall  be  owned  by  the  Principal   Shareholders  to  the  extent
hereinbefore  provided.  Any transfer or attempted  transfer in contravention of
this provision shall be void and of no effect.  If, after the date Developer has
developed and opened for continuous operation the number of Restaurants required
by this Subsection 8.6, the Principal  Shareholders  desire to dispose of all or
substantially  all of the Interests of the Principal  Shareholders in Developer,
or the  Principal  Shareholders  (or  Developer)  desire  to  dispose  of all or
substantially  all of  Developer's  Interest in this  Agreement or in the assets
which  Developer  has  acquired  pursuant  to  this  Agreement,   the  Principal
Shareholders or Developer,  as the case may be, shall notify  Franchisor of that
desire,  in writing,  thirty (30) days before  announcing  that fact publicly or
engaging the services of a broker or sales agent.

                                       13
<PAGE>

       8.7 (a) If at any time any of the Principal Shareholders or Developer, as
the case may be,  obtains from a third party or third  parties a bona fide offer
(the  "Offer") in writing for the  purchase of all or  substantially  all of the
Interests of the Principal Shareholders in Developer or in the Restaurant assets
which  Developer  has  acquired  as a result of this  Agreement,  the  Principal
Shareholders or Developer shall give notice (the "Selling Notice") to Franchisor
stating that the Principal  Shareholders or Developer,  as the case may be, have
received the Offer,  identifying the prospective  purchaser by name and address,
specifying the proposed purchase price and attaching a true and complete copy of
the Offer.  Notwithstanding  the  foregoing,  however,  Developer  and Principal
Shareholders  understand  and agree that, as provided in Subsection  8.6 hereof,
until such time as Developer  has  developed and opened for operation the number
of Restaurants required by said Subsection 8.6. hereof, any portion of any Offer
regarding  the right to develop  Restaurants  or  Developer's  Interest  in this
Agreement  shall  be  invalid  and of no  force or  effect,  it being  expressly
understood and agreed that such rights may not be transferred, and any franchise
agreements to be granted  hereunder  shall be issued solely to Developer,  which
shall be owned by the Principal  Shareholders as hereinbefore set forth. At such
time as  Developer  has  developed  and  opened  for  operation  the  number  of
Restaurants  required by Subsection  8.6, any portion of such an Offer regarding
Developer's Interest in this Agreement shall be effective in accordance with its
terms.

               (b) Franchisor  shall have an option to purchase (the  "Option"),
exercisable within a period of forty-five (45) days after receipt of the Selling
Notice (the "Option Period"),  such Interests at the price and on the conditions
set forth in the Offer, except that Franchisor shall not be obligated to pay any
finder's or broker's fee, and if the Offer provides for payment of consideration
other  than  cash,  or  if  the  Offer  involves  certain  intangible  benefits,
Franchisor may elect to purchase such Interests by offering a reasonable  dollar
value substitute including,  at Franchisor's option, cash or the common stock or
other  securities  of  the  Franchisor  or  any  combination   thereof  for  the
non-cash/intangible benefits part of the Offer.

               (c) The Option shall be exercisable  by Franchisor  delivering to
the Principal  Shareholders or Developer,  as the case may be, within the Option
Period,  a notice  (i)  stating  that the  Option is being  exercised,  and (ii)
specifying  the time,  date and place at which such  purchase and sale will take
place, which date shall be within forty-five (45) days after Franchisor delivers
such notice.  Developer  shall provide  Franchisor  access to and copies of such
information and  documentation  Franchisor shall request regarding the purchase.
The  forty-five  (45)  day  limitation  described  at the  end of the  preceding
sentence  shall not apply if at the end of said  forty-five  (45) day period the
only issue which  prevents  completion  of the  purchase and sale is the need to
effect  transfers  of the  applicable  liquor  licenses.  In the event of such a
delay,  the purchase  and sale shall take place  within seven (7) business  days
after those liquor licenses have been transferred.

               (d) If the Option is not exercised, the Principal Shareholders or
Developer,  as the case may be, may sell the Interests in or of Developer to the
third  party  which made the  Offer,  on  conditions  no more  favorable  to the
third-party offerer than those set forth in the Offer,  provided that Franchisor
approves the proposed  transferee in  accordance  with the criteria set forth in
Appendix D and provided  further  that such sale takes place within  ninety (90)
days after the expiration of the Option  Period.  The ninety (90) day limitation
described in the preceding sentence shall not apply if at the end of said ninety
(90) day period the issue which prevents  completion of the purchase and sale is
either the need to effect transfers of the applicable liquor licenses or consent
or approval of the transaction by a state or federal  regulatory  agency. In the
event of such a delay,  the  purchase and sale shall take place within seven (7)
business days after those issues have been resolved or waived by Franchisor.  In
the event of such a  transfer,  Franchisor  may, in its  discretion,  require an
amendment to Subsection  2.1 of this  Agreement in order to increase or decrease
the  number  of  restaurants  required  thereby  and the  dates  of the  Initial
Development Periods referred to therein.

                                       14
<PAGE>

               (e) If the Option is not exercised, the Principal Shareholders or
Developer, as the case may be, shall immediately notify Franchisor in writing of
any change in the terms of an Offer.  Any change in the terms of an Offer  shall
cause it to be deemed a new  Offer,  conferring  upon  Franchisor  a new  Option
pursuant to this  Subsection  8.7;  the Option  Period  with  respect to the new
Option  shall be  deemed to  commence  on the day on which  Franchisor  receives
written notice of a change in the terms of the original Offer. Provided however,
in such an instance,  Franchisor  shall provide  Franchisee its response  within
fifteen  (15) days  after  Franchisor's  receipt of all of the  modified  terms,
unless such  changes are deemed  material  by  Franchisor  and in such an event,
Franchisor  shall have a forty-five  (45) day period within which to review said
changes.

       8.8 (a) Developer understands and acknowledges that the rights and duties
set forth in this  Agreement are personal to Developer and that  Franchisor  has
entered  into this  Agreement in reliance on the  business  skill and  financial
capacity of Developer, and the business skill, financial capability and personal
character of each Principal Shareholder. Any transfer of Principal Shareholders'
Interest  in  Developer  or  in  Developer's   Interest  in  this  Agreement  in
contravention  of this Section 8 shall cause the  immediate  termination  of all
development rights granted herein with respect to Restaurants not otherwise open
for  operation.  Except as otherwise  set forth in this Section 8, the Principal
Shareholders shall at all times retain control of Developer. Except as otherwise
provided in this Section 8, no Transfer of any part of  Developer's  Interest in
this  Agreement,  and no Transfer of any Interest of any  Principal  Shareholder
shall be completed  except in accordance  with this Subsection 8.8. In the event
of  such a  proposed  Transfer  of any  part  of  Developer's  Interest  in this
Agreement, or of any Interest of any Principal Shareholder, the party or parties
desiring to effect such Transfer shall give Franchisor  notice in writing of the
proposed  Transfer,  which  notice  shall set forth the name and  address of the
proposed transferee, its financial condition,  including a copy of its financial
statement dated not more than ninety (90) days prior to the date of said notice,
and all the terms and conditions of the proposed  Transfer.  Upon receiving such
notice, Franchisor may (i) approve the Transfer, or (ii) withhold its consent to
the Transfer.  Franchisor  shall,  within forty-five (45) days of receiving such
notice and all the  information  required  therein,  advise the party or parties
desiring to effect the Transfer  whether it (1) approves  the  Transfer,  or (2)
withholds its consent to the Transfer,  giving the reasons for such disapproval.
Failure of Franchisor to so advise said party or parties within that  forty-five
(45) day  period  shall be  deemed  to be  approval  of the  proposed  Transfer.
Appendix D sets  forth the  criteria  for  obtaining  Franchisor's  consent to a
proposed Transfer.

               (b) In the event that Franchisor  approves the Transfer,  and the
Transfer is not completed within ninety (90) days of the later of (i) expiration
of the  forty-five  (45) day  notice  period,  or (ii)  delivery  of  notice  of
Franchisor's  approval of the proposed  Transfer,  Franchisor's  approval of the
proposed Transfer shall automatically be revoked. The ninety (90) day limitation
described in the preceding sentence shall not apply if at the end of said ninety
(90) day period the only issue which prevents  completion of the Transfer is the
need to effect transfers of the applicable liquor licenses. In the event of such
a delay,  the Transfer  shall take place  within  seven (7) business  days after
those liquor licenses have been transferred. Any subsequent proposal to complete
the  proposed  Transfer  shall be subject to  Franchisor's  right of approval as
provided herein.  The party which desires to effect the proposed  Transfer shall
immediately  notify  Franchisor  in  writing  of any  change  in the  terms of a
Transfer.  Any change in terms of a Transfer  prior to closing shall cause it to
be deemed a new Transfer,  revoking any approval  previously given by Franchisor
and conferring upon Franchisor a new right to approve such Transfer, which shall
be deemed to commence on the day on which Franchisor  receives written notice of
such change in terms.

                                       15
<PAGE>

       8.9 In  connection  with  any  request  for  Franchisor's  approval  of a
proposed  Transfer to this Section 8, the parties to the proposed Transfer shall
pay Franchisor a nonaccountable  fee to defray the actual cost of review and the
administrative  and professional  expenses related to the proposed  Transfer and
the preparation  and execution of documents and  agreements,  up to a maximum of
two thousand five hundred dollars ($2,500).

9.     TERMINATION

       9.1 This  Agreement  shall  expire on  _______________,  _______,  unless
sooner terminated pursuant to the terms hereof.

       9.2  Franchisor   shall  have  the  right  to  terminate  this  Agreement
immediately  upon  written  notice to  Developer  stating  the  reason  for such
termination,  and  Developer  shall no longer have any of the rights  created by
this Agreement, in the event of:

               (a)  development  by  Developer  of a  Restaurant  without  first
       obtaining   approval  from  Franchisor  of  the  Restaurant  site  or  of
       Developer's  architectural  and/or  engineering  plans in accordance with
       Section 5 hereof;

               (b) any breach or default of any of the  provisions of Sections 8
       and 11 of this Agreement and Subsection  14.1 of any franchise  agreement
       entered into pursuant to this Agreement;

               (c) the filing by  Developer  of a  petition  in  bankruptcy,  an
       arrangement   for  the   benefit  of   creditors,   or  a  petition   for
       reorganization; the filing against Developer of a petition in bankruptcy,
       an   arrangement   for  the  benefit  of   creditors,   or  petition  for
       reorganization,  not  dismissed  within  ninety  (90) days of the  filing
       thereof;  the making of an  assignment  by  Developer  for the benefit of
       creditors;  or the  appointment  of a receiver or trustee for  Developer,
       which  receiver or trustee  shall not have been  dismissed  within ninety
       (90) days of such appointment;

               (d) the discovery by Franchisor  that Developer made any material
       misrepresentation  or omitted any material fact in the information  which
       was furnished to Franchisor in connection with this Agreement;

                                       16
<PAGE>

               (e)  failure by  Developer  to locate  and  employ a Director  of
       Operations  who is approved by Franchisor in accordance  with  Subsection
       12.2  within  ninety  (90) days of the date of this  Agreement  or,  with
       respect to a replacement Director of Operations,  failure by Developer to
       locate such a  replacement  who is approved by  Franchisor  in accordance
       with  Subsection 12.2 within one hundred eighty (180) days of the date on
       which the last  Director of  Operations  who was  approved by  Franchisor
       ceased to be employed by Developer in that capacity;

               (f) any part of this Agreement relating to the payment of fees to
       Franchisor,  or the  preservation  of any of  Franchisor's  trade  names,
       service marks,  trademarks,  trade secrets or secret formulae licensed or
       disclosed  hereunder or under any franchise  agreement between Franchisor
       and Developer, for any reason being declared invalid or unenforceable;

               (g) Developer or any Principal  Shareholder being convicted of or
       pleading  nolo  contendere  to a  felony  or any  crime  involving  moral
       turpitude; or

               (h)  the  franchisee  under  any  franchise   agreement  executed
       pursuant to this  Agreement  committing  a default  subject to  immediate
       termination under the franchise agreement.

       9.3 Except as provided above in Subsection 9.2, if Developer  defaults in
the performance or observance of any of its other obligations hereunder or under
any franchise  agreement between Developer and Franchisor,  and any such default
continues  for a period of thirty (30) days after  written  notice to  Developer
specifying  such  default,  Franchisor  shall have the right to  terminate  this
Agreement  upon  written  notice to  Developer.  If  Developer  defaults  in the
performance or observance of the same  obligation two (2) or more times within a
twelve (12) month  period,  Franchisor  shall have the right to  terminate  this
Agreement immediately upon commission of the second act of default, upon written
notice to Developer stating the reason for such  termination,  without allowance
for any curative period.

       9.4 This Agreement shall automatically terminate under the conditions and
at the times specified in Subsection 2.3 and 3.3.

10.    PREREQUISITES TO OBTAINING FRANCHISES FOR INDIVIDUAL
       RESTAURANT UNITS

       10.1 Developer understands and agrees that this Agreement does not confer
upon Developer a right to obtain a franchise for any Restaurant, but is intended
by the parties to set forth the terms and conditions  which, if fully satisfied,
shall  entitle  Developer  to  obtain  such  a  franchise,  located  within  the
Territory. Developer further understands that until the date Developer opens for
operation all those Restaurants required under Subsection 8.6 of this Agreement,
such aforesaid  terms and conditions may only be satisfied by Developer (and not
an  assignee or  transferee  thereof),  who shall  remain at all times owned and
controlled by the Principal Shareholders as herein set forth.

       10.2  In the  event  that  Developer  shall  have  obtained  Franchisor's
approval of a particular proposed site for a Restaurant,  and if Franchisor,  in
the  exercise  of  its  sole  discretion,  has  granted  Developer  operational,
financial and legal  approval,  then Franchisor will grant Developer a franchise
for a Restaurant at the site in question.  As used herein,  Franchisor will give
Developer  "operational",  "financial" and "legal"  approval under the following
circumstances:

                                       17
<PAGE>

       "Operational"  approval will be granted if Franchisor has determined,  in
       the exercise of its sole  discretion,  that  Developer is conducting  the
       operation of each of its  Restaurants,  and is capable of conducting  the
       operation of the proposed Restaurant, including physical aspects thereof,
       (a) in accordance with the terms and conditions of this Agreement, (b) in
       accordance  with the provisions of the respective  franchise  agreements,
       and (c) in accordance with the standards,  specifications  and procedures
       set forth and  described in the  Franchise  Operations  Manual and in any
       other  materials  or manuals  provided or made  available to Developer by
       Franchisor  (collectively,  the  "Manuals"),  as such may be amended from
       time to time.  Developer  understands  that  changes  in said  standards,
       specifications  and  procedures  may become  necessary from time to time.
       Developer  agrees to accept said changes,  and Developer  further  agrees
       that it is within the sole discretion of Franchisor to make said changes.

       "Financial" approval will be granted if (a) Developer is not in breach of
       its  obligations  under  Subsection  7.3  hereof  and  has  been  and  is
       faithfully performing all terms and conditions under each of its existing
       franchise agreements with Franchisor,  (b) Developer or its affiliates is
       not in  default  of any money  obligations  owed to  Franchisor,  and (c)
       Developer  is not in default of any  financial  obligation  to any of its
       suppliers,  unless any such obligation is being disputed in good faith by
       the  Developer.  Developer  acknowledges  and agrees  that it is vital to
       Franchisor's  interest that each of its franchisees be financially  sound
       to avoid failure of a franchised  business (which would adversely  affect
       the  reputation  and good name of Franchisor  and the System).  Developer
       acknowledges and agrees that it is vital to Franchisor's  interest and to
       the  interests  of  the  System  that   Developer  (in  its  capacity  as
       franchisee) remain current in satisfying its financial  obligations to it
       suppliers.

       "Legal"  approval will be granted if Franchisor  has  determined,  in the
       exercise  of  its  sole  discretion,  that  Developer  has  submitted  to
       Franchisor,  in  a  timely  manner  as  requested,  all  information  and
       documents  requested  by  Franchisor  prior  to and as a  basis  for  the
       issuance of  individual  franchises  or pursuant to any right  granted to
       Franchisor  by  this  Agreement  or by any  franchise  agreement  between
       Developer  and  Franchisor,  and has taken  such  additional  actions  in
       connection therewith as may be requested from time to time.

       10.3 It is understood and agreed that the foregoing criteria apply to the
operational,  financial  and  legal  aspects  of any  Restaurant  franchised  by
Franchisor  in which  Developer or any  Principal  Shareholder  has any legal or
equitable  interest.  It is further  understood  and agreed that  Developer  and
Principal Shareholders have an ongoing responsibility to operate each Restaurant
in which  Developer  or any  Principal  Shareholder  has any legal or  equitable
interest in a manner which satisfies the foregoing requirements for operational,
financial and legal approval.

                                       18
<PAGE>

11.    RESTRICTIONS

       11.1 Developer and its Principal  Shareholders  acknowledge that over the
term of  this  Agreement  they  are to  receive  proprietary  information  which
Franchisor has developed over time at great expense,  including, but not limited
to,  methods  of  site  selection,   marketing  methods,  product  analysis  and
selection,  and service  methods  and skills  relating  to the  development  and
operation of Restaurants. They further acknowledge that this information,  which
includes,  but is not necessarily  limited to, that contained in the Manuals, is
not generally  known in the industry and is beyond their own present  skills and
experience, and that to develop it themselves would be expensive, time-consuming
and difficult. Developer and Principal Shareholders further acknowledge that the
Franchisor's  information provides a competitive  advantage and will be valuable
to them in the development of their  business,  and that gaining access to it is
therefore  a  primary  reason  why  they  are  entering  into  this   Agreement.
Accordingly,  Developer and its Principal  Shareholders  agree that Franchisor's
information,  as described above,  which may or may not be "trade secrets" under
prevailing judicial  interpretations or statutes,  is private and valuable,  and
constitutes  trade secrets  belonging to  Franchisor;  and in  consideration  of
Franchisor's  confidential disclosure to them of these trade secrets,  Developer
and Principal Shareholders agree as follows:

               (a) During the term of this Agreement,  neither Developer nor any
       Principal Shareholder,  for so long as such Principal Shareholder owns an
       Interest  in  Developer,  may,  without  the  prior  written  consent  of
       Franchisor, directly or indirectly engage in, or acquire any financial or
       beneficial    interest   (including   any   interest   in   corporations,
       partnerships,  trusts, unincorporated associations or joint ventures) in,
       advise,  help,  guarantee loans or make loans to, any restaurant business
       whose  menu or  method  of  operation  is  similar  to that  employed  by
       restaurant  units  within the System  which is either (i)  located in the
       Territory, (ii) located in the Area of Dominant Influence (as defined and
       established  from  time to  time  by  Arbitron  Ratings  Company)  of any
       Restaurant  developed pursuant to this Agreement,  (iii) located within a
       five (5) mile radius of any  restaurant  unit within the System,  or (iv)
       determined by Franchisor,  exercising  reasonable good faith judgment, to
       be a direct competitor of the System.

               (b)  Neither   Developer,   for  two  (2)  years   following  the
       termination of this Agreement, nor any Principal Shareholder, for two (2)
       years  following  the  termination  of all of  his  or  her  Interest  in
       Developer or the termination of this Agreement,  whichever  occurs first,
       may  directly  or  indirectly  engage in, or  acquire  any  financial  or
       beneficial    interest   (including   any   interest   in   corporations,
       partnerships,  trusts, unincorporated associations or joint ventures) in,
       advise,  help,  guarantee loans or make loans to, any restaurant business
       whose  menu or  method  of  operation  is  similar  to that  employed  by
       restaurant  units  within the System  which is located  either (i) in the
       Territory,  (ii) in the  Area  of  Dominant  Influence  (as  defined  and
       established  from  time to  time  by  Arbitron  Ratings  Company)  of any
       Restaurant developed pursuant to this Agreement,  (iii) within a five (5)
       mile radius of any restaurant unit within the System,  or (iv) within any
       area for which an active,  currently  binding  development  agreement has
       been  granted  by  Franchisor  to  another  franchisee  as of the date of
       termination.

                                       19
<PAGE>

       11.2  Neither  Developer  nor  any  Shareholder  shall  at any  time  (a)
appropriate or use the trade secrets  incorporated in the System, or any portion
thereof,  in any other restaurant  business which is not within the System,  (b)
disclose  or reveal  any  portion  of the  System to any  person  other  than to
Developer's employees as an incident of their training, (c) acquire any right to
use any name,  mark or other  intellectual  property  right which may be granted
pursuant to any agreement between Franchisor and Developer, except in connection
with the operation of a Restaurant,  or (d) communicate,  divulge or use for the
benefit of any other person or entity any confidential information, knowledge or
know-how  concerning  the methods of  development  or  operation of a restaurant
utilizing the System, which may be communicated by Franchisor in connection with
the Restaurants to be developed hereunder.

       11.3  Developer and Principal  Shareholders  agree that the provisions of
this Section 11 are and have been a primary  inducement  to  Franchisor to enter
into this Agreement, and that in the event of breach thereof Franchisor would be
irreparably  injured and would be without an adequate remedy at law.  Therefore,
in the event of a breach,  or a threatened or attempted  breach,  of any of such
provisions Franchisor shall be entitled, in addition to any other remedies which
it may have  hereunder or in law or in equity  (including the right to terminate
this Agreement),  to a preliminary and/or permanent  injunction and a decree for
specific performance of the terms hereof without the necessity of showing actual
or  threatened  damage,  and without  being  required to furnish a bond or other
security.

       11.4 The restrictions  contained in Subsection 11.1 above shall not apply
to  ownership  of less than two  percent  (2%) of the shares of a company  whose
shares are listed and traded on a national  securities  exchange  if such shares
are owned  for  investment  only,  and are not  owned by an  officer,  director,
employee or consultant of such publicly traded company.

       11.5 If any court or other tribunal having  jurisdiction to determine the
validity  or  enforceability  of this  Section  11  determines  that it would be
invalid or unenforceable as written,  then the provisions hereof shall be deemed
to be modified or limited to such extent or in such manner as necessary for such
provisions to be valid and enforceable to the greatest extent possible.

12.    DEVELOPMENT PROCEDURES

       12.1 Franchisor will use its reasonable efforts to furnish Developer with
advice in developing Restaurants and in selecting sites therefor.

       12.2  Developer  shall  designate  an  individual  employee  who shall be
personally  responsible  for  Developer's  activities  during  the  term of this
Agreement, and who shall devote his or her full-time,  best efforts and constant
personal  attention,  on a day-to-day  basis,  to Developer's  activities in the
Territory  (the  "Director of  Operations").  Developer  shall  require that the
Director of Operations  maintain his or her principal  personal residence in the
Territory.  Franchisor reserves the right to require that, as a condition of his
or her employment  with Developer,  the Director of Operations,  as well as each
supervisory employee referred to in Subsection 12.3, must successfully  complete
Franchisor's  interview  process and a  psychological  profile  test in a manner
which satisfies a uniform standard established by Franchisor.  The test shall be
administered by Franchisor,  or by a testing agency designated by Franchisor, at
Developer's   expense.   Developer's   designation  of  the  first  Director  of
Operations,  and any subsequent Director of Operations,  shall be subject to the
written  approval  of  Franchisor,  which  approval  shall  not  be  arbitrarily
withheld,  and  shall  also be  subject  to the time  limitations  described  in
Subsection  9.2(e) hereof.  Franchisor  shall notify Developer in writing within
fourteen (14) business days of receipt of Developer's request whether Franchisor
disapproves  such person.  Failure by Franchisor to so notify  Developer  within
that period shall be deemed to constitute Franchisor's approval of such person.

                                       20
<PAGE>

       12.3 In the event that  Developer  desires to  designate  an employee (in
addition to the Director of Operations) who will have supervisory authority over
the  development  of  operation  of more  than  one (1)  Restaurant  within  the
Territory,  Developer's  designation  of such a  supervisory  employee  shall be
subject to the  written  approval of  Franchisor,  which  approval  shall not be
arbitrarily  withheld.  Franchisor  shall  notify  Developer  in writing  within
fourteen (14) business days of receipt of Developer's request whether Franchisor
disapproves  such person.  Failure by Franchisor to so notify  Developer  within
that period shall be deemed to constitute  Franchisor's approval of such person.
Developer shall require that any such supervisory  employee  maintain his or her
principal personal residence in the Territory.

       12.4  Developer  shall  require the Director of  Operations  to execute a
confidentiality  agreement  and  covenant  not to compete  in the form  attached
hereto as Appendix E. In addition,  at  Franchisor's  request,  Developer  shall
obtain  from the  Director  of  Operations  an  agreement  verifying  his or her
employment status. Developer shall require that each other employee of Developer
who will have  supervisory  authority over the  development or operation of more
than one (1) Restaurant execute a confidentiality agreement in the form attached
hereto as Appendix F.  Developer  shall be  responsible  for  compliance  of its
employees  with the  agreements  identified  in this  Subsection,  including the
payment of any costs needed to enforce the obligations.

       12.5 (a) Developer shall require its Director of Operations and any other
supervisory  employee  designated  pursuant to Subsection  12.3 to attend and to
successfully  complete to  Franchisor's  reasonable  satisfaction  an operations
training  course  provided by  Franchisor.  If the Director of Operations or any
such supervisory employee fails to successfully complete Franchisor's operations
training  course,  Franchisor  may  require  designation  of a new  Director  of
Operations  or  replacement  supervisory  employee,  as the  case  may  be,  and
Developer   shall   designate  a  new  Director  of  Operations  or  replacement
supervisory  employee  who  shall be  required  to  successfully  complete  such
training course.

               (b)  The  Director  of  Operations  and   supervisory   employees
designated  pursuant to Subsection  12.3 shall,  from time to time as reasonably
requested  by  Franchisor,  attend and  successfully  complete  to  Franchisor's
reasonable  satisfaction a  Franchisor-provided  refresher  course in restaurant
operations.

       12.6 With respect to each  Restaurant  within the Territory  developed by
Developer,   Developer's   employees  must  satisfy  the  training  requirements
described  in Section 6 of  Appendix B hereto.  After  Developer  opens it first
Restaurant pursuant to this Agreement, Franchisor may at its option, and subject
to  such  conditions  as  Franchisor  deems  necessary,   permit  Developer  (at
Developer's own expense) to conduct a portion of the required training at one of
Developer's existing Restaurants.  In that event,  Developer will be required to
provide qualified personnel to administer training tests and to maintain records
relating to the training and performance of employees.

                                       21

<PAGE>

13.    NO WAIVER OF DEFAULT

       13.1 The waiver by any party to this  Agreement of any breach or default,
or series of breaches or defaults, of any term, covenant or condition herein, or
of any same or  similar  term,  covenant  or  condition  contained  in any other
agreement between Franchisor and any other person,  shall not be deemed a waiver
of any subsequent or continuing breach or default of the same or any other term,
covenant or  condition  in this  Agreement,  or in any other  agreement  between
Franchisor and any other person.

       13.2 All rights and remedies of Franchisor  shall be  cumulative  and not
alternative,  in addition to and not  exclusive  of any other rights or remedies
which are  provided  for herein or which may be available at law or in equity in
case of any breach,  failure or default or threatened breach, failure or default
of any term,  provision or condition of this Agreement.  Franchisor's rights and
remedies  shall be continuing  and shall not be exhausted by any one (1) or more
uses thereof,  and may be exercised at any time or from time to time as often as
may be expedient; and any option or election to enforce any such right or remedy
may be exercised or taken at any time and from time to time.  The  expiration or
earlier  termination of this Agreement shall not discharge or release  Developer
or any Principal  Shareholder from any liability or obligation then accrued,  or
any liability or obligation continuing beyond, or arising out of, the expiration
or earlier termination of this Agreement.

14.    FORCE MAJEURE

       14.1 As used in this  Agreement,  the term "Force Majeure" shall mean any
act of God, strike, lock-out or other industrial  disturbance,  war (declared or
undeclared),  riot, epidemic,  fire or other catastrophe,  act of any government
and any other  similar  cause  not  within  the  control  of the party  affected
thereby.

       14.2  If the  performance  of any  obligation  by any  party  under  this
Agreement is prevented  or delayed by reason of Force  Majeure,  which cannot be
overcome by use of normal commercial measures,  the parties shall be relieved of
their  respective  obligations  to  the  extent  the  parties  are  respectively
necessarily  prevented or delayed in such performance  during the period of such
Force  Majeure.  The party  whose  performance  is affected by an event of Force
Majeure  shall give prompt notice of such Force Majeure event to the other party
by  facsimile,  telephone or telegram (in each case to be confirmed in writing),
setting forth the nature  thereof and an estimate as to its duration,  and shall
be liable for  failure to give such  timely  notice only to the extent of damage
actually caused.

15.    CONSTRUCTION, SEVERABILITY, GOVERNING LAW AND
       JURISDICTION

       15.1 If any part of this  Agreement  shall  for any  reason  be  declared
invalid,  unenforceable  or impaired in any way, the  validity of the  remaining
portions  shall  remain in full force and effect as if this  Agreement  had been
executed with such invalid  portion  eliminated,  and it is hereby  declared the
intention of the parties that they would have executed the remaining  portion of
this  Agreement  without  including  therein  any such  portions  which might be
declared invalid;  provided however,  that in the event any part hereof relating
to the payment of fees to Franchisor, or the preservation of any of Franchisor's
trade  names,  service  marks,  trademarks,  trade  secrets  or secret  formulae
licensed or disclosed  hereunder or pursuant to any franchise  agreement between
Franchisor and Developer is for any reason  declared  invalid or  unenforceable,
then Franchisor shall have the option of terminating this Agreement upon written
notice to Developer.  If any clause or provision  herein would be deemed invalid
or  unenforceable  as  written,  it shall be deemed to be modified or limited to
such  extent or in such  manner as may be  necessary  to  render  the  clause or
provision  valid and enforceable to the greatest extent possible in light of the
interest of the parties  expressed in that clause or  provision,  subject to the
provisions of the preceding sentence.

                                       22

<PAGE>

       15.2 DEVELOPER AND PRINCIPAL SHAREHOLDERS ACKNOWLEDGE THAT FRANCHISOR MAY
ENTER INTO OTHER  DEVELOPMENT  AGREEMENTS  THROUGHOUT THE UNITED STATES ON TERMS
AND CONDITIONS  SIMILAR TO THOSE SET FORTH IN THIS AGREEMENT,  AND THAT IT IS OF
MUTUAL BENEFIT TO DEVELOPER AND PRINCIPAL  SHAREHOLDERS  AND TO FRANCHISOR  THAT
THESE TERMS AND  CONDITIONS  BE UNIFORMLY  INTERPRETED.  THEREFORE,  THE PARTIES
AGREE THAT TO THE EXTENT THAT THE LAW OF THE STATE OF KANSAS  DOES NOT  CONFLICT
WITH LOCAL FRANCHISE STATUTES, RULES AND REGULATIONS,  KANSAS LAW SHALL APPLY TO
THE  CONSTRUCTION  OF THIS AGREEMENT AND SHALL GOVERN ALL QUESTIONS  WHICH ARISE
WITH REFERENCE HERETO; PROVIDED HOWEVER, THAT PROVISIONS OF KANSAS LAW REGARDING
CONFLICTS OF LAW SHALL NOT APPLY HERETO.

       15.3 THE PARTIES AGREE THAT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT
OF OR RELATING TO THIS  AGREEMENT  OR THE  PERFORMANCE  THEREOF  WHICH CANNOT BE
AMICABLY SETTLED, EXCEPT AS OTHERWISE PROVIDED HEREIN, MAY, AT THE OPTION OF THE
CLAIMANT, BE RESOLVED BY A PROCEEDING IN A COURT IN JOHNSON COUNTY,  KANSAS, AND
DEVELOPER  AND  THE  PRINCIPAL   SHAREHOLDERS   EACH   IRREVOCABLY   ACCEPT  THE
JURISDICTION OF THE COURTS OF THE STATE OF KANSAS AND THE FEDERAL COURTS SERVING
JOHNSON COUNTY, KANSAS FOR SUCH CLAIMS, CONTROVERSIES OR DISPUTES.

       The parties agree that service of process in any  proceeding  arising out
of or relating to this  Agreement or the  performance  thereof may be made as to
Developer and any Principal  Shareholder by serving a person of suitable age and
discretion  (such as the  person in  charge of the  office)  at the  address  of
Developer  specified  in this  Agreement  and as to  Franchisor  by serving  the
president or a  vice-president  of Franchisor at the address of Franchisor or by
serving Franchisor's registered agent.

                                       23
<PAGE>

16.    MISCELLANEOUS

       16.1 All notices and other  communications  required or  permitted  to be
given  hereunder  shall be deemed given when  delivered in person,  by overnight
courier  service,  facsimile  transmission  or mailed by registered or certified
mail  addressed to the  recipient  at the address set forth  below,  unless that
party shall have given written notice of change of address to the sending party,
in which event the new address so specified shall be used.

       FRANCHISOR:  Applebee's International, Inc.
                                 4551 W. 107th Street, Suite 100
                                 Overland Park, Kansas  66207
                                 Attention:  President

       DEVELOPER:

       PRINCIPAL SHAREHOLDERS:

       16.2 All terms  used in this  Agreement,  regardless  of the  number  and
gender in which they are used,  shall be deemed  and  construed  to include  any
other number, singular or plural, and any other gender,  masculine,  feminine or
neuter,  as the context or sense of this  Agreement may require,  the same as if
such words had been written in this Agreement themselves.  The headings inserted
in this  Agreement  are for  reference  purposes  only and shall not  affect the
construction of this Agreement or limit the generality of any of its provisions.
The term  "business  day"  means any day other  than  Saturday,  Sunday,  or the
following   national   holidays:   New  Year's  Day,  Martin  Luther  King  Day,
Washington's Birthday,  Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans' Day, Thanksgiving and Christmas.

       16.3 This Agreement, the Uniform Franchise Offering Circular currently in
effect and the  documents  referred to herein  constitute  the entire  agreement
between parties, superseding and canceling any and all prior and contemporaneous
agreements, understandings, representations, inducements and statements, oral or
written, of the parties in connection with the subject matter hereof.

       16.4 Except as expressly  authorized herein, no amendment or modification
of this Agreement shall be binding unless executed in writing both by Franchisor
and by Developer and Principal Shareholders.

                                       24
<PAGE>

       16.5 In the event that any party to this  Agreement  initiates  any legal
proceeding to construe or enforce any of the terms, conditions and/or provisions
of this Agreement, including, but not limited to, its termination provisions, or
to obtain  damages or other  relief to which any party may be entitled by virtue
of this Agreement,  the prevailing party or parties shall be paid its reasonable
attorneys' fees and expenses by other party or parties.

IN WITNESS  WHEREOF,  the undersigned have entered into this Agreement as of the
date first above written.

                                       25
<PAGE>

                                         FRANCHISOR:

ATTEST:                                  APPLEBEE'S INTERNATIONAL, INC.

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

                                         DEVELOPER:

ATTEST:

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

                                         PRINCIPAL SHAREHOLDER(S):

Witness                                  Name:

Witness                                  Name:

Witness                                  Name:

Witness                                  Name:

                                       26
<PAGE>

                       APPENDIX A TO DEVELOPMENT AGREEMENT

                                    TERRITORY

Franchisor  specifically excludes from the Territory,  and reserves the right to
operate or license  any other  person to operate  restaurants  in, any  location
within an airport  (serviced by one or more public or charter  carrier),  arena,
stadium,  state or national  park, or military  fort,  post or base which may be
within the boundaries of the Territory otherwise granted to Developer.

         One  hundred  percent (100%)  of  the  number of  Restaurants  required
by  Subsections 2.1  and  3.1 is ---------- (-----).

                                       27
<PAGE>

                       APPENDIX B TO DEVELOPMENT AGREEMENT

                            FORM FRANCHISE AGREEMENT

                    (See Exhibit F to this Offering Circular)

                                       28
<PAGE>

                       APPENDIX C TO DEVELOPMENT AGREEMENT

                        STATEMENT OF OWNERSHIP INTERESTS

                                            Percent of Issued
                                             and Outstanding
     Shareholder                            Shares of Developer

                                       29

<PAGE>

                       APPENDIX D TO DEVELOPMENT AGREEMENT

                  REVIEW AND CONSENT WITH RESPECT TO TRANSFERS

         In  determining  whether to grant or to withhold  consent to a proposed
Transfer,  Franchisor shall consider all of the facts and circumstances which it
views as relevant in the particular instance, including, but not limited to, any
of the following:  (i) work experience and aptitude of Proposed New Owner and/or
proposed new  management  (a proposed  transferee  of a Principal  Shareholder's
Interest  and/or a proposed  transferee  of this  Agreement  is  referred  to as
"Proposed New Owner");  (ii) financial  background and condition of Proposed New
Owner,  and  actual  and pro  forma  financial  condition  of  Developer;  (iii)
character and reputation of Proposed New Owner;  (iv)  conflicting  interests of
Proposed New Owner; (v) the terms and conditions of Proposed New Owner's rights,
if the  proposed  Transfer is a pledge or  hypothecation;  (vi) the  adequacy of
Developer's  operation (as Franchisee) of any Restaurant and compliance with the
System and this  Agreement;  and (vii) such other  criteria  and  conditions  as
Franchisor shall then consider  relevant in the case of an application for a new
franchise to operate a restaurant unit within the System by an applicant that is
not then currently doing so.  Franchisor's  consent also may be conditioned upon
execution  by Proposed  New Owner of an  agreement  whereby  Proposed  New Owner
assumes  full,  unconditional,  joint and several  liability  for, and agrees to
perform  from  the  date  of  such  Transfer,  all  obligations,  covenants  and
agreements  contained  herein to the same  extent as if it had been an  original
party  to  this   Agreement  and  may  also  require   Developer  and  Principal
Shareholders, including the proposed Transferor(s), to execute a general release
which releases Franchisor from any claims they may have had or then have against
Franchisor. In the event Proposed New Owner is a partnership (including, but not
limited to, a limited partnership),  Proposed New Owner will also be required to
execute an addendum to the  Agreement  which amends the  references to Developer
and its Principal Shareholders to include the partnership approved by Franchisor
and Proposed New Owner's  general  partner(s) and the principal  shareholders of
the  general  partner(s),  if the  general  partner(s)  is a  corporation.  This
addendum will contain a provision  including in the definition of "Transfer" the
withdrawal, removal or voluntary/involuntary  dissolution (if applicable) of the
general  partner(s) or the  substitution  or addition of a new general  partner.
Developer  or  Principal  Shareholders,  as  the  case  may  be,  shall  provide
Franchisor with such  information as it may require in connection with a request
for approval of a proposed Transfer.

                                       30
<PAGE>

                       APPENDIX E TO DEVELOPMENT AGREEMENT

                          CONFIDENTIALITY AGREEMENT AND
                             COVENANT NOT TO COMPETE

         THIS AGREEMENT is made this ________ day of ________________, 19______,
by  and   between   _______________________________________,   a   _____________
corporation  ("Developer"),   and   __________________________,   an  individual
employed by Developer ("Employee").

WITNESSETH:

         WHEREAS, APPLEBEE'S INTERNATIONAL,  INC. ("Applebee's") is the owner of
all  rights in and to a unique  system  for the  development  and  operation  of
restaurants (the "System"),  which includes proprietary rights in valuable trade
names,  service  marks and  trademarks,  including  the service mark  Applebee's
Neighborhood  Grill & Bar and variations of such mark, designs and color schemes
for restaurant premises, signs, equipment, procedures and formulae for preparing
food and  beverage  products,  specifications  for  certain  food  and  beverage
products,  inventory methods,  operating methods,  financial control concepts, a
training facility and teaching techniques;

         WHEREAS,  Developer  is the  owner of the  exclusive  right to  develop
restaurants  franchised by Applebee's  which utilize the System  ("Restaurants")
for the period  and in the  territory  described  in the  Development  Agreement
between Applebee's and Developer (the "Development Agreement");

         WHEREAS, Developer and Employee acknowledge that Applebee's information
as described  above was developed over time at great  expense,  is not generally
known  in  the  industry  and is  beyond  Developer's  own  present  skills  and
experience, and that to develop it itself would be expensive, time-consuming and
difficult,  that it  provides a  competitive  advantage  and will be valuable to
Developer in the development of its business,  and that gaining access to it was
therefore a primary reason why Developer entered into the Development Agreement;
and

         WHEREAS,  in  consideration  of Applebee's  confidential  disclosure to
Developer of these trade  secrets,  Developer  has agreed to be obligated by the
terms of Development  Agreement to execute,  with its Director of Operations,  a
written   agreement   protecting   Applebee's  trade  secrets  and  confidential
information entrusted to Employee, and protecting against unfair competition;

         NOW,   THEREFORE,   in   consideration  of  the  mutual  covenants  and
obligations contained herein, the parties agree as follows:

                                       31

<PAGE>

         (1) The  parties  acknowledge  and agree  that  Employee  is or will be
employed in a supervisory or managerial  capacity and in such capacity will have
access  to  information  and  materials  which   constitute  trade  secrets  and
confidential and proprietary  information.  The parties further  acknowledge and
agree that any actual or potential  direct or indirect  competitor of Applebee's
or of any of its  franchisees  shall not have  access to such trade  secrets and
confidential information.

         (2) The parties  acknowledge  and agree that the System  includes trade
secrets and  confidential  information  which  Applebee's  has  revealed or will
reveal to Developer in confidence, and that protection of said trade secrets and
confidential information and protection of Applebee's against unfair competition
from  others  who  enjoy  or who have  had  access  to said  trade  secrets  and
confidential  information  are  essential  for the  maintenance  of goodwill and
special value of the System.

         (3)  Employee  agrees  that  he or  she  shall  not  at  any  time  (i)
appropriate or use the trade secrets  incorporated in the System, or any portion
thereof,  for use in any business which is not within the System;  (ii) disclose
or reveal any  portion of the  System to any  person  other than to  Developer's
employees as an incident of their  training;  (iii) acquire any right to use, or
to license or franchise the use of any name, mark or other intellectual property
right which is or may be granted by any franchise  agreement between  Applebee's
and Developer; or (iv) communicate,  divulge or use for the benefit of any other
person or entity any confidential information,  knowledge or know-how concerning
the  methods  of  development  or  operation  of  a  Restaurant   which  may  be
communicated  to  Employee  or of which  Employee  may be  apprised by virtue of
Employee's  employment by Developer.  Employee  shall divulge such  confidential
information  only to such of Developer's  other employees as must have access to
that  information  in order to operate a Restaurant  or to develop a prospective
site  for a  Restaurant.  Any  and  all  information,  knowledge  and  know-how,
including, without limitation,  drawings, materials, equipment,  specifications,
techniques and other data, which Applebee's designates as confidential, shall be
deemed confidential for purposes of this Agreement.

         (4) Employee  agrees that for the duration of his or her  employment by
Developer,  and for two (2) years following  termination  thereof,  Employee may
not,  without the prior written  consent of Applebee's,  directly or indirectly,
for  himself  or  through,  on  behalf  of or in  conjunction  with any  person,
partnership  or  corporation,  engage in or acquire any  financial or beneficial
interest  (including  any  interest  in  corporations,   partnerships,   trusts,
unincorporated associations or joint ventures) in, advise, help, guarantee loans
or make loans to, any  restaurant  business whose menu or method of operation is
the same as or similar to that  employed by  restaurant  units within the System
which is located  either  (a) in the  Territory,  as defined in the  Development
Agreement,  or (b) in the Area of Dominant Influence (as defined and established
from time to time by  Arbitron  Ratings  Company)  of any  Restaurant  developed
pursuant to the Development Agreement.

                                       32
<PAGE>

         (5)  Employee  further  acknowledges  and  agrees  that  the  Franchise
Operations Manual and any other materials and manuals provided or made available
to Developer by Applebee's (collectively, the "Manuals"), described in Section 5
of the form of  franchise  agreement  which is  attached  as  Appendix  B to the
Development Agreement are loaned by Applebee's to Developer for limited purposes
only, remain the property of Applebee's,  and may not be reproduced, in whole or
in part, without the written consent of Applebee's.

         (6) Employee agrees to surrender to Developer or to Applebee's each and
every copy of the  Manuals and any other  information  or material in his or her
possession or control upon request,  upon  termination  of  employment,  or upon
completion  of the use for which said Manuals or other  information  or material
may have been furnished to Employee.

         (7) The parties agree that in the event of a breach of this  Agreement,
Applebee's would be irreparably  injured and would be without an adequate remedy
at law. Therefore,  in the event of a breach or a threatened or attempted breach
of any of the  provisions  hereof,  Applebee's  shall be entitled to enforce the
provisions of this  agreement as a third-party  beneficiary  hereof and shall be
entitled,  in addition to any other  remedies which it may have hereunder at law
or in equity (including the right to terminate the Development Agreement),  to a
temporary and/or permanent  injunction and a decree for specific  performance of
the terms hereof without the necessity of showing  actual or threatened  damage,
and without being required to furnish a bond or other security.

         (8) The  restrictions  in  Subsection  (4)  hereof  shall  not apply to
ownership of less than two percent (2%) of the shares of a company  whose shares
are  traded on a  national  securities  exchange  if such  shares  are owned for
investment  only,  and  are not  owned  by an  officer,  director,  employee  or
consultant of such publicly traded company.

         (9) If any court or other tribunal having jurisdiction to determine the
validity or enforceability of this Agreement determines that it would be invalid
or  unenforceable  as  written,  the  provisions  hereof  shall be  deemed to be
modified  or  limited  to such  extent  or in such  manner  necessary  for  such
provisions to be valid and enforceable to the greatest extent possible.

         (10) In the  event  that any  party  to this  Agreement  or  Applebee's
initiates  any  legal  proceeding  to  construe  or  enforce  any of the  terms,
conditions  and/or  provisions of this Agreement,  or to obtain damages or other
relief  to which  any party may be  entitled  by virtue of this  Agreement,  the
prevailing party or parties shall be paid its/their  reasonable  attorneys' fees
and expenses by other party or parties.

         IN WITNESS WHEREOF, the undersigned have entered into this Agreement as
of the date first above written.

DEVELOPER:                                                    EMPLOYEE:

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

                                       33
<PAGE>

                       APPENDIX F TO DEVELOPMENT AGREEMENT

                            CONFIDENTIALITY AGREEMENT

         THIS   AGREEMENT  is  made  this  ________  day  of   ________________,
19_______,   by   and   between   ________________________________________,    a
_____________  corporation  ("Developer"),  and  __________________________,  an
individual employed by Developer ("Employee").

WITNESSETH:

          WHEREAS, APPLEBEE'S INTERNATIONAL, INC. ("Applebee's") is the owner of
all  rights in and to a unique  system  for the  development  and  operation  of
restaurants (the "System"),  which includes proprietary rights in valuable trade
names,  service  marks and  trademarks,  including  the service mark  Applebee's
Neighborhood  Grill & Bar and variations of such mark, designs and color schemes
for restaurant premises, signs, equipment, procedures and formulae for preparing
food and  beverage  products,  specifications  for  certain  food  and  beverage
products,  inventory methods,  operating methods,  financial control concepts, a
training facility and teaching techniques;

          WHEREAS,  Developer  is the owner of the  exclusive  right to  develop
restaurants  franchised by Applebee's  which utilize the System  ("Restaurants")
for the period  and in the  territory  described  in the  Development  Agreement
between Applebee's and Developer (the "Development Agreement"); and

          WHEREAS,   Developer   acknowledges  that  Applebee's  information  as
described above was developed over time at great expense, is not generally known
in the industry and is beyond Developer's own present skills and experience, and
that to develop it itself would be expensive, time-consuming and difficult, that
it provides a  competitive  advantage  and will be valuable to  Developer in the
development  of its  business,  and that  gaining  access to it was  therefore a
primary reason why Developer entered into the Development Agreement; and

          WHEREAS,  in  consideration of Applebee's  confidential  disclosure to
Developer of these trade  secrets,  Developer  has agreed to be obligated by the
terms of Development  Agreement to execute,  with each employee of Developer who
will have  supervisory  authority over the development or operation of more than
one  Restaurant  in the  Territory  described in the  Development  Agreement,  a
written   agreement   protecting   Applebee's  trade  secrets  and  confidential
information entrusted to Employee;

          NOW,   THEREFORE,   in  consideration  of  the  mutual  covenants  and
obligations contained herein, the parties agree as follows:

                                       34
<PAGE>

          (1) The  parties  acknowledge  and agree that  Employee  is or will be
employed in a supervisory or managerial  capacity and in such capacity will have
access  to  information  and  materials  which   constitute  trade  secrets  and
confidential and proprietary  information.  The parties further  acknowledge and
agree that any actual or potential direct or indirect  competitor of Applebee's,
or of any of its  franchisees,  shall not have access to such trade  secrets and
confidential information.

          (2) The parties  acknowledge  and agree that the System includes trade
secrets and confidential  information which Applebee's has revealed to Developer
in  confidence,  and that  protection  of said trade  secrets  and  confidential
information and protection of Applebee's  against unfair competition from others
who  enjoy  or who  have had  access  to said  trade  secrets  and  confidential
information  are essential for the  maintenance of goodwill and special value of
the System.

          (3)  Employee  agrees  that  he or  she  shall  not at  any  time  (i)
appropriate or use the trade secrets  incorporated in the System, or any portion
thereof,  for use in any business which is not within the System;  (ii) disclose
or reveal any  portion of the  System to any  person  other than to  Developer's
employees as an incident of their  training;  (iii) acquire any right to use, or
to license or franchise the use of any name, mark or other intellectual property
right which is or may be granted by any franchise  agreement between  Applebee's
and Developer; or (iv) communicate,  divulge or use for the benefit of any other
person or entity any confidential information,  knowledge or know-how concerning
the  methods  of  development  or  operation  of  a  Restaurant   which  may  be
communicated  to  Employee  or of which  Employee  may be  apprised by virtue of
Employee's  employment by Developer.  Employee  shall divulge such  confidential
information  only to such of Developer's  other employees as must have access to
that  information  in order to operate a Restaurant  or to develop a prospective
site for a Restaurant. Any and information,  knowledge and know-how,  including,
without limitation, drawings, materials, equipment,  specifications,  techniques
and other data,  which Applebee's  designates as  confidential,  shall be deemed
confidential for purposes of this Agreement.

          (4)  Employee  further  acknowledges  and  agrees  that the  Franchise
Operations  Manual and any other materials or manuals provided or made available
to Developer by Applebee's (collectively, the "Manuals"), described in Section 5
of the applicable  franchise  agreement  between  Applebee's and Developer,  are
loaned by Applebee's to Developer for limited purposes only, remain the property
of  Applebee's,  and may not be  reproduced,  in whole or in part,  without  the
written consent of Applebee's.

          (5) Employee  agrees to surrender to Developer or to  Applebee's  each
and every copy of the  Manuals and any other  information  or material in his or
her possession or control upon request,  upon  termination of employment or upon
completion  of the use for which said Manuals or other  information  or material
may have been furnished to Employee.

                                       35
<PAGE>

          (6) The parties agree that in the event of a breach of this Agreement,
Applebee's would be irreparably  injured and would be without an adequate remedy
at law. Therefore,  in the event of a breach or a threatened or attempted breach
of any of the  provisions  hereof,  Applebee's  shall be entitled to enforce the
provisions of this  Agreement as a third-party  beneficiary  hereof and shall be
entitled,  in addition to any other  remedies which it may have hereunder at law
or in equity (including the right to terminate the Development Agreement),  to a
temporary and/or permanent  injunction and a decree for specific  performance of
the terms hereof without the necessity of showing  actual or threatened  damage,
and without being required to furnish a bond or other security.

          (7) If any court or other tribunal  having  jurisdiction  to determine
the validity or  enforceability  of this Agreement  determines  that it would be
invalid or unenforceable as written, the provisions hereof shall be deemed to be
modified  or  limited  to such  extent  or in such  manner  necessary  for  such
provisions to be valid and enforceable to the greatest extent possible.

          IN WITNESS  WHEREOF,  the undersigned have entered into this Agreement
as of the date first above written.

DEVELOPER                                                     EMPLOYEE

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

                                       36

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