Document:

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                                                                    EXHIBIT 10.5

THE PUT OPTION EVIDENCED BY THIS INSTRUMENT HAS NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER THE SECURITIES LAWS OF ANY STATE, AND IS BEING OFFERED AND SOLD IN
RELIANCE ON AN EXEMPTION FROM THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF
SUCH LAWS. THE TRANSFERABILITY OF THE PUT OPTION IS SUBJECT TO RESTRICTIONS SET
FORTH IN THIS INSTRUMENT AND IMPOSED BY SUCH LAWS.

                              PUT OPTION AGREEMENT
                                (John Sarkisian)

        This Put Option Agreement (this "Agreement") is made as of August 30,
2000 by and between Sizzler International, Inc. ("Optionor") and FFPE Holding
Company, Inc. ("Optionee"). Unless the context otherwise indicates, capitalized
terms used herein shall have the meanings given them in Section 10 hereof.

                                    RECITALS

        A.     Optionor is a Delaware corporation having its principal place of
               business in Culver City, California.

        B.     Optionee is a Delaware corporation having its principal place of
               business in San Diego, California. John Sarkisian, an individual
               resident of California ("John"), is the holder of 33.94%, Tamara
               Sarkisian-Celmo, as trustee of the Tamara Sarkisian-Celmo Family
               Trust UDT 10/16/97 ("Tamara"), is the holder of 28.94% and the
               Sarkisian Family Trust UDT dated 7/19/95 is the holder of 37.12%
               of the outstanding capital stock of Optionee.

        C.     Optionee is the holder of certain units of membership interest
               in FFPE, LLC, a Delaware limited liability company (the
               "Units").

        D.     Pursuant to an LLC Membership Interest Purchase Agreement dated
               May 23, 2000 as amended by that Amended and Restated LLC
               membership Purchase Agreement dated August 21, 2000 between
               Optionor as Seller and Optionee as Purchaser (the "Purchase
               Agreement"), Optionee has sold 82% of the Units to Optionor.

        E.     As of the date hereof, Optionee continues to be the holder of
               18% of the outstanding Units (the "Retained Units").

        F.     Pursuant to the Purchase Agreement, Optionor and Optionee have
               entered into this Agreement, under which Optionor agrees to grant
               to Optionee an option to sell up to 14 Retained Units
               (representing 77.78% of all of the Retained Units) to Optionor on
               the terms and conditions set forth in this Agreement. In this
               Agreement, such 14 Retained Units are referred to as the
               "Optioned Units."

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        G.     Pursuant to the Purchase Agreement, Optionor and Optionee have
               entered into a Put Option Agreement (Tamara Sarkisian-Celmo)
               dated as of even date herewith (the "Other Put Option
               Agreement"), under which Optionor has agreed to grant to Optionee
               an option to sell up to 22.22% of the Retained Units to Optionor
               on the terms and conditions set forth in the Other Put Option
               Agreement.

                                    AGREEMENT

        1. GRANT AND ACCEPTANCE. On the terms and conditions set forth in this
Agreement, (a) Optionor hereby grants to Optionee an option (the "Put Option")
to sell to Optionor the Optioned Units at the Option Exercise Price and (b)
Optionee hereby confirms its acceptance of the Put Option.

        2. OPTION EXERCISE PRICE. The price per Unit at which Optionee shall be
entitled to sell any Optioned Units (the "Option Exercise Price") shall be the
dollar amount equal to the number obtained by dividing (A) the positive
difference, if any, between (1) the number obtained by multiplying the EBITDA of
FFPE, LLC for the Relevant Trailing 12 Month Period by the Applicable Multiple
and (2) the Current Debt of FFPE, LLC as of the end of such Relevant Trailing
12-Month Period by (B) all of the then outstanding Units.

               In determining the EBITDA for purposes of this Section, the
parties shall make any adjustments required by the Intercompany Accounting
procedures set forth on the EBITDA Adjustment Guidelines attached as EXHIBIT A.

        3. TERM. The term of the Put Option shall commence as of the date of the
grant thereof, which shall be the date hereof, and shall expire on the
Expiration Date. Upon the Expiration Date, the Put Option and this Agreement
shall become void and of no force or effect, and the parties shall have no
further rights or obligations under this Agreement, other than any liability for
any breach of the contract arising before the Expiration Date.

        4. EXERCISABILITY. The Put Option may be exercised by Optionee or any
Transferee thereof in accordance with this Agreement only during Year 3, Year 4
and Year 5 and Thereafter of the term hereof (the "Exercisability Period"). The
Put Option may be exercised in whole or in part. However, Optionee shall be
entitled to no more than two exercises of the Put Option. For purposes of the
foregoing sentence only, the exercise by Optionee of any put option under the
Other Put Option Agreement made during the Exercisability Period shall be
counted as an exercise under this Agreement. Immediately after the exercise of
the second of two exercises during the Exercisability Period, the Put Option
shall cease to be exercisable.

        5. METHOD OF EXERCISE. The Put Option may be exercised only by Optionee.
The Put Option shall be exercised by written notice of exercise given by in
accordance with Section 18 hereof. Such notice (a "Notice of Exercise") shall
state that it is intended as an exercise under this Agreement and the number of
the Optioned Units being sold. The Put Option shall include the Optionee's
calculation of the sales price of the Units. To the extent that the Optionor
disagrees with the calculations provided by the Optionee, then Optionor

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shall give notice of such disagreement to the Optionee within 30 days. The
parties will use their reasonable efforts to resolve such disagreement. If the
Optionor gives such notice of objection and the parties fail to resolve such
objection within 30 days, then the issues in dispute will be submitted to a "Big
Five" accounting firm (the "Accountants") for resolution. If issues are
submitted to the Accountants for resolution, (i) each party will furnish to the
Accountants such work papers and other documents and information relating to the
disputed issues as the Accountants may request and are reasonably available to
that party, and will be afforded the opportunity to present to the Accountants
any material relating to the determination and to discuss the determination with
the Accountants; (ii) the determination by the Accountants, as set forth in a
notice delivered to both parties by the Accountants, will be binding and
conclusive on the parties; and (iii) the Optionee and the Optionor will each
bear 50% of the fees of the Accountants for such determination.

        6. SALE PROCEDURES.

               (a)    Upon the giving of a Notice of Exercise, Optionor shall
                      thereupon become obligated to purchase the number of the
                      Optioned Units stated in the Notice of Exercise from
                      Optionee, subject only to delivery by Optionee of the
                      instruments described in Section 6(b) hereof.

               (b)    The consummation of the purchase of such Optioned Units
                      (the "Closing") shall take place at the principal
                      executive offices of Optionor on such business day, not
                      later than 90 days after the giving of the Notice of
                      Exercise, as Optionor and Optionee may select.

               (c)    At the Closing, and upon the tender by Optionee of (i)
                      certificates evidencing the Optioned Units being sold,
                      duly endorsed in blank or accompanied by written
                      instruments of transfer in form satisfactory to Optionor
                      duly executed by the Optionee, free and clear of any
                      Encumbrances, (ii) an Opinion of Counsel, and (iii) a
                      Sellers' Certificate, Optionor shall deliver to Optionee
                      the full amount of the Option Exercise Price, in cash,
                      due hereunder with respect to the Optioned Units being
                      sold.

        7. NON-TRANSFERABILITY OF PUT OPTION.

               (a)    Except as otherwise provided herein, Optionee shall not
                      Transfer the Put Option without the express prior written
                      consent of Optionor, which consent may be withheld in
                      Optionor's sole and absolute discretion, and the Put
                      Option shall not be subject to execution, attachment or
                      similar process. Any attempt to Transfer the Put Option,
                      or to subject the Put Option to execution, attachment or
                      similar process, other than in accordance with this
                      Agreement shall be void ab initio.

               (b)    Optionee may Transfer the Put Option to any Affiliate,
                      provided that the Optionee gives Optionor at least 30
                      days' prior written notice of such Transfer and the
                      Transferee acquires the unexercised Optioned

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                      Units, assumes in writing all of the obligations of
                      Optionee under this Agreement, and acknowledges that the
                      acceptance of the Put Option subject to all terms,
                      conditions and restrictions hereof, a copy of which
                      assumption and acknowledgement is provided to Optionor.

        8. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee represents and
warrants to Optionor, as of the date hereof and as of the date of any exercise
of the Put Option, that:

               (a)    The Optioned Units are duly authorized, validly issued,
                      fully paid and non-assessable units of membership interest
                      of FFPE, LLC.

               (b)    There are no outstanding subscriptions, options, warrants,
                      rights, puts, calls, pre-emptive rights, commitments,
                      conversion rights, rights of exchange, plans, or other
                      agreements of any kind relating to the Optioned Units.

               (c)    Optionee is the sole beneficial owner and holder of record
                      of all 14 of the Optioned Units. The Optioned Units are
                      free and clear of any Encumbrances. The delivery to
                      Optionor of certificates evidencing the Optioned Units,
                      duly endorsed in blank or accompanied by appropriate
                      written instruments of transfer duly executed by Optionee,
                      is sufficient to transfer to Optionor valid title thereto,
                      free and clear of any Encumbrance.

               (d)    Optionee has the full individual capacity to enter into
                      this Agreement and make any endorsement or execute and
                      deliver any written instrument of transfer necessary to
                      transfer the Optioned Units to Optionor.

               (e)    This Agreement has been duly executed and delivered by
                      Optionee and is a valid and binding obligation of
                      Optionee, enforceable against Optionee in accordance with
                      its terms.

               (f)    No consent by any third party or governmental authority
                      is required in connection with the execution or delivery
                      by Optionee of this Agreement or the consummation of the
                      sale of the Optioned Units to Optionor contemplated
                      hereunder. The execution and delivery by Optionee of
                      this Agreement and the sale of the Optioned Units to
                      Optionor will not conflict with or result in any breach
                      of or constitute a default under any agreement or
                      instrument to which FFPE, LLC or Optionee is a party or
                      by which its or Optionee's assets are bound.

               (g)    Optionee has acquired and will exercise the Put Option for
                      its own account and not with a view to or sale in
                      connection with any distribution of the security.

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               (h)    The grant of the Put Option under this Agreement was not
                      accomplished by the publication of any advertisement.

               (i)    Optionee understands that the Put Option is subject to
                      restrictions on transferability as set forth in this
                      Agreement. Optionee understands that the Put Option has
                      not been registered with the SEC under the Securities
                      Act of 1933, as amended, or under the securities laws of
                      any state, and has been issued by Optionor in reliance
                      upon one or more exemptions from registration or
                      qualification under such laws. Accordingly, the Put
                      Option may not be transferred or resold by Optionee
                      unless registered or qualified under such laws, or
                      unless such transfer or resale is made pursuant to an
                      available exemption from such registration or
                      qualification.

        9. ADJUSTMENTS. If outstanding Optioned Units subject to the Put Option
are increased, decreased or exchanged for or converted into cash, property
and/or a different number or kind of securities, or if cash, property and/or
securities are distributed in respect of such outstanding securities, in either
case as a result of a reorganization, merger or consolidation of FFPE, LLC, or
as a result of a recapitalization, reclassification, dividend by, or other
distribution, Unit split, reverse Unit split or the like involving, FFPE, LLC,
then Optionor shall make appropriate and proportionate adjustment in the number
and type of shares or other securities or cash or other property that may be
acquired upon the exercise in full of the Put Option, provided, however, that
any such adjustment shall be made without changing the aggregate Option Exercise
Price of the unexercised portion of the Put Option.

        10. DEFINITIONS. Capitalized terms used in this Agreement without
definition shall have the following meanings:

               (a)    "Affiliate" shall mean, with respect to a specified
                      person, a person who controls, is controlled by or under
                      common control with the specified person, and with respect
                      to the Optionor, John, Tamara, or a trust in which Tamara
                      or John are one or more of the beneficiaries.

               (b)    "Applicable Multiple" shall mean the average of (A) the
                      Sizzler Multiple at the time of the exercise of the Put
                      Option for which the Option Exercise Price is being
                      determined and (B) either (i) eight (8) if such exercise
                      is during Year 3, (ii) seven (7) if such exercise is
                      during Year 4, or (iii) six (6) if such exercise is
                      during Year 5 or Thereafter; provided, however, in no
                      event shall the Applicable Multiple exceed nine (9) if
                      such exercise is during Year 3, or eight (8) if such
                      exercise is during Year 4, or seven (7) if such exercise
                      is during Year 5 of Thereafter.

               (c)    "Change of Control" shall mean any Transfer of 20% or more
                      of the issued and outstanding shares of capital stock of
                      Optionee.

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               (d)    "Current Debt" of a company or division shall refer to the
                      total debt (current and non-current) of such company or
                      division, determined from the financial statements thereof
                      prepared in accordance with GAAP.

               (e)    "EBITDA" of a company or a division for any period shall
                      mean the earnings of the company or division for such
                      period before interest, income taxes, depreciation and
                      amortization of the company or division, other than
                      non-recurring items, determined from financial statements
                      of such company or division prepared in accordance with
                      GAAP.

               (f)    "Encumbrances" shall mean any security interest, pledge,
                      mortgage, hypothecation, lien, charge, encumbrance,
                      adverse claim, preferential arrangement or restriction of
                      any kind, including, without limitation, any pre-emptive
                      rights, options, warrants, puts, calls, or restrictions on
                      use, voting, transfer (other than restrictions under
                      applicable securities laws), receipt of income or other
                      exercise of any attributes of ownership.

               (g)    "Expiration Date" shall be the first to occur of (a) the
                      tenth (10th) anniversary of the date of this Agreement or
                      (b) the date of the sale of all of the remaining Optioned
                      Units subject to this Agreement or (c) the date as of
                      which the Put Option is no longer exercisable under this
                      Agreement.

               (h)    "Fair Market Value" of a security on any day shall be
                      equal to the last sale price, regular way, per unit of
                      such security on such day or, in case no such sale takes
                      place on such day, the average of the closing bid and
                      asked prices, regular way, in either case as reported in
                      the principal consolidated transaction reporting system
                      with respect to securities listed or admitted to trading
                      on the New York Stock Exchange or, if such security is
                      not listed or admitted to trading on the New York Stock
                      Exchange, as reported in the principal consolidated
                      transaction reporting system with respect to securities
                      listed on the principal national securities exchange on
                      which such security is listed or admitted to trading or,
                      if securities are not listed or admitted to trading on
                      any national securities exchange, the last quoted price
                      or, if not so quoted, the average of the high bid and
                      low asked prices in the over-the-counter market, as
                      reported by the National Association of Securities
                      Dealers, Inc. Automated Quotations System ("NASDAQ") or
                      such other system then in use or, if on any such date
                      such security is not quoted by any such organization,
                      the average of the closing bid and asked prices as
                      furnished by a professional market maker making a market
                      in such security selected by the Board of Directors of
                      the corporation issuing such security. In all other
                      cases, Fair Market Value shall be the value determined
                      in good faith by such Board.

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               (i)    "GAAP" shall mean generally accepted accounting
                      principles, consistently applied.

               (j)    "Opinion of Counsel" shall mean an opinion of Optionee's
                      legal counsel, in form satisfactory to Optionor and
                      dated as of the date of the sale of Optioned Units
                      hereunder, to the effect that: (a) the Optioned Units
                      are validly issued, fully paid and non-assessable units
                      of membership interest of FFPE, LLC; (b) Optionee is the
                      sole holder of record and beneficial owner of the
                      Optioned Units; (c) the execution and delivery of the
                      assignment instruments do not contravene any applicable
                      provision of law; and (d) the Optioned Units have been
                      validly assigned by Optionee to Optionor and, to the
                      best of counsel's knowledge, are free and clear of any
                      Encumbrance.

               (k)    "Permitted Transferee" shall mean an individual to whom
                      the Put Option and the Optioned Units to which the Put
                      Option relates have been transferred in accordance with
                      Section 7(b) hereof. A Permitted Transferee shall be
                      treated as Optionee for all purposes under this Agreement.

               (l)    "Relevant Trailing 12 Month Period" shall mean, with
                      respect to the determination of the Option Exercise Price
                      applicable to any exercise of the Put Option, the
                      Optionor's thirteen (13) completed four-week accounting
                      periods immediately preceding the exercise.

               (m)    "Sellers' Certificate" shall mean a written certificate
                      signed by Optionee, in form satisfactory to Optionor and
                      dated as of the date of any sale of Optioned Units
                      hereunder, to the effect that the representations and
                      warranties of Optionee set forth in Section 8(a), (b),
                      (c), (d) and (f) of this Agreement are true and correct in
                      all respects as of the date of the sale of any Optioned
                      Units hereunder.

               (n)    "Sizzler Multiple" shall mean the number obtained by
                      dividing (A) the sum of (1) the number obtained by
                      multiplying (x) the Fair Market Value of a share of
                      Optionor's common stock as of the end of the Relevant
                      Trailing 12-Month Period and (y) the number of shares of
                      Optionor's common stock outstanding as of such date and
                      (2) the Current Debt of Optionor as of such date by (B)
                      EBITDA of Optionor for the Relevant Trailing 12-Month
                      Period.

               (o)    "Subsidiary" of a specified person shall mean any
                      corporation or other entity, more than 50% of the stock or
                      ownership interest of which is held by the specified
                      person.

               (p)    "Transfer" shall mean sell, transfer, assign, convey,
                      gift, pledge, hypothecate or dispose of in any way,
                      whether by operation of law or

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                      otherwise (other than to Optionor or its Subsidiaries),
                      or any Change of Control.

               (q)    "Year 3" shall mean the period commencing on August 30,
                      2002 and terminating on August 29, 2003.

               (r)    "Year 4" shall mean the period commencing on August 30,
                      2003 and terminating on August 29, 2004.

               (s)    "Year 5 and Thereafter" shall mean the period commencing
                      on August 30, 2004 and terminating on the Expiration Date.

        11. PAYMENT OF INCOME TAXES. If Optionor is required to withhold any
amount on account of federal, state or local tax (including, without limitation,
any income, FICA, disability insurance, or employment tax) imposed as a result
of the exercise of the Put Option, Optionee shall, concurrently with such
withholding, pay such amount to Optionor in full in cash.

        12. STOCKHOLDER RIGHTS. Optionor shall not be entitled to vote, receive
dividends, or be deemed for any purpose the holder of any Optioned Units until
the Put Option shall have been duly exercised to sell such Optioned Units in
accordance with the provisions of this Agreement.

        13. EXPENSES. Except as otherwise express set forth herein, all fees and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such costs or expenses.

        14. WAIVER OF COMPLIANCE; CONSENTS. Any failure by Optionor or Optionee
to comply with any obligation, covenant, agreement or condition herein may be
waived by Optionee or Optionor, as applicable, only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.

        15. GOVERNING LAW. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of the
State of California applicable to contracts made and to be performed entirely
within the State of California by California residents without regard to
California choice of law principles.

        16. CAPTIONS. The Section captions used herein are for reference
purposes only, and shall not in any way affect the meaning or interpretation of
this Agreement.

        17. NOTICES. Any notice or other communications required or permitted
hereunder shall be sufficiently given if delivered in person or sent by telecopy
or by registered or certified mail, postage prepaid, addressed as follows:

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<PAGE>   9

                   if to Optionor at:

                   Sizzler International, Inc.
                   6101 West Centinela Avenue
                   Culver City, California 90230
                   Attn:  Michael B. Green, Esq.
                   Tel:    (310) 568-0135
                   Fax:    (310) 568-8255

                   with a copy to its counsel at:

                   Pachulski, Stang, Ziehl, Young & Jones PC
                   10100 Santa Monica Boulevard Suite 1100
                   Los Angeles, California 90067
                   Attn:  David J. Barton, Esq.
                   Tel:    (310) 277-6910
                   Fax:    (310) 201-0760

                   and if to Optionee at:

                   FFPE Holding Company, Inc.
                   9823 Pacific Heights Blvd., Suite J
                   San Diego, California 92121
                   Attn:  John Sarkisian
                   Tel: 858-843-3266
                   Fax: 858-552-4930

                   and with a copy to each of the
                   following counsel at:

                   Sheppard, Mullin, Richter & Hampton, LLP
                   501 West Broadway, 19th Floor
                   San Diego, California  92101-3598
                   Attn:  Richard L. Kintz, Esq.
                   Tel:    (619) 338-6500
                   Fax:    (619) 234-3815

or such other address or number as shall be furnished in writing by any such
party, and such notice or communication shall be deemed to have been given as of
the date so delivered, sent by telecopy or mailed. Any notice, request, demand,
claim or other communication hereunder shall be deemed duly delivered to and
received by the party to whom it is directed three (3) business days after it is
sent by registered or certified mail, return receipt requested, postage prepaid,
or upon delivery via overnight courier service, in each case addressed to the
intended recipient as described above. Any notice, request, claim, demand or
other communication given in any other

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<PAGE>   10

manner shall only be deemed received by the intended recipient thereof upon such
recipient's actual receipt thereof.

        18. PARTIES IN INTEREST. This Agreement may not be transferred,
assigned, sold, conveyed, pledged or hypothecated by any party hereto, other
than by operation of law. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.

        19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.

        20. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes the Letter of Intent between the parties
dated February 28, 2000 and all other prior agreements and understandings
(written or oral) between the parties with respect to such subject matter.

        21. AMENDMENTS. This Agreement may not be changed orally, but only by an
agreement in writing signed by the parties hereto. Any provision of this
Agreement can be waived, amended, supplemented or modified by written agreement
of the parties hereto.

        22. THIRD PARTY BENEFICIARIES. Nothing contained in this Agreement shall
create any rights in, or be deemed to have been executed for the benefit of, any
person or entity that is not a party hereto or thereto or a successor or
permitted assign of such a party.

        23. SEVERABILITY. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable in a jurisdiction, such provision shall be
modified or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity, legality or
enforceability of such provision be affected thereby in any other jurisdiction.

        24. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.

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<PAGE>   11

        25. PRINCIPLES OF CONSTRUCTION.

               (a)    All references to sections, schedules and exhibits are to
                      sections, schedules and exhibits in or to this Agreement
                      unless otherwise specified.

               (b)    The words "hereof", "herein" and "hereunder" and words of
                      similar import when used in this Agreement shall refer to
                      this Agreement as a whole and not to any particular
                      provision of this Agreement.

               (c)    The words "include", "includes" and "including" shall be
                      deemed to be followed by the phrase "without limitation",
                      unless already expressly followed by such phrase or the
                      phrase "but not limited to".

               (d)    All references to "U.S. dollars" or "$" shall be deemed
                      references to lawful money of the United States of
                      America.

               (e)    All accounting terms not specifically defined herein shall
                      be construed in accordance with generally accepted
                      accounting principles in the United States of America.

               (f)    All words importing any gender shall be deemed to
                      include the other genders.

               (g)    All references to statutes are to be construed as
                      including all statutory provisions consolidating, amending
                      or replacing the statute referred to.

               (h)    Unless otherwise specified, references to agreements and
                      other contractual instruments shall be deemed to include
                      all subsequent amendments, modifications and supplements
                      thereto.

               (i)    Each party has reviewed and commented upon this Agreement
                      and, therefore, the rule of construction requiring that
                      any ambiguity be resolved against the drafting party shall
                      not be employed in the interpretation of this Agreement.

        27. FURTHER ASSURANCES. Each party agrees to promptly provide the other
party with such information as is necessary to make the computations required
hereunder and to effectuate the purposes of this Agreement.

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<PAGE>   12

        IN WITNESS WHEREOF, Optionor and Optionee have entered into this Option
Agreement in Los Angeles, California as of the day and year first written.

                                    "OPTIONOR":

                                    Sizzler International, Inc.

                                    By:     /s/ CHARLES L. BOPPELL
                                            --------------------------

                                    Its:    President and CEO
                                            --------------------------

                                    By:     /s/ STEVEN R. SELCER
                                            --------------------------
                                    Its:    Vice President
                                            --------------------------

                                    "OPTIONEE":

                                    FFPE Holding Company, Inc.

                                    By:     /s/ JOHN SARKISIAN
                                            --------------------------

                                    Its:    President
                                            --------------------------

                                    By:     /s/ TAMARA SARKISIAN-CELMO
                                            --------------------------

                                    Its:    Vice President
                                            --------------------------

                                      -12-
<PAGE>   13

                                    EXHIBIT A

                          EBITDA ADJUSTMENT GUIDELINES

The parties acknowledge that a substantial portion of the value of the Put
Option may be related to the Units of the Membership Interests of FFPE, LLC (the
"Company"). Therefore, Optionor and Optionee have agreed upon the following
EBITDA Adjustment Guidelines:

1. Intercompany Accounting. During the term of the Put Option, for purposes of
determining the Option Exercise Price, the EBITDA of the Company shall be
adjusted to eliminate any impact adverse to Optionee of any of the following
items, unless such item is agreed to by Optionee in the Agreement or otherwise:

        (a)     Any charge or allocate any corporate overhead services or
                similar items (collectively, "Overhead Charges");

        (b)     Any charge to the Company for any costs related to the
                Optionor's acquisition of the Company, including, but not
                limited to: acquisition expenses, legal expenses, investment
                banking and similar expense;

        (c)     Any non-recurring or extraordinary charges other than attributed
                to the Company during the term of the Put Option from any
                source;

        (d)     Any subsequent change to the reserves of the Company established
                at the Closing (as defined in the Agreement); and

        (e)     The 2% management fee, if any, paid or payable to Optionor
                permitted in Section 6.5 of the limited liability company
                agreement of the Company.

2. Corporate Services. During the term of the Put Option, in the event that
Optionor can provide needed goods and services at a price and terms equal to or
less than the price and terms offered by and at a quality level equal to that of
unaffiliated third parties, then such goods and services shall be acquired from
Optionor.

3. Volume Discounts. During the term of the Put Option, Optionor shall not
charge the Company for any volume purchasing discounts that the Company is able
to recognize as a result of the joint purchasing power of Optionor and the
Company.

4. Consent. For purposes of these Guidelines, the agreement of John Sarkisian
shall be conclusively presumed to be the agreement of the Optionee and of the
Shareholders.

                                      -1-<PAGE>   1
                                                                    EXHIBIT 10.6

THE PUT OPTION EVIDENCED BY THIS INSTRUMENT HAS NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER THE SECURITIES LAWS OF ANY STATE, AND IS BEING OFFERED AND SOLD IN
RELIANCE ON AN EXEMPTION FROM THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF
SUCH LAWS. THE TRANSFERABILITY OF THE PUT OPTION IS SUBJECT TO RESTRICTIONS SET
FORTH IN THIS INSTRUMENT AND IMPOSED BY SUCH LAWS.

                              PUT OPTION AGREEMENT
                            (Tamara Sarkisian-Celmo)

        This Put Option Agreement (this "Agreement") is made as of August 30,
2000 by and between Sizzler International, Inc. ("Optionor") and FFPE Holding
Company, Inc. ("Optionee"). Unless the context otherwise indicates, capitalized
terms used herein shall have the meanings given them in Section 10 hereof.

                                    RECITALS

        A.     Optionor is a Delaware corporation having its principal place of
               business in Culver City, California.

        B.     Optionee is a Delaware corporation having its principal place of
               business in San Diego, California. John Sarkisian, an individual
               resident of California ("John"), is the holder of 33.94%, Tamara
               Sarkisian-Celmo, as trustee of the Tamara Sarkisian-Celmo Family
               Trust UDT 10/16/97 ("Tamara"), is the holder of 28.94% and the
               Sarkisian Family Trust UDT dated 7/19/95 is the holder of 37.12%
               of the outstanding capital stock of Optionee.

        C.     Optionee is the holder of certain units of membership interest
               in FFPE, LLC, a Delaware limited liability company (the
               "Units").

        D.     Pursuant to an LLC Membership Interest Purchase Agreement dated
               May 23, 2000 as amended by that Amended and Restated LLC
               membership Purchase Agreement dated August 21, 2000 between
               Optionor as Seller and Optionee as Purchaser (the "Purchase
               Agreement"), Optionee has sold 82% of the Units to Optionor.

        E.     As of the date hereof, Optionee continues to be the holder of
               18% of the outstanding Units (the "Retained Units").

        F.     Pursuant to the Purchase Agreement, Optionor and Optionee have
               entered into this Agreement, under which Optionor agrees to
               grant to Optionee an option to sell up to four Retained Units
               (representing 22.22% of all of the Retained Units) to Optionor
               on the terms and conditions set forth in this

<PAGE>   2

               Agreement. In this Agreement, such four Retained Units are
               referred to as the "Optioned Units."

        G.     Pursuant to the Purchase Agreement, Optionor and Optionee have
               entered into a Put Option Agreement (John Sarkisian) dated as of
               even date herewith (the "Other Put Option Agreement"), under
               which Optionor has agreed to grant to Optionee an option to sell
               up to 77.78% of the Retained Units to Optionor on the terms and
               conditions set forth in the Other Put Option Agreement.

                                    AGREEMENT

        1. GRANT AND ACCEPTANCE. On the terms and conditions set forth in this
Agreement, (a) Optionor hereby grants to Optionee an option (the "Put Option")
to sell to Optionor the Optioned Units at the Option Exercise Price and (b)
Optionee hereby confirms its acceptance of the Put Option.

        2. OPTION EXERCISE PRICE. The price per Unit at which Optionee shall be
entitled to sell any Optioned Units (the "Option Exercise Price") shall be the
dollar amount described in (a) or (b) below, whichever is applicable:

               (a)    With respect to any exercise of the Put Option during Year
                      1 or Year 2, the dollar amount equal to the number
                      obtained by dividing (A) $780,488 by (B) the number of
                      Optioned Units;

               (b)    With respect to any exercise of the Put Option after the
                      end of Year 2, the dollar amount equal to the number
                      obtained by dividing (A) the positive difference, if any,
                      between (1) the number obtained by multiplying the EBITDA
                      of FFPE, LLC for the Relevant Trailing 12 Month Period by
                      the Applicable Multiple and (2) the Current Debt of FFPE,
                      LLC as of the end of such Relevant Trailing 12-Month
                      Period by (B) all of the then outstanding Units.

               In determining the EBITDA for purposes of this Section, the
parties shall make any adjustments required by the Intercompany Accounting
procedures set forth on the EBITDA Adjustment Guidelines attached as EXHIBIT A.

        3. TERM. The term of the Put Option shall commence as of the date of the
grant thereof, which shall be the date hereof, and shall expire on the
Expiration Date. Upon the Expiration Date, the Put Option and this Agreement
shall become void and of no force or effect, and the parties shall have no
further rights or obligations under this Agreement, other than any liability for
any breach of the contract arising before the Expiration Date.

        4. EXERCISABILITY. The Put Option may be exercised by Optionee or any
Transferee thereof in accordance with this Agreement at any time during the term
hereof. The Put Option may be exercised in whole or in part. However, Optionee
shall be entitled to no more than one exercise of the Put Option before the end
of Year 2 and a

                                      -2-
<PAGE>   3

total of two exercises of the Put Option during the term hereof. For purposes of
the foregoing sentence only, the exercise by Optionee of any put option under
the Other Put Option Agreement made after the end of Year 2 shall be counted as
an exercise under this Agreement. Immediately after the exercise of the second
of two exercises during the term hereof, the Put Option shall cease to be
exercisable.

        5. METHOD OF EXERCISE. The Put Option may be exercised only by Optionee.
The Put Option shall be exercised by written notice of exercise given by in
accordance with Section 18 hereof. Such notice (a "Notice of Exercise") shall
state that it is intended as an exercise under this Agreement and the number of
the Optioned Units being sold. The Put Option shall include the Optionee's
calculation of the sales price of the Units. To the extent that the Optionor
disagrees with the calculations provided by the Optionee, then Optionor shall
give notice of such disagreement to the Optionee within 30 days. The parties
will use their reasonable efforts to resolve such disagreement. If the Optionor
gives such notice of objection and the parties fail to resolve such objection
within 30 days, then the issues in dispute will be submitted to a "Big Five"
accounting firm (the "Accountants") for resolution. If issues are submitted to
the Accountants for resolution, (i) each party will furnish to the Accountants
such work papers and other documents and information relating to the disputed
issues as the Accountants may request and are reasonably available to that
party, and will be afforded the opportunity to present to the Accountants any
material relating to the determination and to discuss the determination with the
Accountants; (ii) the determination by the Accountants, as set forth in a notice
delivered to both parties by the Accountants, will be binding and conclusive on
the parties; and (iii) the Optionee and the Optionor will each bear 50% of the
fees of the Accountants for such determination.

        6. SALE PROCEDURES.

               (a)    Upon the giving of a Notice of Exercise, Optionor shall
                      thereupon become obligated to purchase the number of the
                      Optioned Units stated in the Notice of Exercise from
                      Optionee, subject only to delivery by Optionee of the
                      instruments described in Section 6(b) hereof.

               (b)    The consummation of the purchase of such Optioned Units
                      (the "Closing") shall take place at the principal
                      executive offices of Optionor on such business day, not
                      later than 90 days after the giving of the Notice of
                      Exercise, as Optionor and Optionee may select.

               (c)    At the Closing, and upon the tender by Optionee of (i)
                      certificates evidencing the Optioned Units being sold,
                      duly endorsed in blank or accompanied by written
                      instruments of transfer in form satisfactory to Optionor
                      duly executed by the Optionee, free and clear of any
                      Encumbrances, (ii) an Opinion of Counsel, and (iii) a
                      Sellers' Certificate, Optionor shall deliver to Optionee
                      the full

                                      -3-
<PAGE>   4

                      amount of the Option Exercise Price, in cash, due
                      hereunder with respect to the Optioned Units being sold.

        7. NON-TRANSFERABILITY OF PUT OPTION.

               (a)    Except as otherwise provided herein, Optionee shall not
                      Transfer the Put Option without the express prior
                      written consent of Optionor, which consent may be
                      withheld in Optionor's sole and absolute discretion, and
                      the Put Option shall not be subject to execution,
                      attachment or similar process. Any attempt to Transfer
                      the Put Option, or to subject the Put Option to
                      execution, attachment or similar process, other than in
                      accordance with this Agreement shall be void ab initio.

               (b)    Optionee may Transfer the Put Option to any Affiliate,
                      provided that the Optionee gives Optionor at least 30
                      days' prior written notice of such Transfer and the
                      Transferee acquires the unexercised Optioned Units,
                      assumes in writing all of the obligations of Optionee
                      under this Agreement, and acknowledges that the
                      acceptance of the Put Option subject to all terms,
                      conditions and restrictions hereof, a copy of which
                      assumption and acknowledgement is provided to Optionor.

        8. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee represents and
warrants to Optionor, as of the date hereof and as of the date of any exercise
of the Put Option, that:

               (a)    The Optioned Units are duly authorized, validly issued,
                      fully paid and non-assessable units of membership interest
                      of FFPE, LLC.

               (b)    There are no outstanding subscriptions, options, warrants,
                      rights, puts, calls, pre-emptive rights, commitments,
                      conversion rights, rights of exchange, plans, or other
                      agreements of any kind relating to the Optioned Units.

               (c)    Optionee is the sole beneficial owner and holder of record
                      of all four of the Optioned Units. The Optioned Units are
                      free and clear of any Encumbrances. The delivery to
                      Optionor of the certificates evidencing the Optioned
                      Units, duly endorsed in blank or accompanied by
                      appropriate written instruments of transfer duly executed
                      by Optionee, is sufficient to transfer to Optionor valid
                      title thereto, free and clear of any Encumbrance.

               (d)    Optionee has all necessary corporate power and authority
                      to enter into this Agreement and make any endorsement or
                      execute and deliver any written instrument of transfer
                      necessary to transfer the Optioned Units to Optionor.

                                      -4-
<PAGE>   5

               (e)    This Agreement has been duly executed and delivered by
                      Optionee and is a valid and binding obligation of
                      Optionee, enforceable against Optionee in accordance with
                      its terms.

               (f)    No consent by any third party or governmental authority
                      is required in connection with the execution or delivery
                      by Optionee of this Agreement or the consummation of the
                      sale of the Optioned Units to Optionor contemplated
                      hereunder. The execution and delivery by Optionee of
                      this Agreement and the sale of the Optioned Units to
                      Optionor will not conflict with or result in any breach
                      of or constitute a default under any agreement or
                      instrument to which FFPE, LLC or Optionee is a party or
                      by which its or Optionee's assets are bound.

               (g)    Optionee has acquired and will exercise the Put Option for
                      its own account and not with a view to or sale in
                      connection with any distribution of the security.

               (h)    The grant of the Put Option under this Agreement was not
                      accomplished by the publication of any advertisement.

               (i)    Optionee understands that the Put Option is subject to
                      restrictions on transferability as set forth in this
                      Agreement. Optionee understands that the Put Option has
                      not been registered with the SEC under the Securities
                      Act of 1933, as amended, or under the securities laws of
                      any state, and has been issued by Optionor in reliance
                      upon one or more exemptions from registration or
                      qualification under such laws. Accordingly, the Put
                      Option may not be transferred or resold by Optionee
                      unless registered or qualified under such laws, or
                      unless such transfer or resale is made pursuant to an
                      available exemption from such registration or
                      qualification.

        9. ADJUSTMENTS. If outstanding Optioned Units subject to the Put Option
are increased, decreased or exchanged for or converted into cash, property
and/or a different number or kind of securities, or if cash, property and/or
securities are distributed in respect of such outstanding securities, in either
case as a result of a reorganization, merger or consolidation of FFPE, LLC, or
as a result of a recapitalization, reclassification, dividend by, or other
distribution, Unit split, reverse Unit split or the like involving, FFPE, LLC,
then Optionor shall make appropriate and proportionate adjustment in the number
and type of shares or other securities or cash or other property that may be
acquired upon the exercise in full of the Put Option, provided, however, that
any such adjustment shall be made without changing the aggregate Option Exercise
Price of the unexercised portion of the Put Option.

                                      -5-
<PAGE>   6

        10. DEFINITIONS. Capitalized terms used in this Agreement without
definition shall have the following meanings:

               (a)    "Affiliate" shall mean, with respect to a specified
                      person, a person who controls, is controlled by or under
                      common control with the specified person and with respect
                      to the Optionor, John, Tamara, or a trust where Tamara or
                      John are one of the beneficiaries.

               (b)    "Applicable Multiple" shall mean the average of (A) the
                      Sizzler Multiple at the time of the exercise of the Put
                      Option for which the Option Exercise Price is being
                      determined and (B) either (i) eight (8) if such exercise
                      is during Year 3, (ii) seven (7) if such exercise is
                      during Year 4, or (iii) six (6) if such exercise is
                      during Year 5 or Thereafter; provided, however, in no
                      event shall the Applicable Multiple exceed nine (9) if
                      such exercise is during Year 3, or eight (8) if such
                      exercise is during Year 4, or seven (7) if such exercise
                      is during Year 5 or Thereafter.

               (c)    "Change of Control" shall mean any Transfer of 20% or more
                      of the issued and outstanding shares of capital stock of
                      Optionee.

               (d)    "Current Debt" of a company or division shall refer to the
                      total debt (current and non-current) of such company or
                      division, determined from the financial statements thereof
                      prepared in accordance with GAAP.

               (e)    "EBITDA" of a company or a division for any period shall
                      mean the earnings of the company or division for such
                      period before interest, income taxes, depreciation and
                      amortization of the company or division, other than
                      non-recurring items, determined from financial statements
                      of such company or division prepared in accordance with
                      GAAP.

               (f)    "Encumbrances" shall mean any security interest, pledge,
                      mortgage, hypothecation, lien, charge, encumbrance,
                      adverse claim, preferential arrangement or restriction of
                      any kind, including, without limitation, any pre-emptive
                      rights, options, warrants, puts, calls, or restrictions on
                      use, voting, transfer (other than restrictions under
                      applicable securities laws), receipt of income or other
                      exercise of any attributes of ownership.

               (g)    "Expiration Date" shall be the first to occur of (a) the
                      tenth (10th) anniversary of the date of this Agreement or
                      (b) the date of the sale of all of the remaining Optioned
                      Units subject to this Agreement or (c) the date as of
                      which the Put Option is no longer exercisable under this
                      Agreement.

                                      -6-
<PAGE>   7

               (h)    "Fair Market Value" of a security on any day shall be
                      equal to the last sale price, regular way, per unit of
                      such security on such day or, in case no such sale takes
                      place on such day, the average of the closing bid and
                      asked prices, regular way, in either case as reported in
                      the principal consolidated transaction reporting system
                      with respect to securities listed or admitted to trading
                      on the New York Stock Exchange or, if such security is
                      not listed or admitted to trading on the New York Stock
                      Exchange, as reported in the principal consolidated
                      transaction reporting system with respect to securities
                      listed on the principal national securities exchange on
                      which such security is listed or admitted to trading or,
                      if securities are not listed or admitted to trading on
                      any national securities exchange, the last quoted price
                      or, if not so quoted, the average of the high bid and
                      low asked prices in the over-the-counter market, as
                      reported by the National Association of Securities
                      Dealers, Inc. Automated Quotations System ("NASDAQ") or
                      such other system then in use or, if on any such date
                      such security is not quoted by any such organization,
                      the average of the closing bid and asked prices as
                      furnished by a professional market maker making a market
                      in such security selected by the Board of Directors of
                      the corporation issuing such security. In all other
                      cases, Fair Market Value shall be the value determined
                      in good faith by such Board.

               (i)    "GAAP" shall mean generally accepted accounting
                      principles, consistently applied.

               (j)    "Opinion of Counsel" shall mean an opinion of Optionee's
                      legal counsel, in form satisfactory to Optionor and
                      dated as of the date of the sale of Optioned Units
                      hereunder, to the effect that: (a) the Optioned Units
                      are validly issued, fully paid and non-assessable units
                      of membership interest of FFPE, LLC; (b) Optionee is the
                      sole holder of record and beneficial owner of the
                      Optioned Units; (c) the execution and delivery of the
                      assignment instruments do not contravene any applicable
                      provision of law; and (d) the Optioned Units have been
                      validly assigned by Optionee to Optionor and, to the
                      best of counsel's knowledge, are free and clear of any
                      Encumbrance.

               (k)    "Permitted Transferee" shall mean an individual to whom
                      the Put Option and the Optioned Units to which the Put
                      Option relates have been transferred in accordance with
                      Section 7(b) hereof. A Permitted Transferee shall be
                      treated as Optionee for all purposes under this Agreement.

               (l)    "Relevant Trailing 12-Month Period" shall mean, with
                      respect to the determination of the Option Exercise
                      Price applicable to any

                                      -7-
<PAGE>   8

                      exercise of the Put Option, the Optionor's thirteen (13)
                      completed four-week accounting periods immediately
                      preceding the exercise.

               (m)    "Sellers' Certificate" shall mean a written certificate
                      signed by Optionee, in form satisfactory to Optionor and
                      dated as of the date of any sale of Optioned Units
                      hereunder, to the effect that the representations and
                      warranties of Optionee set forth in Section 8(a), (b),
                      (c), (d) and (f) of this Agreement are true and correct in
                      all respects as of the date of the sale of any Optioned
                      Units hereunder.

               (n)    "Sizzler Multiple" shall mean the number obtained by
                      dividing (A) the sum of (1) the number obtained by
                      multiplying (x) the Fair Market Value of a share of
                      Optionor's common stock as of the end of the Relevant
                      Trailing 12-Month Period and (y) the number of shares of
                      Optionor's common stock outstanding as of such date and
                      (2) the Current Debt of Optionor as of such date by (B)
                      EBITDA of Optionor for the Relevant Trailing 12-Month
                      Period.

               (o)    "Subsidiary" of a specified person shall mean any
                      corporation or other entity, more than 50% of the stock or
                      ownership interest of which is held by the specified
                      person.

               (p)    "Transfer" shall mean sell, transfer, assign, convey,
                      gift, pledge, hypothecate or dispose of in any way,
                      whether by operation of law or otherwise (other than to
                      Optionor or its Subsidiaries), or any Change of Control.

               (q)    "Year 1" shall mean the period commencing on August 30,
                      2000 and terminating on August 29, 2001.

               (r)    "Year 2" shall mean the period commencing on August 30,
                      2001 and terminating on August 29, 2002.

               (s)    "Year 3" shall mean the period commencing on August 30,
                      2002 and terminating on August 29, 2003.

               (t)    "Year 4" shall mean the period commencing on August 30,
                      2003 and terminating on August 29, 2004.

               (u)    "Year 5 and Thereafter" shall mean the period commencing
                      on August 30, 2004 and terminating on the Expiration Date.

        11. PAYMENT OF INCOME TAXES. If Optionor is required to withhold any
amount on account of federal, state or local tax (including, without limitation,
any income, FICA, disability insurance, or employment tax) imposed as a result
of the exercise of the Put Option, Optionee shall, concurrently with such
withholding, pay such amount to Optionor in full in cash.

                                      -8-
<PAGE>   9

        12. STOCKHOLDER RIGHTS. Optionor shall not be entitled to vote, receive
dividends, or be deemed for any purpose the holder of any Optioned Units until
the Put Option shall have been duly exercised to sell such Optioned Units in
accordance with the provisions of this Agreement.

        13. EXPENSES. Except as otherwise express set forth herein, all fees and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such costs or expenses.

        14. WAIVER OF COMPLIANCE; CONSENTS. Any failure by Optionor or Optionee
to comply with any obligation, covenant, agreement or condition herein may be
waived by Optionee or Optionor, as applicable, only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.

        15. GOVERNING LAW. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of the
State of California applicable to contracts made and to be performed entirely
within the State of California by California residents without regard to
California choice of law principles.

        16. CAPTIONS. The Section captions used herein are for reference
purposes only, and shall not in any way affect the meaning or interpretation of
this Agreement.

        17. NOTICES. Any notice or other communications required or permitted
hereunder shall be sufficiently given if delivered in person or sent by telecopy
or by registered or certified mail, postage prepaid, addressed as follows:

                   if to Optionor at:

                   Sizzler International, Inc.
                   6101 West Centinela Avenue
                   Culver City, California 90230
                   Attn:  Michael B. Green
                   Tel:    (310) 568-0135
                   Fax:    (310) 568-8255

                   with a copy to its counsel at:

                   Pachulski, Stang, Ziehl, Young & Jones PC
                   10100 Santa Monica Boulevard Suite 1100
                   Los Angeles, California 90067
                   Attn:  David J. Barton, Esq.
                   Tel:    (310) 277-6910
                   Fax:    (310) 201-0760

                                      -9-
<PAGE>   10

                   and if to Optionee at:

                   FFPE Holding Company, Inc.
                   9823 Pacific Heights Blvd., Suite J
                   San Diego, California 92121
                   Attn:  John Sarkisian
                   Tel: 858-843-3266
                   Fax: 858-552-4930

                   and with a copy to each of the
                   following counsel at:

                   Sheppard, Mullin, Richter & Hampton, LLP
                   501 West Broadway, 19th Floor
                   San Diego, California  92101-3598
                   Attn:  Richard L. Kintz, Esq.
                   Tel:    (619) 338-6500
                   Fax:    (619) 234-3815

or such other address or number as shall be furnished in writing by any such
party, and such notice or communication shall be deemed to have been given as of
the date so delivered, sent by telecopy or mailed. Any notice, request, demand,
claim or other communication hereunder shall be deemed duly delivered to and
received by the party to whom it is directed three (3) business days after it is
sent by registered or certified mail, return receipt requested, postage prepaid,
or upon delivery via overnight courier service, in each case addressed to the
intended recipient as described above. Any notice, request, claim, demand or
other communication given in any other manner shall only be deemed received by
the intended recipient thereof upon such recipient's actual receipt thereof.

        18. PARTIES IN INTEREST. This Agreement may not be transferred,
assigned, sold, conveyed, pledged or hypothecated by any party hereto, other
than by operation of law. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.

        19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.

        20. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes the Letter of Intent between the parties
dated February 28, 2000 and all other prior agreements and understandings
(written or oral) between the parties with respect to such subject matter.

        21. AMENDMENTS. This Agreement may not be changed orally, but only by an
agreement in writing signed by the parties hereto. Any provision of this
Agreement can

                                      -10-
<PAGE>   11

be waived, amended, supplemented or modified by written agreement of the parties
hereto.

        22. THIRD PARTY BENEFICIARIES. Nothing contained in this Agreement shall
create any rights in, or be deemed to have been executed for the benefit of, any
person or entity that is not a party hereto or thereto or a successor or
permitted assign of such a party.

        23. SEVERABILITY. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable in a jurisdiction, such provision shall be
modified or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity, legality or
enforceability of such provision be affected thereby in any other jurisdiction.

        24. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.

        25. PRINCIPLES OF CONSTRUCTION.

               (a)    All references to sections, schedules and exhibits are to
                      sections, schedules and exhibits in or to this Agreement
                      unless otherwise specified.

               (b)    The words "hereof", "herein" and "hereunder" and words of
                      similar import when used in this Agreement shall refer to
                      this Agreement as a whole and not to any particular
                      provision of this Agreement.

               (c)    The words "include", "includes" and "including" shall be
                      deemed to be followed by the phrase "without limitation",
                      unless already expressly followed by such phrase or the
                      phrase "but not limited to."

               (d)    All references to "U.S. dollars" or "$" shall be deemed
                      references to lawful money of the United States of
                      America.

               (e)    All accounting terms not specifically defined herein shall
                      be construed in accordance with generally accepted
                      accounting principles in the United States of America.

                                      -11-
<PAGE>   12

               (f)    All words importing any gender shall be deemed to
                      include the other genders.

               (g)    All references to statutes are to be construed as
                      including all statutory provisions consolidating, amending
                      or replacing the statute referred to.

               (h)    Unless otherwise specified, references to agreements and
                      other contractual instruments shall be deemed to include
                      all subsequent amendments, modifications and supplements
                      thereto.

               (i)    Each party has reviewed and commented upon this Agreement
                      and, therefore, the rule of construction requiring that
                      any ambiguity be resolved against the drafting party shall
                      not be employed in the interpretation of this Agreement.

        26. FURTHER ASSURANCES. Each party agrees to promptly provide the other
party with such information as is necessary to make the computations required
hereunder and to effectuate the purposes of this Agreement.

        IN WITNESS WHEREOF, Optionor and Optionee have entered into this Option
Agreement in Los Angeles, California as of the day and year first written.

                                    "OPTIONOR":

                                    Sizzler International, Inc.

                                    By:     /s/ CHARLES L. BOPPELL
                                            --------------------------

                                    Its:    President and CEO
                                            --------------------------

                                    By:     /s/ STEVEN R. SELCER
                                            --------------------------
                                    Its:    Vice President and CFO
                                            --------------------------

                                    "OPTIONEE":

                                    FFPE Holding Company, Inc.

                                    By:     /s/ JOHN SARKISIAN
                                            --------------------------

                                    Its:    President
                                            --------------------------

                                    By:     /s/ TAMARA SARKISIAN-CELMO
                                            --------------------------

                                    Its:    Vice President
                                            --------------------------

                                      -12-

<PAGE>   13

                                    EXHIBIT A

                          EBITDA ADJUSTMENT GUIDELINES

The parties acknowledge that a substantial portion of the value of the Put
Option may be related to the Units of the Membership Interests of FFPE, LLC (the
"Company"). Therefore, Optionor and Optionee have agreed upon the following
EBITDA Adjustment Guidelines:

1. Intercompany Accounting. During the term of the Put Option, for purposes of
determining the Option Exercise Price, the EBITDA of the Company shall be
adjusted to eliminate any impact adverse to Optionee of any of the following
items, unless such item is agreed to by Optionee in the Agreement or otherwise:

        (a)     Any charge or allocate any corporate overhead services or
                similar items (collectively, "Overhead Charges");

        (b)     Any charge to the Company for any costs related to the
                Optionor's acquisition of the Company, including, but not
                limited to: acquisition expenses, legal expenses, investment
                banking and similar expense;

        (c)     Any non-recurring or extraordinary charges other than attributed
                to the Company during the term of the Put Option from any
                source;

        (d)     Any subsequent change to the reserves of the Company established
                at the Closing (as defined in the Agreement); and

        (e)     The 2% management fee, if any, paid or payable to Optionor
                permitted in Section 6.5 of the limited liability company
                agreement of the Company.

2. Corporate Services. During the term of the Put Option, in the event that
Optionor can provide needed goods and services at a price and terms equal to or
less than the price and terms offered by and at a quality level equal to that of
unaffiliated third parties, then such goods and services shall be acquired from
Optionor.

3. Volume Discounts. During the term of the Put Option, Optionor shall not
charge the Company for any volume purchasing discounts that the Company is able
to recognize as a result of the joint purchasing power of Optionor and the
Company.

4. Consent. For purposes of these Guidelines, the agreement of John Sarkisian
shall be conclusively presumed to be the agreement of the Optionee and of the
Shareholders.

                                      -1-

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