Document:

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                                                                    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 __________, 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 77.78% and Tamara
         Sarkisian-Celmo as trustee of the Tamara Sarkisian-Celmo Family Trust
         UTD 10/16/97 ("Tamara"), is the holder of 22.22% of the outstanding
         capital stock of Optionee.

     C.  Before the date hereof, Optionee was the holder of all of the
         outstanding 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 between Optionee as Seller and Optionor 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 Agreement. In this Agreement, such four Retained Units
         are referred to as the "Optioned Units."
<PAGE>

     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 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.

                                      -2-
<PAGE>

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

                                      -3-
<PAGE>

     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.

          (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.

                                      -4-
<PAGE>

          (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.

     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

                                      -5-
<PAGE>

               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.

          (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

                                      -6-
<PAGE>

               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
               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

                                      -7-
<PAGE>

               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 _____________, 2000
               and terminating on ____________, 2001.

          (r)  "Year 2" shall mean the period commencing on _____________, 2001
               and terminating on ____________, 2002.

          (s)  "Year 3" shall mean the period commencing on _____________, 2002
               and terminating on ____________, 2003.

          (t)  "Year 4" shall mean the period commencing on _____________, 2003
               and terminating on ____________, 2004.

          (u)  "Year 5 and Thereafter" shall mean the period commencing on
               _____________, 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.

                                      -8-
<PAGE>

     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>

                 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, 19/th/ 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>

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>

          (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 ___________, California as of the day and year first written.

                         "OPTIONOR":

                         Sizzler International, Inc.

                         By:   _________________________
                         Its:  _________________________

                         By:   _________________________
                         Its:  _________________________

                         "OPTIONEE":

                         FFPE Holding Company, Inc.

                         By:   _________________________
                         Its:  _________________________

                         By:   _________________________
                         Its:  _________________________

                                      -12-
<PAGE>

                                   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-
                                   Exhibit A
                                   ---------<PAGE>

                                                                    Exhibit 10.7

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.

                          SIZZLER INTERNATIONAL, INC.

                                    WARRANT
                                    -------

     FOR VALUE RECEIVED, on and after the date of this Warrant, and subject to
the terms and conditions herein, FFPE Holding Company, Inc., a Delaware
corporation (the "Holder"), is entitled to purchase from Sizzler International,
                  ------
Inc., a Delaware corporation (the "Company"), at any time before 5:00 p.m.
                                   -------
California time on ____________, 2005 (the "Expiration Date"), at the Exercise
                                            ---------------
Price (as defined in Section 1(e), below), _______________ (____________) shares
of fully paid and nonassessable shares of common stock, par value $0.01 per
share, of the Company, subject to adjustment as set forth in Section 3, below.
This Warrant is one of the _____ Warrants (collectively, the "Warrants") being
                                                              --------
issued to the Holder, on the terms and subject to the conditions of the LLC
Membership Interest Agreement dated _______, 2000, by and among the Company, the
Holder, S&C Company, Inc., the shareholders and certain principals of S&C
Company, Inc. and FFPE, LLC.

     1.   Definitions. As used in this Warrant, the following terms shall have
          -----------
the definitions given to them below:

          (a)  "Change of Control Event" means any of the following: (A) the
                -----------------------
Company enters into an agreement to merge or consolidate, or otherwise
reorganize, with or into one or more persons other than an affiliate, as a
result of which the outstanding voting securities of the Company immediately
prior to such merger or consolidation are, or are to be, converted (1) solely
into cash or non-voting securities of the surviving or resulting person, or (2)
at least in part into voting securities of the surviving or resulting person,
but such voting securities will represent less than 50% of the outstanding
voting securities of the surviving or resulting person; (B) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company to a
person that is not an affiliate; or (C) a person that was not a holder of voting
securities of the Company (or an affiliate thereof) as of the date hereof
acquires directly or indirectly 50% or more of the Company's outstanding voting
securities.

          (b)  "Company": Sizzler International, Inc., a Delaware corporation.
                -------

          (c)  "Common Stock": Common Stock, $0.01 par value per share, of the
                ------------
Company.

                                      -1-
<PAGE>

          (d)  "Current Market Price" shall mean as of any specified date the
                --------------------
average of the daily market prices of the Common Stock of the Company over the
twenty (20) consecutive trading days immediately preceding such date.  The
"daily market price" for each such trading day shall be (i) the closing price on
such day on the principal stock exchange on which such Common Stock is then
listed or admitted to trading or on NASDAQ as applicable, (ii) if no sale takes
place on such day on any such exchange or system, the average of the closing bid
and asked prices on such day as officially quoted on any such exchange or
system, (iii) if such Common Stock is not then listed or admitted to trading on
any stock exchange or system, the last reported sale price on such day, or if no
sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by NASDAQ or the National Quotation Bureau, (iv) in the
case of a security not then listed or admitted to trading on any securities
exchange and as to which no such reported sale price or bid and asked prices are
available, the average of the reported high bid and low asked prices on such
day, as reported by a reputable quotation service, or a newspaper of general
circulation in the City of Los Angeles, the State of California, customarily
published on each business day, or if there shall be no bid and asked prices on
such day, the average of the high bid and low asked prices, as so reported, on
the most recent day (not more than 30 days prior to the date in question) for
which prices have been so reported, and (v) if there are no bid and asked prices
reported during the 30 days prior to the date in question, the Current Market
Price of the security shall be determined in accordance with Section 1(f) below
as if the Company did not have a class of equity securities which are publicly
traded.

          (e)  "Exercise Price":  Four Dollars ($4.00), subject to adjustment
                --------------
pursuant to Section 3, below.

          (f)  "Fair Value" per share of Common Stock as of any specified date
                ----------
shall mean (i) if the Common Stock is publicly traded on such date, the Current
Market Price per share, or (ii) if the Common Stock is not publicly traded on
such date, the fair market value per share of Common Stock as determined in good
faith by the Board of Directors of the Company and set forth in a written notice
to the Holder, provided however, that if the Board of Directors of the Company
is unable to determine the fair market value per share of Common Stock (the
"Valuation"), or if the holders of the Warrants representing at least fifty-one
 ---------
percent (51%) of the shares of Warrant Stock which are then subject to exercise
under the Warrants (collectively, the "Requesting Holders") disagree with the
                                       ------------------
Board's determination of any Valuation by written notice delivered to the
Company within five (5) business days after the determination thereof by the
Board of Directors of the Company is communicated to Holder and the holders of
the other Warrants then outstanding, which notice specifies a majority-in-
interest of the Requesting Holders' determination of such Valuation, then,
unless the Company accepts the Valuation so proposed and the Company and a
majority-in-interest of the Requesting Holders agree upon a valuation within
five (5) business days thereafter, the Company and (in the event of a
disagreement by the Requesting Holders) a majority-in-interest of the Requesting
Holders shall select a mutually acceptable investment banking firm of national
reputation which has not had a material relationship with the Company or any
officer of the Company within the preceding two (2) years, which shall determine
such Valuation. Such investment banking firm's determination of such Valuation
shall be final, binding and conclusive on the Company, the Holder and the
holders of all of the other Warrants then

                                      -2-
<PAGE>

outstanding, to the extent of the issuance or distribution to which such
Valuation applies. If the Board of Directors of the Company was unable to
determine such Valuation, all costs and fees of such investment banking firm
shall be borne by the Company. If the Requesting Holders initially disagreed
with the Board's determination of such Valuation, the party whose determination
of such Valuation differed from the Valuation determined by such investment
banking firm by the greatest amount shall bear all costs and fees of such
investment banking firm.

     (g)  "Holder": FFPE Holding Company, Inc., a Delaware corporation, and
           ------
its permitted transferees and assigns.

     (h)  "Warrant Stock": Shares of Common Stock or other securities
           -------------
purchasable upon exercise of this Warrant.

2.   Exercisability. Subject to the accelerated exercisability provisions
     --------------
set forth in this Section, this Warrant shall only become exercisable as
follows:

Date on Which Installment               Number of Shares
---------------------------             ----------------
  Becomes Exercisable             of Warrant Stock in Installment
  -------------------             -------------------------------

      ______, 2000                                 250,000

      ______, 2001                                 250,000

      ______, 2002                                 250,000

      ______, 2003                                 250,000

      ______, 2004                                 250,000

These installments shall be cumulative, so that this Warrant may be exercised as
to any or all of the shares of Warrant Stock covered by an installment at any
time or times after the installment becomes exercisable and prior to the
termination of this Warrant.

Notwithstanding the foregoing, immediately prior to the consummation of a Change
of Control Event, all of the shares of Warrant Stock subject to this Warrant
shall become fully exercisable.

3.   Adjustment of Exercise Price and Number of Shares. The number of shares of
     -------------------------------------------------
Warrant Stock issuable upon the exercise hereof and the Exercise Price shall be
subject to adjustment from time to time, and the Company agrees to provide
notice to the Holder upon the occurrence of certain events, as follows:

     (a)  Reclassification, etc. If the Company at any time, by subdivision,
          ---------------------
combination or reclassification of securities or otherwise, changes any of the
securities to which purchase rights

                                      -3-
<PAGE>

under this Warrant exist into the same or a different number or type of
securities of any class or classes, this Warrant shall thereafter be to acquire
such number and kind of securities as would have been issuable as the result of
such change with respect to the securities which were subject to the purchase
rights under this Warrant immediately prior to such subdivision, combination,
reclassification or other change. If shares of the Common Stock are split,
subdivided, recapitalized, reclassified or combined into a greater or smaller
number of shares, the Exercise Price shall be proportionately reduced (in the
case of actions resulting in a greater number of outstanding shares) or
proportionately increased (in the case of actions resulting in a smaller number
of outstanding shares), in both cases by the ratio which the total number of
shares of Common Stock outstanding immediately after such event bears to the
total number of shares of Common Stock outstanding immediately prior to such
event.

     (b)  Merger, Sale of Assets, etc. In the event of any (i) consolidation or
          ---------------------------
merger (including a merger in which the Company is the surviving entity) or (ii)
sale or other disposition of all or substantially all of the Company's assets or
distribution of property to stockholders (other than distributions payable out
of earnings or retained earnings), then the Company shall take all necessary
actions (including but not limited to executing and delivering to the Holder an
additional Warrant or other instrument, in form and substance satisfactory to
the Holder) to ensure that the Holder shall thereafter have the right to
receive, at a total purchase price not to exceed that payable upon the exercise
of the unexercised portion of this Warrant, and in lieu of the shares of Common
Stock theretofore issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable upon such
consolidation, merger, sale or other disposition, reclassification, change or
conversion by a holder of the number of shares of Common Stock then purchasable
under this Warrant. The provisions of this Section 3(b) shall similarly apply to
successive reclassifications, changes and conversions.

     (c)  Adjustment for Dividends in Stock. If, at any time or from time to
          ---------------------------------
time on or after the date hereof, the holders of all of the shares of
outstanding Common Stock receive, or become entitled to receive, without payment
therefor, other or additional securities of the Company by way of dividend,
other than dividends or other distributions payable in cash, then and in each
case, the Holder shall, upon the exercise hereof, be entitled to receive, in
addition to the number of shares of Warrant Stock receivable thereupon, and
without payment of any additional consideration therefor, the amount of such
other or additional securities of the Company which the Holder would hold on the
date of such exercise had it been the holder of record of such Warrant Stock on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock receivable by it as aforesaid during such period, giving effect
to all adjustments called for during such period by this Section 3.

     (d)  Authorizations and Exemptions. Before taking any action which would
          -----------------------------
result in an adjustment in the number of shares of Common Stock or the kind of
securities for which this Warrant is exercisable or in the current Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.

4.   Certificate of Adjustment. Whenever the Exercise Price or number or
     -------------------------
type of securities

                                      -4-
<PAGE>

issuable upon exercise of this Warrant is adjusted, the Company shall promptly
deliver to the Holder a certificate of an officer of the Company setting for the
nature of such adjustment and a brief statement of the facts requiring such
adjustment.

5.   No Shareholder Rights. This Warrant, by itself, as distinguished from any
     ---------------------
shares purchased hereunder, shall not entitle the Holder to any of the rights of
a stockholder of the Company.

6.   Reservation of Stock. All Warrant Stock that may be issued upon the
     --------------------
exercise of the rights represented by this Warrant will, upon issuance pursuant
to the terms and conditions herein, be duly and validly issued, fully paid and
nonassessable. The Company shall pay all transfer taxes, if any, attributable to
the issuance of the Warrant Stock upon the exercise of this Warrant. During the
period within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized, and reserved for the purpose of the
issue upon exercise of this Warrant, a sufficient number of shares of its Common
Stock to provide for the exercise of this Warrant, as the same may be adjusted
as provided herein.

7.   Exercise of Warrant.
     -------------------

     (a)  Exercise; Delivery of Certificates. This Warrant may be exercised by
          ----------------------------------
delivering the payment of the Exercise Price for the number of shares of Warrant
Stock being purchased and concurrently surrendering to the Company at its
principal office or at such other location as the Company may advise the Holder
in writing (the "Designated Office"), this Warrant with the Form of Exercise
                 -----------------
Subscription attached hereto as Attachment 1 duly completed and signed. This
Warrant may be exercised, at the option of the Holder, at any time and from time
to time during the Exercise Period, for all or any part of the vested shares of
Warrant Stock. The shares of Warrant Stock purchased under this Warrant shall be
and are deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made therefor. Certificates for shares of Common Stock
so purchased shall be delivered to the Holder within five business days after
this Warrant has been exercised, and, in case of a purchase of less than all of
the Warrant Shares purchasable upon exercise of this Warrant, the Company shall
cancel this Warrant and, within five business days, shall execute and deliver to
the Holder a new Warrant of like tenor for the balance of the Warrant Shares.
Each stock certificate so delivered shall be registered in the name of the
Holder or such other name as shall be designated by the Holder.

     (b)  Payment of Exercise Price; Cashless Exercise. Payment of the
          --------------------------------------------
Exercise Price may be made, at the option of the Holder (i) by certified or
official bank check, (ii) by wire transfer, (iii) by instructing the Company to
withhold and cancel a number of shares of Warrant Stock then issuable upon
exercise of this Warrant with respect to which the excess of the Fair Value over
the Exercise Price for such canceled shares of Warrant Stock is at least equal
to the Exercise Price for the shares of Warrant Stock being purchased (a
"Cashless Exercise"), (iv) by surrender to the Company of shares of Common Stock
 -----------------
previously acquired by the Holder with a Fair Value at least equal to the
Exercise Price for the shares of Warrant Stock being purchased, or (v) by any
combination of the foregoing.

                                      -5-
<PAGE>

     (c)  Automatic Exercise. In the event that any portion of this Warrant
          ------------------
remains unexercised at the Expiration Date and the Fair Value (determined in
accordance with Section 1(f) above) of one share of Common Stock at the
Expiration Date is greater than the applicable Exercise Price at the Expiration
Date, then this Warrant shall be deemed to have been exercised automatically
immediately prior to the close of business on the Expiration Date (or, in the
event that the Expiration Date is not a business day, the immediately preceding
business day) (the "Automatic Exercise Date"), and the Holder shall be treated
                    -----------------------
for all purposes as the holder of record of such shares of Warrant Stock as of
the close of business on such Automatic Exercise Date. This Warrant shall be
deemed to be surrendered to the Company on the Automatic Exercise Date by virtue
of this Section 7(c) and without any action by the Holder or any other person,
and payment to the Company of the then applicable Exercise Price multiplied by
the number of shares of Warrant Stock then being purchased shall be deemed to be
made by Cashless Exercise pursuant to the terms of Section 7(b)(iii), above
(without payment by the Holder of any cash or other consideration). As promptly
as practicable on or after the Automatic Exercise Date and in any event within
ten (10) business days thereafter, the Company at its expense shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of shares of Warrant Stock issuable upon such
exercise.

     (d)  No Fractional Shares. The Company shall not be required to issue
          --------------------
fractional shares of Common Stock upon the exercise of this Warrant. If any
fraction of a share of Common Stock would, except for the provisions of this
paragraph, be issuable on the exercise of this Warrant (or specified portion
thereof), the Company shall pay an amount in cash calculated by it to be equal
to the then Fair Value per share of Common Stock multiplied by such fraction
computed to the nearest whole cent.

8.   Transfer. This Warrant and the Warrant Stock may be transferred or assigned
     --------
by the Holder, in whole or in part, to any person subject, however, to the
Holder's prior compliance with Section 11(c) below, without the prior written
consent of the Company. Each permitted transfer of this Warrant and all rights
hereunder, in whole or in part, shall be registered on the books of the Company
to be maintained for such purpose, upon surrender of this Warrant at the
Designated Office, together with an Assignment in the form attached as
Attachment 2 hereto duly filled in and signed. Upon such surrender and delivery,
the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in such Assignment,
and shall issue to the assignor a new Warrant evidencing the portion, if any, of
this Warrant not so assigned, and this Warrant shall promptly be canceled.

9.   Termination. This Warrant shall terminate at 5:00 p.m. California time on
     -----------
_____________________, 2005.

10.  Representations of Company. The Company represents and warrants to the
     --------------------------
Holder as follows:

     (a)  This Warrant has been duly authorized and executed by the Company
and is a valid and binding obligation of the Company enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and the rules of law

                                      -6-
<PAGE>

or principles at equity governing specific performance, injunctive relief and
other equitable remedies;

     (b)  The shares of Warrant Stock have been duly authorized and reserved
for issuance by the Company and, when issued in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable;

     (c)  The rights, preferences, privileges and restrictions granted to or
imposed upon the Common Stock and the holders thereof are as set forth in the
certificate of incorporation of the Company, as amended to the date of this
Warrant (as so amended, the "Charter"), a true and complete copy of which has
                             -------
been delivered to the Holder;

     (d) The execution and delivery of this Warrant are not, and the
issuance of the shares of Warrant Stock upon exercise of this Warrant in
accordance with the terms hereof will not be, inconsistent with the Charter or
by-laws of the Company, do not and will not contravene, in any material respect,
any governmental rule or regulation, judgment or order applicable to the
Company, and do not and will not conflict with or contravene any provision of,
or constitute a default under, any indenture, mortgage, contract or other
instrument of which the Company is a party or by which it is bound or require
the consent or approval of, the giving of notice to, the registration or filing
with or the taking of any action in respect of or by, any Federal, state or
local government authority or agency or other person, except for the filing of
notices pursuant to federal and state securities laws, which filings will be
effected by the time required thereby; and

11.  Representations of the Holder.
     -----------------------------

     (a)  The shares of Warrant Stock to be received by the Holder upon the
exercise of the Warrant (the "Securities") will be acquired for investment for
                              ----------
its own account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and the Holder has no present intention of
selling, granting participation in or otherwise distributing the same, but
subject, nevertheless, to any requirement of law that the disposition of its
property shall at all times be within its control. The Holder further represents
that it does not have any contract, undertaking, agreement, or arrangement with
any person to sell, transfer, or grant participations to such person or to any
third person, with respect to any Securities issuable upon exercise of this
Warrant.

     (b)  The Holder understands that the Securities issuable upon exercise of
the Warrant at the time of issuance may not be registered under the Securities
Act of 1933, as amended (the "Act"), and applicable state securities laws, on
                              ---
the ground that the issuance of such securities is exempt pursuant to Section
4(2) of the Act and state law exemptions relating to offers and sales not by
means of a public offering, and that the Company's reliance on such exemptions
is predicated on the Holder's representations set forth herein.

     (c)  Subject to the right of the Holder to have the Securities acquired
upon exercise of the Warrant registered pursuant to the Warrant Registration
Rights Agreement of even date herewith between the Company and the Holder, the
Holder agrees that in no event will it make a disposition of any Securities
acquired upon the exercise of the Warrant unless and until (i) it shall

                                      -7-
<PAGE>

have notified the Company of the proposed disposition and shall have furnished
the Company with a statement of the circumstances surrounding the proposed
disposition, and (ii) it shall have furnished the Company with an opinion of
counsel satisfactory to the Company and Company's counsel to the effect that (A)
appropriate action necessary for compliance with the Act and any applicable
state securities laws has been taken or an exemption from the registration
requirements of the Act and such laws is available, and (B) that the proposed
transfer will not violate any of said laws.

     (d)  The Holder acknowledges that an investment in the Company is highly
speculative and represents that it is able to fend for itself in the
transactions contemplated by this Statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investments, and has the ability to bear the economic risks
(including the risk of a total loss) of its investment. The Holder represents
that it has had the opportunity to ask questions of the Company concerning the
Company's business and assets and to obtain any additional information which it
considered necessary to verify the accuracy of or to amplify the Company's
disclosures, and has had all questions which have been asked by it
satisfactorily answered by the Company.

     (e)  The Holder acknowledges that the shares of Warrant Stock issuable upon
exercise of the Warrant must be held indefinitely unless subsequently registered
under the Act or an exemption from such registration is available. The Holder is
aware of the provisions of Rule 144 promulgated under the Act which permit
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, the existence
of a public market for the shares, the availability of certain current public
information about the Company, the resale occurring not less than one year after
a party has purchased and paid for the security to be sold, the sale being
through a "broker's transaction" or in transactions directly with a "market
makers" (as provided by Rule 144(f)) and the number of shares being sold during
any three-month period not exceeding specified limitations.

12.  Lost Warrants or Stock Certificates. The Company covenants to the Holder
     -----------------------------------
that, upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
and, in the case of any loss, theft or destruction, upon receipt of an executed
lost securities bond or indemnity reasonably satisfactory to the Company, or in
the case of any such mutilation upon surrender and cancellation of such Warrant
or stock certificate, the Company will make and deliver a new Warrant or stock
certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.

13.  Survival of Representations, Warranties and Agreements. Each of the
     ------------------------------------------------------
representations and warranties contained herein shall survive the date of this
Warrant, the exercise of this Warrant (or any part hereof) and the termination
or expiration of any rights hereunder. Each of the respective agreements of each
of the Company and the Holder contained herein shall survive indefinitely until,
by their respective terms, they are no longer operative.

14.  No Impairment of Rights. The Company will not, by amendment of its Charter
     -----------------------
or through any other means, avoid or seek to avoid the observance or performance
of any of the terms of this

                                      -8-
<PAGE>

Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against
material impairment.

15.  Miscellaneous. This Warrant shall be governed by the laws of the State of
     -------------
Delaware, without giving effect to is principles of conflict of laws. The
headings herein are for purposes of convenience and reference only, and shall
not be deemed to constitute a part hereof. The terms of this Warrant may not be
changed or waived orally, but only by an instrument in writing signed by the
Company and the Holder. All notices and other communications from the Company to
the Holder shall be delivered personally, sent by overnight courier or mailed by
first class mail, postage prepaid, to the last address furnished to the Company
in writing by the Holder, and if sent by overnight courier shall be deemed given
one business day after deposit with such courier, and if mailed shall be deemed
given three days after deposit in the United States mail.

ISSUED: ____________, 2000

                                   SIZZLER INTERNATIONAL, INC.

                                   By:________________________________
                                   Its:_______________________________

                                      -9-
<PAGE>

                                 Attachment 1

                         FORM OF EXERCISE SUBSCRIPTION
                         -----------------------------

                 (To be signed only upon exercise of Warrant)

To the Company:

     The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ________________ (_____________) of the number of shares of
Common Stock purchasable under this Warrant for an aggregate Exercise Price of
________________________ Dollars ($__________), and requests that a
certificate(s) for such shares be issued in the name of, and delivered to,
____________________________________________________________ whose address is
_______________________________________________.

     The undersigned represents that it is acquiring such shares of Common Stock
for its own account for investment purposes only and not with a view to or for
sale in connection with any distribution thereof.

Dated: ___________________    _________________________________________________
                              Name of the Holder (must conform precisely to the
                              name specified on the face of the Warrant)

                              _________________________________________________
                              Signature of authorized representative of the
                              Holder

                              _________________________________________________
                              Print or type name of authorized representative

                              Address of the Holder:
                              _________________________________________________
                              _________________________________________________
                              _________________________________________________

                                 Attachment 1
                                 Page 1 of 1

<PAGE>

                                 Attachment 2

                                ASSIGNMENT FORM
                                ---------------

     FOR VALUE RECEIVED, _____________________________________________ hereby
sells, assigns and transfers unto:

     Name:     __________________________________

     Address:  __________________________________

     Social Security or Tax Identification Number: ___________________

the right to purchase Common Stock represented by this Warrant to the extent of
_____________ shares as to which such right is presently exercisable and does
hereby irrevocably constitute and appoint _________________________________,
attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.

Dated: ___________________    __________________________________________________
                              Name of the Holder (must conform precisely to the
                              name specified on the face of the Warrant)

                              _________________________________________________
                              Signature of authorized representative of the
                              Holder

                              _________________________________________________
                              Print or type name of authorized representative

                                 Attachment 2
                                 Page 1 of 1

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