MEMORANDUM OF AGREEMENT

           BETWEEN AARON B. PARKER AND FRIENDLY ICE CREAM CORPORATION

         This acknowledges and documents our mutual agreement concerning your
separation from Friendly Ice Cream Corporation ("Friendly's") effective
September 26, 2003 ("Separation Date"). This letter will confirm various matters
concerning your separation from employment so that no misunderstanding exists
between you and Friendly's.

I.       SALARY CONTINUATION

         Friendly's will continue to pay you semimonthly, until September 30,
2004, at your current base rate of pay (plus executive match and automobile
allowance). The salary you receive will be subject to appropriate statutory
deductions and such other deductions normally made for employees of Friendly's;
however it will not be considered pensionable earnings.

         From time to time after your separation, but during your salary
continuation period, you may be contacted with questions relating to matters you
have been involved with while employed by Friendly's. You agree to provide your
complete cooperation and make all pertinent information regarding these matters
available upon request, as well as be personally available, at mutually
convenient times, on an as-needed basis.

         After your salary continuation period, or with respect to new matters
which you have not been involved with while employed by the company, Friendly's
management, at its sole discretion, may utilize you to perform legal services
for Friendly's pursuant to a written agreement at that time.

II.      VACATION

         You will be paid for any earned and unused vacation time (10 day
maximum), as of your Separation Date, in accordance with our Vacation Policy
dated December 21, 2001.

III.     BENEFIT/RETIREMENT PLANS

         You will be eligible to participate in the medical/dental, short-term
disability, accidental death and dismemberment, long-term disability, pension
plan, Restricted Stock Plan, Stock Option Plans and such other benefits plans in
which you may currently be enrolled only through your Separation Date, and under
the terms and conditions of these plans; provided however, that as part of this
Agreement, and in consideration of all of its terms and conditions, we will,
subject to the approval of the Board of Directors, vest the balance of your
unvested shares (803) in the Restricted Stock program and the stock options
granted to you THAT WOULD OTHERWISE HAVE VESTED between your Separation Date and
December 31, 2004 under the 1997 Stock Option Plan (16,001 options) and the 2003
Incentive Plan (2,255 options). While your participation in the 2003 Annual
Incentive Plan (AIP) ended on your Separation Date, the Board of Directors may,
at its sole, exclusive and absolute discretion, elect to grant a Bonus Award to
you. If so granted, the Award payment will generally be made on or before March
31, 2004. Your group medical/dental insurance ends on your last day of active
work. To continue medical/dental coverage beyond your Separation Date, you must
complete a continuation of coverage (COBRA) application, which will be provided
to you. It is your responsibility to make all payments to the COBRA carrier.
Friendly's will issue a check or checks to you in order for you to pay for
coverage through September 30, 2004.

<PAGE>


         Additional information about the effect of your separation on your
benefits is contained in the Separation Information document that was provided
to you. If there are any inconsistencies between this Agreement and the
Separation Information document, this Agreement will control.

IV.      OUTPLACEMENT

         To assist you in securing a new position, Friendly's has engaged the
services of the nationally recognized outplacement firm of Lee Hecht Harrison,
Inc. for a period of six (6) months. They will provide the following services at
any of their offices:

         1. Assistance with your skills analysis and preparation of your resume;

         2. Training which covers critical job search techniques and
         interviewing skills; and

         3. Individualized counseling for a six-month period.

         You may utilize the services of another outplacement provider if you
wish; however, the cost of the services may not exceed $8,000. Payment will be
made directly to the organization by Friendly's, or reimbursement will be made
to you upon presentation of an invoice indicating that you have already paid it.

V.       LIFE INSURANCE

         The life insurance coverage that has been provided to you through
Pacific Mutual Life Insurance Company is unaffected by your leaving employment
because it is your own personal policy. Payments by Friendly's on your behalf
will cease as of your Separation Date. Questions about coverage thereafter or
about other matters related to this policy should be referred to Ms. Karen
Socola of the AYCO Corporation at (518) 373-7725. Friendly's will pay for the
cost of customary meetings with an AYCO representative for the sole purpose of
concluding your financial planning services with AYCO, including the preparation
of your 2003 individual tax return, up through September 30, 2004, after which
Friendly's will no longer pay for any further AYCO advisory services on your
behalf.

VI.      COVENANTS

         In consideration of the terms set forth in this letter, you agree to
the following:

         1. You will forever refrain from disclosing or confirming, either
         directly or indirectly, any information concerning insurance, loss
         claims, loss payments, safety and health conditions, financial
         condition, strategic planning or other confidential or non-public
         information relating to Friendly's or its subsidiaries, divisions,
         parents and affiliates, and any of their agents, employees, directors
         and officers which you learned or became aware of since the inception
         of your employment with Friendly's except for information which is
         generally known by the public, without Friendly's prior written
         consent.

         2. You will turn over to your supervisor all originals and copies of
         any documents, manuals, plans, equipment, business papers, computer
         diskettes or other materials relating to Friendly's and its
         subsidiaries, divisions, parents and affiliates, their agents,
         employees,


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<PAGE>


         directors and officers which are in your control or possession within
         seven days of the execution of this Agreement.

         3. You, on behalf of yourself, your spouse, heirs, agents, attorneys,
         representatives and assigns, hereby release and discharge forever all
         claims and causes of action of every name and nature that have arisen
         or might have arisen at any time up to and including the date on which
         you sign this Agreement (whether known or unknown, accrued, contingent,
         or liquidated) that you now have or may have against Friendly's, any of
         its subsidiaries, divisions, parents and affiliates, or any of the
         aforementioned entities' agents, employees, directors, and officers,
         including but not limited to, any claims relating to your employment
         with Friendly's and the termination thereof; any claims based on
         statute, regulation, ordinance, contract or tort; any claims arising
         under the Age Discrimination in Employment Act of 1967, as amended (the
         "ADEA"), or any other federal, state, or local law relating to
         employment discrimination, harassment, or retaliation; any claims
         relating to wages, compensation, or benefits; and any related claims
         for attorney's fees.

         4. You agree not to file a lawsuit in any court of the United States or
         any State thereof concerning any matter released in this Agreement.
         Nothing in this Agreement shall be interpreted to prohibit you from
         filing an age discrimination claim with any anti-discrimination agency,
         or from participating in an age discrimination investigation or
         proceeding conducted by any such agency. However, by signing this
         Agreement, you acknowledge that you are waiving your right to money
         damages and any other relief should any agency pursue claims on your
         behalf arising out of or relating to your employment with and/or
         separation from Friendly's.

         5. The parties agree to forever refrain from taking any action or
         making any statement which brings discredit upon or disparages the
         other party (including, with respect to Friendly's, its services or
         products, or any of its directors, officers, employees, or agents).

         6. Friendly's will provide inquiring outplacement agencies, recruiters,
         or prospective employers with only your start date, end date, and
         positions held during your employment with Friendly's.

         7. Friendly's shall not contest any claims made by you for unemployment
         benefits administered by any governmental agency.

         8. If either party breaches any of the terms of this Agreement, the
         non-breaching party may be entitled to recover from the breaching party
         all costs, fees, and expenses (including attorney's fees) as may be
         awarded by a court of competent jurisdiction under applicable law and
         if Friendly's prevails as a non-breaching party, it will be entitled to
         set off what it has paid you under this Agreement.

VII.     ENTIRE AGREEMENT

         This is the entire agreement between us and any prior agreements or
understandings, whether oral or written, are entirely superseded by this
Agreement. We each have voluntarily accepted the terms as sufficient without
reservation. This Agreement may only be modified by a written agreement signed
by you and an officer of Friendly's.


                                      -3-
<PAGE>


         Should any provision of this Agreement be declared or determined by any
court to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby and said illegal part, term or
provision shall be deemed not to be a part of this Agreement.

         Pursuant to its obligations under the ADEA, Friendly's advises you to
consult with an attorney prior to executing this agreement. You have 21 days
from the date of receipt of this document in which to consider this agreement.
In addition, you may revoke this agreement for seven days following its
execution, but only by delivering a written revocation notice to Garrett Ulrich.
This agreement shall not become effective or enforceable until the seven-day
revocation period has expired.

         By signing this Agreement, you acknowledge that you have read and fully
understand all of its provisions and that you are signing it voluntarily. You
also acknowledge that you are not relying on any representations by any
representative of Friendly's concerning the meaning of any aspect of this
Agreement.

         In the event, after the execution of this Agreement but before all
payments to you have been made, Friendly's determines that you have engaged in
any fraudulent or illegal activity related to Friendly's not actually known to
Friendly's prior to the execution of this Agreement, Friendly's shall have the
right to terminate its remaining obligations under this Agreement, declaring it
null and void.

         Each party hereto agrees that they are fully authorized and have all of
the requisite right, power, and authority to enter into this Agreement, which is
fully binding upon and enforceable against the respective parties hereto in
accordance with its terms.

         This Agreement is made and entered into in the Commonwealth of
Massachusetts and shall in all respects be interpreted, enforced, and governed
by the laws of the Commonwealth of Massachusetts.

         If the above is in agreement with your understanding, please sign and
keep one copy of this document for your records and return one copy to me.


                                    By: /s/ Garrett J. Ulrich
                                        --------------------------------------
                                        Garrett J. Ulrich
                                        Vice President, Human Resources


         ACCEPTED AND AGREED TO AS OF THIS 21ST DAY OF OCTOBER, 2003.



                                    By: /s/ Aaron B. Parker
                                        --------------------------------------
10/08/03                                Aaron B. Parker



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Source: OneCLE Business Contracts.