EXTENSION AGREEMENT

                               EXTENSION AGREEMENT


     EXTENSION  AGREEMENT  made  this  17th  day of  July,  1997 by and  between
NATHAN'S FAMOUS,  INC., a Delaware  corporation  (hereinafter the "Company") and
XXXXXX X. XXXXXX (hereinafter the "Employee").

                              W I T N E S S E T H:

     WHEREAS,  the Company and  Employee  entered into an  Employment  Agreement
dated November 8, 1993 which was modified by an agreement dated January 26, 1996
(hereinafter the "Employment Agreement"); and

     WHEREAS,  the Employment  Agreement expires,  per its terms, on October 31,
1997; and

     WHEREAS, the parties desire to extend the term of the Employment Agreement.

     NOW, THEREFORE, the parties hereto agree as follows:

     1.  Paragraph  "3" of the  Employment  Agreement  entitled  "Term" shall be
xxxxxx    
     Directors of the Company and Employee shall so serve the Company for a
     further  term of four (4) years from July 17,  1997  subject,  however, to
     to termination  as  hereinafter   provided.   Employee   hereby  accepts
     such employment."

     2. The  aforesaid  Employment  Agreement  in all other  respects  is hereby
ratified and approved.

     IN WITNESS WHEREOF,  the undersigned have executed this Extension Agreement
as of the day and year first above written.

                                        NATHAN'S FAMOUS, INC.


                                         By: /s/ Xxxxx Xxxxxxx
                                             ---------------------
                                             Xxxxx Xxxxxxx
                                             President

                                            
                                         /s/ Xxxxxx X. Xxxxxx   
                                         --------------------
                                             Xxxxxx X. Xxxxxx