EXHIBIT 10.38

                                  EXHIBIT 10.38



                        AMENDMENT - EMPLOYMENT AGREEMENT


THIS AGREEMENT,  effective September 1, 1996 by and between Spaghetti Warehouse,
Inc., a Texas  Corporation,  ("Company"),  and Xxxxxx X. Xxxx, a resident of the
State of Texas, ("Employee").


                              W I T N E S S E T H:


WHEREAS, effective January 30, 1996 Employee entered into an employment contract
with  Company  ("Agreement")  under  which  Employee  agreed to  render  certain
services for the benefit of Company in consideration of Company's obligations as
set forth in such Agreement; and

WHEREAS,  due to a  reorganization  of Company,  the services  being rendered on
behalf of Company and its subsidiaries relate primarily (but not exclusively) to
matters  for which  responsibility  has been  assigned  to  Spaghetti  Warehouse
Service Corporation ("Service Corp."); and

WHEREAS,  Company, the Employee,  and Service Corp. believe it is appropriate 
that Service Corp. be substituted for Company under the Agreement; and

WHEREAS,  in  accordance  with  the  provisions  of the  Agreement,  in order to
accomplish  such  substitution,  Company and Employee  must enter into a written
agreement.

NOW THEREFORE, IT IS HEREBY AGREED by and between Company and Employee:

1.       Except as otherwise  required by the  context,  all  references  in the
                 Agreement  to "Company"  shall be deemed references to Service 
                 Corp.

2.       The last line of Section 6 shall be deleted in its entirety and the 
                  following substituted therefor:

                  "This  Agreement  may not be amended or  terminated  except by
                  writing  subscribed  by  Spaghetti  Warehouse,  Inc.,  Service
                  Corp., and the Employee.

3. Notwithstanding the provisions of Section 1 above, Spaghetti Warehouse,  Inc.
shall remain secondarily  liable to fulfill all conditions of the Agreement,  as
now or hereafter amended, and, without limitation, shall remain primarily liable
for  benefits  under the Survivor  Benefit  Agreement  with the  Employee  dated
January 30, 1996.

4. This Amendment shall be executed in one or more  counterparts,  each of which
shall be deemed an original but all of which together shall  constitute a single
Amendment.

IN WITNESS  whereof the parties have agreed to this Amendment as of this 1st day
of September, 1996.


            --------------------------------------------------------

SPAGHETTI WAREHOUSE, INC.                                EMPLOYEE



By: /s/ Xxxxxxx Xxxxxx                                   By: /s/ Xxxxxx X. Xxxx
Xxxxxxx Xxxxxx, President                                Xxxxxx X. Xxxx
000 X. X-00                                              0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000                                     Xxxxxxxx, XX 00000

            --------------------------------------------------------
            --------------------------------------------------------


          -----------------------------------------------------------

                                 ACKNOWLEDGMENT

         Spaghetti  Warehouse Service  Corporation agrees that it shall be bound
by all of the terms of the Agreement as amended by the foregoing Amendment.

         DATED as of the 1st day of September, 1996.


SPAGHETTI WAREHOUSE
SERVICE CORPORATION


By: /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, President
000 X. X-00
Xxxxxxx, Xxxxx 00000