SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                   For the quarterly period ended July 1, 2001

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

               For the transition period from _______ to _______.

                           Commission File No. 0-23226

                              GRILL CONCEPTS, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                             13-3319172
----------------------------------                 -----------------------------
(State or other jurisdiction                       (IRS Employer
 of incorporation or organization)                  Identification No.)

        11661 San Vicente Blvd., Suite 404, Los Angeles, California 90049
        -----------------------------------------------------------------
               (Address of principal executive offices)(Zip code)

                                 (310) 820-5559
       ------------------------------------------------------------------
              (Registrant's telephone number, including area code)

             -------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

         As of August 10, 2001,  5,537,071  shares of Common Stock of the issuer
were outstanding.



<PAGE>

                              GRILL CONCEPTS, INC.

                                      INDEX



                                                                         Page
                                                                        Number
                                                                      ----------
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

  Consolidated Condensed Balance Sheets -
    July 1, 2001 and December 31, 2000.....................................  1

  Consolidated Condensed Statements of Operations -
    For the three months and six months ended July
    1, 2001 and June 25, 2000..............................................  2

  Consolidated  Condensed  Statements  of Cash Flows - For the six months
    ended July 1, 2001 and
    June 25, 2000..........................................................  4

  Notes to Consolidated Condensed Financial Statements.....................  5

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations.......................................  7

Item 3.  Quantitative and Qualitative Disclosures About Market Risk........ 13

PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders............... 14

Item 5.  Other Information................................................. 15

Item 6.  Exhibits and Reports on Form 8-K.................................. 16

SIGNATURES................................................................. 17


<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                      GRILL CONCEPTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS


                                     ASSETS


                                                     July 1,        December 31,
                                                      2001              2000
                                                   ----------      -------------
                                                   (unaudited)
Current assets:
     Cash and cash equivalents                       $ 148,431       $ 623,097
     Inventories                                       604,270         541,579
     Receivables                                       497,842         654,594
     Prepaid expenses                                  327,017         270,672
                                                     ----------     -----------

       Total current assets                          1,577,560       2,089,942

     Furniture, equipment, & improvements, net       8,729,794       9,300,548

     Goodwill, net                                     208,943         213,053

     Liquor licenses                                   587,494         587,614

     Other assets                                      479,571         342,921
                                                   ------------   -------------

       Total assets                                $11,583,362    $ 12,534,078
                                                   ============   =============



   The accompanying notes are an integral part of these consolidated condensed
                             financial statements.

                                       1
<PAGE>

                      GRILL CONCEPTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (Continued)
             LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
<TABLE>

                                                             July  1,          December 31,
                                                               2001               2000
                                                           ------------        ------------
                                                           (unaudited)
<S>                                                        <C>                 <C>

Current liabilities:
     Bank line of credit                                    $ 100,000           $  100,000
     Accounts payable                                       1,036,935            1,420,591
     Accrued expenses                                       2,276,426            2,358,699
     Current portion of long term debt                        726,321              737,881
     Note payable - related party                             193,168              191,716
                                                         ------------          ------------
       Total current liabilities                            4,332,850            4,808,887

     Long-term debt                                         1,993,726            2,408,151
     Notes payable - related parties                          435,332              458,132
                                                         ------------          ------------
          Total liabilities                                 6,761,908            7,675,170

     Minority interest                                      1,070,916            1,363,494

     Stockholders' equity:
       Series A, 10% Convertible Preferred Stock, $.001
             par value; 1,000,000 shares authorized,
       none issued                                                  -                    -
             and outstanding in 2001 and 2000
       Series B, 8%  Convertible  Preferred  Stock,
       $.001 par value;  1,000,000
              shares authorized, none issued
              and outstanding in 2001 and 2000                      -                    -
       Series I, Convertible Preferred Stock, $.001 par
     value; 1,000,000 shares authorized, none
     issued and outstanding in 2001 and 2000                        -                    -
       Series II, 10% Convertible  Preferred Stock,
      $.001 par value;  1,000,000
     shares, authorized, 500 shares
     issued and outstanding in 2001 and 2000                        1                    1
       Common stock, $.00004 par value; 12,000,000 shares
       authorized in 2001 and 7,500,000 shares authorized
       in 2000, 4,203,738 shares issued and outstanding
       in 2001 and 2000                                           168                  168
       Additional paid-in capital                          11,071,055           11,071,055
       Accumulated deficit                                 (7,320,686)          (7,575,810)
                                                          ------------          -----------
     Total stockholders' equity                             3,750,538            3,495,414
                                                          ------------          -----------
       Total liabilities, minority interest and
           stockholders' equity                           $11,583,362          $12,534,078
                                                          ============          ===========
</TABLE>

  The accompanying notes are an integral part of these consolidated condensed
                             financial statements.

                                        2
<PAGE>


                     GRILL CONCEPTS, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>


                                                    Three Months Ended                 Six Months Ended
                                             -------------------------------   --------------------------------
                                              July 1, 2001     June 25, 2000    July 1, 2001     June 25, 2000
                                             -------------     -------------   -------------     --------------
<S>                                          <C>               <C>              <C>              <C>

     Revenues:Sales                           $ 11,042,489      $10,195,015     $23,321,350      $ 20,871,005
     Management and license fees                   257,092          146,350         413,599           296,090
                                             -------------     -------------    ------------     -------------
       Total revenues                           11,299,581       10,341,365      23,734,949        21,167,095
     Cost of sales                               3,136,961        2,938,597       6,509,228         5,948,282
                                             -------------     -------------    ------------     -------------
     Gross profit                                8,162,620        7,402,768      17,225,721        15,218,813

     Costs and expenses:Restaurant operating
     expenses                                    6,959,748        6,017,244      14,286,652        12,321,357
     General and administrative                    873,705          874,668       1,897,214         1,675,963
     Depreciation and amortization                 346,732          296,684         656,286           583,368
     Preopening costs                                               437,419                           457,928
                                             -------------     -------------    ------------     -------------
       Total operating expenses                  8,180,185        7,626,015      16,840,152        15,038,616

     Income (loss) from operations                 (17,565)        (223,247)       385,569            180,197
Interest expense, net                             (103,083)         (96,750)      (193,335)          (180,657)
(Loss) income before provision for
income taxes, equity in loss of joint
venture and minority interest                     (120,648)        (319,997)       192,234               (460)

Provision for income taxes                          (1,771)          (1,600)        (1,870)            (5,600)
Equity in loss of joint venture                     (4,390)               -         (4,390)            (9,469)
Minority interest                                   53,146          201,002         69,150            168,366
                                             -------------     -------------    ------------     -------------
Net (loss) income                                  (73,663)        (120,595)       255,124            152,837
Preferred dividends accrued or paid                (12,500)         (12,500)       (25,000)           (25,000)
                                             -------------     -------------    ------------     -------------

     Net (loss) income available to
      common stockholders                        $(86,163)       $ (133,095)      $230,124          $ 127,837
                                                 ==========      ===========    ============     =============

     Basic net (loss) income share               $  (0.02)       $    (0.03)      $   0.05          $    0.03
                                                 ==========      ===========    ============     =============

     Diluted (loss) income per share             $  (0.02)       $    (0.03)      $   0.05          $    0.03
                                                 ==========      ===========    ============     =============

     Weighted average shares outstanding
     Basic                                      4,203,738         4,003,738      4,203,738          4,003,738
                                                ===========      ===========    ============     =============
     Diluted                                    4,203,738         4,003,738      4,575,601          4,537,071
                                                ===========      ===========    ============     =============
</TABLE>

   The accompanying notes are an integral part of these consolidated condensed
                             financial statements.

                                        3
<PAGE>


                     GRILL CONCEPTS, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>

                                                                         Six Months Ended
                                                                     ------------------------
                                                                      July 1,         June 25,
                                                                       2001            2000
                                                                     ---------       --------
<S>                                                                  <C>              <C>

Cash flows from operating activities:
     Net income                                                      $255,124        $ 152,837
     Adjustments to reconcile net income to net cash
     provided by operating activities:
         Depreciation and amortization                                656,286          583,368
         Minority interest in net loss of subsidiaries                (69,150)        (168,366)
         Equity in loss of joint venture                                4,390            9,469
     Changes in operating assets and liabilities
         Inventories                                                  (62,691)        (113,892)
         Receivables                                                  156,752          243,515
         Prepaid expenses                                            (257,031)          71,930
         Other assets                                                (167,051)         (69,944)
         Accounts payable                                            (383,656)        (139,723)
         Accrued liabilities                                          118,413          346,616
                                                                    ----------       ----------
     Net cash provided by operating activities                        251,386          915,810
                                                                    ----------       ----------

     Cash flows from investing activities:
     Additions to furniture, equipment and improvements               (55,412)      (2,013,501)
            Liquor Licenses                                               120                -
                                                                    ----------       ----------
     Net cash used in investing activities                            (55,292)      (2,013,501)
                                                                    ----------       ----------

     Cash flows from financing activities:Proceeds from
     equipment financing                                                    -          995,096
     Proceeds from investment in Chicago Grill                              -        1,196,945
     Payments on line of credit                                             -         (435,000)
     Preferred return to minority stockholders                       (133,518)               -
     Return of capital to minority stockholders                       (89,910)               -
     Payments to related parties                                      (21,348)               -
     Payments on long-term debt                                      (425,984)        (458,272)
                                                                    ----------       ----------

     Net cash (used in) provided by financing activities             (670,760)       1,298,769
                                                                    ----------       ----------

Net (decrease) increase in cash and cash equivalents                 (474,666)          201,078
Cash and cash equivalents, beginning of period                        623,097           352,453
                                                                    ----------       ----------
Cash and cash equivalents, end of period                             $148,431         $ 553,531
                                                                     =========         =========

Supplemental cash flow information: Cash paid during the period for:
         Interest                                                   $ 160,121         $ 215,608
         Income taxes                                                  13,468                 -
</TABLE>


        The accompanying notes are an integral part of these consolidated
                        condensed financial statements.


                                        4
<PAGE>

                     GRILL CONCEPTS, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   INTERIM FINANCIAL PRESENTATION

The interim  consolidated  financial  statements  are  prepared  pursuant to the
requirements  for reporting on Form 10-Q.  These  financial  statements have not
been audited by  independent  accountants.  The December 31, 2000 balance  sheet
data was derived  from  audited  financial  statements  but does not include all
disclosures  required by generally accepted accounting  principles.  The interim
financial  statements and notes thereto  should be read in conjunction  with the
financial  statements  and notes  included  in the  Company's  Form  10-K  dated
December  31,  2000.  In the  opinion of  management,  these  interim  financial
statements  reflect all adjustments of a normal recurring nature necessary for a
fair  statement of the results for the interim  periods  presented.  The current
period results of operations are not  necessarily  indicative of results,  which
ultimately will be reported for the full year ending December 30, 2001.

Certain  prior year  amounts have been  reclassified  to conform to current year
presentation.

2.   FUTURE ACCOUNTING REQUIREMENTS

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities". This Statement requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of  derivatives  will be recorded each period in current  earnings or
other comprehensive  income,  depending on whether a derivative is designated as
part of a hedge  transaction and, if it is, the type of hedge  transaction.  The
new rules were  effective  the first  quarter of 2001.  The new standard did not
have a material impact on the Company's financial statements.

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard No. 141 ("SFAS 141"), "Business  Combinations."
SFAS141 requires that the purchase method of accounting be used for all business
combinations  initiated  after  June 30,  2001.  Use of the  pooling-of-interest
method will be  prohibited.  The Company  does not believe  that the adoption of
SFAS 141 will have a significant impact on its financial statements.

In July 2001,  the FASB also issued  Statement  of Financial  Standards  No. 142
("SFAS 142"), "Goodwill and Other Intangible Assets." SFAS 142 which changes the
accounting  for  goodwill  and   indefinite-lived   intangible  assets  from  an
amortization method to an impairment-only approach, will be effective for fiscal
years  beginning  after  December 15, 2001.  The company has not  determined the
impact that adoption of this  Standard  will have on its  financial  statements.

                                       5
<PAGE>

3.   PER SHARE DATA

Basic  earnings  per share data is based  upon the  weighted  average  number of
common  shares  outstanding.  Diluted  earnings per share data is based upon the
weighted  average number of common shares  outstanding plus the number of common
shares  potentially  issuable for dilutive securities  such as stock options and
warrants.

4.   DISTRIBUTION  OF CAPITAL AND PREFERRED RETURNS

The Operating Agreement for San Jose Grill LLC, stipulates that distributions of
distributable  cash  shall  be made  first,  10% to the  Manager  and 90% to the
Members  in the  ratio of their  percentage  interests  until the  Members  have
received  the  amount of their  initial  capital  contribution.  Second,  to the
payment of the preferred  return of ten percent per annum on the unpaid  balance
of the  Member's  adjusted  capital  contribution  until the entire  accrued but
unpaid  preferred  return has been paid.  Third,  to the Members in the ratio of
their percentage  interests until the additional  capital  contributions have be
repaid.  Thereafter, to the Manager and Members in the ratio of their percentage
interests.

The Operating  Agreement and the Senior  Promissory Note for Chicago - The Grill
on the Alley, LLC stipulates that the non-manager  member of Chicago - The Grill
on the Alley,  LLC is entitled to cumulative  preferred  return of eight percent
annually of their converted capital contribution.

5.   CAPITALIZED TRANSACTION COSTS

Transaction  costs  associated  with the  proposed  issuance of common  stock to
Starwood Hotels and Resorts Worldwide,  Inc. and other strategic  investors,  in
the amount of $120,000,  have been  deferred and included in Other Assets on the
balance sheet.  These costs will be netted against the proceeds received for the
stock and  recorded as a reduction to  Additional  Paid in Capital on closing of
the transaction.

6.   SUBSEQUENT EVENTS

On July 17, 2001 the Company  finalized the sale of its franchised  Pizzeria Uno
restaurant in South  Plainfield,  New Jersey.  The sales price of the assets was
$700,000 with an estimated gain on the sale of approximately  $225,000.

On July 18, 2001 the Company signed an agreement forming The Grill on Hollywood,
LLC with TrizecHahn Development Corporation to operate a Grill restaurant in the
Academy of Motion Pictures building in Hollywood,  California.  The Company will
manage the restaurant for the LLC.

On July 27, 2001, the Company  completed a transaction  with Starwood Hotels and
Resorts  Worldwide,  Inc. pursuant to which (1) the Company and Starwood entered
into a  Development  Agreement  under which the Company and  Starwood  agreed to
jointly develop the Company's restaurant  properties in Starwood hotels; and (2)
the Company sold 666,666  shares of  restricted  common stock and 666,666  stock
purchase warrants at $2.00 to Starwood for $1,000,000. Concurrently, the Company
sold an additional  666,666 shares of restricted  common stock and 666,666 stock
purchase warrants at $2.25 to other strategic investors for $1,000,000.

                                       6
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

The following  discussion and analysis  should be read in  conjunction  with the
Company's financial statements and notes thereto included elsewhere in this Form
10-Q. Except for the historical  information contained herein, the discussion in
this Form 10-Q contains  certain forward  looking  statements that involve risks
and  uncertainties,  such as  statements  of the  Company's  plans,  objectives,
expectations  and intentions.  The cautionary  statements made in this Form 10-Q
should be read as being  applicable to all related  forward  looking  statements
wherever  they appear in this Form 10-Q.  The  Company's  actual  results  could
differ materially from those discussed here. For a discussion of certain factors
that  could  cause  actual  results  to be  materially  different,  refer to the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.

Results of Operations.

The following table sets forth, for the periods indicated,  information  derived
from  the  Company's  consolidated  statements  of  operations  expressed  as  a
percentage  of  total  operating   revenues,   except  where  otherwise   noted.
Percentages may not add due to rounding.

<TABLE>

                                                      Three Months Ended              Six Months Ended
                                                   July 1,         June 25,         July 1,       June 25,
                                                    2001             2000            2001          2000
                                                  --------        ---------       ----------    ----------
<S>                                               <C>             <C>             <C>           <C>

Revenues:
    Company restaurant sales                         97.7 %         98.6 %           98.3 %         98.6 %
    Management and license fees                       2.3            1.4              1.7            1.4
                                                 ---------        --------         ---------      ---------
         Total operating revenues                   100.0 %        100.0 %          100.0 %        100.0 %

Cost of sales                                        27.8           28.4             27.4           28.1
                                                 ---------        --------         ---------      ---------
     Gross profit                                    72.2           71.6             72.6           71.9
                                                 ---------        --------         ---------      ---------

     Restaurant operating expense                    61.6           58.2             60.2           58.2
     General and administrative expense               7.7            8.5              8.0            7.9
     Depreciation and amortization                    3.1            2.9              2.8            2.8
     Pre-opening costs                                  -            4.2                0            2.2
                                                 ---------        --------         ---------      ---------
          Total operating expenses                   72.4           73.7             71.0           71.0
                                                 ---------        --------         ---------      ---------


          Operating (loss) income                    (0.2)          (2.2)             1.6            0.9

Interest expense, net                                (0.9)          (0.9)            (0.8)          (0.9)
                                                 ---------        --------         ---------      ---------


(Loss) income before provision for income taxes,
 minority interest and equity in loss of joint
 venture                                            (1.1)           (3.1)             0.8            0.0
Provision for income taxes                           0.0             0.0              0.0            0.0
Minority interest                                    0.5             1.9              0.3            0.8
Equity in loss of joint venture                     (0.1)              0              0.0            0.0
                                                 --------         -------        ---------      ---------

Net (loss) income                                   (0.7)%          (1.2)%            1.1%           0.7%
                                                 ========         =======        =========      =========
</TABLE>


                                       7
<PAGE>

The following table sets forth certain unaudited financial information and other
restaurant data relating to Company owned restaurants and Company managed and/or
licensed restaurants.
<TABLE>


                                   Second Quarter       Year-to-date       Total open at
                                      Openings            Openings         End of Quarter
                                 -----------------    ---------------     -----------------
                                 FY 2001   FY 2000   FY 2001   FY 2000    FY 2001  FY 2000
                                 -------   -------   -------   -------    -------  -------
<S>                              <C>       <C>       <C>       <C>        <C>      <C>

Daily Grill restaurants:
    Company owned                     -         -         -        -          10       10
    Managed and/or licensed           -         -         -        -           4        3
Grill on the Alley restaurants:
    Company owned                     -         1         -        1           3        3
Pizza restaurants                     -         -         -        -           2        3
Other restaurants
    Managed and/or licensed           -         -         -        -           1        1
                                  -----     -----     -----     ----        ----     ----
Total                                 -         1         -        1          20       20
                                  =====     =====     =====     ====        ====      ===
</TABLE>


<TABLE>

                                                Three Months Ended        Six Months Ended
                                                July 1,    June 25,      July 1,     June 25,
                                                 2001        2000         2001         2000
                                              ----------  ----------    --------    ----------
<S>                                           <C>         <C>           <C>         <C>

Weighted average weekly sales
   per company owned restaurant:
    Daily Grill                              $   59,833    $   57,965   $   63,441   $  59,925
    Grill on the Alley                           81,165        74,863       85,542      79,401
    Pizza restaurants                            33,715        31,216       34,688      31,671
Change in comparable restaurant (1):
    Daily Grill                                    2.9%          5.3%          5.9%        5.0%
    Grill on the Alley                             0.4%         11.9%          2.9%       11.7%
    Pizza restaurants                             (6.0)%        (4.4)%        (3.3)%      (3.9)%

Total revenues:
    Daily Grill                            $ 7,000,466    $ 6,781,888  $14,845,299  $14,022,510
    Grill on the Alley                       3,165,425      2,195,714    6,672,288    4,378,119
    Pizza restaurants                          876,598      1,217,413    1,803,763    2,470,376
    Management and license fees                257,092        146,350      413,599      296,090
                                          -------------   ------------  -----------  -----------

Total consolidated revenues              $  11,299,581    $10,341,365  $23,734,949  $21,167,095
                                         ==============   ============  ============ ===========

Managed restaurants                          2,694,250      2,816,703    5,527,879    5,586,624
Licensed restaurants                         2,136,314      1,390,756    4,079,725    2,638,126
Less: management and license fees             (257,092)      (146,350)    (413,599)    (296,090)
                                         --------------   ------------  ------------ -----------
Total system sales                         $15,873,063    $14,402,474  $32,928,954  $29,095,755
                                         ==============   ============  ============ ===========
</TABLE>

When computing  comparable  restaurant  sales,  restaurants open for at least 12
months are compared from period to period.


                                       8
<PAGE>

Material  Changes in Results of  Operations  for the Three and Six Months  Ended
July 1, 2001 as  compared  to the Three and Six Months  Ended June 25,  2000

The Company's revenues for the second quarter of fiscal 2001 increased to $ 11.3
million,  9.3% over the $ 10.3 million  generated for the same quarter of fiscal
2000. Total revenues  included $ 11.0 million of sales revenues and $ 257,000 of
management and licensing fees for the 2001 quarter compared to $ 10.2 million of
sales  revenues  and $ 146,000 of  management  and  licensing  fees for the 2000
quarter. This $ 0.8 million, or 8.3%, increase in sales revenues for the quarter
was primarily  attributable to an increase in same store sales  ($153,000) and a
full 13 weeks of sales for Chicago - The Grill on the Alley compared to only two
weeks in 2000  ($961,000),  partially  offset by the closure of Pizzeria  Uno in
Media ($285,000).

Revenues for the six months ended July 1, 2001 rose 12.1% to $ 23.7 million from
the $ 21.2 million  generated for the same period of fiscal 2000. Total revenues
included  $ 23.3  million of sales  revenues  and $ 414,000  of  management  and
licensing fees for the first six months of 2001, compared  to $ 20.9  million of
sales  revenues and $ 296,000 of management and licensing fees for the first six
months  of 2000.  The  increase  in sales  revenues  for the six  months  ($ 2.5
million, or 11.7%) was primarily attributable to an increase in same store sales
($879,000),  plus a full 26 weeks of sales  at the  Chicago  - The  Grill on the
Alley  compared  to only two weeks in 2000  ($2,176,000),  which  was  partially
offset by the closure of the Pizzeria Uno restaurant in Media ($604,000).

Same store sales (for restaurants  open at least 12 months)  increased 2.9 % for
the quarter and 5.9 % for the six months. For the quarter, this increase was due
to average check price increases at the Daily Grill restaurants  ($73,000),  and
at the Grill on the Alley restaurants  ($98,000),  and an increase in the number
of guests at the Daily Grill restaurants ($128,000),  which was partially offset
by a  decrease  in the  number of  guests at the Grill on the Alley  restaurants
($90,000).  For the six  months the  increase  was due to  average  check  price
increases at the Daily Grill restaurants ($1,016,000) and the Grill on the Alley
restaurants ($287,000) which was partially offset by a decrease in the number of
guests at both the Daily  Grill and Grill on the Alley  restaurants  ($358,000).
The increase in management and licensing fees for both the quarter ($ 111,000 or
75.7 %) and the six months ($ 118,000 or 39.7%) was  primarily  attributable  to
increased sales at the Daily Gill  restaurants at Georgetown Inn and Los Angeles
International  Airport  and  the  opening  of the  Daily  Grill  in  the  Skokie
DoubleTree  in  September  2000.

In  addition  to  the  restaurants  owned  by  the  Company,   which  sales  are
consolidated  and included in the results of  operations  for the  Company,  the
Company also manages and licenses six other restaurants.  Total revenues for all
20 restaurants  owned,  managed and licensed by the Company were $15,873,000 and
$14,402,000  for the quarters and $32,929,000 and $29,096,000 for the six months
ended  July  2001  and  2000,  respectively.  This  represents  an  increase  of
$1,471,000,  or 10.2%,  for the quarter and  $3,833,000,  or 13.2%,  for the six
months.

Cost of sales increased by $198,000,  or 6.8%, for the quarter and $561,000,  or
9.4%,  for the six months  ended July 1, 2001 as compared to the same periods in
2000  primarily  due to the  opening of  Chicago - The Grill on the Alley  which
increased  $323,000 and  $707,000 for the quarter and six months,  respectively.
Cost of sales  decreased as a percentage  of sales  revenues,  cost of sales was
27.8% for the  quarter  and 27.4 % for the six months as  compared to 28.4 % for
the second  quarter of 2000 and 28.1% for the  year-to-date  period in 2000. The
decrease in cost of sales as a  percentage  of sales  during the 2001 six months
was  primarily the result of menu  refinements  and related sales mix as well as
cost reductions resulting from improved purchasing.

                                       9
<PAGE>

Restaurant  operating expenses increased by $943,000,  or 15.7%, for the quarter
and $1,965,000,  or 16.0%, for the six months as compared to the same periods in
2000  primarily due to the opening of Chicago - The Grill on the Alley which had
increased  operating expenses of $816,000 and $1,378,000 for the quarter and six
months,  respectively.   Restaurant  operating  expenses,  as  a  percentage  of
revenues, increased in the second quarter from 58.2 % in 2000 to 61.6 % in 2001.
For the six months,  the percentages  were 58.2 % in 2000 and 60.2% in 2001. The
increase in restaurant  operating expenses as a percentage of total revenues was
primarily  attributable to payroll and related  expenses which were up $527,000,
or 14.7%,  for the  quarter  and  $1,381,000,  or 19.8%,  for the six months and
variable  costs  which  were up  $380,000,  or 37.0%,  for the three  months and
$522,000, or 23.3%, for the six months. Payroll and related benefits for Chicago
- The Grill on the Alley are up $351,000  for the quarter and  $874,000  for the
six  months.  Variable  expenses  for  Chicago  - The  Grill on the Alley are up
$159,000  for the  quarter and  $276,000  for the six  months.  The  increase in
expenses at Chicago - The Grill on the Alley are due to the restaurant's  having
13 and 26 weeks of  operations in the quarter and six months of 2001 compared to
only 2 weeks for both the quarter and six months of 2000.

General and administrative expense decreased 0.1 % for the quarter and increased
13.2 % for the six  months  as  compared  to the  same  periods  in  2000.  As a
percentage of total revenues,  general and administrative  expense totaled 7.7 %
for the  quarter and 8.0% for the six months as compared to 8.5% for the quarter
and 7.9 % for the six months in 2000. General and  administrative  expenses were
flat for the second  quarter  compared  to prior  year.  The  increase  in total
general and  administrative  expense of $221,000,  or 13.2%,  for the six months
during 2001was  primarily  attributable to increased  headcount at the corporate
office and related benefits.

Depreciation  and amortization  expense  increased by 16.9 % for the quarter and
12.5 % for the six months compared to 2000,  representing  2.8% of sales for the
six months of 2001 and 2000.  The  increase  in  depreciation  and  amortization
expense for both the quarter and the six months was primarily due to the Chicago
- The Grill on the Alley  assets being in service for 13 and 26 weeks during the
quarter and six months of 2001, respectively.

All pre-opening  costs incurred during the 2000 quarter and six months relate to
the  opening of  Chicago-The  Grill on the Alley and were fully  funded  through
landlord contributions,  partnerships or a combination thereof and were expensed
as incurred.

                                       10
<PAGE>

Interest  expense,  net,  increased by $6,000,  or 6.5%,  during the quarter and
$13,000,  or 7.0%,  during the six months  compared to the same periods in 2000.
The increase in interest expense related to preferred returns payable to Chicago
- The  Grill on the Alley  and San Jose  Grill  investors,  which  increased  by
$69,000  for the 2001  year-to-date  period,  which  was  partially  offset by a
$56,000  decrease in bank  interest  due to a reduction  in bank debt.  Interest
expense  was flat as a  percentage  of sales for both the quarter and six months
compared to prior year.

The Company  recorded  only  minimal  income taxes for the six months due to the
available  federal  and  state  net  operating  loss  carryforwards  that can be
utilized to offset federal and state taxable earnings.

Results  for the  quarter and six months  reflect  minority  interest in the net
losses of  subsidiaries  of $53,000  and  $69,000  respectively,  compared  with
$201,000 and $168,000 in the same periods in 2000.  This  decrease in the amount
of net losses allocated to minority  interests resulted primarily from expensing
$468,000 of pre-opening costs during the 2000 quarter  attributable to Chicago -
The Grill on the Alley.

The company  incurred a charge of $5,000 for its equity in loss of joint venture
during the six months of 2001  compared to $9,000 in 2000,  which  reflects  the
Company's 50% interest in the Daily Grill Short Order at Universal  Studios City
Walk.

The Company  reported  dividends  on  preferred  stock of $12,500 in each of the
quarters  and $25,000 in each of the six months  ended July 1, 2001 and June 25,
2000.

Material Changes in Financial Condition, Liquidity and Capital Resources.

At July 1, 2001 the Company had negative  working capital of $ 2.8 million and a
cash  balance of $0.1  million  compared  to  negative  working  capital of $2.7
million and a cash balance of $0.6  million at December 31, 2000.  The change in
working  capital was  primarily  attributable  to a $0.4  million  reduction  of
accounts  payable  and  $0.1million  of  capitalized  expenses  related  to  the
subsequent issuance of equity to Starwood Hotels and other strategic  investors.

The  Company's  need  for  capital  resources  has  resulted  from,  and for the
foreseeable  future is  expected to relate  primarily  to, the  construction  of
restaurants.  Historically,  the  Company has funded its  day-to-day  operations
through its operating  cash flow,  while funding growth through a combination of
bank borrowing,  loans from  stockholders/officers,  the sale of Debentures, the
sale of Preferred Stock, the issuance of warrants,  loans and tenant  allowances
from certain of its  landlords  and,  beginning in 1998,  through  joint venture
arrangements.  At July 1, 2001,  the Company had existing bank borrowing of $1.0
million, an SBA loan of $ 0.1 million, loans from stockholders/officers of $ 0.6
million, equipment loans of $ 1.3 million and loans/advances from a landlord and
others of $ 0.4 million.

                                       11
<PAGE>

As of August 10,  2001 the Company had opened no new  restaurants  in 2001.  The
Company is  scheduled  to open a Grill  restaurant  in the new Academy of Motion
Pictures building in Hollywood in November 2001. The Company will be responsible
for  approximately  $250,000 of pre-opening  costs in Hollywood.  The Company is
scheduled  to  begin  management  of a San  Francisco  hotel-based  Daily  Grill
restaurant in the first  quarter of 2002.  The Company will be  responsible  for
approximately  $250,000  of  pre-opening  costs  in  San  Francisco.  Management
anticipates  that new non-hotel based  restaurants  will cost between $1 million
and $2 million per  restaurant to build and open depending upon the location and
available  tenant  allowances.  Hotel based  restaurants may involve  remodeling
existing facilities.  Substantial capital contributions from the hotel operators
and other factors will cause the cost to the Company of opening such restaurants
to be  substantially  less than the Company's  cost to build and open  non-hotel
based restaurants.

Management  believes  that  the  Company  has  adequate  resources  on hand  and
operating cash flow to sustain  operations for at least the following 12 months.
In order to fund the  opening of  additional  restaurants,  on July 27, 2001 the
Company raised $2.0 million of additional capital through the issuance of equity
securities to Starwood  Hotels and Resorts  Worldwide,  Inc. and other strategic
investors.  In conjunction with the Company's transaction with Starwood, in July
2001, the Company  entered into a development  arrangement  with Starwood Hotels
and Resorts Worldwide, Inc. to develop the Company's restaurants in Sheraton and
Westin hotel properties.

In July 2000,  the Company sold the assets of its South  Plainfield,  New Jersey
franchised pizza restaurant for $700,000.

Future Accounting Requirements

In June 1998, the Financial  Accounting Standards Board ("FASB') issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities."  This
Statement  requires that all  derivative  instruments be recorded on the balance
sheet at their fair  value.  Changes in the fair  value of  derivatives  will be
recorded  each  period  in  current  earnings  or  other  comprehensive  income,
depending on whether a derivative is  designated as part of a hedge  transaction
and, if it is, the type of hedge  transaction.  The new rules were effective the
first  quarter of 2001.  The new standard did not have a material  impact on the
Company's financial statements.

In July 2001, the FASB issued Statement of Financial Accounting Standard No. 141
("SFAS 141"), "Business Combinations." SFAS141 requires that the purchase method
of accounting  be used for all business  combinations  initiated  after June 30,
2001. Use of the pooling-of-interest method will be prohibited. The Company does
not believe that the adoption of SFAS 141 will have a significant  impact on its
financial statements.

In July 2001,  the FASB also issued  Statement  of Financial  Standards  No. 142
("SFAS 142"),  "Goodwill and Other  Intangible  Assets." SFAS 142, which changes
the  accounting  for goodwill  and  indefinite-lived  intangible  assets from an
amortization method to an impairment-only approach, will be effective for fiscal
years  beginning  after  December 15, 2001.  The company has not  determined the
impact that adoption of this Standard will have on its financial statements.

                                       12
<PAGE>

Certain Factors Affecting Future Operating Results

In  addition to the  planned  opening of the new  restaurants  during  2001,  as
described  above,  and the various  factors  described in the  Company's  Annual
Report  on Form  10-K  for the year  ended  December  31,  2000,  the  following
developments may impact future operating results.

On July 17,  2001 the  Company  finalized  the sale of assets of its  franchised
South  Plainfield,  New Jersey Pizza  Restaurant  which had been entered into in
October 2000 for  $700,000.  The proceeds  from the sale will be used for future
capital projects.

The  Company  is  actively  looking  for a buyer  for the  remaining  franchised
Pizzeria Uno restaurant in Cherry Hill, New Jersey.

Opening of the Grill on  Hollywood  is  expected  to have a negative  short-term
impact on cash flow due to the required  expenditures for pre-opening costs. The
San Francisco  restaurant is expected to open in the first quarter of 2002.  The
Company will incur approximately $250,000 of pre-opening costs during the second
half of 2001  and the  first  quarter  of  2002.  Management  fees  from the San
Francisco  restaurant  will begin following  opening of the restaurant  which is
scheduled for the first quarter of 2002.  Discussions  are ongoing with Starwood
Hotels and Resorts regarding any development locations.

The current  economic  downturn has had a negative  impact,  and may continue to
have a negative impact,  on the Company's  revenues.  Increases in energy prices
and potential  shortages of electricity and natural gas might have a significant
impact on the business.

There can be no  assurance  that the Company will be  successful  in opening new
restaurants in accordance with its anticipated opening schedule; that sufficient
capital  resources will be available to fund scheduled  restaurant  openings and
start-up  costs;  that new restaurants  can be operated  profitably;  that hotel
restaurant management services will produce satisfactory cash flow and operating
results to support such operations;  that additional hotels will elect to retain
the Company's hotel  restaurant  management  services;  that the remaining Pizza
Restaurant can be sold on terms  satisfactory to the Company;  or that proceeds,
if any, from the sale of the Pizza Restaurants can be deployed in a manner so as
to replace the cash flows from the Pizza Restaurants.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk from  changes in interest  rates on funded
debt. This exposure relates to its  non-revolving  credit and term loan facility
(the  "Credit  Facility").  Borrowings  outstanding  under the  Credit  Facility
totaled $ 1,025,000 at July 1, 2001.  Borrowings  under the Credit Facility bear
interest at the lender's  reference rate plus 0.25%. A hypothetical  1% interest
rate  change  would not have a  material  impact  on the  Company's  results  of
operations.

                                       13
<PAGE>

                           PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

         At an annual meeting of shareholders  of Grill  Concepts,  Inc. held on
June 25,  2001,  the  stockholders  voted on five  proposals:  the  election  of
directors;  amendment of the Company's 1998 Comprehensive Stock Option and Award
Plan to increase the number of shares  reserved for issuance  under the plan and
to modify the terms of option grants to non-employee directors; authorization of
the issuance of shares and warrants pursuant to, and approval of the terms of, a
Subscription  Agreement  with  Starwood  Hotels  and  Resorts  Worldwide,  Inc.;
amendment of the Company's  Certificate of  Incorporation to increase the number
of  authorized  shares  of Common  Stock  from  7,500,000  to  12,000,000;  and,
ratification of the appointment of  PricewaterhouseCoopers  LLP as the Company's
independent certifying accountants.

         The  first  matter  voted on was a  proposal  to elect  Robert  Spivak,
Michael Weinstock, Charles Frank, Glenn Golenberg, Lewis Wolff, Stephen Ross and
Norman MacLeod, as directors of the Company. All director nominees were elected.
The following table sets forth the votes in such election:

                                     Votes For            Votes Against

         Robert Spivak              2,807,767                 15,001
         Michael Weinstock          2,808,771                 14,997
         Charles Frank              2,808,767                 15,001
         Glenn Golenberg            2,808,767                 15,001
         Lewis Wolff                2,808,739                 15,029
         Stephen Ross               2,808,739                 15,029
         Norman MacLeod             2,808,739                 15,029

         In addition to the election of directors as noted above,  the following
matters were voted upon at such meeting:


                                       14
<PAGE>

       Proposal 2, to amend the Company's 1998 Comprehensive  Stock Option and
Award Plan to increase the number of shares reserved for issuance under the plan
and to modify the terms of option grants to non-employee  directors was approved
with 1,479,922 votes cast for, 48,964 votes cast against, 33,024 votes abstained
and 1,672,514 broker non-votes.

         Proposal 3, to authorize  the issuance of shares and warrants  pursuant
to, and approval of the terms of, a Subscription  Agreement with Starwood Hotels
and Resorts  Worldwide,  Inc. was approved with 2,774,318 votes cast for, 23,411
votes cast against, 26,672 votes abstained and 410,023 broker non-votes.

         Proposal 4, to amend the  Company's  Certificate  of  Incorporation  to
increase  the number of  authorized  shares of Common  Stock from  7,500,000  to
12,000,000  was  approved  with  2,757,462  votes  cast for,  34,525  votes cast
against, 32,414 votes abstained and 410,023 broker non-votes.

         Proposal 5, to ratify the appointment of PricewaterhouseCoopers  LLP as
the Company's  independent  certifying  accountants  was approved with 2,780,828
votes cast for,  23,869 votes cast against,  19,704 votes  abstained and 410,023
broker non-votes.

Item 5.  Other Information

     On July 27, 2001, the Company  completed a transaction with Starwood Hotels
and Resorts  Worldwide,  Inc.  pursuant  to which (1) the  Company and  Starwood
entered into a Development Agreement under which the Company and Starwood agreed
to jointly develop the Company's  restaurant  properties in Starwood hotels; and
(2) the Company sold 666,666 shares of restricted common stock and 666,666 stock
purchase warrants at $2.00 to Starwood for $1,000,000. Concurrently, the Company
sold an additional  666,666 shares of restricted  common stock and 666,666 stock
purchase warrants at $2.25 to other strategic investors for $1,000,000.

         In  conjunction  with the Starwood  transaction,  on July 17, 2001, the
Company sold the assets of its  franchised  Pizzeria Uno  restaurant  located in
South Plainfield, New Jersey for $700,000.


                                       15
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

a.   Exhibits
     Exhibit No.                                 Description
     -----------                                --------------

     3.1  Certificate of Amendment of Restated Certificate of Incorporation

     10.1 Amendment to Hotel Restaurant Properties,  Inc. Agreement,  dated July
          27, 2001

b.   Reports on Form 8-K

     Form  8-K  dated  May  16,  2001  reporting  on Item 5 the  execution  of a
     Subscription Agreement with Starwood Hotels and Resorts Worldwide, Inc.

                                       16
<PAGE>

                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                    GRILL CONCEPTS, INC.


Dated: August 13, 2001     By:  /s/ Robert Spivak
                               --------------------------------------
                               Robert Spivak, President and C.E.O



Dated: August 13, 2001     By: /s/ Daryl Ansel
                               --------------------------------------
                               Daryl Ansel, Chief Financial Officer


                                       17