SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  FORM 10-QSB


(Mark One)

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

                For the quarterly period ended September 28, 1997

                                       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 small business issuer as specified in its charter)




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


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


                                 (310) 820-5559
                           ---------------------------
                           (Issuer's telephone number)


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


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 November  3, 1997,  15,672,481  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 - September 28, 1997
          and December 29, 1996............................................ 1

          Consolidated Condensed Statements of Operations - For the
          three months and nine months ended September 28, 1997 and
          September 29, 1996............................................... 3

          Consolidated Condensed Statements of Cash Flows - For the
          nine months ended September 28, 1997 and September 29, 1996...... 4

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

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

PART II - OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K............................. 9

SIGNATURES................................................................. 9

<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                      GRILL CONCEPTS, INC. AND SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>

                                                September 28,         December 29,
                                                    1997                  1996
                                               ----------------      ----------------
<S>                                            <C>                   <C>
Current assets:
     Cash and cash equivalents                        $303,221              $372,317
     Inventory                                         251,568               239,237
     Prepaid expenses                                1,046,904             1,038,036
                                               ----------------      ----------------

          Total current assets                       1,601,693             1,649,590
                                               ----------------      ----------------

Property and equipment, at cost                     10,256,685             8,589,597
     Less:  accumulated depreciation               (4,009,524)            (3,364,486)
                                               ----------------      ----------------

          Property and equipment, net                6,247,161             5,225,111
                                               ----------------      ----------------

Other assets:
     Goodwill                                          239,685               245,829
     Other                                             855,545               961,484
                                               ----------------      ----------------

          Total other assets                         1,095,230             1,207,313
                                               ----------------      ----------------

          Total assets                              $8,944,084            $8,082,014
                                               ================      ================
</TABLE>


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


                                       1
<PAGE>
                                        GRILL CONCEPTS, INC. AND SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (Continued)

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                            September 28,          December 29,
                                                                                 1997                  1996
                                                                           -----------------      ----------------
<S>                                                                        <C>                    <C>
Current liabilities:
     Bank line of credit                                                           $400,000
     Accounts payable                                                               981,321            $1,143,484
     Accrued expenses                                                               864,494             1,283,805
     Current portion of long term debt                                              422,146               421,317
                                                                           -----------------      ----------------

          Total current liabilities                                               2,667,961             2,848,606

Long-term debt, net of current                                                      767,476             1,030,927
                                                                           -----------------      ----------------

          Total liabilities                                                       3,435,437             3,879,533
                                                                           -----------------      ----------------

Stockholders' equity:
    Series A, Convertible Preferred Stock, $.001 par value, authorized
      1,000,000 shares; shares issued and outstanding: 0 in 1997, 700
      in 1996                                                                                                   1
    Series B, Convertible Preferred Stock, $.001 par value, authorized
      1,000,000  shares;  shares issued and  outstanding:  32 in 1997, 65
in       1996.                                                                            1                     1
   Series I, Convertible Preferred Stock,$.001 par value, authorized
      1,000,000 shares, shares issued and outstanding: 1000 shares in
      1997, 0 in 1996                                                                     1
    Series II, Convertible Preferred Stock, $.001 par value, authorized
      1,000,000 shares, shares issued and outstanding: 500 shares in
      1997, 0 in 1996                                                                     1
    Common stock, $.00001 par value: 30,000,000 shares authorized,
      shares issued and outstanding: 15,672,481 in 1997 and
     13,799,230 in 1996                                                                 157                   138

   Additional paid-in capital                                                    11,010,801             9,552,458

   Accumulated deficit                                                          (5,502,314)           (5,350,117)
                                                                           -----------------      ----------------

          Stockholders' equity                                                    5,508,647             4,202,481
                                                                           -----------------      ----------------

          Total liabilities and stockholders' equity                             $8,944,084            $8,082,014
                                                                           ================       ===============
</TABLE>


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


                                       2
<PAGE>
                     GRILL CONCEPTS, INC. AND SUBSIDIARIES

                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                       Three Months Ended                            Nine Months Ended
                                              --------------------------------------       --------------------------------------
                                               September 28,        September 29,           September 28,         September 29,
                                                   1997                  1996                    1997                 1996
                                              ----------------     -----------------       -----------------     ----------------
<S>                                           <C>                  <C>                     <C>                   <C>
Sales                                              $7,066,991            $5,542,120             $21,514,492          $16,479,505

Cost of sales                                       1,949,128             1,583,740               5,892,371            4,476,052
                                              ----------------     -----------------       -----------------     ----------------

Gross Profit                                        5,117,863             3,958,380              15,622,121           12,003,453
                                              ----------------     -----------------       -----------------     ----------------

Costs and expenses:
    Restaurant operating expenses                   4,412,527             3,493,798              13,289,238           10,260,698
    General and administrative                        543,904               423,443               1,607,024            1,334,594
    Depreciation and amortization                     220,378               181,547                 645,038              559,534
    Amortization of preopening expenses                90,400                    --                 226,000                   --
                                              ----------------     -----------------       -----------------     ----------------

              Total operating expenses              5,267,209             4,098,788              15,767,300           12,154,826
                                              ----------------     -----------------       -----------------     ----------------

Loss from operations                                (149,346)             (140,408)               (145,179)            (151,373)

Non-recurring acquisition costs                                           (230,671)                                    (230,671)
Non-recurring credit                                                                                 93,000
Interest expense, net                                (22,070)               (2,205)                (95,684)             (72,663)
                                              ----------------     -----------------       -----------------     ----------------
Loss before taxes on income                         (171,416)             (373,284)               (147,863)            (454,707)

Provision for taxes on income                              --                    --                     800                  800
                                              ----------------     -----------------       -----------------     ----------------

Net loss                                           ($171,416)            ($373,284)              ($148,663)           ($455,507)
                                              ----------------     =================       -----------------     ================

Preferred stock:
    Dividends accrued                                (12,639)                                      (13,056)
    Accounting deemed dividends                      (42,133)                                     (168,522)
                                              ----------------                             -----------------
                                                     (54,772)                                     (181,578)
                                              ----------------                             -----------------

    Net loss applicable to common stock             ($226,188)                                   ($330,241)
                                              ================                             =================

Net income (loss) per share
    Net income (loss)                                 ($0.01)                                       ($0.01)
                                              ----------------                             -----------------

    Preferred Stock
         Dividends                                    ($0.00)                                           (0)
         Accounting deemed dividends                  ($0.00)                                       ($0.01)
                                              ----------------                             -----------------
                                                      ($0.00)                                       ($0.02)
                                              ----------------                             -----------------

Net loss applicable to common stocks                  ($0.01)               ($0.03)                 ($0.02)              ($0.03)
                                              ================     =================       =================     ================
Average weighted shares outstanding                15,672,481            13,900,190              14,901,494           13,517,499
                                              ================     =================       =================     ================
</TABLE>


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

                                       3
<PAGE>
                      GRILL CONCEPTS, INC. AND SUBSIDIARIES

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                                      Nine Months Ended
                                                                            ---------------------------------------
                                                                             September 28,          September 29,
                                                                                  1997                  1996
                                                                            -----------------      ----------------
<S>                                                                         <C>                     <C>
Cash flows from operating activities:
     Net loss                                                                     ($148,663)            ($455,507)
     Adjustments to reconcile net income (loss) to net cash
       provided by operating activities:
        Depreciation and amortization                                                871,038               559,534
        Changes in operating assets and liabilities
          Inventories                                                               (12,331)              (32,823)
          Prepaid expenses                                                           (8,868)              (59,573)
          Other assets                                                                22,332              (11,128)
          Accounts payable                                                         (162,163)             (117,321)
          Accrued liabilities                                                      (419,169)              (54,013)
                                                                            -----------------      ----------------

     Net cash provided by operating activities                                       142,176               170,831
                                                                            -----------------      ----------------

Cash flows from investing activities;
     Additions to furniture, equipment and improvements                          (1,667,088)           (1,169,649)
     Net cash acquired through purchase of business                                       --               337,153
                                                                            -----------------      ----------------
     Net cash (used in) investing activities                                     (1,667,088)             (832,496)
                                                                            -----------------      ----------------

Cash flows from financing activities:
     Proceeds from issue of Common and Preferred Stock                             1,456,630             1,455,000
     Proceeds from line of credit                                                    400,000
     Payments on long-term debt                                                    (262,622)             (226,337)
                                                                            -----------------      ----------------
     Net cash provided by financing activities                                     1,594,008             1,228,663
                                                                            -----------------      ----------------

Net increase (decrease) in cash and cash equivalents                                (69,096)               225,336

Cash and cash equivalents, beginning of period                                       372,317               631,116
                                                                            -----------------      ----------------
Cash and cash equivalents, end of period                                            $303,221              $856,452
                                                                            =================      ================

*Net cash acquired through purchase of business
   Working capital, other than cash                                                                         22,778
   Furniture, equipment and improvements                                                                 (321,880)
   Excess of cost over net assets acquired                                                               (157,969)
   Other assets                                                                                           (55,776)
   Fair value of stock exchanged                                                                           850,000
                                                                                                   ----------------
      Net cash acquired                                                                                   $337,153
                                                                                                   ================

Supplemental cash flow information: Cash paid during the period for:
       Interest                                                                      $80,265              $122,294
       Income taxes                                                                   $2,650                $2,650
</TABLE>


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


                                       4
<PAGE>
                     GRILL CONCEPTS, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1.   INTERIM FINANCIAL PRESENTATION

     The interim consolidated  financial statements are prepared pursuant to the
     requirements for reporting on Form 10-QSB.  These financial statements have
     not been audited by independent accountants.  The December 29, 1996 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-KSB  dated  December  29,  1996.  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 28, 1997.

2.   BUSINESS AND ORGANIZATION

     In April of 1996, the Company  acquired 100% of the common stock of EMNDEE,
     Inc.  ("EMNDEE") and The Grill on the Alley, Inc. ("Grill,  Inc.").  EMNDEE
     and Grill, Inc. own, collectively, 100% of The Grill Limited Partnership, a
     California  limited  partnership  which owns and  operates The Grill on the
     Alley (the "Grill"),  an upscale Beverly Hills  restaurant  which opened in
     1984 and served as the model for the Company's Daily Grill restaurants.  As
     a result of the foregoing, these interim statements include the accounts of
     the Grill during 1997. As  acquisition  of the Grill occurred April 1,1996,
     the accounts of the Grill are reflected in the financial  statements,  from
     that date.

     The unaudited proforma  financial  information set forth below is presented
     as if the acquisition of the Grill had been  consummated as of December 31,
     1995. The proforma financial  information is not necessarily  indicative of
     what actual  results of  operations  of the Company  would have been if the
     acquisitions  were consummated as of December 31, 1995, nor does it purport
     to represent the results of operations for future periods.

                                                   1997           1996
                                                   ----           ----
                          Sales               $21,514,492    $17,334,800

                          Net loss              ($148,863)     ($399,215)

3.   STOCKHOLDERS' EQUITY

     During the quarter ended June 29, 1997,  the remaining 610 shares of Series
     A Convertible Preferred Stock were converted,  resulting in the issuance of
     an aggregate of 702,080 shares of common stock at an average price of $0.87
     per  share.  Additionally,  during  the  quarter,  33  shares  of  Series B
     Convertible  Preferred Stock were converted resulting in the issuance of an
     aggregate of 388,067  shares of common  stock at an average  price of $0.85
     per share.  There were no additional  conversions of Preferred Stock in the
     third quarter of 1997.

     On June 24,  1997,  the Company  completed a private  placement  of 200,000
     shares of common  stock,  1,000  shares of Series I  Convertible  Preferred
     Stock, 500 shares of Series II Convertible  Preferred  Stock,  750,000 five
     year $2.00  Warrants and 750,000 five year $3.00  Warrants.  The  aggregate
     sales price of those securities was $1,500,000.

     The Series I Convertible  Preferred Stock is convertible  into common stock
     at $1.25 per share.


                                       5
<PAGE>
     The Series II Convertible  Preferred Stock is convertible into common stock
     commencing  one year from the date of  issuance at the greater of (i) $1.00
     per  share,  or (ii) 75 % of the  average  closing  price of the  Company's
     common  stock for the five trading  days  immediately  prior to the date of
     conversion;  provided, however, that the conversion price shall in no event
     exceed  $2.50 per  share.  The  Series II  Convertible  Preferred  Stock is
     entitled to receive an annual  dividend  equal to $100 per share payable on
     conversion or redemption  in cash or, at the  Company's  option,  in common
     stock at the then applicable  conversion  price.  The Series II Convertible
     Preferred  Stock is  subject  to  redemption,  in whole or in part,  at the
     option of the  Company on or after the second  anniversary  of  issuance at
     $1,000 per share.

     The $2.00 Warrants are  exercisable to purchase  common stock at a price of
     $2.00 per share commencing three years from the date of issuance and ending
     five years from the date of  issuance.  The $2.00  Warrants  are subject to
     cancellation  in the event the  holders  of Series I  Preferred  Stock,  or
     common stock issued upon conversion of such preferred stock,  sell,  assign
     or transfer such  preferred  stock or underlying  common stock,  other than
     transfers to permitted  persons,  within three years of the initial sale of
     the warrants.

     The $3.00 Warrants are  exercisable to purchase  common stock at a price of
     $3.00 per share commencing three years from the date of issuance and ending
     five years from the date of  issuance.  The $3.00  Warrants  are subject to
     cancellation  in the event the  holders  of Series I  Preferred  Stock , or
     common stock issued upon conversion of such preferred stock,  sell,  assign
     or transfer such  preferred  stock or underlying  common stock,  other than
     transfers to permitted  persons,  within three years of the initial sale of
     the warrants.

4.   BANK LINE OF CREDIT

     During the quarter,  the Company borrowed $400,000 of its available line of
     credit.

5.   DEEMED DIVIDEND

     In  accordance  with the recent  position of the  Securities  and  Exchange
     Commission regarding accounting for Preferred Stock which is convertible at
     a discount from market price for common stock, the Company has reflected an
     accounting  "deemed  dividend."  This  accounting  deemed  dividend,  which
     relates  to  the  issuance  of  the   Preferred   Stock,   is  a  non-cash,
     non-recurring  accounting entry for determining income (loss) applicable to
     common stock and income (loss) per share.

6.   IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

     In February 1997, the Financial  Accounting Standards Board issued SFAS No.
     128,  "Earnings Per Share",  which  establishes  standard for computing and
     presenting  earnings per share.  SFAS No. 128 requires the  replacement  of
     primary  earnings per share with basic  earnings per share.  Basic earnings
     per share excludes  dilution,  and is computed by dividing income available
     to common  stockholders  by the  weighted-average  number of common  shares
     outstanding  during the period.  The Company  will be required to adopt the
     provisions  of SFAS No. 128 for 1997.  It is not expected that the adoption
     of the SFAS No.  128 will  have a  material  impact on  earnings  per share
     results  reported  by the  Company  under  the  Company's  current  capital
     structure.

     Other recently issued  standards of the FASB are not expected to affect the
     Company as conditions to which those standards apply are absent.


                                       6
<PAGE>
7.       CLOSURE OF JOJO PLAYERS

     During the quarter ended September 28, 1997, the Company  executed a Mutual
     Release  and  Lease  Termination  Agreement  covering  the  property  which
     operated as JoJo Players,  a sports themed restaurant  previously closed by
     the Company. The Company also assigned its interest in a liquor license for
     such property.

     As a result,  the  Company  has no  further  liability  under the lease and
     suffered no current  charges since the loss on this closure was  previously
     reserved.

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-QSB.  Except for the historical  information contained herein, the discussion
in this Form 10-QSB 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-QSB
should be read as being  applicable to all related forward  statements  wherever
they appear in this Form  10-QSB.  The  Company's  actual  results  could differ
materially from those discussed here.

Material  Changes in Results of Operations  for the Nine Months Ended  September
28, 1997 as Compared to the Nine Months Ended September 29, 1996.

The  results of  operations  for the 39 week  period  ended  September  28, 1997
include the operations of seven Daily Grill restaurants for the full nine months
plus the Washington D.C. Daily Grill for twenty-nine  weeks;  three Pizzeria Uno
units and The Grill  restaurant.  The first 3 quarters of 1996 include six Daily
Grill restaurants, three Pizzeria Uno stores and The Grill for twenty-six weeks.

The Company's  revenues for the nine month period increased 30.6% to $21,514,000
from  $16,480,000  for the same period in 1996.  The increase of $5.0 million is
primarily a result of added sales by the inclusion of The Grill  restaurant  for
the full period this year, the addition of the Irvine,  California,  Daily Grill
opened in September, 1996 and sales from the Washington D.C. Daily Grill, opened
in March, 1997. Additionally, same store sales increased 3.1%.

While  revenues  increased by 30.6% in the 1997 nine month period when  compared
with the similar period in 1996,  cost of sales increased 31.6% and increased as
a percentage  of sales from 27.2% to 27.4%.  This increase in cost of sales as a
percentage of sales during the 1997 period is  attributable  principally  to the
inclusion of The Grill which has historically  experienced an approximate  31.0%
cost of sales as  compared  to  approximately  a 27.0 % cost of sales  for Daily
Grill  restaurants.  This  higher  cost of sales at The Grill is offset by lower
labor costs.

As a result,  gross profit increased 30.1% from $12,003,000  (72.8% of sales) in
1996 to $15,622,000 (72.6% of sales) in 1997.

Restaurant  operating expenses increased to $13,289,000 (61.8% of sales) in 1997
from  $10,261,000  (62.3% of sales) in 1996.  The dollar  increase in restaurant
operating  expenses was attributable to the operation of the two new restaurants
during the 1997 period,  plus the operation of The Grill for three full quarters
in 1997.

General and  administrative  expenses  increased only 20.4% to represent 7.5% of
sales in the  1997  nine  months  while  amounting  to 8.1% of sales in the 1996
period.  This percentage  decrease occurred as a result of the added volume from
two  additional  Daily  Grills  and  the  addition  of  The  Grill  with  out  a
commensurate increase in corporate overhead.


                                       7
<PAGE>
Depreciation and amortization expense increased by $311,000 during the 1997 nine
month  period as a result of the  opening of two new  restaurants.  Included  in
amortization  expense is $226,000  relating to the  amortization  of  preopening
expenses  for  these  two  new  Daily  Grill  restaurants.  The  Company  had no
amortization of preopening expenses during the similar period in 1996.

The Company also reported a non-recurring credit of $93,000 during 1997 relating
to overaccruals of non-recurring acquisition costs reported in the third quarter
of 1996.

Material Changes in Financial Condition, Liquidity and Capital Resources.

At September 28, 1997 the Company had negative working capital of $1,066,000 and
a cash balance of $303,000  compared to negative  working  capital of $1,199,000
and a cash  balance of  $372,000  at December  29,  1996.  The change in working
capital and cash was primarily  attributable  to the sale of the Preferred I and
II stocks in June, 1997 offset by funds expended on the  Washington,  D.C. Daily
Grill.

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,  and loans and tenant allowances from
certain of its landlords.  At September  28,1997,  the Company had existing term
loan  bank   borrowing  of  $827,000  an  SBA  loan  of  $146,000,   loans  from
stockholders/officers of $84,000 and loans/advances from a landlord of $133,000.

In addition to the  Washington,  D.C.  Daily Grill  opened in March,  1997,  the
Company  presently  anticipates  opening one additional Daily Grill store in the
greater Washington, D.C. area and has signed an agreement to form an LLC for the
operation of a "The Grill" restaurant in San Jose, California.  The Company will
contribute $200,000 toward the expected cost of this restaurant of approximately
$1,200,000.  The Company  anticipates opening four restaurants in 1998. The cost
of opening new Daily Grill restaurants is anticipated to be between $800,000 and
$1,400,000 per site depending upon the location and available tenant improvement
allowances.

On June 24, 1997, the Company completed a private placement of 200,000 shares of
common stock,  1,000 shares of Series I Convertible  Preferred Stock, 500 shares
of Series II Convertible  Preferred Stock,  750,000 five year $2.00 Warrants and
750,000 five year $3.00 Warrants.  The aggregate sales price of those securities
was $1,500,000.

The Series I Convertible  Preferred  Stock is  convertible  into common stock at
$1.25 per share.

The Series II  Convertible  Preferred  Stock is  convertible  into common  stock
commencing  one year from the date of  issuance  at the greater of (i) $1.00 per
share, or (ii) 75 % of the average  closing price of the Company's  common stock
for the five trading days immediately prior to the date of conversion; provided,
however, that the conversion price shall in no event exceed $2.50 per share. The
Series II Convertible  Preferred Stock is entitled to receive an annual dividend
equal to $100 per share  payable on  conversion or redemption in cash or, at the
Company's option,  in common stock at the then applicable  conversion price. The
Series II Convertible  Preferred Stock is subject to redemption,  in whole or in
part,  at the  option of the  Company  on or after  the  second  anniversary  of
issuance at $1,000 per share.

The $2.00 Warrants are  exercisable to purchase common stock at a price of $2.00
per share commencing three years from the date of issuance and ending five years
from the date of issuance. The $2.00 Warrants are subject to cancellation in the
event the  holders of Series I  Preferred  Stock,  or common  stock  issued upon
conversion of such  preferred  stock,  sell,  assign or transfer such  preferred
stock or underlying  common stock,  other than  transfers to permitted  persons,
within three years of the initial sale of the warrants.

The $3.00 Warrants are  exercisable to purchase common stock at a price of $3.00
per share commencing three years from the date of issuance and ending five years
from the date of issuance. The $3.00 Warrants are subject to cancellation in the
event the  holders of Series I  Preferred  Stock , or common  stock  issued upon
conversion of such  preferred  stock,  sell,  assign or transfer such  preferred
stock or underlying  common stock,  other than  transfers to permitted  persons,
within three years of the initial sale of the warrants.


                                       8
<PAGE>
In accordance with the recent position of the Securities and Exchange Commission
regarding accounting for Preferred Stock which is convertible at a discount from
market price for common stock,  the Company has reflected an accounting  "deemed
dividend." This accounting deemed dividend, which relates to the issuance of the
Preferred Stock, is a non-cash,  non-recurring  accounting entry for determining
income (loss) applicable to common stock and income (loss) per share.

Other than the opening of new restaurants,  management believes that the Company
has adequate  resources on hand and through cash flow to sustain  operations for
at least the following 12 months.

                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

     (a)     Exhibits

             27.1  Financial Data Schedule

     (b)     Reports on Form 8-K

             None


                                   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:  November 7, 1997                  By: /s/ ROBERT SPIVAK
                                             -----------------------------------
                                              Robert Spivak, President and C.E.O



Dated:  November 7, 1997                  By: /s/ BEN SUMNER
                                             -----------------------------------
                                             Ben Sumner, Chief Financial Officer
                                             and Accounting Officer


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