SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A

(Mark One)

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

                  For the quarterly period ended March 28, 2004

                                       OR

[_]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACTS 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 of              (IRS Employer
      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 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 [_]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).     Yes [_]     No [X]

As of May 5, 2004, 5,588,019 shares of Common Stock of the issuer were
outstanding.


                                        1
<PAGE>
<TABLE>
<CAPTION>
                              GRILL CONCEPTS, INC.
                              --------------------

                                      INDEX

                                                                               Page
                                                                              Number
<S>                                                                           <C>

PART I - FINANCIAL INFORMATION

  Item 1.  Financial Statements

        Consolidated Condensed Balance Sheets - March 28, 2004 (restated)
        and December 28, 2003 (restated) . . . . . . . . . . . . . . . . . .       3

        Consolidated Condensed Statements of Operations - For the three
        months ended March 28, 2004 (restated) and March 30, 2003 (restated)       5

        Consolidated Condensed Statements of Cash Flows - For the three
        months ended March 28, 2004 (restated) and March 30, 2003 (restated)       6

        Notes to Consolidated Condensed Financial Statements . . . . . . . .       7

  Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations . . . . . . . . . . . . . . . . . . . .      23

  Item 3.  Quantitative and Qualitative Disclosures About Market Risk. . . .      42

  Item 4.  Controls and Procedures . . . . . . . . . . . . . . . . . . . . .      42

PART II - OTHER INFORMATION

  Item 2.  Changes in Securities and Use of Proceeds . . . . . . . . . . . .      43

  Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . .      44

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      45
</TABLE>


                                EXPLANATORY NOTE
                                ----------------

This amended Form 10-Q/A for the quarter ended March 28, 2004 is being filed to
restate our financial statements to properly account for certain of the
Company's joint ventures, record costs and revenues associated with reimbursed
costs under management agreements, make other miscellaneous corrections and
reflect the retroactive adoption of FIN 46 (see Note 1 to the financial
statements) and to reflect resulting corrections to the Management Discussion
and Analysis in Part I, Item 2.  Part I, Item 4. Controls and Procedures has
also been amended to reflect the foregoing.  Except as noted, this Amendment
speaks as of the original filing date and has not been updated to reflect events
occurring subsequent to the original filing date.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                         GRILL CONCEPTS, INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS

                                      (Unaudited)
                                        ASSETS


                                                           March 28,     December 28,
                                                              2004           2003
                                                           (restated)     (restated)
                                                          ------------  --------------
<S>                                                       <C>           <C>

Current assets:
  Cash and cash equivalents                               $  1,415,000  $    1,496,000
  Inventories                                                  586,000         585,000
  Receivables, net of reserve ($13,000 in 2004 and 2003)       488,000         658,000
  Reimbursable costs receivable                                542,000         580,000
  Prepaid expenses and other current assets                    895,000         612,000
                                                          ------------  --------------

    Total current assets                                     3,926,000       3,931,000

Furniture, equipment and improvements, net                  11,857,000      11,061,000

Goodwill, net                                                  205,000         205,000
Liquor licenses                                                350,000         350,000
Restricted cash                                                 72,000          72,000
Note receivable                                                112,000         111,000
Other assets                                                   247,000         275,000
                                                          ------------  --------------

    Total assets                                          $ 16,769,000  $   16,005,000
                                                          ============  ==============
</TABLE>

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


                                        3
<PAGE>
<TABLE>
<CAPTION>
                           GRILL CONCEPTS, INC. AND SUBSIDIARIES
                                CONSOLIDATED BALANCE SHEETS
                                        (Unaudited)
                                        (Continued)

                  LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY

                                                                March 28,     December 28,
                                                                   2004           2003
                                                                (restated)     (restated)
                                                               ------------  --------------
<S>                                                            <C>           <C>
Current liabilities:
  Accounts payable                                             $ 1,347,000   $   1,046,000
  Accrued expenses                                               2,313,000       2,400,000
  Reimbursable costs payable                                       542,000         580,000
  Current portion of long term debt                                360,000         298,000
  Current portion notes payable - related parties                  321,000         345,000
                                                               ------------  --------------
    Total current liabilities                                    4,883,000       4,669,000

Long-term debt                                                     104,000         285,000
Notes payable - related parties                                    935,000         969,000
Other long-term liabilities                                      3,536,000       2,734,000
                                                               ------------  --------------
    Total liabilities                                            9,458,000       8,657,000

Minority interest                                                1,898,000       2,058,000

Stockholders' equity:
  Series I, Convertible Preferred Stock, $.001 par
    value; 1,000,000 shares authorized, none
    issued and outstanding in 2004 and 2003                              -               -
  Series II, 10% Convertible Preferred Stock, $.001 par
    value; 1,000,000 shares authorized, 500 shares issued
    and outstanding in 2004 and 2003                                     -               -
  Common stock, $.00004 par value; 12,000,000 shares
    authorized in 2004 and 2003, 5,588,019 issued and
     outstanding in 2004 and 5,537,071 issued and
     outstanding 2003                                                    -               -

  Additional paid-in capital                                    13,627,000      13,601,000
  Accumulated deficit                                           (8,214,000)     (8,311,000)
                                                               ------------  --------------
    Total stockholders' equity                                   5,413,000       5,290,000
                                                               ------------  --------------

Total liabilities, minority interest and stockholders' equity  $16,769,000   $  16,005,000
                                                               ============  ==============
</TABLE>

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


                                        4
<PAGE>
<TABLE>
<CAPTION>
                      GRILL CONCEPTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)


                                                       Three Months Ended
                                                   --------------------------
                                                    March 28,     March 30,
                                                       2004          2003
                                                   ------------  ------------
                                                    (restated)    (restated)
<S>                                                <C>           <C>
Revenues:
  Sales                                            $13,510,000   $12,134,000
  Cost reimbursements                                3,190,000     2,067,000
  Management and license fees                          296,000       231,000
                                                   ------------  ------------
    Total revenues                                  16,996,000    14,432,000

Cost of sales (exclusive of depreciation,
      presented separately below)                    3,772,000     3,283,000
                                                   ------------  ------------
  Gross profit                                      13,224,000    11,149,000
                                                   ------------  ------------

Operating expenses:
  Restaurant operating expenses                      8,125,000     7,308,000
  Reimbursed costs                                   3,190,000     2,067,000
  General and administrative                         1,227,000       910,000
  Depreciation and amortization                        449,000       502,000
  Pre-opening costs                                    147,000       187,000
  Gain on sale of assets                                     -       (11,000)
                                                   ------------  ------------
    Total operating expenses                        13,138,000    10,963,000
                                                   ------------  ------------

Income from operations                                  86,000       186,000
  Interest expense, net                                (66,000)      (83,000)
                                                   ------------  ------------
Income before provision for income taxes
  and minority interest                                 20,000       103,000

Provision for income taxes                             (23,000)      (55,000)
Minority interest in net loss of subsidiaries          100,000       196,000
                                                   ------------  ------------
    Net income                                          97,000       244,000

Preferred dividends accrued                            (13,000)      (13,000)
                                                   ------------  ------------

Net income applicable to common stock              $    84,000   $   231,000
                                                   ============  ============
Net income per share applicable to common stock:
  Basic net income                                 $      0.02   $      0.04
                                                   ============  ============
  Diluted net income                               $      0.01   $      0.04
                                                   ============  ============

Weighted average share outstanding:
  Basic                                              5,545,864     5,537,071
                                                   ============  ============
  Diluted                                            6,192,910     5,537,071
                                                   ============  ============
</TABLE>

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


                                        5
<PAGE>
<TABLE>
<CAPTION>
                           GRILL CONCEPTS, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (unaudited)


                                                                   Three Months Ended
                                                                -------------------------
                                                                 March 28,     March 30,
                                                                    2004         2003
                                                                ------------  -----------
Cash flows from operating activities:                            (restated)   (restated)
<S>                                                             <C>           <C>
  Net income                                                    $    97,000   $  244,000
   Adjustments to reconcile net income to net cash provided by
     (used in) operating activities:
    Depreciation and amortization                                   449,000      502,000
    Stock based compensation expense                                187,000        5,000
    Gain on sale of assets                                                -      (11,000)
    Minority interest in loss of subsidiaries                      (100,000)    (196,000)

  Changes in operating assets and liabilities:
      Inventories                                                    (1,000)     (25,000)
      Receivables                                                   170,000     (234,000)
      Reimbursable costs receivable                                  38,000       (9,000)
      Prepaid expenses and other current assets                    (287,000)    (292,000)
      Other assets                                                   28,000        1,000
      Accounts payable                                              301,000       49,000
      Accrued expenses                                             (276,000)    (353,000)
      Reimbursable costs payable                                    (38,000)       9,000
      Other long-term liabilities                                   (83,000)     (44,000)
                                                                ------------  -----------
Net cash provided by (used in) operating activities                 485,000     (354,000)
                                                                ------------  -----------

Cash flows from investing activities:
  Purchase of furniture, equipment and improvements              (1,241,000)    (184,000)
  Restricted cash for Daily Grill at Continental Park, LLC                -      466,000
  Proceeds from sale of assets                                            -       26,000
                                                                ------------  -----------
Net cash provided by (used in) investing activities              (1,241,000)     308,000
                                                                ------------  -----------

Cash flows from financing activities:
  Tenant improvement allowances                                     885,000            -
  Proceeds from minority interests                                   35,000            -
  Payments on related party debt                                    (58,000)     (61,000)
  Payments on long term debt                                       (119,000)     (98,000)
  Return of capital and profits to minority shareholder             (68,000)     (72,000)
                                                                ------------  -----------
Net cash provided by (used in) financing activities                 675,000     (231,000)
                                                                ------------  -----------

Net decrease in cash and cash equivalents                           (81,000)    (277,000)
Cash and cash equivalents, beginning of period                    1,496,000    1,275,000
                                                                ------------  -----------
Cash and cash equivalents, end of period                        $ 1,415,000   $  998,000
                                                                ============  ===========

Supplemental cash flow information:
  Cash paid during the period for:
    Interest                                                    $    51,000   $   59,000
    Income taxes                                                $    36,000   $   16,000
</TABLE>

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


                                        6
<PAGE>
 GRILL CONCEPTS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED 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 auditors. The December 28, 2003 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  for  the year ended December 28, 2003, as amended on
     October  15,  2004.  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  26,  2004.

     RESTATEMENT FOR CORRECTION OF ERRORS AND RETROACTIVE ADOPTION OF FIN 46

     The  accompanying consolidated financial statements as of December 28, 2003
     and  for  the  three-month period ended March 30, 2003 were restated on May
     14,  2004  from  those  originally  issued  to  reflect certain adjustments
     related  to stock compensation and other miscellaneous adjustments, and the
     consolidated  financial  statements  as  of March 28, 2004 and December 28,
     2003  and  for  the  three-month periods ended March 28, 2004 and March 30,
     2003  (as  previously  restated)  were subsequently restated on October 15,
     2004 to further reflect additional adjustments to revise the accounting for
     certain  of  the  Company's  ventures, record costs and revenues associated
     with  reimbursed  costs  under  management  agreements  and  make  other
     miscellaneous  corrections. Additionally, the Company revised its financial
     statements  as  of and for the three months ended March 28, 2004 to correct
     for  the  initial adoption of FASB Interpretation No. 46, "Consolidation of
     Variable  Interest  Entities,  an  interpretation  of ARB No. 51," (FIN 46)
     which  was  first  effective  for  this  quarter.

     In connection with the restatement resulting from these errors, the Company
     has elected to apply the retroactive adoption provisions of FIN 46 in these
     restated  financial statements and adjust previously reported amounts as of
     December  28,  2003  and  for the three months ended March 30, 2003 to give
     effect  to the adoption of FIN 46 as if it had been applied for all periods
     presented.  (Note - Except where there is no change to diluted earnings per
     share, the impact of each adjustment on diluted earnings per share has been
     identified  below.)

     RETROACTIVE ADOPTION OF FIN 46
     ------------------------------

     Effective  December  29,  2003  (the  first  day  of fiscal year 2004), the
     Company  adopted  the  provisions  of  FIN  46.  The Company has elected to
     retroactively adopt the provisions of FIN 46. The impact of the retroactive
     adoption  is  to consolidate The San Jose Grill LLC, Chicago - the Grill on
     the  Alley, LLC, the Daily Grill at Continental Park, LLC and the Universal
     CityWalk  Daily  Grill prior to fiscal year 2004. There is no impact on net
     income (loss) in any period as a result of the retroactive adoption. Errors
     in  the  prior accounting for these entities are discussed in the following
     sections.  The  restatement adjustment gives effect to the consolidation of
     these  entities. See further discussion of the adoption of FIN 46 under the
     accounting  policy  note  below.

     CORRECTIONS OF ERRORS
     ---------------------


                                        7
<PAGE>
     Stock  Compensation  and  Miscellaneous  Adjustments

     In  May  2004,  the terms of the Company's option grants were reevaluated -
     specifically,  provisions which allow an employee to exercise the option by
     surrendering  a  portion of the vested shares in lieu of paying cash. Under
     the  provisions  of Accounting Principles Board Opinion No. 25, "Accounting
     for Stock Issued to Employees," this cashless exercise feature requires the
     Company  to  account  for  its  option  plan  using  a  variable accounting
     treatment.  Under  variable  accounting,  compensation  expense  must  be
     remeasured  each  balance  sheet  date  based on the difference between the
     current  market  price  of  the  Company's  stock and the option's exercise
     price.  An  accrual  for  compensation  expense  is determined based on the
     proportionate  vested  amount  of  each  option  as prescribed by Financial
     Interpretation  No. 28, "Accounting for Stock Appreciation Rights and Other
     Variable  Stock  Option  or  Award  Plans." Each period, adjustments to the
     accrual are recognized in the income statement. Previously, the Company had
     accounted  for  its  options  using  a  fixed  accounting treatment whereby
     compensation  expense, if any, was only evaluated at the date of the option
     grant. The impact of this adjustment was to increase operating expenses and
     net  loss by $5,000 in first quarter of 2003. Results for the first quarter
     of  fiscal  2004  were  originally  reported  correctly and did not require
     restatement.

     In  addition  to  this change, the Company also recorded additional general
     and  administrative  expense  of  $28,000 ($0.01  per share) in  the fourth
     quarter  of  fiscal  year 2003 to correctly state its liability for payroll
     and  other  costs.  This  adjustment  increased  accumulated  deficit as of
     December 28, 2003. Lastly, the Company increased additional paid-in capital
     and  accumulated deficit by $55,000 as of each fiscal yearend in the period
     from  1998  through 2003 to properly reflect the fair value of fully vested
     stock  options  issued  in connection with severance agreements arranged in
     fiscal  year  1998  which  had  not  been  previously  expensed.

     Joint  Venture  Accounting  and  Miscellaneous  Adjustments

     Deconsolidation  of  The  San  Jose  Grill  LLC, Chicago - the Grill on the
     Alley,  LLC  and  the  Daily Grill at Continental Park, LLC Pursuant to SOP
     78-9

     In  August  2004,  the  Company reevaluated its consolidation policies with
     respect  to  its  investments in four restaurants held by limited liability
     companies (LLCs). Previously, all four of the LLCs were consolidated due to
     the  Company's  majority ownership in these entities. However, the terms of
     three  agreements  gave the minority interests certain voting rights which,
     when  evaluated under the relevant terms of Statement of Position No. 78-9,
     "Accounting   for   Investments   in   Real   Estate  Ventures,"  precluded
     consolidation.  Therefore, the Company restated previously reported results
     to  show  the investments in the San Jose Grill LLC, Chicago - The Grill on
     the  Alley,  LLC  and  the  Daily  Grill at Continental Park, LLC under the
     equity  method,  rather  than as consolidated subsidiaries. The fourth LLC,
     The  Grill on Hollywood, LLC, remained consolidated. There was no impact on
     net  income  as  a  result  of  this  change.  See further discussion below
     regarding  other  errors in the accounting for the Company's joint ventures
     and  the  consolidation  of all the Company's partially-owned entities upon
     the  adoption  of  FIN  46.

     Correction  of  Adoption  of  FIN  46

     FIN  46 was first effective for the Company for the quarter ended March 28,
     2004.  At  that  time,  the  Company  was  consolidating  all  of  its LLCs
     (incorrectly, in some cases, as indicated above), namely the San Jose Grill
     LLC, Chicago - The Grill on the Alley, LLC, The Grill on Hollywood, LLC and
     the  Daily  Grill  at  Continental  Park,  LLC,  and was accounting for its
     investment  in  the  Universal  CityWalk  Daily Grill partnership under the
     equity  method.  Upon  the  initial adoption of FIN 46, the Company made no
     changes to its accounting for the LLCs and partnership, as it believed them
     to  already  be  appropriately  consolidated.


                                        8
<PAGE>
     As  part  of  the  restatement  process  undertaken  in September 2004, the
     Company  reevaluated its adoption of FIN 46 which became even more relevant
     given  the  deconsolidation  of many of the LLC's pursuant to SOP 78-9. The
     Company  assessed  all  entities which are not wholly owned to determine if
     these  entities  would be considered variable interest entities and whether
     the  Company  would  be  considered  the  primary  beneficiary. The Company
     determined  that all of the following entities would be considered variable
     interest entities: The San Jose Grill LLC, Chicago - The Grill on the Alley
     LLC,  The  Grill on Hollywood LLC, The Daily Grill at Continental Park LLC,
     and  the  Universal  CityWalk  Daily  Grill  partnership.  The Company also
     determined  that it is the primary beneficiary for all these entities which
     has resulted in consolidation of these entities. The Company has elected to
     retroactively  adopt  the  provisions  of FIN 46 and present these variable
     interest  entities  as  consolidated  subsidiaries  for  the  prior periods
     presented  in  these  financial  statements.

     Chicago - The Grill on the Alley, LLC Loss Allocation and Interest Charge

     In  August  2004,  the  Company  reevaluated the accounting for its venture
     relating  to  the  Chicago  Grill  on the Alley restaurant. The venture was
     established  in  1999  and  is  administered  under  an operating agreement
     whereby  the  Company owns a 60% stated interest and the minority investor,
     the  Michigan Avenue Group (MAG), owns the remaining interests. The venture
     was originally funded by an eight percent, $1.7 million loan from MAG which
     was  used  to build the restaurant and fund initial operations. GCI made no
     financial  contribution  and  was  not  credited  with  any capital for the
     trademarks  and restaurant expertise it contributed to the venture. MAG had
     the  right  to  convert all or part of the loan into capital of the venture
     and  in  2000,  upon  completion  of  the  initial  built-out, it converted
     approximately $1.2 million of the loan into capital. There was no change in
     the  voting,  ownership  or  profit  sharing  interests as a result of this
     conversion.  The  terms  of  the  equity  interest  into which the loan was
     converted were such that MAG was entitled to an eight percent return on its
     capital  balance (defined as the "Preferred Return") which was identical to
     the  interest  rate  on  the  original  note. Additionally, the venture was
     obligated  to  repay  converted  capital  amounts  under  an  identical
     payment/amortization  schedule  as  the  original  note. GCI guaranteed the
     venture's  repayment  of  both  the loan and MAG converted capital amounts.

     Historically,  the  Company  had  consolidated the entity due to its belief
     that  it  had  a  controlling  voting  interest (see separate comment above
     regarding  deconsolidation  of  this  entity)  and  recognized  a  minority
     interest  at  an amount equal to MAG's capital contribution reduced by 40 %
     of  the  venture's  losses  and any return of capital amounts and allocated
     losses.  The  restaurant  has operated at a loss since inception and losses
     were  allocated  based  on  the  stated  40%  interest  noted  above.

     In  reviewing  this  accounting,  it  was  determined  that  the  venture's
     obligation  to  return  MAG's  capital  should  have  been  recognized as a
     liability  of the joint venture rather than treated as equity. As the joint
     venture is a consolidated entity, pursuant to FIN 46 the Company's accounts
     should  also  recognize  this  liability rather than reflect it as minority
     interest.  Furthermore,  interest  expense should have been recorded in the
     statement  of  operations  related  to  the  Preferred Return as opposed to
     treating  the  amounts  as  dividends.  Lastly, the Company determined that
     losses should not have been allocated to the minority interest member given
     that  MAG  had  no  equity  at risk. The impact of these adjustments was to
     decrease  the minority interest in loss of subsidiary by $41,000 ($0.01 per
     share)  and  $11,000  in  the  first quarters of fiscal year 2003 and 2004,
     respectively,  and  increase interest expense by $19,000 and $17,000 in the
     first  quarters  of  fiscal  year  2003  and  2004,  respectively.

     Chicago Grill on the Alley Warrants

     In  the  process  of evaluating prior accounting for this joint venture, it
     was  noted  that  warrants  to purchase approximately 203,000 shares of GCI
     stock  were  given  to  MAG in connection with the issuance of the original
     note.  In accordance with APB 14, "Accounting for Convertible Debt and Debt
     Issued  with Stock Purchase Warrants," the Company determined that the fair
     value  of  such  warrants


                                        9
<PAGE>
     should  have been recognized as a debt discount and recorded as a reduction
     to  the  loan  balance,  with  accretion  of  the  discount  recognized  as
     additional interest expense using the effective interest method. The effect
     of  this  adjustment was to increase additional paid-in capital by $322,000
     as  of each fiscal year-end in the period from 1999 to 2003 and as of March
     28,  2004.  Amortization  of  this amount has increased interest expense by
     $12,000  and  $9,000  in each of the first quarters of fiscal year 2003 and
     2004,  respectively.

     Other Joint Venture Loss Allocations

     The  Company  also  reviewed  its  accounting for its other joint ventures,
     specifically,  those that had been generating losses. Based on the terms of
     these  agreements,  losses  are  typically  allocated  in proportion to the
     recorded  amount  of  each  member's capital account balances. The recorded
     capital  balances  differ  from  the  actual  ownership percentages and the
     method  to  distribute  cash  flows  in  the  event of a liquidation of the
     venture. As noted above, while the Company usually has a majority ownership
     percentage,  the  minority  partner usually contributes the majority of the
     capital.  The  venture  agreements  specify  that  the  minority  member is
     entitled to cash distributions before the Company so that its investment is
     returned  prior  to  the  Company's.

     The  Company  determined that its previous loss allocations to the minority
     partners  were  incorrect  because  they  do  not  reflect  the  underlying
     economics  of  the  investments. The Company determined that a hypothetical
     liquidation  at  book value model should be utilized to allocate losses for
     each  reporting  period based on the prescribed order of cash distributions
     upon  liquidation.  The  change  in the amounts allocated to the individual
     members  based  on  this  process, as adjusted for actual contributions and
     distributions,  determines the allocation of profits or losses each period.
     The  impact  of this adjustment was to reduce the minority interest in loss
     of  subsidiaries  by  $23,000 and increase the minority interest in loss of
     subsidiaries by $23,000 in the first quarters of fiscal year 2003 and 2004,
     respectively.

     Reimbursed Costs

     The  Company  operates  a number of restaurants under management agreements
     whereby  it  is  responsible  for the operation of each restaurant. For its
     services,  the  Company  typically  receives  a  management  fee based on a
     percentage  of  revenue, an incentive fee which is usually a profit sharing
     arrangement  (collectively,  "Fees")  and  a reimbursement of the Company's
     direct  costs  of  operating  the  restaurant. Management agreements are in
     place  for restaurants in which the Company has a non-controlling ownership
     percentage  as  well as a number of restaurants in which the Company has no
     ownership.  For  non-consolidated  restaurants, the Company previously only
     reflected its Fees as revenue in the consolidated accounts. In August 2004,
     the  Company  reviewed  these  arrangements considering the primary obligor
     criteria  as described in EITF 01-14, "Income Statement Characterization of
     Reimbursements  Received  for 'Out-of-Pocket' Expenses Incurred." Under the
     terms  of the management agreements, the Company is hired as an independent
     contractor  and  is  responsible  for  settlement of all liabilities of the
     restaurant.  Additionally,  all employees are employees of the Company, not
     the  individual  restaurant.  Although payroll and other operating expenses
     are  paid  out of an agency bank account belonging to the restaurant, based
     on  the  weight  of the indicators identified in EITF 01-14 and EITF 99-19,
     "Reporting  Revenue  Gross  as  a  Principal  versus  Net as an Agent," the
     Company  determined  it  should  recognize  the reimbursement of restaurant
     expenses  of  the  unconsolidated  outlets  as  revenues  in  its financial
     statements  and  the  related  expenses.

     These  adjustments  have  been  reflected  in the accompanying statement of
     operations  through the addition of two new line items, cost reimbursements
     and  reimbursed  costs.  The  impact  of  these adjustments was to increase
     revenues  by $2,067,000 and $3,190,000 in the first quarter of fiscal years
     2003 and 2004, respectively and to increase operating expenses by a similar
     amount  for  both  periods.


                                       10
<PAGE>
     In  evaluating  certain  transactions  related to the San Francisco managed
     outlet, the Company also determined that advances made to the restaurant in
     prior  periods  should have been expensed in the period incurred instead of
     capitalized  and  deferred.

     Accounting  for  Lease  Incentives

     In  2003,  the  Company  began recording reimbursements received for tenant
     improvement  allowances  as  a  liability. Consistent with the guidance set
     forth  in SFAS No. 13, "Accounting for Leases," and FASB Technical Bulletin
     No.  88-1,  "Issues  Related  to  the  Accounting  for Leases," these lease
     incentives  are  amortized  over  the life of the lease as a credit to rent
     expense.   Prior   to   2003,   however,  the  Company  had  recorded  such
     reimbursements  as  a reduction to the value of the fixed asset. As part of
     this  restatement  process,  the Company has corrected its prior accounting
     practice  and recorded the unamortized value of previously unrecorded lease
     incentives  as  an increase to fixed assets and increase to other long-term
     liabilities.  This  adjustment totaled $835,000 and $800,000 as of December
     28,  2003  and  March  28,  2004,  respectively. There was no impact on net
     income  or  earnings per  share  as  a  result of this adjustment, however,
     depreciation  expense  was increased and restaurant operating expenses were
     decreased  by  $35,000  for the quarters ended March 30, 2003 and March 28,
     2004.  Upon  retroactive adoption of FIN 46, the adjustment increased fixed
     assets  and  other long-term liabilities by $1,238,000 and $1,194,000 as of
     December  28,  2003  and  March  28,  2004,  respectively,  and  increased
     depreciation expense and decreased restaurant operating expenses by $44,000
     for  the  first  quarters  of  fiscal  year  2003  and  2004.

     Other Equity Award Adjustments

     The  Company  recorded  additional interest expense of $5,000 in both first
     quarters  of  fiscal  year 2003 and 2004 to correct the amortization of the
     fair  value  of warrants issued to two principal shareholders in connection
     with  their  guarantee  of the Company's credit facility. Such amortization
     should  have  been recognized over the three-year term of the guarantee but
     was  incorrectly  being amortized over the term of the warrants. Additional
     paid-in  capital  was  increased  by $27,000 as of each fiscal yearend from
     2000  to  2003 to adjust the fair value of these warrants. The Company also
     increased  additional paid-in capital and accumulated deficit by $45,000 as
     of each fiscal yearend in the period from 2000 through 2003 and as of March
     28,  2004 to recognize the fair value of warrants to purchase 50,000 shares
     of  the  Company's  stock,  pursuant  to EITF 96-18, "Accounting for Equity
     Instruments  that  Are  Issued to Other than Employees for Acquiring, or in
     Conjunction  with Selling, Goods or Services." Such warrants were issued to
     a  professional  advisor  for services rendered in fiscal year 2000 and had
     not  been  previously  recognized.


     SUMMARY
     -------

     The  above  revisions  impacted the balance sheets as of March 28, 2004 and
     December  28,  2003 and the statements of operations and cash flows for the
     three-month  periods ended March 28, 2004 and March 30, 2003. The revisions
     have  had  no  impact  to  our  income  tax  provisions. The impact of this
     restatement, which has been reflected throughout the consolidated financial
     statements  and  accompanying  notes, is as follows (amounts in thousands):


                                       11
<PAGE>
<TABLE>
<CAPTION>
                                                     March 28, 2004
                                            ----------------------------------

                                                              As restated for
                                             As previously     correction of
                                             reported (1)         errors
<S>                                         <C>              <C>
Cash & equivalents                          $        1,405   $          1,415
Inventories                                            569                586
Receivables, net                                       561                488
Reimbursable costs receivable                                             542
Prepaid & Other                                        876                895
                                            ----------------------------------
Current assets                                       3,411              3,926
                                            ----------------------------------

Furniture, equipment and improvements, net           9,878             11,857

Goodwill, net                                          205                205
Liquor Licenses                                        330                350
Restricted Cash                                         72                 72
Advances to managed outlets                            302                  -
Note Receivable                                        112                112
Other Assets                                           420                247
                                            ----------------------------------
Total assets                                $       14,730   $         16,769
                                            ==================================

Current Liabilities
  Bank line of credit                       $            -   $              -
  Accounts payable                                   1,289              1,347
  Accrued expenses                                   2,239              2,313
  Reimbursable costs payable                                              542
  Current portion of debt                              326                360
  Note payable related parties                         242                321
                                            ----------------------------------
Current liabilities                                  4,096              4,883
                                            ----------------------------------

Long term debt                                         104                104
Note payable related parties                           310                935
Other long-term liabilities                          2,342              3,536
                                            ----------------------------------
Total liabilities                                    6,852              9,458
                                            ----------------------------------

Minority interest                                    1,337              1,898

Convertible stock
Common stock
Paid in capital                                     13,233             13,627
Accumulated deficit                                 (6,692)            (8,214)
                                            ----------------------------------
Total equity                                         6,541              5,413
                                            ----------------------------------

Total liabilities, minority interest and
  stockholders' equity                      $       14,730   $         16,769
                                            ==================================
</TABLE>


                                       12
<PAGE>
<TABLE>
<CAPTION>
                                                           December 28, 2003
                                       ---------------------------------------------------------
                                                                                As restated for
                                                                                 correction of
                                                                                  errors and
                                                             As restated for      retroactive
                                          As previously       correction of       adoption of
                                          reported (1)           errors             FIN 46
<S>                                    <C>                  <C>                <C>
Current assets:
  Cash and cash equivalents            $            1,473   $            972   $          1,496
  Inventories                                         570                355                585
  Receivables                                         741                747                658
  Reimbursable costs receivable                         -              1,503                580
  Prepaid and other current assets                    608                535                612
                                       ---------------------------------------------------------
    Total current assets                            3,392              4,112              3,931

Furniture, equipment and improvements               9,020              5,690             11,061

Goodwill                                              205                205                205
Liquor licenses                                       330                264                350
Restricted cash                                        72                  -                 72
Advances to managed outlets                           331                  -                  -
Note receivable                                       111                111                111
Other assets                                          426              1,320                275
                                       ---------------------------------------------------------
      Total assets                     $           13,887   $         11,702   $         16,005
                                       =========================================================

Current liabilities:
  Accounts payable                     $              998   $            676   $          1,046
  Accrued expenses                                  2,315              1,134              2,400
  Reimbursable costs payable                            -              1,503                580
  Current portion of debt                             254                 82                298
  Note payable related party                          269                346                345
                                       ---------------------------------------------------------
    Total current liabilities                       3,836              3,741              4,669
                                       ---------------------------------------------------------

Long term debt                                        283                106                285
Note payable related party                            323                230                969
Other long term liabilities                         1,496              1,632              2,734
                                       ---------------------------------------------------------
    Total liabilities                               5,938              5,709              8,657
                                       ---------------------------------------------------------

Minority interest                                   1,521                703              2,058
Stockholders' equity
  Preferred stock                                       -                  -                  -
  Common stock                                                             -                  -
  Additional paid-in capital                       13,207             13,601             13,601
  Accumulated deficit                              (6,779)            (8,311)            (8,311)
                                       ---------------------------------------------------------
    Total liabilities, minority
      interest and stockholders'
      equity                                        6,428              5,290              5,290
                                       ---------------------------------------------------------
                                       $           13,887   $         11,702   $         16,005
                                       =========================================================
</TABLE>


                                       13
<PAGE>
<TABLE>
<CAPTION>
                                               Three months ended                       Three months ended
                                                  March 28, 2004                          March 30, 2003
                                       ------------------------------  ----------------------------------------------------------

                                                                                                              As restated for
                                                                                         As restated for    correction of errors
                                        As previously                   As previously     correction of       and retroactive
                                        reported (1)     As restated    reported (1)         errors          adoption of FIN 46
<S>                                    <C>              <C>            <C>              <C>                <C>

Revenues
  Sales                                $       12,958   $     13,510   $       11,667   $          8,691   $              12,134
Cost reimbursements                                 -          3,190                -              6,806                   2,067
  Management Fees                                 296            296              255                333                     231
                                       ------------------------------  ----------------------------------------------------------
    Total Revenues                             13,254         16,996           11,922             15,830                  14,432
Cost of sales                                   3,630          3,772            3,174              2,316                   3,283
                                       ------------------------------  ----------------------------------------------------------
    Gross Profit                                9,624         13,224            8,748             13,514                  11,149
                                       ------------------------------  ----------------------------------------------------------
Operating expenses

  Restaurant and operating expenses             7,776          8,125            6,997              5,117                   7,308
  Reimbursed costs                                  -          3,190                -              6,806                   2,067
  General and administrative                    1,227          1,227              910                910                     910

  Depreciation and amortization                   386            449              432                312                     502
  Pre-opening costs                               147            147              187                  -                     187
  Gain on sale of assets                            -              -              (12)               (11)                    (11)
                                       ------------------------------  ----------------------------------------------------------
    Total operating expenses                    9,536         13,138            8,514             13,134                  10,963
                                       ------------------------------  ----------------------------------------------------------

  Income (loss) from operations                    88             86              234                380                     186
Interest expense, net                             (34)           (66)             (48)               (33)                    (83)
                                       ------------------------------  ----------------------------------------------------------
Income (loss) before provision from
income taxes, minority interest and
equity in loss of joint venture                    54             20              186                347                     103
Provision for income taxes                        (23)           (23)             (55)               (53)                    (55)
                                       ------------------------------  ----------------------------------------------------------
Income (loss) before minority
interest and equity in loss of joint
venture                                            31             (3)             131                294                      48
Minority interest in loss (earnings)
of subsidiaries                                    60            100              216                 90                     196
Equity in loss of joint venture                    (4)             -               (5)              (140)                      -
                                       ------------------------------  ----------------------------------------------------------
Net income (loss)                                  87             97              342                244                     244
Preferred dividends accrued                       (13)           (13)             (13)               (13)                    (13)
                                       ------------------------------  ----------------------------------------------------------
Net income available for common
shareholders                           $           74   $         84   $          329   $            231   $                 231
                                       ==============================  ==========================================================

Net income per share applicable to
common stock :
Basic Net Income                                 0.01           0.02             0.06               0.04                    0.04
Diluted Net Income                               0.01           0.01             0.06               0.04                    0.04

Average-weighted shares
outstanding
Basic                                           5,546          5,546            5,537              5,537                   5,537
Diluted                                         6,193          6,193            5,537              5,537                   5,537
</TABLE>


                                       14
<PAGE>
<TABLE>
<CAPTION>
                                                                      March 28, 2004
                                                           ---------------------------------------

                                                            As previously      As restated for
                                                            reported (1)     correction of errors
<S>                                                        <C>              <C>

Cash flows from operating activities
    Net Income                                             $           87   $                  97
    Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
        Depreciation and amortization                                 386                     449
        Stock based compensation                                      187                     187
        Minority interest in net income                               (60)                   (100)
        Equity in loss of JV                                            4                       -
    Changes in operating assets and liabilities:
        Inventories                                                     1                      (1)
        Receivables                                                   180                     170
        Reimbursable costs receivable                                   -                      38
        Prepaid expenses and other current assets                    (272)                   (287)
        Other assets                                                   22                      28
        Accounts payable                                              291                     301
        Accrued expenses                                             (265)                   (276)
        Reimbursable costs payable                                      -                     (38)
        Other long-term liabilities                                    (1)                    (83)
                                                           ---------------------------------------
            Net cash provided by operating activities                 560                     485
                                                           ---------------------------------------

Cash flows from investing activities:
    Purchase of furnitutre, equipment and improvements             (1,240)                 (1,241)
    Additional investment in CityWalk                                 (20)                      -
    Advance repaid by managed outlet                                   29                       -
                                                           ---------------------------------------
            Net cash used in investing activities                  (1,231)                 (1,241)
                                                           ---------------------------------------

Cash flows from financing activities:
    Tenant improvement allowances                                     847                     885
    Proceeds from minority interests                                   15                      35
    Payments on related party debt                                    (40)                    (58)
    Payments on long term debt                                       (107)                   (119)
    Return of capital and profits to minority shareholder             (68)                    (68)
    Preferred return to Chicago                                       (44)                      -
                                                           ---------------------------------------
            Net cash provided by financing activities                 603                     675
                                                           ---------------------------------------

            Net decrease in cash and cash equivalents                 (68)                    (81)

Cash and cash equivalents, beginning of period                      1,473                   1,496
                                                           ---------------------------------------

Cash and cash equivalents, end of period                   $        1,405   $               1,415
                                                           =======================================
</TABLE>


                                       15
<PAGE>
<TABLE>
<CAPTION>
                                                                                  March 30, 2003
                                                           --------------------------------------------------------------------

                                                                                                          As restated for
                                                                                                      correction of errors and
                                                            As previously       As restated for       retroactive adoption of
                                                             reported (1)     correction of errors             FIN 46
<S>                                                        <C>               <C>                     <C>
Cash flows from operating activities
    Net Income                                             $           342   $                 244   $                     244
    Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
        Depreciation and amortization                                  432                     312                         502
        Stock based compensation                                         5                       5                           5
        Gain on sale of assets                                         (12)                    (12)                        (11)
        Minority interest in net income                               (216)                    (90)                       (196)
        Equity in loss of JV                                             5                     140                           -
        Changes in operating assets and liabilities:
        Inventories                                                    (22)                     (6)                        (25)
        Receivables                                                   (285)                   (176)                       (234)
        Reimbursable cost receivables                                                          181                          (9)
        Prepaid expenses and other currents assets                    (269)                   (232)                       (292)
        Other assets                                                    (4)                     (9)                          1
        Accounts payable                                                (9)                    (34)                         49
        Accrued expenses                                              (316)                   (239)                       (353)
        Reimbursable cost payable                                        -                    (181)                          9
        Other liabilities                                                                      (23)                        (44)
                                                           --------------------------------------------------------------------
            Net cash used in operating activities                     (349)                   (120)                       (354)
                                                           --------------------------------------------------------------------

Cash flows from investing activities:
    Purchase of furniture, equipment and improvements                 (184)                    (41)                       (184)
    Restricted cash for DGCP, LLC                                      466                       -                         466
    Proceeds from sale of assets                                        26                      26                          26
                                                           --------------------------------------------------------------------
            Net cash provided by investing activities                  308                     (15)                        308
                                                           --------------------------------------------------------------------

Cash flows from financing activities:
    Payments on related party debt                                     (36)                     22                         (61)
    Payments on long term debt                                         (98)                    (63)                        (98)
    Return of capital and profits to minority shareholder              (72)                      -                         (72)
    Preferred return to Chicago                                        (44)                      -                           -
                                                           --------------------------------------------------------------------
            Net cash used in financing activities                     (250)                    (41)                       (231)
                                                           --------------------------------------------------------------------

            Net increase(decrease) in cash                 $          (291)  $                (176)  $                    (277)
Cash and cash equivalents, beginning of period             $         1,275   $                 581   $                   1,275
                                                           --------------------------------------------------------------------
Cash and cash equivalents, end of period                   $           984   $                 405   $                     998
                                                           ====================================================================
</TABLE>

     (1)  The  Company previously restated its consolidated financial statements
     as  of  December  28,  2003  and  the three months ending March 30, 2003 to
     reflect the accounting for employee stock options using variable accounting
     treatment  and  to make other miscellaneous corrections. The effect of this
     restatement  was  to increase operating expenses and decrease net income by
     $5,000  in  for  the  quarter  ended March 30, 2003. There was no change to
     reported  net  income  per  share.  These  "As previously reported" amounts
     already  reflect  these  adjustments and represent the amounts presented in
     the


                                       16
<PAGE>
     Company's  Quarterly Report on Form 10-Q filed on May 27, 2004.In addition,
     certain  prior  year  amounts  have been reclassified to conform to current
     year  presentation.

2.   RESTRICTED CASH

     Restricted  cash  consists of amounts held in escrow for the Daily Grill at
     Continental Park in El Segundo, California which was opened in January 2003
     and  all  but  $72,000  was  released  by  March  28,  2004.

3.   WORKER'S COMPENSATION LOSS RESERVE

     In  the  first  quarter  of  2004,  the Company obtained a large deductible
     worker's  compensation  policy  for  2004  that  includes  a deductible per
     occurrence  of  $250,000  subject to an aggregate loss of $1.7 million. The
     Company  has  established  a loss reserve to cover the potential deductible
     amounts.  The loss reserve is determined by estimating the ultimate cost to
     the  Company  utilizing  information  on  current  accidents,  prior  year
     experience  and  the  carrier's  loss  development  and loss trend factors.

4.   LONG-TERM TENANT IMPROVEMENT ALLOWANCE

     Construction  of  the  Bethesda  Daily  Grill  was  paid for through a $1.8
     million  tenant improvement allowance of which $885,000 was received during
     the  first  quarter  of  2004.  This  tenant improvement allowance has been
     recorded  in  long-term  leasehold  improvement  allowance  and  is  being
     amortized  against  rent  expense  over  the  15  year  lease  term.

5.   OPERATING  LEASES  AND  CONTRACTUAL  OBLIGATIONS

     During  the  quarter ended March 28, 2004, we entered into a lease relating
     to a restaurant scheduled to open in Santa Monica, CA, in the first quarter
     of  2005. Accordingly, at March 28, 2004, we were obligated under seventeen
     leases covering the premises in which our Daily Grill and Grill Restaurants
     are  located  as  well  as leases on our executive offices. Such restaurant
     leases and the executive office lease contain minimum rent provisions which
     provide  for  the  payment  of  minimum  aggregate  rental  payments  of
     approximately  $22.5  million  over  the life of those leases, with minimum
     annual  rental  payments of $3.1 million in 2004, $5.3 million between 2005
     and  2006, $4.3 million between 2007 and 2008, and $9.8 million thereafter.
     With  the  exception  of  entering into the referenced lease, there were no
     material  changes  in  our  obligations  under  operating  leases  or other
     contracts  during  the  quarter  ended  March 28, 2004 as compared to those
     described  in the Company's Form 10-K for the year ended December 28, 2003,
     as  amended.

6.   RECENTLY ISSUSED ACCOUNTING REQUIREMENTS

     Effective  December  29,  2003  (the  first  day  of fiscal year 2004), the
     Company adopted the provisions of FIN 46. In light of the changes resulting
     from  the  current  restatement  process,  the  Company  has  elected  to
     retroactively  adopt  the  provisions  of  FIN  46  so  that  the financial
     presentation  in  this  Amended  Quarterly  Report  on  Form 10-Q/A is more
     consistent  with  the  presentation  of  the  Company's  ongoing  financial
     position  and  results  of  operations.

     Under  FIN  46,  an  entity  is considered to be a variable interest entity
     ("VIE")  when  it  has equity investors which lack the characteristics of a
     controlling financial interest, or its capital is insufficient to permit it
     to  finance  its  activities  without  additional  subordinated  financial
     support.  Consolidation  of  a  VIE  by  an investor is required when it is
     determined  that  the investor is the primary beneficiary and will absorb a
     majority  of  the  VIE's expected losses or residual returns if they occur.


                                       17
<PAGE>
     Management  has  assessed  all  entities  which are not wholly owned by the
     Company to determine if these entities would be considered VIEs and whether
     the  Company would be considered the primary beneficiary. It was determined
     that  all of the following entities would be considered VIEs: Chicago - The
     Grill  on the Alley, San Jose Grill, South Bay Daily Grill, Hollywood Grill
     and  Universal  Daily  Grill.  Of  these  entities,  the  Company  has been
     determined  to  be  the  primary beneficiary for Chicago - The Grill on the
     Alley,  San  Jose  Grill,  South Bay Daily Grill and Universal Daily Grill.

     Chicago - The Grill on the Alley LLC, an Illinois limited liability company
     ("Chicago  Grill"), was formed in February 1999 and commenced operations on
     June  12,  2000. The Chicago Grill was formed for the purpose of owning and
     operating  "The  Grill on the Alley" restaurant located in the Westin Hotel
     in Chicago, Illinois. All of the business of the Company is conducted under
     the  name  "The Grill on the Alley," patterned after The Grill on the Alley
     in  Beverly  Hills,  California.

     The  members  of  the Chicago Grill are the Company, which holds a member's
     percentage  interest  of  60%,  and  The  Michigan  Avenue Group, a general
     partnership  which holds the remaining member's percentage interest of 40%.
     The  Chicago  Grill  is  managed  exclusively  by the Company who has full,
     complete  and  exclusive  authority,  power,  and  discretion to manage and
     control the business, property and affairs of the Chicago Grill. In return,
     the  Chicago  Grill  pays  the  Company  a  management  fee  of 5% of gross
     restaurant  revenues.  Total assets and revenues of the Chicago Grill as of
     and  for  the  three  months  ended  March 28, 2004 were approximately $2.6
     million and $1.0 million, respectively.

     San  Jose  Grill  LLC,  a  California  limited liability company ("San Jose
     Grill"),  was formed in July 1997 and commenced operations on May 13, 1998.
     San  Jose  Grill  was  formed  for the purpose of owning and operating "The
     Grill  on  the Alley" restaurant located in the Fairmont Hotel in San Jose,
     California.  All of the business of the Company is conducted under the name
     "The  Grill  on  the Alley," also patterned after The Grill on the Alley in
     Beverly  Hills,  California,  owned  by  the  Company.

     The  members  of the San Jose Grill are the Company, which holds a member's
     percentage interest of 50.05%, and Light Tower Restaurant Associates LLC, a
     California  limited  liability  company, which holds the remaining member's
     percentage  interest of 49.95% and is an affiliate of the San Jose Fairmont
     Hotel.  The  San  Jose  Grill is managed exclusively by the Company who has
     full, complete and exclusive authority, power, and discretion to manage and
     control  the  business,  property  and  affairs  of  the San Jose Grill. In
     return, the San Jose Grill pays the Company a management fee of 5% of gross
     restaurant sales. Total assets and revenues of the San Jose Grill as of and
     for  the  three months ended March 28, 2004 were approximately $1.6 million
     and  $1.2  million,  respectively.

     Daily  Grill  at  Continental  Park,  LLC,  a  California limited liability
     company (the "Daily Grill at Continental Park"), was formed on May 28, 2002
     and commenced operations on January 16, 2003. The South Bay Daily Grill was
     formed  for  the  purpose  of  owning  and  operating  the  Daily  Grill at
     Continental Park restaurant located in the Plaza in El Segundo, California.
     All  of  the business of the entity is conducted under the name Daily Grill
     at  Continental  Park,  LLC and is patterned after Daily Grill restaurants,
     owned  by  the  Company.

     The  members  of  Daily  Grill  at  Continental  Park  are  Grill  Concepts
     Management  Inc.,  which holds an ownership's percentage interest of 50.1%,
     and  Continental  Plaza  Restaurant  Corporation  ("CPR"),  a  California
     corporation  which  holds  the  remaining  ownership percentage interest of
     49.9%.  The operations are managed exclusively by the Company who has full,
     complete  and  exclusive  authority,  power,  and  discretion to manage and
     control  the  business,  property and affairs of the entity. In return, the
     Daily  Grill at Continental Park pays the Company a management fee of 5% of
     the adjusted gross restaurant's revenues. Total assets and restaurant sales
     of the Daily Grill at Continental Park as of and for the three months ended
     March  28,  2004  were  approximately  $1.3  million  and  $0.8  million,
     respectively.


                                       18
<PAGE>
     The  Grill  on  Hollywood  LLC, a California limited liability company (the
     "Grill on Hollywood"), was formed on July 26, 2001 and commenced operations
     on  November  9,  2001. The entity was formed for the purpose of owning and
     operating  "The Grill on Hollywood" restaurant located in the Hollywood and
     Highland  entertainment  and shopping complex in Hollywood, California. All
     of  the  business  of  the entity is conducted under the name "The Grill on
     Hollywood,"  patterned  after  The  Grill  on  the  Alley in Beverly Hills,
     California,  owned  by  the  Company.

     The  members  of  the  Grill  on  Hollywood  are  the Company which holds a
     member's  percentage  interest  of  51%,  and  TH  Grill,  Inc., a Delaware
     corporation,  which holds the remaining member's percentage interest of 49%
     and is an affiliate of the TrizecHahn Hollywood, LLC. The entity is managed
     exclusively  by  the  Company.  In  return, the Grill on Hollywood pays the
     Company  a  management fee of 5% of gross restaurant revenues. Total assets
     and  restaurant  sales  of  the  Grill on Hollywood as of and for the three
     months ended March 28, 2004 were approximately $1 million and $0.7 million,
     respectively.

     Universal  Grill  Joint  Venture,  a  California  general  partnership (the
     "Universal Grill"), was formed in December 1998 and commenced operations on
     June  28,  1999.  Universal  Grill was formed for the purpose of owning and
     operating  "Daily  Grill  Short Order" restaurant located in the retail and
     entertainment  district  of Universal CityWalk Hollywood in Universal City,
     California.  All  of the business of the entity is conducted under the name
     "Daily  Grill  Short  Order,"  patterned  after  Daily  Grill in Brentwood,
     California,  owned  by  the  Company.

     The  partners  of the Universal Grill are Universal Grill Concepts, Inc., a
     wholly  owned subsidiary of the Company, which holds a partner's percentage
     interest  of  50%,  and  Universal  Studios  Development  Venture  Six,  a
     California  corporation  which  holds  the remaining partnership percentage
     interest  of 50%. The Universal Grill is managed exclusively by the Company
     who  has  full,  complete and exclusive authority, power, and discretion to
     manage  and  control  the  business, property and affairs of the entity. In
     return,  the  Universal  Grill pays the Company a management fee of 5.5% of
     the adjusted gross restaurant's revenues. Total assets and restaurant sales
     of  the Universal Grill as of and for the three months ended March 28, 2004
     were approximately $1.0 million and $0.5 million, respectively.
     In  April  2004,  the  EITF  reached  final  consensus  on  EITF  03-06,
     "Participating Securities and the Two-Class Method under FASB Statement No.
     128,"  which  requires  companies  that  have  participating  securities to
     calculate  earnings  per  share  using  the  two-class  method. This method
     requires  the allocation of undistributed earnings to the common shares and
     participating  securities based on the proportion of undistributed earnings
     that  each  would  have been entitled to had all the period s earnings been
     distributed.  EITF  03-06  is  effective for fiscal periods beginning after
     June  30,  2004  and earnings per share reported in prior periods presented
     must  be  retroactively  adjusted  in  order to comply with EITF 03-06. The
     Company  believes  there  will  be  no  impact  on  the Company's financial
     statements  as  the  preferred  shares  are  not  participating securities.


7.   DISTRIBUTION OF CAPITAL AND PREFERRED RETURNS

     The  Company's  San  Jose  Grill,  Chicago  -  Grill on the Alley, Grill on
     Hollywood and South Bay (Continental Park) Daily Grill restaurants are each
     owned  by  limited  liability  companies  (the "LLCs") in which the Company
     serves  as  manager  and  owns a controlling interest. Each of the LLCs has
     minority  interest  owners,  some  of whom have participating rights in the
     joint  venture such as the ability to approve operating and capital budgets
     and the borrowing of money. In connection with the financing of each of the
     LLCs,  the  minority  members  may  have  certain  rights  to  priority
     distributions of capital until they have received a return of their initial
     investments  ("Return  of  Member  Capital")  as  well as rights to receive
     defined  preferred  returns on their invested capital ("Preferred Return").

     The  following  tables  set forth a summary for each of the LLCs of (1) the
     distributions  of  capital  to  the  Members  and/or the Company during the
     quarter  ended  March  28,  2004,  (2)  the  unreturned  balance


                                       19
<PAGE>
     of the capital contributions of the Members and/or the Company at March 28,
     2004,  and  (3) the accrued but unpaid preferred returns due to the Members
     and/or  the  Company  at  March  28,  2004:


<TABLE>
<CAPTION>
SAN JOSE GRILL LLC

<S>                                  <C>      <C>
Distributions of capital, preferred
return and profit during the three
months ended March 28, 2004:         Members  $68,000
                                              =======
                                     Company  $68,000
                                              =======
Unreturned Initial Capital
Contributions at March 28, 2004:     Members  $     0
                                              =======
                                     Company  $     0
                                              =======

Accrued but unpaid Preferred
Returns at March 28, 2004:           Members  $     0
                                              =======
                                     Company  $     0
                                              =======
</TABLE>


<TABLE>
<CAPTION>
CHICAGO - GRILL ON THE ALLEY

<S>                                 <C>          <C>
Distributions of capital and note
repayments during the three months
ended March 28, 2004:               Members (a)  $   63,000
                                                 ==========
                                    Company      $        0
                                                 ==========
Unreturned Initial Capital
Contributions at March 28, 2004:    Members      $1,072,000
                                                 ==========
                                    Company      $        0
                                                 ==========

Accrued but unpaid Preferred
Returns at March 28, 2004:          Members      $        0
                                                 ==========
                                    Company      $        0
</TABLE>



                                       20
<PAGE>
<TABLE>
<CAPTION>
THE GRILL ON HOLLYWOOD LLC

<S>                                    <C>      <C>
Distributions of capital during three
months ended March 28, 2004:           Members  $        0
                                                ==========
                                       Company  $        0
                                                ==========
Unreturned Initial Capital
Contributions at March 28, 2004:       Members  $1,200,000
                                                ==========
                                       Company  $  250,000
                                                ==========

Accrued but unpaid Preferred
Returns at March 28, 2004:             Members  $        0
                                                ==========
                                       Company  $   73,000
                                                ==========
</TABLE>


<TABLE>
<CAPTION>
SOUTH BAY DAILY GRILL (CONTINENTAL PARK LLC)

<S>                                    <C>      <C>
Distributions of capital during three
months ended March 28, 2004:           Members  $        0
                                                ==========
                                       Company  $        0
                                                ==========
Unreturned Initial Capital
Contributions at March 28, 2004:       Members  $1,000,000
                                                ==========
                                       Company  $  350,000
                                                ==========

Accrued but unpaid Preferred
Returns at March 28, 2004:             Members  $  128,000
                                                ==========
                                       Company  $   45,000
                                                ==========
</TABLE>


     (a)  Distribution  of  capital  as  of  March  28, 2004 includes $29,000 of
          payments  of  capital and loan and $34,000 of payments on interest and
          preferred  return.


8.   STOCK-BASED COMPENSATION

     In  December 2002, the Financial Accounting Standards Board ("FASB") issued
     SFAS  No.  148,  "Accounting  for  Stock-Based  Compensation-Transition and
     Disclosure,"  which  amends SFAS No. 123. SFAS No. 148 provides alternative
     methods of transition for a voluntary change to the fair value based method
     of  accounting  for  stock-based  compensation.  In  addition, SFAS No. 148
     amends  the  disclosure  requirements  of SFAS No. 123 to require prominent
     disclosures  in  both  annual  and  interim  financial statements about the
     method  of  accounting for stock-based employee compensation and the effect
     of  the  method  used on reported results of operations. As the Company has
     not  elected  to  change  to  the fair value based method of accounting for
     stock  based  employee  compensation,  the adoption of SFAS No. 148 did not
     have  a  material  impact on the Company's financial position or results of
     operations.  All  disclosure requirements of SFAS No. 148 have been adopted
     and  are  reflected  in  these  financial  statements.


                                       21
<PAGE>
     The  Company accounts for stock-based employee compensation arrangements in
     accordance  with  provisions of Accounting Principles Board ("APB") Opinion
     No.  25,  "Accounting  for  Stock  Issued  to  Employees,"  and  related
     interpretations,  and  complies  with the disclosure provisions of SFAS No.
     123,  "Accounting for Stock-Based Compensation." Under APB 25, compensation
     expense  is  based  on the difference, if any, on the date of grant between
     the  fair  value of the Company's stock and the amount an employee must pay
     to  acquire  the  stock.  Because  grants  under  the plan require variable
     accounting  treatment,  due  to  the  cashless  exercise  feature  of those
     options,  compensation  expense  is  remeasured  at each balance sheet date
     based  on  the difference between the current market price of the Company's
     stock and the option exercise price. An accrual for compensation expense is
     determined  based  on  the  proportionate  vested  amount of each option as
     prescribed  by  Financial  Interpretation  No.  28,  "Accounting  for Stock
     Appreciation  Rights  and Other Variable Stock Option or Award Plans." Each
     period,  adjustments to the accrual are recognized in the income statement.
     The  Company  accounts for stock and options to non-employees at fair value
     in  accordance  with the provisions of SFAS No. 123 and the Emerging Issues
     Task  Force  Consensus  on  Issue  No.  96-18.

     On  June  1,  1995,  the  Company's  Board  of  Directors adopted the Grill
     Concepts,  Inc.  1995  Stock  Option Plan (the "1995 Plan") and on June 12,
     1998  the 1998 Stock Option Plan (the "1998 Plan") was adopted. These Plans
     provide for options to be issued to the Company's employees and others. The
     exercise  price of the shares under option shall be equal to or exceed 100%
     of  the  fair  market value of the shares at the date of grant. The options
     generally  vest  over  a  five-year  period.
     The terms of the option grants allow the employee to exercise the option by
     surrendering a portion of the vested shares in lieu of paying cash, subject
     to the terms of the plan including the rights of the Compensation Committee
     to  amend  grants  in  any manner that the committee in its sole discretion
     deems  to  not  adversely  impact  the  option  holders.

     The  Company has adopted the disclosure-only provisions of SFAS No. 148 and
     SFAS  No. 123, and will continue to use the intrinsic value-based method of
     accounting  prescribed  by APB Opinion No. 25, "Accounting for Stock Issued
     to  Employees."  Pro  forma  compensation  expense  for the Company's stock
     option  plans  determined  based  on  the  fair value at the grant date for
     awards  is  as  follows:

<TABLE>
<CAPTION>
                                              2004         2003
                                           -----------  -----------
                                           (restated)   (restated)
<S>                                        <C>          <C>
Net income, as reported                    $   97,000   $  244,000
Add: stock compensation expense
recorded                                      187,000        5,000
Deduct: stock compensation expense
  under fair value method                     (30,000)     (38,000)
Net income, pro forma                      $  254,000   $  211,000
Net income per share applicable to common
stock, as reported:
    Basic                                  $     0.02   $     0.04
    Diluted                                $     0.01   $     0.04
Net income per share applicable to common
stock, pro forma:
    Basic                                  $     0.04   $     0.04
    Diluted                                $     0.04   $     0.04
</TABLE>


                                       22
<PAGE>
9.   PER SHARE DATA

     Pursuant  to SFAS No. 128, "Earnings Per Share," basic net income per share
     is  computed by dividing the net income attributable to common shareholders
     by  the  weighted-average  number  of  common shares outstanding during the
     period. Diluted net income per share is computed by dividing the net income
     attributable  to  common  shareholders  by  the  weighted-average number of
     common  and  common equivalent shares outstanding during the period. Common
     share  equivalents  included  in  the  diluted computation represent shares
     issuable  upon  assumed exercise of stock options, warrants and convertible
     preferred  stocks  using  the  treasury  stock  method.

     A  reconciliation  of earnings available to common stockholders and diluted
     earnings  available to common stockholders and the related weighted average
     shares  for  the  quarters  ended March 28, 2004 and March 30, 2003 follow:

<TABLE>
<CAPTION>
                                   2004                    2003
                                -----------             -----------
                                 Earnings     Shares     Earnings     Shares
                                ----------------------------------------------
<S>                             <C>          <C>        <C>          <C>
                                (restated)              (restated)
Net income                      $   97,000              $  244,000
Less: preferred stock dividend     (13,000)                (13,000)
                                -----------             -----------
Earnings available for common
stockholders                        84,000   5,545,864     231,000   5,537,071
Dilutive securities:
   Stock options                         -     142,215           -           -
   Warrants                              -     504,831           -           -
                                -----------  ---------  -----------  ---------
Dilutive earnings available to
common stockholders             $   84,000   6,192,910  $  231,000   5,537,071
                                ==============================================
</TABLE>

     Stock  options  for  230,750  and  664,525  shares  for  2004  and  2003,
     respectively,  were  excluded  from the calculation of diluted earnings per
     share  because  they were anti-dilutive. Warrants for 203,645 and 1,922,786
     shares  for 2004 and 2003, respectively, were excluded from the calculation
     of  diluted  earnings per share because they were anti-dilutive. 500 shares
     of  preferred  stock were excluded from the calculation of diluted earnings
     per  share  because  they  were  anti-dilutive  for  both  2004  and  2003.


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 28, 2003, as amended on October 15, 2004

     RESTATEMENT FOR CORRECTION OF ERRORS AND RETROACTIVE ADOPTION OF FIN 46

     The  accompanying consolidated financial statements as of December 28, 2003
     and  for  the  three-month period ended March 30, 2003 were restated on May
     14,  2004  from  those  originally  issued  to  reflect certain adjustments
     related  to stock compensation and other miscellaneous adjustments, and the
     consolidated  financial  statements  as  of March 28, 2004 and December 28,
     2003  and  for  the  three-month periods ended March 28, 2004 and March 30,
     2003  (as  previously  restated)  were subsequently restated on October 15,


                                       23
<PAGE>
     2004 to further reflect additional adjustments to revise the accounting for
     certain  of  the  Company's  ventures, record costs and revenues associated
     with  reimbursed  costs  under  management  agreements  and  make  other
     miscellaneous  corrections. Additionally, the Company revised its financial
     statements  as  of and for the three months ended March 28, 2004 to correct
     for  the  initial adoption of FASB Interpretation No. 46, "Consolidation of
     Variable  Interest  Entities,  an  interpretation  of ARB No. 51," (FIN 46)
     which  was  first  effective  for  this  quarter.

     In connection with the restatement resulting from these errors, the Company
     has elected to apply the retroactive adoption provisions of FIN 46 in these
     restated  financial statements and adjust previously reported amounts as of
     December  28,  2003  and  for the three months ended March 30, 2003 to give
     effect  to the adoption of FIN 46 as if it had been applied for all periods
     presented.  (Note - Except where there is no change to diluted earnings per
     share, the impact of each adjustment on diluted earnings per share has been
     identified  below.)

     RETROACTIVE ADOPTION OF FIN 46
     ------------------------------

     Effective  December  29,  2003  (the  first  day  of fiscal year 2004), the
     Company  adopted  the  provisions  of  FIN  46.  The Company has elected to
     retroactively adopt the provisions of FIN 46. The impact of the retroactive
     adoption  is  to consolidate The San Jose Grill LLC, Chicago - the Grill on
     the  Alley, LLC, the Daily Grill at Continental Park, LLC and the Universal
     CityWalk  Daily  Grill prior to fiscal year 2004. There is no impact on net
     income (loss) in any period as a result of the retroactive adoption. Errors
     in  the  prior accounting for these entities are discussed in the following
     sections.  The  restatement adjustment gives effect to the consolidation of
     these  entities. See further discussion of the adoption of FIN 46 under the
     accounting  policy  note  below.

     CORRECTIONS OF ERRORS
     ---------------------

     Stock  Compensation  and  Miscellaneous  Adjustments

     In  May  2004,  the terms of the Company's option grants were reevaluated -
     specifically,  provisions which allow an employee to exercise the option by
     surrendering  a  portion of the vested shares in lieu of paying cash. Under
     the  provisions  of Accounting Principles Board Opinion No. 25, "Accounting
     for Stock Issued to Employees," this cashless exercise feature requires the
     Company  to  account  for  its  option  plan  using  a  variable accounting
     treatment.  Under  variable  accounting,  compensation  expense  must  be
     remeasured  each  balance  sheet  date  based on the difference between the
     current  market  price  of  the  Company's  stock and the option's exercise
     price.  An  accrual  for  compensation  expense  is determined based on the
     proportionate  vested  amount  of  each  option  as prescribed by Financial
     Interpretation  No. 28, "Accounting for Stock Appreciation Rights and Other
     Variable  Stock  Option  or  Award  Plans." Each period, adjustments to the
     accrual are recognized in the income statement. Previously, the Company had
     accounted  for  its  options  using  a  fixed  accounting treatment whereby
     compensation  expense, if any, was only evaluated at the date of the option
     grant. The impact of this adjustment was to increase operating expenses and
     net  loss by $5,000 in first quarter of 2003. Results for the first quarter
     of  fiscal  2004  were  originally  reported  correctly and did not require
     restatement.

     In  addition  to  this change, the Company also recorded additional general
     and  administrative  expense  of  $28,000 ($0.01  per share) in  the fourth
     quarter  of  fiscal  year 2003 to correctly state its liability for payroll
     and  other  costs.  This  adjustment  increased  accumulated  deficit as of
     December 28, 2003. Lastly, the Company increased additional paid-in capital
     and  accumulated deficit by $55,000 as of each fiscal yearend in the period
     from  1998  through 2003 to properly reflect the fair value of fully vested
     stock  options  issued  in connection with severance agreements arranged in
     fiscal  year  1998  which  had  not  been  previously  expensed.


                                       24
<PAGE>
     Joint  Venture  Accounting  and  Miscellaneous  Adjustments

     Deconsolidation  of  The  San  Jose  Grill  LLC, Chicago - the Grill on the
     Alley,  LLC  and  the  Daily Grill at Continental Park, LLC Pursuant to SOP
     78-9

     In  August  2004,  the  Company reevaluated its consolidation policies with
     respect  to  its  investments in four restaurants held by limited liability
     companies (LLCs). Previously, all four of the LLCs were consolidated due to
     the  Company's  majority ownership in these entities. However, the terms of
     three  agreements  gave the minority interests certain voting rights which,
     when  evaluated under the relevant terms of Statement of Position No. 78-9,
     "Accounting   for   Investments   in   Real   Estate  Ventures,"  precluded
     consolidation.  Therefore, the Company restated previously reported results
     to  show  the investments in the San Jose Grill LLC, Chicago - The Grill on
     the  Alley,  LLC  and  the  Daily  Grill at Continental Park, LLC under the
     equity  method,  rather  than as consolidated subsidiaries. The fourth LLC,
     The  Grill on Hollywood, LLC, remained consolidated. There was no impact on
     net  income  as  a  result  of  this  change.  See further discussion below
     regarding  other  errors in the accounting for the Company's joint ventures
     and  the  consolidation  of all the Company's partially-owned entities upon
     the  adoption  of  FIN  46.

     Correction  of  Adoption  of  FIN  46

     FIN  46 was first effective for the Company for the quarter ended March 28,
     2004.  At  that  time,  the  Company  was  consolidating  all  of  its LLCs
     (incorrectly, in some cases, as indicated above), namely the San Jose Grill
     LLC, Chicago - The Grill on the Alley, LLC, The Grill on Hollywood, LLC and
     the  Daily  Grill  at  Continental  Park,  LLC,  and was accounting for its
     investment  in  the  Universal  CityWalk  Daily Grill partnership under the
     equity  method.  Upon  the  initial adoption of FIN 46, the Company made no
     changes to its accounting for the LLCs and partnership, as it believed them
     to  already  be  appropriately  consolidated.

     As  part  of  the  restatement  process  undertaken  in September 2004, the
     Company  reevaluated its adoption of FIN 46 which became even more relevant
     given  the  deconsolidation  of many of the LLC's pursuant to SOP 78-9. The
     Company  assessed  all  entities which are not wholly owned to determine if
     these  entities  would be considered variable interest entities and whether
     the  Company  would  be  considered  the  primary  beneficiary. The Company
     determined  that all of the following entities would be considered variable
     interest entities: The San Jose Grill LLC, Chicago - The Grill on the Alley
     LLC,  The  Grill on Hollywood LLC, The Daily Grill at Continental Park LLC,
     and  the  Universal  CityWalk  Daily  Grill  partnership.  The Company also
     determined  that it is the primary beneficiary for all these entities which
     has resulted in consolidation of these entities. The Company has elected to
     retroactively  adopt  the  provisions  of FIN 46 and present these variable
     interest  entities  as  consolidated  subsidiaries  for  the  prior periods
     presented  in  these  financial  statements.

     Chicago - The Grill on the Alley, LLC Loss Allocation and Interest Charge

     In  August  2004,  the  Company  reevaluated the accounting for its venture
     relating  to  the  Chicago  Grill  on the Alley restaurant. The venture was
     established  in  1999  and  is  administered  under  an operating agreement
     whereby  the  Company owns a 60% stated interest and the minority investor,
     the  Michigan Avenue Group (MAG), owns the remaining interests. The venture
     was originally funded by an eight percent, $1.7 million loan from MAG which
     was  used  to build the restaurant and fund initial operations. GCI made no
     financial  contribution  and  was  not  credited  with  any capital for the
     trademarks  and restaurant expertise it contributed to the venture. MAG had
     the  right  to  convert all or part of the loan into capital of the venture
     and  in  2000,  upon  completion  of  the  initial  built-out, it converted
     approximately $1.2 million of the loan into capital. There was no change in
     the  voting,  ownership  or  profit  sharing  interests as a result of this
     conversion.  The  terms  of  the  equity  interest  into which the loan was
     converted were such that MAG was entitled to an eight percent return on its
     capital  balance (defined as the "Preferred Return") which was identical to


                                       25
<PAGE>
     the  interest  rate  on  the  original  note. Additionally, the venture was
     obligated  to  repay  converted  capital  amounts  under  an  identical
     payment/amortization  schedule  as  the  original  note. GCI guaranteed the
     venture's  repayment  of  both  the loan and MAG converted capital amounts.

     Historically,  the  Company  had  consolidated the entity due to its belief
     that  it  had  a  controlling  voting  interest (see separate comment above
     regarding  deconsolidation  of  this  entity)  and  recognized  a  minority
     interest  at  an amount equal to MAG's capital contribution reduced by 40 %
     of  the  venture's  losses  and any return of capital amounts and allocated
     losses.  The  restaurant  has operated at a loss since inception and losses
     were  allocated  based  on  the  stated  40%  interest  noted  above.

     In  reviewing  this  accounting,  it  was  determined  that  the  venture's
     obligation  to  return  MAG's  capital  should  have  been  recognized as a
     liability  of the joint venture rather than treated as equity. As the joint
     venture is a consolidated entity, pursuant to FIN 46 the Company's accounts
     should  also  recognize  this  liability rather than reflect it as minority
     interest.  Furthermore,  interest  expense should have been recorded in the
     statement  of  operations  related  to  the  Preferred Return as opposed to
     treating  the  amounts  as  dividends.  Lastly, the Company determined that
     losses should not have been allocated to the minority interest member given
     that  MAG  had  no  equity  at risk. The impact of these adjustments was to
     decrease  the minority interest in loss of subsidiary by $41,000 ($0.01 per
     share)  and  $11,000  in  the  first quarters of fiscal year 2003 and 2004,
     respectively,  and  increase interest expense by $19,000 and $17,000 in the
     first  quarters  of  fiscal  year  2003  and  2004,  respectively.

     Chicago Grill on the Alley Warrants

     In  the  process  of evaluating prior accounting for this joint venture, it
     was  noted  that  warrants  to purchase approximately 203,000 shares of GCI
     stock  were  given  to  MAG in connection with the issuance of the original
     note.  In accordance with APB 14, "Accounting for Convertible Debt and Debt
     Issued  with Stock Purchase Warrants," the Company determined that the fair
     value  of  such warrants should have been recognized as a debt discount and
     recorded as a reduction to the loan balance, with accretion of the discount
     recognized  as  additional  interest  expense  using the effective interest
     method.  The  effect  of this adjustment was to increase additional paid-in
     capital  by  $322,000 as of each fiscal year-end in the period from 1999 to
     2003  and  as  of March 28, 2004. Amortization of this amount has increased
     interest  expense  by  $12,000  and $9,000 in each of the first quarters of
     fiscal  year  2003  and  2004,  respectively.

     Other Joint Venture Loss Allocations

     The  Company  also  reviewed  its  accounting for its other joint ventures,
     specifically,  those that had been generating losses. Based on the terms of
     these  agreements,  losses  are  typically  allocated  in proportion to the
     recorded  amount  of  each  member's capital account balances. The recorded
     capital  balances  differ  from  the  actual  ownership percentages and the
     method  to  distribute  cash  flows  in  the  event of a liquidation of the
     venture. As noted above, while the Company usually has a majority ownership
     percentage,  the  minority  partner usually contributes the majority of the
     capital.  The  venture  agreements  specify  that  the  minority  member is
     entitled to cash distributions before the Company so that its investment is
     returned  prior  to  the  Company's.

     The  Company  determined that its previous loss allocations to the minority
     partners  were  incorrect  because  they  do  not  reflect  the  underlying
     economics  of  the  investments. The Company determined that a hypothetical
     liquidation  at  book value model should be utilized to allocate losses for
     each  reporting  period based on the prescribed order of cash distributions
     upon  liquidation.  The  change  in the amounts allocated to the individual
     members  based  on  this  process, as adjusted for actual contributions and
     distributions,  determines the allocation of profits or losses each period.
     The  impact  of this adjustment was to reduce the minority interest in loss
     of  subsidiaries  by  $23,000 and increase the minority interest in loss of
     subsidiaries by $23,000 in the first quarters of fiscal year 2003 and 2004,
     respectively.


                                       26
<PAGE>
     Reimbursed Costs

     The  Company  operates  a number of restaurants under management agreements
     whereby  it  is  responsible  for the operation of each restaurant. For its
     services,  the  Company  typically  receives  a  management  fee based on a
     percentage  of  revenue, an incentive fee which is usually a profit sharing
     arrangement  (collectively,  "Fees")  and  a reimbursement of the Company's
     direct  costs  of  operating  the  restaurant. Management agreements are in
     place  for restaurants in which the Company has a non-controlling ownership
     percentage  as  well as a number of restaurants in which the Company has no
     ownership.  For  non-consolidated  restaurants, the Company previously only
     reflected its Fees as revenue in the consolidated accounts. In August 2004,
     the  Company  reviewed  these  arrangements considering the primary obligor
     criteria  as described in EITF 01-14, "Income Statement Characterization of
     Reimbursements  Received  for 'Out-of-Pocket' Expenses Incurred." Under the
     terms  of the management agreements, the Company is hired as an independent
     contractor  and  is  responsible  for  settlement of all liabilities of the
     restaurant.  Additionally,  all employees are employees of the Company, not
     the  individual  restaurant.  Although payroll and other operating expenses
     are  paid  out of an agency bank account belonging to the restaurant, based
     on  the  weight  of the indicators identified in EITF 01-14 and EITF 99-19,
     "Reporting  Revenue  Gross  as  a  Principal  versus  Net as an Agent," the
     Company  determined  it  should  recognize  the reimbursement of restaurant
     expenses  of  the  unconsolidated  outlets  as  revenues  in  its financial
     statements  and  the  related  expenses.

     These  adjustments  have  been  reflected  in the accompanying statement of
     operations  through the addition of two new line items, cost reimbursements
     and  reimbursed  costs.  The  impact  of  these adjustments was to increase
     revenues  by $2,067,000 and $3,190,000 in the first quarter of fiscal years
     2003 and 2004, respectively and to increase operating expenses by a similar
     amount  for  both  periods.


                                       10
<PAGE>
     In  evaluating  certain  transactions  related to the San Francisco managed
     outlet, the Company also determined that advances made to the restaurant in
     prior  periods  should have been expensed in the period incurred instead of
     capitalized  and  deferred.

     Accounting  for  Lease  Incentives

     In  2003,  the  Company  began recording reimbursements received for tenant
     improvement  allowances  as  a  liability. Consistent with the guidance set
     forth  in SFAS No. 13, "Accounting for Leases," and FASB Technical Bulletin
     No.  88-1,  "Issues  Related  to  the  Accounting  for Leases," these lease
     incentives  are  amortized  over  the life of the lease as a credit to rent
     expense.   Prior   to   2003,   however,  the  Company  had  recorded  such
     reimbursements  as  a reduction to the value of the fixed asset. As part of
     this  restatement  process,  the Company has corrected its prior accounting
     practice  and recorded the unamortized value of previously unrecorded lease
     incentives  as  an increase to fixed assets and increase to other long-term
     liabilities.  This  adjustment totaled $835,000 and $800,000 as of December
     28,  2003  and  March  28,  2004,  respectively. There was no impact on net
     income  or  earnings per  share  as  a  result of this adjustment, however,
     depreciation  expense  was increased and restaurant operating expenses were
     decreased  by  $35,000  for the quarters ended March 30, 2003 and March 28,
     2004.  Upon  retroactive adoption of FIN 46, the adjustment increased fixed
     assets  and  other long-term liabilities by $1,238,000 and $1,194,000 as of
     December  28,  2003  and  March  28,  2004,  respectively,  and  increased
     depreciation expense and decreased restaurant operating expenses by $44,000
     for  the  first  quarters  of  fiscal  year  2003  and  2004.

     Other Equity Award Adjustments

     The  Company  recorded  additional interest expense of $5,000 in both first
     quarters  of  fiscal  year 2003 and 2004 to correct the amortization of the
     fair  value  of warrants issued to two principal shareholders in connection
     with  their  guarantee  of the Company's credit facility. Such amortization
     should  have  been recognized over the three-year term of the guarantee but
     was  incorrectly  being amortized over the term of the warrants. Additional
     paid-in  capital  was  increased  by $27,000 as of each fiscal yearend from
     2000  to  2003 to adjust the fair value of these warrants. The Company also
     increased  additional paid-in capital and accumulated deficit by $45,000 as
     of each fiscal yearend in the period from 2000 through 2003 and as of March
     28,  2004 to recognize the fair value of warrants to purchase 50,000 shares
     of  the  Company's  stock,  pursuant  to EITF 96-18, "Accounting for Equity
     Instruments  that  Are  Issued to Other than Employees for Acquiring, or in
     Conjunction  with Selling, Goods or Services." Such warrants were issued to
     a  professional  advisor  for services rendered in fiscal year 2000 and had
     not  been  previously  recognized.


     SUMMARY
     -------

     The  above  revisions  impacted the balance sheets as of March 28, 2004 and
     December  28,  2003 and the statements of operations and cash flows for the
     three-month  periods ended March 28, 2004 and March 30, 2003. The revisions
     have  had  no  impact  to  our  income  tax  provisions. The impact of this
     restatement, which has been reflected throughout the consolidated financial
     statements  and  accompanying  notes, is as follows (amounts in thousands):


                                       27
<PAGE>




                                       28
<PAGE>
<TABLE>
<CAPTION>
                                                March 28, 2004
                                        ----------------------------------

                                                          As restated for
                                         As previously     correction of
                                           reported           errors
<S>                                     <C>              <C>
Cash & equivalents                      $        1,405   $          1,415
Inventories                                        569                586
Receivables, net                                   561                488
Reimbursable costs receivable                                         542
Prepaid & other current assets                     876                895
                                        ----------------------------------
Current assets                                   3,411              3,926
                                        ----------------------------------

Furniture, equipment and improvements            9,878             11,857

Goodwill, net                                      205                205
Liquor licenses                                    330                350
Restricted cash                                     72                 72
Advances to managed outlets                        302                  -
Note receivable                                    112                112
Other assets                                       420                247
                                        ----------------------------------
Total assets                            $       14,730   $         16,769
                                        ==================================

Current Liabilities
  Bank line of credit                   $            -   $              -
  Accounts Payable                               1,289              1,347
  Accrued Expenses                               2,239              2,313
  Reimburseable costs payable                                         542
  Current portion of debt                          326                360
  Note payable related parties                     242                321
                                        ----------------------------------
Current liabilities                              4,096              4,883
                                        ----------------------------------

Long-term debt                                     104                104
Note payable related parties                       310                935
Other long-term liabilities                      2,342              3,536
                                        ----------------------------------
Total liabilities                                6,852              9,458
                                        ----------------------------------

Minority interest                                1,337              1,898

Convertible stock
Common stock
Paid in capital                                 13,233             13,627
Accumulated deficit                             (6,692)            (8,214)
                                        ----------------------------------
Total equity                                     6,541              5,413
                                        ----------------------------------

Total liabilities & equity              $       14,730   $         16,769
                                        ==================================
</TABLE>


                                       29
<PAGE>
<TABLE>
<CAPTION>
                                                         December 28, 2003
                                       -----------------------------------------------------
                                                                            As restated for
                                                                             correction of
                                                                              errors and
                                        As previously    As restated for      retroactive
                                           reported      correction of       adoption of
                                              (1)            errors             FIN 46
<S>                                    <C>              <C>                <C>
Current assets:
  Cash and cash equivalents            $        1,473   $            972   $          1,496
  Inventories                                     570                355                585
  Receivables                                     741                747                658
  Reimbursable costs receivable                     -              1,503                580
  Prepaid and other current assets                608                535                612
                                       -----------------------------------------------------
    Total current assets                        3,392              4,112              3,931

Furniture, equipment and improvements           9,020              5,690             11,061

Goodwill                                          205                205                205
Liquor licenses                                   330                264                350
Restricted cash                                    72                  -                 72
Advances to managed outlets                       331                  -                  -
Note receivable                                   111                111                111
Other assets                                      426              1,320                275
                                       -----------------------------------------------------
      Total assets                     $       13,887   $         11,702   $         16,005
                                       =====================================================

Current liabilities:
  Accounts payable                     $          998   $            676   $          1,046
  Accrued expenses                              2,315              1,134              2,400
  Reimbursable costs payable                        -              1,503                580
  Current portion of debt                         254                 82                298
  Note payable related party                      269                346                345
                                       -----------------------------------------------------
    Total current liabilities                   3,836              3,741              4,669
                                       -----------------------------------------------------

Long term debt                                    283                106                285
Note payable related party                        323                230                969
Other long term liabilities                     1,496              1,632              2,734
                                       -----------------------------------------------------
    Total liabilities                           5,938              5,709              8,657
                                       -----------------------------------------------------

Minority interest                               1,521                703              2,058
Stockholders' equity
  Preferred stock                                   -                  -                  -
  Common stock                                                         -                  -
  Additional paid-in capital                   13,207             13,601             13,601
  Accumulated deficit                          (6,779)            (8,311)            (8,311)
                                       -----------------------------------------------------
    Total stockholders' equity                  6,428              5,290              5,290
                                       -----------------------------------------------------
    Total liabilities, minority
      interest and stockholders'
      equity                          $       13,887   $         11,702   $         16,005
                                       =====================================================
</TABLE>


                                       30
<PAGE>
<TABLE>
<CAPTION>
                                             Three months ended                          Three months ended
                                               March 28, 2004                               March 30, 2003
                                      ---------------------------------  ---------------------------------------------------------

                                                                                                               As restated for
                                                         As restated                        As restated      correction of errors
                                       As previously    for correction    As previously    for correction      and retroactive
                                       reported (1)       of errors       reported (1)       of errors        adoption of FIN 46
<S>                                   <C>              <C>               <C>              <C>               <C>
Revenues
  Sales                               $       12,958   $        13,510   $       11,667   $         8,691   $              12,134
Cost reimbursements                                -             3,190                -             6,806                   2,067
  Management Fees                                296               296              255               333                     231
                                      ---------------------------------  ---------------------------------------------------------
    Total Revenues                            13,254            16,996           11,922            15,830                  14,432
Cost of sales                                  3,630             3,772            3,174             2,316                   3,283
                                      ---------------------------------  ---------------------------------------------------------
    Gross Profit                               9,624            13,224            8,748            13,514                  11,149
                                      ---------------------------------  ---------------------------------------------------------
Operating exenses

  Restaurant and operating expenses            7,776             8,125            6,997             5,117                   7,308
  Reimbursed costs                                 -             3,190                              6,806                   2,067
  General and administartive                   1,227             1,227              910               910                     910

  Depreciation and amortization                  386               449              432               312                     502
  Pre-opening costs                              147               147              187                 -                     187
  Gain on sale of assets                           -                 -              (12)              (11)                    (11)
                                      ---------------------------------  ---------------------------------------------------------
    Total operating expenses                   9,536            13,138            8,514            13,134                  10,963
                                      ---------------------------------  ---------------------------------------------------------

  Income (loss) from operations                   88                86              234               380                     186
Interest expense, net                            (34)              (66)             (48)              (33)                    (83)
                                      ---------------------------------  ---------------------------------------------------------

Income (loss) before provision from
income taxes, minority interest and
equity in loss of joint venture                   54                20              186               347                     103
Provision for income taxes                       (23)              (23)             (55)              (53)                    (55)
                                      ---------------------------------  ---------------------------------------------------------
Income (loss) before minorty
interest and equity in loss of
joint venture                                     31                (3)             131               294                      48
Minority interest in loss
(earnings) of subsidiaries                        60               100              216                90                    196
Equity in loss of joint venture                   (4)                -               (5)             (140)                       -
                                      ---------------------------------  ---------------------------------------------------------
Net income (loss)                                 87                97              342               244                     244
Preferred dividends accrued                      (13)              (13)             (13)              (13)                    (13)
                                      ---------------------------------  ---------------------------------------------------------
Net income available for common
shareholders                          $           74   $            84   $          329   $           231   $                 231
                                      =================================  =========================================================

Net income per share applicable to
common stock :
Basic Net Income                                0.01              0.02             0.06              0.04                    0.04
Diluted Net Income                              0.01              0.01             0.06              0.04                    0.04

Average-weighted shares
outstanding
Basic                                          5,546             5,546            5,537             5,537                   5,537
Diluted                                        6,193             6,193            5,537             5,537                   5,537
</TABLE>


                                       31
<PAGE>
<TABLE>
<CAPTION>
                                                                            March 28, 2004
                                                                 ---------------------------------------

                                                                  As previously      As restated for
                                                                  reported (1)     correction of errors
<S>                                                              <C>              <C>
Cash flows from operating activities
    Net income                                                   $           87   $                  97
    Adjustments to reconcile net income to net cash provided
    by (used in) operating activities:
        Depreciation and amortization                                       386                     449
        Minority interest in net income                                     (60)                   (100)
        Equity in loss of JV                                                  4                       -
        Stock based compensation                                            187                     187
    Changes in operating assets and liabilities
        Inventories                                                           1                      (1)
        Receivables                                                         180                     170
        Reimbursable costs receivable                                         -                      38
        Prepaid expenses and other currents assets                         (272)                   (287)
        Other assets                                                         22                      28
        Accounts payable                                                    291                     301
        Accrued expenses                                                   (265)                   (276)
        Reimbursable costs payable                                            -                     (38)
        Other long term liabilities                                          (1)                    (83)
                                                                 ---------------------------------------
            Net cash provided by operating activities                       560                     485
                                                                 ---------------------------------------

Cash flows from investing activities:
    Purchases of PP&E                                                    (1,240)                 (1,241)
    Additional investment in CityWalk                                       (20)                      -
    Proceeds from sale of assets                                             29                       -
                                                                 ---------------------------------------
            Net cash used in investing activities                        (1,231)                 (1,241)
                                                                 ---------------------------------------

Cash flows from financing activities:
    Tenant improvement allowances                                           847                     885
    Payments on related party debt                                          (40)                    (58)
    Payments on notes payable                                              (107)                   (119)
    Proceeds from minority interest investment                               15                      35
    Preferred return to Chicago                                             (44)                      -
    Return of capital to minority interests                                 (68)                    (68)
                                                                 ---------------------------------------
            Net cash provided by financing activities                       603                     675
                                                                 ---------------------------------------

            Net increase(decrease) in cash                                  (68)                    (81)

Cash and cash equivalents, beginning of period                            1,473                   1,496
                                                                 ---------------------------------------

Cash and cash equivalents, end of period                         $        1,405   $               1,415
                                                                 =======================================
</TABLE>


                                       32
<PAGE>
<TABLE>
<CAPTION>
                                                                                   March 30, 2003
                                                                 ---------------------------------------------------------------

                                                                                                             As restated for
                                                                                                           correction of errors
                                                                  As previously      As restated for         and retroactive
                                                                  reported (1)     correction of errors     adoption of FIN 46
<S>                                                              <C>              <C>                     <C>
Cash flows from operating activities
    Net income                                                   $          342   $                 244   $                 244

    Adjustments to reconcile net income to net cash provided
    by (used in) operating activities:
        Depreciation and amortization                                       432                     312                     502
        Minority interest in net income                                    (216)                    (90)                   (196)
        Equity in loss of JV                                                  5                     140                       -
        Gain on sale of assets                                              (12)                    (12)                    (11)
        Stock based compensation                                              5                       5                       5
        Changes in operating assets and liabilities
        Inventories                                                         (22)                     (6)                    (25)
        Receivables                                                        (285)                   (176)                   (234)
        Reimbursable costs receivable                                                               181                      (9)
        Prepaid expenses and other current assets                          (269)                   (232)                   (292)
        Other assets                                                         (4)                     (9)                      1
        Accounts payable                                                     (9)                    (34)                     49
        Accrued expenses                                                   (316)                   (239)                   (353)
        Reimbursable costs payable                                            -                    (181)                      9
        Other liabilities                                                     -                     (23)                    (44)
                                                                 ---------------------------------------------------------------
            Net cash used in operating activities                          (349)                   (120)                   (354)
                                                                 ---------------------------------------------------------------

Cash flows from investing activities:
        Purchases of furniture, equipment and improvements                 (184)                    (41)                   (184)
        Proceeds from sale of assets                                         26                      26                      26
        Restricted cash for DGCP, LLC                                       466                       -                     466
                                                                 ---------------------------------------------------------------
            Net cash provided by investing activities                       308                     (15)                    308
                                                                 ---------------------------------------------------------------

Cash flows from financing activities:
    Payments on related party debt                                          (36)                     22                     (61)
    Payments on notes payable                                               (98)                    (63)                    (98)
    Preferred return to Chicago                                             (44)                      -                       -
    Return of capital to minority interests                                 (72)                      -                     (72)
                                                                 ---------------------------------------------------------------
            Net cash used in financing activities                          (250)                    (41)                   (231)
                                                                 ---------------------------------------------------------------

            Net decrease in cash                                           (291)                   (176)                   (277)

Cash and cash equivalents, beginning of period                            1,275                     581                   1,275
                                                                 ---------------------------------------------------------------

Cash and cash equivalents, end of period                         $          984   $                 405   $                 998
                                                                 ===============================================================
</TABLE>


                                       33
<PAGE>
     (1)  The  Company previously restated its consolidated financial statements
     as  of  December  28,  2003  and  the three months ending March 30, 2003 to
     reflect the accounting for employee stock options using variable accounting
     treatment  and  to make other miscellaneous corrections. The effect of this
     restatement  was  to increase operating expenses and decrease net income by
     $5,000  in  for  the  quarter  ended March 30, 2003. There was no change to
     reported  net  income  per  share.  These  "As previously reported" amounts
     already  reflect  these  adjustments and represent the amounts presented in
     the  Company's  Quarterly  Report  on  Form  10-Q  filed  on  May 27, 2004.

     In  addition,  certain prior year amounts have been reclassified to conform
     to  current  year  presentation.



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 sales revenues, except where otherwise noted.  We typically
analyze our operating expenses as a percentage of sales revenues, not total
revenues.

<TABLE>
<CAPTION>
                                                 Three Months Ended
                                               -----------------------
                                                March 28,   March 30,
                                                  2004         2003
                                               -----------  ----------
                                               (restated)   (restated)
                                               -----------  ----------
                                                    %           %
<S>                                            <C>          <C>
Revenues:
  Sales revenues                                     79.5        84.1
  Cost reimbursements                                18.8        14.3
  Management and license fees                         1.7         1.6
                                               -----------  ----------
    Total revenues                                  100.0       100.0

Cost of sales (exclusive of depreciation,
      presented separately below)                    22.2        22.7
                                               -----------  ----------
    Gross profit                                     77.8        77.3
                                               -----------  ----------

  Restaurant operating expenses                      47.8        50.6
  Reimbursed costs                                   18.8        14.3
  Gain on sale of assets                                -        (0.1)
  General and administrative                          7.2         6.3
  Depreciation and amortization                       2.7         3.5
  Pre-opening costs                                   0.9         1.4
                                               -----------  ----------
    Total operating expenses                         77.4        76.0
                                               -----------  ----------

    Operating income                                  0.4         1.3
Interest expense, net                                (0.3)       (0.6)
                                               -----------  ----------
Income before taxes, equity in loss of joint
    venture and minority interest                     0.1         0.7
Provision for income taxes                           (0.1)       (0.4)
Minority interest                                     0.6         1.4
Equity in loss of joint venture                       0.0         0.0
                                               -----------  ----------
    Net income                                        0.6         1.7
                                               ===========  ==========
</TABLE>


                                       34
<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>
<CAPTION>
                                   First Quarter     Total open at
                                      Openings      End of Quarter
                                 ----------------  ----------------
                                 FY 2004  FY 2003  FY 2004  FY 2003
<S>                              <C>      <C>      <C>      <C>
Daily Grill Restaurants:
  Company owned                        1        1       11       10
  Managed and/or licensed              -        -        7        6
Grill on the Alley restaurants:
  Company owned                        -        -        4        4
Other restaurants
  Managed and/or licensed              -        -        1        1
                                 -------  -------  -------  -------
Total                                  1        1       23       21
                                 =======  =======  =======  =======
</TABLE>

<TABLE>
<CAPTION>
                                                   Three Months Ended
                                            ----------------------------------
                                             March 28, 2004    March 30, 2003
                                            ----------------  ----------------
<S>                                         <C>               <C>
Weighted average weekly sales per company
owned restaurant:
  Daily Grill                               $        69,700   $        67,800
  Grill on the Alley                                 80,115            75,500

Change in comparable restaurants (1)
  Daily Grill                                           8.7%              3.4%
  Grill on the Alley                                    6.1%            (1.3)%

Total Company revenues:
  Daily Grill                               $     9,344,000   $     8,206,000
  Grill on the Alley                              4,166,000         3,928,000
  Reimbursed Costs                                3,190,000         2,067,000
  Management and license fees                       296,000           231,000
                                            ----------------  ----------------
Total consolidated revenues                      16,996,000        14,432,000
                                            ----------------  ----------------

Managed restaurants sales                         4,020,000         2,835,000
Licensed restaurants sales                        2,142,000         2,295,000
Less Reimbursed Costs                            (3,190,000)       (2,067,000)
Less management and license fees                   (296,000)         (231,000)
                                            ----------------  ----------------
Total system sales                          $    19,672,000   $    17,264,000
                                            ================  ================
</TABLE>

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


                                       35
<PAGE>
MATERIAL CHANGES IN RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 28,
2004 AS COMPARED TO THE THREE MONTHS ENDED MARCH 30, 2003

Revenues.  Revenues for the 2004 quarter increased 17.8% to $17.0 million from
$14.4 million in the 2003 period.  Sales revenues increased 11.3% to $13.5
million in 2004 from $12.1 million in 2003.  Reimbursed costs increased 54.3% to
$3.2 million in 2004 from $2.1 million in 2003.  Management and license fee
revenues increased to $296,000 in 2004 from $231,000 in 2003.  System-wide
sales, including sales of non-consolidated restaurants operated under license,
management or partnership agreements, totaled $19.7 million in 2004, an increase
of 13.9% from $17.3 million in 2003.  System-wide sales, computed by adding to
total revenues the revenues of unconsolidated restaurants and subtracting
license and management fees reported from those restaurants, is a non-GAAP
measure considered by management to be a key indicator of brand strength.  See
reconciliation of system-wide sales to revenues above.

Sales for Daily Grill restaurants increased by 13.9% from $8.2 million in the
2003 quarter to $9.3 million in the 2004 period.  The increase in sales revenues
for the Daily Grill restaurants from 2003 to 2004 was primarily attributable to
an increase in same store sales of 8.7% ($0.6 million) for restaurants open for
12 months in both 2003 and 2004 and opening of the Bethesda Daily Grill ($0.6
million). Management considers performance of same store or comparable store
sales to be an important measure of growth when evaluating performance. Weighted
average weekly sales at the Daily Grill restaurants increased 2.8% from $67,800
in 2003 to $69,700 in 2004.  Comparable restaurant sales and weighted average
weekly sales at the Daily Grill restaurants in 2004 reflected both increased
guest counts and improved average checks during the period.

Sales for Grill restaurants increased by 6.1% from $3.9 million in the 2003
quarter to $4.2 million in 2004.  The increase in sales revenues for the Grill
restaurants from 2003 to 2004 was attributable to the improved check averages
and increased guest counts.  Weighted average weekly sales at the Grill
restaurants increased 6.1% from $75,500 in 2003 to $80,115 in 2004.

Reimbursed costs which represent employee and other operating expenses of
managed restaurants for which we are reimbursed by the restaurants increased in
2004 primarily due to the opening of the Portland Daily Grill.

Management and license fee revenues during the 2004 quarter were attributable to
hotel restaurant management services which accounted for $238,000 of management
fees and licensing fees from the LAX Daily Grill, Skokie, Illinois Daily Grill
and the San Jose City Bar and Grill which totaled $58,000.  The increase in
management fees during 2004 was attributable to management of the Portland Daily
Grill beginning in September 2003 and improved sales at other managed locations.


Cost of Sales and Gross Profit.  While sales revenues increased by 11.3% ($1.4
million) in the 2004 quarter as compared to 2003, cost of sales increased by
14.9% ($489,000) and increased as a percentage of sales from 27.1% in 2003 to
27.9% in 2004.  The increase in cost of sales as a percentage of sales revenues
was attributable to higher costs for a variety of food and grocery products,
including dairy, poultry and seafood during the current period.  The dollar
increase in cost of sales reflects the opening of the Bethesda Daily Grill,
increased same store sales and the increase in various food and grocery prices.

Gross profit from restaurant sales increased 10.0% from $8.9 million (72.9% of
restaurant sales) in 2003 to $9.7 million (72.1% of restaurant sales ) in 2004.

Operating Expenses and Operating Results.  Total operating expenses, including
restaurant operating expenses, reimbursed costs, general and administrative
expense, depreciation and amortization, and pre-


                                       36
<PAGE>
opening costs, increased 19.8% to $13.1 million in the 2004 quarter
(representing 77.4% of total revenues) from $11.0 million in 2003 (representing
76.0% of total revenues).

Restaurant operating expenses increased 11.2% to $8.1 million in the 2004
quarter from $7.3 million in 2003.  As a percentage of restaurant sales,
restaurant operating expenses represented 60.1% in 2004 compared to 60.2% in
2003.  The dollar increase in restaurant operating expenses was primarily
attributable to the sales increase, including the opening of the Bethesda Daily
Grill ($458,000), and increases in various restaurant costs, including wages and
related costs ($107,000), promotion and advertising ($113,000), occupancy costs
($96,000), and compensation expense for stock options ($43,000) among others.
The decrease in operating expenses as a percentage of revenues resulted from
improved operating efficiencies partially offset by compensation expense for
stock options attributable to an increase in the Company's stock price during
the quarter.

Reimbursed  costs  increased  54.3% from $2.1 million in 2003 to $3.2 million in
2004.  These expenses represent the operating costs for which we are the primary
obligor of the restaurants we do not consolidate.  The increase is primarily due
to  the  opening  of  the  Portland  Daily  Grill.

General and administrative expenses rose 34.8% to $1.2 million in the 2004
quarter compared to $0.9 million in 2003.  General and administrative expenses
represented 9.1% of restaurant sales in 2004 as compared to 7.5% of revenues in
2003.  The increase in general and administrative expense was attributable to
increases in a broad number of categories, including compensation expense for
stock options ($139,000), wages and related costs ($82,000), travel expenses
($20,000), telephone ($13,000), taxes and license expenses ($10,000) and
professional services ($56,000), including costs associated with implementing
various systems and procedures mandated by the Sarbanes-Oxley Act.

Depreciation and amortization expense decreased 10.6% for the 2004 quarter
representing 3.3% of restaurant sales in 2004 and 4.1% of restaurant sales in
2003 primarily due to higher revenues with relatively fixed depreciation amounts
and the completion of amortization of a non-compete agreement in 2003.

Pre-opening costs totaled $147,000 in the 2004 period as compared with $187,000
in 2003. These pre-opening costs were attributable to the opening in January
2003 of the South Bay Daily Grill and the opening of the Bethesda Daily Grill in
January 2004.

Interest Expense.  Interest expense, net, totaled $66,000 during the 2004
quarter as compared to $83,000 in 2003.  The decrease in interest expense was
primarily attributable to the reduction in long-term debt.

Minority Interest.  We reported a minority interest in the loss of our majority
owned subsidiaries of $100,000 during the 2004 quarter as compared to $196,000
during the 2003 quarter.  The decrease in minority interest in loss was
primarily attributable to improved operating results from the South Bay Daily
Grill which reflected pre-opening costs for the 2003 quarter.

We reported net income of $97,000 in the 2004 quarter as compared to a net
income of $244,000 for 2003.

MATERIAL CHANGES IN FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES.

At March 28, 2004 the Company had negative working capital of $1.0 million and a
cash balance of $1.4 million compared to negative working capital of $0.7
million and a cash balance of $1.5 million at December 28, 2003.

Net cash provided by operations during the quarter ended March 28, 2004 totaled
$485,000 compared to $354,000 used in operations during the quarter ended March
30, 2003.  The positive change in working


                                       37
<PAGE>
capital resulted from a reduction in receivables and an increase in payables,
offset by a reduction in depreciation and amortization and lower net income.

Net cash used in investing activities during the quarter ended March 28, 2004
totaled $1,241,000 as compared to $308,000 provided by investing activities
during the quarter ended March 30, 2003.  Cash used in investing activities
during the current period related primary to purchases of property, plant and
equipment for the Bethesda Daily Grill ($1,155,000).

Net cash provided by financing activities during the quarter ended March 28,
2004 totaled $675,000 as compared to $231,000 used in financing activities
during the quarter ended March 30, 2003.  Cash provided by financing activities
during the current period related to tenant improvement allowances ($885,000),
and  investments by  minority members in  LLCs ($35,000), partially off-set by
reductions in debt ($177,000),  and distribution of profits to the minority
member of San Jose Grill, LLC ($68,000).

Financing Facilities.  At March 28, 2004, the Company had a bank credit facility
with nothing owing, a loan from a member of Chicago - The Grill on the Alley,
LLC of $1.1 million, equipment loans of $0.3 million, loans from
stockholders/officers of $0.2 million, and loans/advances from a landlord, the
SBA and others of $0.1 million.  Construction of the Bethesda Daily Grill was
paid for through a $1.8 million tenant improvement allowance of which $885,000
was received during the first quarter of 2004.  This tenant improvement
allowance has been recorded in long-term lease incentives and is being amortized
against rent expense over the 15 year lease term.

In March 2004, we entered into a preliminary agreement with respect to the
establishment of a new bank credit facility to replace our facility that expires
in October 2004.  Under the terms of the new bank credit facility, we will be
provided with financing in the form of a revolving line of credit in the amount
of $500,000, an irrevocable standby letter of credit in the amount of $700,000
and equipment financing in the amount of $500,000.  The facility will have a
one-year term, be secured by assets and is subject to certain standard borrowing
covenants.  The definitive loan documents were finalized in June 2004.

Operating Leases and Contractual Obligations. During the quarter ended March 28,
2004, we entered into a lease relating to a restaurant scheduled to open in the
first quarter of 2005. Accordingly, at March 28, 2004, we were obligated under
seventeen leases covering the premises in which our Daily Grill and Grill
Restaurants are located as well as leases on our executive offices. Such
restaurant leases and the executive office lease contain minimum rent provisions
which provide for the payment of minimum aggregate rental payments of
approximately $22.5 million over the life of those leases, with minimum annual
rental payments of $3.1 million in 2004, $5.3 million between 2005 and 2006,
$4.3 million between 2007 and 2008, and $9.8 million thereafter. With the
exception of entering into the referenced lease, there were no material changes
in our obligations under operating leases or other contracts during the quarter
ended March 28, 2004 as compared to those described in the Company's Form 10-K
for the year ended December 28, 2003, as amended.

Commitments Relating to Managed Restaurants and LLCs.  Under certain of our
operating and management agreements we have an obligation to potentially make
additional cash advances and/or contributions and may not realize any
substantial returns for some time.  The agreements and arrangements under which
we may be required to make cash advances or contributions, guarantee obligations
or defer receipt of cash are described in the Company's Form 10-K for the year
ended December 28, 2003, as amended.  Developments with respect to those
agreements and arrangements during the quarter ended March 28, 2004 include:

Pursuant to the obligation of the Owner of the Portland Daily Grill to provide
working capital advances of not less than $50,000 and not more than $150,000,
after which the Company is required to make working capital advances, the Owner
had advanced $100,000 as of March 28, 2004.


                                       38
<PAGE>
The Company's San Jose Grill, Chicago - Grill on the Alley, Grill on Hollywood
and South Bay Daily Grill restaurants are each owned by limited liability
companies (the "LLCs") in which the Company serves as manager and owns a
controlling interest.  Each of the LLCs has minority interest owners, some of
whom have participating rights in the joint venture such as the ability to
approve operating and capital budgets and the borrowing of money.  In connection
with the financing of each of the LLCs, the minority members may have certain
rights to priority distributions of capital until they have received a return of
their initial investments ("Return of Member Capital") as well as rights to
receive defined preferred returns on their invested capital ("Preferred
Return").

Detailed information regarding the initial capital contributions to the LLCs,
Preferred Returns for each LLC, management fees payable to the Company and
principal distribution provisions are included in the Company's Form 10-K for
the year ended December 28, 2003, as amended.  The following tables set forth a
summary for each of the LLCs of (1) the distributions of capital to the Members
and/or the Company during the quarter ended March 28, 2004, (2) the unreturned
balance of the capital contributions of the Members and/or the Company at March
28, 2004, and the accrued but unpaid preferred returns due to the Members and/or
the Company at March 28, 2004:

<TABLE>
<CAPTION>
SAN JOSE GRILL LLC

<S>                                  <C>      <C>
Distributions of capital, preferred
return and profit during the three
months ended March 28, 2004:         Members  $68,000
                                              =======
                                     Company  $68,000
                                              =======
Unreturned Initial Capital
Contributions at March 28, 2004:     Members  $     0
                                              =======
                                     Company  $     0
                                              =======

Accrued but unpaid Preferred
Returns at March 28, 2004:           Members  $     0
                                              =======
                                     Company  $     0
                                              =======
</TABLE>


<TABLE>
<CAPTION>
CHICAGO - GRILL ON THE ALLEY

<S>                                 <C>          <C>
Distributions of capital and note
repayments during the three months
ended March 28, 2004:               Members (a)  $   63,000
                                                 ==========
                                    Company      $        0
                                                 ==========
Unreturned Initial Capital
Contributions at March 28, 2004:    Members      $1,072,000
                                                 ==========
                                    Company      $        0
                                                 ==========

Accrued but unpaid Preferred
Returns at March 28, 2004:          Members      $        0
                                                 ==========
                                    Company      $        0
                                                 ----------
</TABLE>


                                       39
<PAGE>
<TABLE>
<CAPTION>
THE GRILL ON HOLLYWOOD LLC

<S>                                    <C>      <C>
Distributions of capital during three
months ended March 28, 2004:           Members  $        0
                                                ==========
                                       Company  $        0
                                                ==========
Unreturned Initial Capital
Contributions at March 28, 2004:       Members  $1,200,000
                                                ==========
                                       Company  $  250,000
                                                ==========

Accrued but unpaid Preferred
Returns at March 28, 2004:             Members  $        0
                                                ==========
                                       Company  $   73,000
                                                ==========
</TABLE>


<TABLE>
<CAPTION>
SOUTH BAY DAILY GRILL (CONTINENTAL PARK LLC)

<S>                                    <C>      <C>
Distributions of capital during three
months ended March 28, 2004:           Members  $        0
                                                ==========
                                       Company  $        0
                                                ==========
Unreturned Initial Capital
Contributions at March 28, 2004:       Members  $1,000,000
                                                ==========
                                       Company  $  350,000
                                                ==========

Accrued but unpaid Preferred
Returns at March 28, 2004:             Members  $  128,000
                                                ==========
                                       Company  $   45,000
                                                ==========
</TABLE>

a)   Distribution of capital as of March 28, 2004 includes $29,000 of payment of
     capital  and  loan and $34,000 of payment of interest and preferred return.


                                       40
<PAGE>
CRITICAL ACCOUNTING POLICIES

The Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America.  The Company believes certain critical accounting
policies affect its more significant judgments and estimates used in the
preparation of its financial statements.  A description of the Company's
critical accounting policies is set forth in the Company's Form 10-K for the
year ended December 28, 2003, as amended.  As of, and for the quarter ended,
March 28, 2004, there have been no material changes or updates to the Company's
critical accounting policies other than the establishment of a workers
compensation loss reserve.

Worker's Compensation Loss Reserves
-----------------------------------

In the first quarter of 2004, the Company obtained a worker's compensation
policy for 2004.  The Company has established a loss reserve to cover the
potential deductible amounts.  The loss reserve is determined by estimating the
ultimate cost to the Company utilizing information on current accidents, prior
year experience and the carrier's loss development and loss trend factors. The
Company has reduced costs during the first quarter by $27,000 resulting from
savings of $64,000 due to lower premium costs net of the establishment of a loss
reserve of $37,000 related to the deductible.

Based on the Company's review at March 28, 2004, the current loss reserve is
adequate.


RECENTLY ADOPTED ACCOUNTING REQUIREMENTS

Effective December 29, 2003 (the first day of fiscal year 2004), the Company
adopted the provisions of FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities, an interpretation of ARB No. 51."  In light of the changes
resulting from the current restatement process, the Company has elected to
retroactively adopt the provisions of FIN 46 so that the financial presentation
in this Amended Quarterly Report on Form 10-Q/A is more consistent with the
presentation of the Company's ongoing financial position and results of
operations.

Under FIN 46, an entity is considered to be a variable interest entity ("VIE")
when it has equity investors which lack the characteristics of a controlling
financial interest, or its capital is insufficient to permit it to finance its
activities without additional subordinated financial support. Consolidation of a
VIE by an investor is required when it is determined that the investor is the
primary beneficiary and will absorb a majority of the VIE's expected losses or
residual returns if they occur.

Management has assessed all entities which are not wholly owned by the Company
to determine if these entities would be considered VIEs and whether the Company
would be considered the primary beneficiary.  Upon adoption of FIN 46, it was
determined that all of the following entities would be considered VIEs: The San
Jose Grill LLC, Chicago - The Grill on the Alley, LLC,  The Grill on Hollywood,
LLC, The Daily Grill at Continental Park LLC and the Universal CityWalk Daily
Grill partnership.  The Company has determined it is the primary beneficiary for
all these entities.

In April 2004, the EITF reached final consensus on EITF 03-06, "Participating
Securities and the Two-Class Method under FASB Statement No. 128," which
requires companies that have participating securities to calculate earnings per
share using the two-class method. This method requires the allocation of
undistributed earnings to the common shares and participating securities based
on the proportion of undistributed earnings that each would have been entitled
to had all the period s earnings been distributed. EITF 03-06 is effective for
fiscal periods beginning after June 30, 2004 and earnings per share reported in
prior periods presented must be retroactively adjusted in order to comply with
EITF 03-06. The Company has adopted EITF 03-06 for the quarter ended June 30,
2004. The Company believes there will be no impact on the Company's financial
statements as the preferred shares are not participating securities.


                                       41
<PAGE>
CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS

In addition to the opening of new restaurants during 2004 and the various
factors described in the Company's Annual Report on Form 10-K for the year ended
December 28, 2003, as amended, the following developments may impact future
operating results and financial condition.

In March 2004, the Company signed a lease to open an owned Daily Grill in an
office park in Santa Monica, California.  The landlord will provide a turn-key
location built to our specifications.  The restaurant is scheduled to open in
the first quarter of 2005.

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; or that additional hotels will elect to
retain the Company's hotel restaurant management services

Variable accounting, as required, for employee stock options may result in
substantial fluctuations in the Company's compensation expense and accrued
compensation based on movements in stock price.

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 facility (the "Credit
Facility").  There were no borrowings outstanding under the Credit Facility at
March 28, 2004.  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.

ITEM 4. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures (as defined in Exchange
Act Rule 13a-15(e) and 15d-15(e)) that are designed to ensure that information
required to be disclosed in the Company's Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding the required disclosure.

In designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

At the time the original Quarterly Report on Form 10-Q was prepared and filed on
May 27, 2004, an evaluation as of the end of the period covered by this report
had been carried out under the supervision and with the participation of our
management, including our chief executive officer and chief financial officer,
of the effectiveness of our disclosure controls and procedures, as such term is
defined under Rule 13a-15(e) and Rule 15d -15(e) promulgated under the
Securities Exchange Act of 1934, as amended (the


                                       42
<PAGE>
"Exchange Act"). This evaluation was performed in light of a restatement caused
by an error in accounting for the Company's stock options which had been
accounted for using fixed accounting but which should have been accounted for
using variable accounting.  Based on their evaluation, our chief executive
officer and chief financial officer had originally concluded that our disclosure
controls and procedures were effective to ensure that we record, process,
summarize, and report information required to be disclosed by us in our reports
filed under the Securities Exchange Act within the time periods specified by the
Securities and Exchange Commission's rules and forms even though a restatement
had occurred.

Subsequent to filing our original report, and in connection with the review of
our financial statements for the second quarter of 2004, the Company was
informed by its independent accountants that  (i) the Company's accounting for
its joint ventures including loss allocations, guarantees of returns,
consolidation decisions and the initial adoption of FIN 46 was incorrect, (ii)
reimbursed costs related to management agreements should be presented on a
grossed-up basis as both revenue and expense, and (iii)  the accounting for
certain equity awards needed to be adjusted.  These instances were considered to
be material weaknesses in the selection and application of accounting principles
and policies.  After re-evaluation of our accounting practices for joint
ventures, reimbursed costs and equity awards, our management determined to
restate our consolidated financial statements as of December 28, 2003 and March
28, 2004 and for the three months ended March 30, 2003 and March 28, 2004.

In conjunction with the decision to restate our financial statements, management
re-evaluated our disclosure controls and procedures over the selection and
application of accounting principles, in particular, accounting for stock
options, joint ventures, reimbursed costs and equity awards, and concluded that
these controls were not effective as of March 28, 2004.  During the second and
third quarters of 2004, we took steps to identify, rectify and prevent the
recurrence of the circumstances that resulted in our determination to restate
prior period financial statements, including reviewing the terms of our stock
option grant agreements in relation to the option plan agreement, reviewing the
terms of all our joint venture and related agreements, reviewing the accounting
for reimbursed costs under our management agreements and reviewing the
accounting for all our equity awards.  As part of this undertaking, we have
consulted with our independent registered public accounting firm, increased
emphasis on continuing education for our accounting personnel and increased
emphasis on reviewing applicable accounting literature, all relating to the
selection and application of accounting principles pertaining to these areas.
In addition, in July 2004, we hired a new chief financial officer.  We believe
these enhancements to our system of internal controls and our disclosure
controls and procedures will be adequate to provide reasonable assurance that
the control objectives will be met.


                           PART II - OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

In March 2004, the Company issued 43,290 shares of common stock to Michael
Weinstock, the Company's Chairman and Executive Vice President, pursuant to the
exercise of 75,000 warrants held by Mr. Weinstock.  The exercise price of the
warrant, $1.4062 per share, was paid by means of a cashless exercise.  The
warrants were originally issued to Mr. Weinstock pursuant to an agreement by Mr.
Weinstock to guarantee certain bank indebtedness of the Company.

The issuance of the shares of our common stock described above was pursuant to
the exemption from registration provided by Section 4(2) of the Securities Act
of 1933, as amended and related state private offering exemptions. The purchaser
was an Accredited Investors as defined in the Securities Act who took the shares
for investment purposes without a view to distribution and had access to
information concerning the Company and its business prospects, as required by
the Securities Act.


                                       43
<PAGE>
In addition, there was no general solicitation or advertising in connection with
the issuance of the shares. All certificates for our shares contain a
restrictive legend. Finally, our stock transfer agent has been instructed not to
transfer any of such shares, unless such shares are registered for resale or
there is an exemption with respect to their transfer.

No commissions were paid in connection with the issuance described above.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a)  Exhibits

<TABLE>
<CAPTION>
<S>     <C>    <C>
        10.1   Employment Agreement, effective January 1, 2004, with Robert Spivak
        10.2   Consulting Agreement with Robert Spivak
        31.1*  Section 302 Certification of CEO
        31.2*  Section 302 Certification of CFO
        32.1*  Certification of CEO Pursuant to 18.U.S.C. Section 1350, as Adopted Pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002.
        32.2*  Certification of CFO Pursuant to 18.U.S.C. Section 1350, as Adopted Pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>

*       Filed herewith; all other exhibits previously filed.

   (b)  Reports on Form 8-K

        None


                                       44
<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:  October 13, 2004
                                   By:  _________________________________
                                        Robert Spivak
                                        President and Chief Executive Officer




                                   By:  _________________________________
                                        Philip Gay
                                        Chief Financial Officer


                                       45
<PAGE>