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                                                                 EXHIBIT 10.3


                           [EATERIES, INC. LETTERHEAD]


                               September 30, 1998


Dear Brad:

         As Eateries, Inc. desires to establish by this letter the terms and
conditions of your full-time employment with Eateries as Vice President of
Finance and Chief Financial Officer, please review the following to ensure that
we are in agreement.

         1. As compensation for your services, you shall receive a salary
payable in equal bi-weekly installments at the annual rate of $150,000.

         2. Eateries shall pay the premiums for a Key Man Life Insurance policy
covering you and naming Eateries as the beneficiary of the policy. The amount of
insurance coverage shall range between $250,000 and $500,000, to be determined
at the sole discretion of the Chief Executive Officer of Eateries. In the event
of your death during the effectiveness of this letter agreement, Eateries shall
pay your designated beneficiary out of a portion of the policy proceeds a gross
amount equal to your annual salary payable in substantially equal installments
over a one year period at such times as Eateries makes regular salary payments
to its executives and subject to any tax or other withholding required by law.
The first installment shall be made on the first regularly-scheduled Eateries'
payday after Eateries' receipt of all proceeds from the policy.

         3. During your employment with Eateries, you shall be entitled to
receive health insurance, house accounts, and benefits on similar terms and
conditions as other Eateries executive officers. You shall receive six (6) weeks
of paid vacation each calendar year, including for calendar year 1998.

         4. During your employment with Eateries, you may receive cash bonuses,
the payment and amount of which will be determined at the sole discretion of the
Chief Executive Officer of Eateries based on total company performance.

         5. As additional compensation, Eateries shall grant you options to
purchase 150,000 shares of nonqualified, unregistered stock of Eateries (subject
to standard Rule 144 restrictions), subject to the terms and conditions set
forth in a separate Option Agreement to be executed between you and Eateries.
Your rights with respect to the options shall be controlled by the terms of the
Option Agreement and any actions taken under this letter agreement (including
termination) shall not alter the rights and obligations of the parties under the
Option Agreement.


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Brad Grow
September 30, 1998
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         6. Additional stock and/or stock options may be granted to you at the
discretion of the compensation committee of the board of directors and the Chief
Executive Officer of Eateries.

         7. This agreement and your employment with Eateries may be terminated
by either party to this agreement for any reason (or for no reason) upon not
less than ninety (90) days advance written notice. Upon termination, Eateries
shall have no further obligation to pay you any additional compensation,
benefits, or severance.

         If this letter correctly states your understanding of our agreement,
please execute the acceptance block provided below and return one fully-executed
copy to the undersigned.

                                       Very truly yours,

                                       EATERIES, INC.




                                       By:
                                          --------------------------------------
                                          VINCENT F. ORZA, JR., President


Agreed and Accepted this _____ 
day of ________________, 1998.



--------------------------------------
BRAD GROW



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