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PRESS RELEASE

        Boston, Mass., September 2, 1997 -- GRR Holdings, LLC ("Holdings"), a
limited liability company formed by Boston Ventures, and Ground Round
Restaurants, Inc. ("Ground Round") (Nasdaq NMS: GRXR) today announced that they
have signed a definitive merger agreement for Holdings to acquire all
outstanding shares of Ground Round common stock for $1.65 net per share in cash.

        Under the terms of the agreement, which has been approved by the board
of directors of Ground Round, GRR Merger Corp., a subsidiary of Holdings, will
begin a tender offer no later than September 8, 1997 for all outstanding shares
of Ground Round common stock at $1.65 net per share in cash.

        The tender offer will be conditioned upon, among other things, there
being validly tendered and (not withdrawn) prior to the expiration date of the
offer, shares of Ground Round common stock representing, together with shares
currently owned by Holdings, not less than 90% of the outstanding shares,
termination or expiration of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the
receipt of certain regulatory approvals of transfers of liquor licenses held by
the company or its subsidiaries and of exemptions from certain tied-house
statutes. Holdings currently owns 554,900 shares of Ground Round common stock,
or approximately 4.9% of the outstanding shares. In addition, certain
shareholders of Ground Round have agreed to tender their shares, representing
approximately 28% of the outstanding Ground Round common stock, in the offer.
Following the consummation of the tender offer, any shares not purchased in the
tender offer will be acquired in a merger at the same $1.65 net per share in
cash.

        In anticipation of the acquisition, Ground Round's existing lenders
have agreed, subject to certain conditions, to permit the company to use
certain insurance and sale proceeds, as well as certain funds that would
otherwise be required to pay amounts due under the existing credit agreement,
to satisfy Ground Round's ordinary course working capital needs until October
22, 1997. Ground Round's lenders have also made certain other concessions to
help the company consummate the merger.

        In addition, Ground Round's lenders have agreed to work with the
company and Boston Ventures to amend and extend Ground Round's existing credit
agreement to provide for more operating flexibility upon consummation of the
merger.

        Boston Ventures is a private investment partnership which focuses its
investments in the service sector of the economy with an emphasis on the
communications, media and leisure time markets.

        Ground Round operates 121 company and franchises 41 full-service,
casual dining restaurants in the Northeast, Mid-Atlantic and Midwest regions of
the United States.