Harvard Square will become the battleground for a muffin war when the Mug'n' Muffin chain begins to bake muffins at a new restaurant opposite the Country Kitchen muffin house.

Richard Newcombe, manager of the new Harvard Square Mug 'n' Muffin, said yesterday his restaurant will cater to the same clientele as Country Kitchen.

Muffins as Cars

Newcombe said his restaurant, at the site of the old Ye Olde Grist Mill, will differ from Country Kitchen in the quality of its food--"the difference between a Cadillac and a Ford."

Hugh Farrington, owner of Country Kitchen, remains confident that Mug n Muffin will not pose a serious threat to his restaurant.

"Since 1967, 14 new restaurants have opened up within half a mile of us and yet we're still in business," he said.

Until last February the Country Kitchen was a part of the Pewter Pot muffin franchise.

"People are too agraid of competition," Farrington said. "The more traffic Mug 'n' Muffin generates, the more I'll pick up. Competition creates. business."

"No one goes into the same restaurant seven days a week," he said. "Restaurant customers are extremely dis loyal."

Good but Fair

Farrington admitted his restaurant may suffer temporarily, but not in the long run.

"We serve good meals at a fair price," he said.

The location of the new Mug 'n' Muffin has never been a successful one for a restaurant, Farrington said. His father opened a restaurant there in 1921 and it failed miserably, he added.

Ye Olde Grist Mill was preceeded by another restaurant, Hungry Charlie's, which closed its doors in 1974.

Muffins Fall Flat