When Gregory sees Tybalt coming, he knows that Tybalt is a fiery character. He will not back down to a fight.
When he sees Tybalt he says "Say 'Better.' Here comes on of my master's kinsmen."
So he encourages the fight so that once they get it started, Tybalt will enter into the fight as well and they will have a head start in the fighting. Before Tybalt showed up in the distance, they were just going to banter back and forth. Once Tybalt was near, he gained a newfound confidence and decided to get a fight started.