DFRH Expands Bagger Dave's - Analyst Blog

By Zacks | October 04, 2012 AAA

Diversified Restaurant Holdings, Inc. (DFRH) recently opened a new unit under the Bagger Dave's Legendary Burger Tavern restaurant concept in Shelby Township, Michigan. The move is in line with the company's goal of increasing the number of restaurants across major U.S. states in 2012.

Shelby Township is a civil township of Oceana County in Michigan. The town has a growing restaurant industry and takes pride in major restaurateurs, such as McDonald's Corp. (MCD), Panera Bread Co. (PNRA) and Burger King Worldwide, Inc. (BKW).

Bagger Dave's is Diversified Restaurant's full-service, ultra-casual restaurant chain. The Company owns, operates and franchises the chain of Bagger Dave's outlets. The new unit marks the ninth Bagger Dave's restaurant opening in Michigan by Diversified Restaurants. The restaurant is located at The Hall Road Crossing Shopping Center and is a strategic fit, in terms of high customer traffic.

Till date, the company has opened two Bagger Dave's restaurants in Michigan. Also, the company recently opened its first Bagger Dave's restaurant in Indianapolis. Additionally, the company has also inked agreement to franchise Bagger Dave's restaurants in Missouri and intends to franchise Bagger Dave's restaurants in Illinois, Kentucky, Ohio and Wisconsin in the future.

Apart from operating and franchising Bagger Dave's, Diversified Restaurants is also a leading franchisee of Buffalo Wild Wings, Inc. (BWLD). Minnesota-based, Buffalo Wild Wings owns, operates and franchises Buffalo Wild Wings Grill & Bar restaurants. Diversified Restaurants currently operate 30 Buffalo Wild Wings outlets - 14 in Michigan, eight in Florida and four each in Illinois and Indiana.

As part of its plans of opening Buffalo Wild Wings restaurants, the company recently entered into a long-term lease agreement to open a new restaurant in Sault Saint Marie, Michigan. In addition, Diversified Restaurant also completed the acquisition of eight Buffalo Wild Wings restaurants in Indiana and Illinois. With these growth initiatives, Diversified Restaurant expects to operate around 46 Buffalo Wild Wings restaurants by the end of 2017.

Diversified Restaurant is currently on a growth trajectory for both restaurant chains. The total number of Buffalo Wild Wings and Bagger Dave's restaurants is projected to increase from 30 to 45 by the end of 2012.

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