Diversified Restaurant Holdings Inc. closed Sunday nearly a third of its 26 Bagger Dave’s Burger Tavern restaurants, the company said Monday.
Southfield, Mich.-based DRH, which is also the largest Buffalo Wild Wings Grill & Bar franchisee, said the closure of eight underperforming Bagger Dave’s restaurants would result in about $9 million to $10 million in asset impairment and lease obligation charges and $200,000 to $300,000 in cash severance charges for its fourth quarter.
Michael Ansley, DRH chairman, president and CEO, said in a statement that the closures “will allow us to focus our attention on more profitable restaurants.”
Seven of the Bagger Dave’s closures were in Indiana, and one in Detroit, the company said, leaving 16 restaurants in Michigan and one each in Indiana and Ohio.
“Five Bagger Dave’s are operating under the new and improved prototype, and we are very encouraged with the initial performance,” Ansley said. “As we gain experience with the brand, we have confidence that we have made the necessary improvements to drive future success of the concept.”
The full-service burger concept was founded in 2008, in Berkley, Mich., a suburb of Detroit.
Publicly traded DRH said that through its first three quarters ended Sept. 27, the eight restaurants that are now closed generated $5.5 million in revenue and lost $600,000 before interest, taxes, depreciation and amortization.
“On a pro-forma basis, the remaining 18 Bagger Dave’s restaurants generated $14.1 million in revenue” and $700,000 in EBITDA, the company said.
In addition to its 18 remaining Bagger Dave’s locations, DRH operates 62 Buffalo Wild Wings units in Florida, Illinois, Indiana, Michigan and Missouri.
Earlier this year, DRH completed a $54 million acquisition of 18 Buffalo Wild Wings restaurants in the St. Louis area.
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