Diversified Restaurant Holdings Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2009. The company reported revenue of $5.0 million in the third quarter of 2009, which ended September 30, 2009, up 48.1% compared with revenue of $3.4 million in the third quarter of 2008. Food and beverage sales increased 55.2% to $4.6 million, compared with $2.9 million in the 2008 third quarter, while revenue from management and marketing fees was down slightly to $426,000 compared with $428,000 in the third quarter of 2008. Net income in the third quarter of 2009 was $174,000, or $0.006 per diluted share, compared with a net loss of $339,000, or $0.019 per diluted share, in the same period the prior year. Income from operations during the third quarter of 2009 was $444,000 compared with last year's third quarter loss from operations of $292,000. The improvement in income from operations was primarily driven by the increased revenue. Capital expenditures in the third quarter of 2009 were $19,000 compared with $2.3 million in the third quarter of 2008. DRH generated $271,000 in cash from operations during the third quarter of 2009 compared with cash from operations of $155,000 in the 2008 third quarter. The increase in the third quarter of 2009 was attributed to improved net income. For the quarter, the company reported income before tax of $308,983 compared with loss before tax of $392,792 for the same period a year ago. For the first nine months of 2009, revenue was $14.3 million, an 86.9% increase compared with revenue of $7.7 million in the 2008 period. Food and beverage sales were $13.0 million, more than double the level in last year's nine-month period. The 2009 nine-month period includes the operations of three restaurants that were opened during the first nine months of 2008 and an additional location that was opened in June 2009. Revenue from management and marketing fees was down slightly to $1.3 million, compared with $1.4 million in the third quarter of 2008 due to the timing of three new service agreements replacing those associated with acquired restaurant locations. Income from operations during the first nine months of 2009 was $787,000 compared with last year's loss from operations of $236,000 due primarily to the increase in revenue. Net income for the first nine months of 2009 was $323,000, or $0.011 per diluted share, compared with a loss of $370,000, or $0.02 per diluted share, in the same period the prior year, reflecting improved operating efficiencies at restaurants opened in late 2007 and throughout 2008. Through the nine-month period, the company generated $1.4 million in cash from operations compared with $326 thousand generated during the 2008 nine-month period. The year-to-date increase reflects the increase in net income associated with improved efficiencies at new locations. For the nine-month periods, capital expenditures were $287,000 in 2009 and $4.2 million in 2008, when DRH opened three new restaurants. For the nine months, the company reported income before tax of $526,948 compared with loss before tax of $438,633 for the same period a year ago. Capital expenditures are expected to be approximately $400,000 for 2009 with the increase in the fourth quarter related to the new Bagger Dave's restaurant just under construction.

Diversified Restaurant Holdings Inc. announced that its Board of Directors approved the establishment of a franchise system for Bagger Dave's(R). The Bagger Dave's Franchising Corporation has prepared and registered, where necessary, the Franchise Disclosure Document (FDD) in Michigan, Indiana and Ohio, authorizing the Company to sell franchises in those states.

Diversified Restaurant Holdings Inc. announced that it has signed a franchise agreement to operate a new Buffalo Wild Wings in Chesterfield, MI. The store is slated to open in 2010. This is their 12th restaurant out of a recently executed 32 Store Area Development Agreement with Buffalo Wild Wings International Inc.