Diversified Restaurant Holdings Reports Positive Preliminary Same Store Sales for Fourth Quarter 2018; Executes Agreement to Acquire Nine Buffalo Wild Wings Restaurants

2.2% same-store sales growth in fourth quarter breaks 11-quarter
negative trend; Positive momentum has continued into 2019

Restaurant Holdings, Inc.
(Nasdaq:SAUC) (“DRH” or the “Company”),
one of the largest franchisees for Buffalo Wild Wings®
(“BWW”) with 64 stores across five states, announced preliminary
unaudited sales results for the fourth quarter and year ended December
30, 2018. DRH also announced that it has entered into an agreement to
acquire nine BWW restaurants located in the Chicago market for $22.5

David G. Burke, President and CEO, stated, “We achieved our first
positive quarterly same-store sales result in three years and are
encouraged with the early read into 2019, as our quarter-to-date
same-store sales have continued to trend positively, despite severe
weather across many of our regions. Excluding those weather-related
days, same-store sales growth has been over 3% and traffic is the
leading driver. We believe this is a testament to the creative, measured
approach being taken by the new franchisor to reenergize and rebuild the
Buffalo Wild Wings brand, coupled with our focus on guest experience,
loyalty attachment and development of the delivery channel. We believe
there is a significant opportunity to build on this momentum throughout
the year as we execute on forthcoming brand-enhancing initiatives with
the support of a new, comprehensive marketing and promotion strategy,
starting in mid-March.”

He continued, “Given our excitement with the changes being made at BWW,
we believe that prudent, timely expansion will deliver shareholder
value. This transaction is particularly attractive to us because the
restaurants are located within our existing Midwest footprint, centered
in the Chicago market area where we currently have nine other locations.
With this additional scale, we expect to further leverage our
infrastructure, systems, marketing spend and leading operational
expertise to drive improved results in these locations.”

These restaurants generated approximately $32.7 million in revenue and
approximately $4.5 million of EBITDA in 2018. DRH expects to complete
the purchase in the second quarter, subject to franchisor consent and
waiving of its right of first refusal, as well as customary closing
conditions. Mr. Burke concluded, “We are evaluating various alternatives
to financing this transaction, which presents a tremendous
recapitalization opportunity for DRH aimed at adding longer-term
stability and driving future value creation.”

Preliminary 2018 Sales Results

Total revenue for the 2018 fourth quarter (a 13-week period) was $39.1
million compared with $41.9 million in the fourth quarter of 2017 (a
14-week period). Fourth quarter, 13-week comparable sales were up 2.2%,
the first positive quarter since 2015. For the full year 2018 (a 52-week
period), the Company estimates total revenue was $153.1 million compared
with $165.5 million in 2017 (a 53-week period).

Preliminary results remain subject to the completion of normal year-end
accounting procedures and are subject to change. The Company will
release financial and operating results for its fourth quarter and year
ended December 30, 2018 on March 7, 2019.

About Diversified Restaurant Holdings, Inc.

Diversified Restaurant Holdings, Inc. is one of the largest franchisees
for Buffalo Wild Wings with 64 franchised restaurants in key markets in
Florida, Illinois, Indiana, Michigan and Missouri. DRH’s strategy is to
generate cash, reduce debt and leverage its strong franchise operating
capabilities for future growth. The Company routinely posts news and
other important information on its website at http://www.diversifiedrestaurantholdings.com.

Safe Harbor Statement

The information made available in this news release contain
forward-looking statements which reflect DRH’s current view of future
events, results of operations, cash flows, performance, business
prospects and opportunities. Wherever used, the words “anticipate,”
“believe,” “expect,” “intend,” “plan,” “project,” “will continue,” “will
likely result,” “may,” and similar expressions identify forward-looking
statements as such term is defined in the Securities Exchange Act of
1934. Any such forward-looking statements are subject to risks and
uncertainties, actual growth, results of operations, financial
condition, cash flows, performance, business prospects and opportunities
could differ materially from historical results or current expectations.
Some of these risks include, without limitation, the franchisor waiving
its right of first refusal, our ability to obtain financing for the
acquisition, the success of initiatives aimed at improving the Buffalo
Wild Wings brand, the impact of economic and industry conditions,
competition, food safety issues, store expansion and remodeling, labor
relations issues, costs of providing employee benefits, regulatory
matters, legal and administrative proceedings, information technology,
security, severe weather, natural disasters, accounting matters, other
risk factors relating to business or industry and other risks detailed
from time to time in the Securities and Exchange Commission filings of
DRH. Forward-looking statements contained herein speak only as of the
date made and, thus, DRH undertakes no obligation to update or publicly
announce the revision of any of the forward-looking statements contained
herein to reflect new information, future events, developments or
changed circumstances or for any other reason.


Investor and Media:
Deborah K. Pawlowski
Kei Advisors

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