Diversified Restaurant Holdings, the largest franchisee for Buffalo Wild Wings and creator and operator of Bagger Dave's Burger, has closed eight underperforming Bagger Dave’s restaurants.
The restaurant closures will result in approximately $9 to $10 million in non-cash charges related to asset impairment and lease obligations. These costs will be incurred and booked in the fourth quarter of fiscal year 2015.
“DRH is committed to taking all appropriate and necessary actions to enhance value for all shareholders,” says Michael Ansley, chairman, president, and CEO. “We have therefore chosen to optimize our portfolio and improve overall profitability by closing eight underperforming Bagger Dave Restaurants. This will allow us to focus our attention on more profitable restaurants. Currently, five Bagger Dave’s are operating under the new and improved prototype and we are very encouraged with the initial performance. As we gain experience with the brand, we have confidence that we have made the necessary improvements to drive future success of the concept.”
Bagger Dave’s restaurant closures include eight locations opened between fiscal year 2012 and early fiscal year 2015. These restaurants were all closed on December 27. Of these, seven were located in Indiana and one was located in Detroit. Through the first nine months of the company’s fiscal year ended September 27, 2015, these eight restaurants generated $5.5 million in revenue. On a pro-forma basis, the remaining 18 Bagger Dave’s restaurants generated $14.1 million in revenue.
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