8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 4, 2017

DIVERSIFIED RESTAURANT HOLDINGS, INC.

(Name of registrant in its charter)

Nevada	000-53577	03-0606420
(State or other jurisdiction of  incorporation)	(Commission File Number)	(IRS Employer Identification No.)
	27680 Franklin Road Southfield, MI  48034
(Address of principal executive offices)

Registrant's telephone number:  (248) 223-9160

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ]    Written communications pursuant to Rule 425 under the Securities Act

[   ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act

[   ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

[   ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

Earnings Release

On May 4, 2017, Diversified Restaurant Holdings, Inc. (NASDAQ: SAUC) (the "Company") issued a press release announcing earnings and other financial results for the quarter ended March 26, 2017. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated here by reference.

Item 7.01. Regulation FD Disclosure

The Company has prepared presentation materials (the “Investor Presentation”) that management intends to use during its previously announced First Quarter 2017 Conference call on Friday, May 5, 2017 at 10:00 am Eastern Time, and from time to time thereafter in presentations about the Company’s operations and performance. The Company may use the Investor Presentation, possibly with modifications, in presentations to current and potential investors, analysts, lenders, business partners, acquisition candidates, customers, employees and others with an interest in the Company and its business.

A copy of the Investor Presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is available on the Company's website at http://www.diversifiedrestaurantholdings.com/investors/events-and-presentations/default.aspx. Materials on the Company's website are not part of or incorporated by reference into this Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statement and Exhibits

(d) Exhibits

Exhibit No. Description

99.1 Press Release of Diversified Restaurant Holdings, Inc. reporting financial results and earnings for the quarter ended March 26, 2017

99.2 Diversified Restaurant Holdings, Inc. Investor Presentation dated May 4, 2017

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DIVERSIFIED RESTAURANT HOLDINGS, INC.
Dated:  May 4, 2017	By:	/s/ Phyllis A. Knight
	Name:	Phyllis A. Knight
	Title:	Chief Financial Officer (Principal    Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit No.     Description

99.1 Press Release of Diversified Restaurant Holdings, Inc. reporting financial results and earnings for the quarter ended March 26, 2017

99.2 Diversified Restaurant Holdings, Inc. Investor Presentation dated May 4, 2017

EX-99.1

FOR IMMEDIATE RELEASE

Diversified Restaurant Holdings Reports First Quarter 2017 Results

SOUTHFIELD, MI, May 4, 2017 -- Diversified Restaurant Holdings, Inc. (NASDAQ: SAUC) ("DRH" or the "Company"), the largest franchisee for Buffalo Wild Wings^® ("BWW") with 64 stores across five states, today announced results for its first quarter ended March 26, 2017.

First Quarter Highlights (from continuing operations)

• Revenue increased 2.8% to $44.3 million

• Same-store sales were (0.3%)

• Achieved net income of $0.8 million, or $0.03 per diluted share

• Restaurant-level EBITDA of $8.4 million, or 19.0% of sales⁽¹⁾ 

• Adjusted EBITDA was $6.2 million, or 13.9% of sales⁽¹⁾ 

• Total debt, net of cash, reduced $3.0 million in the first quarter

(1)See attached table for a reconciliation of GAAP net income to Restaurant-level EBITDA and Adjusted EBITDA

“Our first quarter results were encouraging and not only validate our decision to focus solely on the BWW business, but demonstrate the strength of the franchise in the face of continued market headwinds,” commented David G. Burke, President and CEO. “Our promotional efforts, such as Half-Price Wing Tuesdays® helped to improve traffic while our delivery service continues to provide incremental sales. The Blazin' Rewards®loyalty program, which has now been rolled out to all 64 locations, continues to attract customers and drive higher tickets for those customers that actively participate in the program.”

There were two favorable calendar shifts in the quarter, Christmas and Easter, which positively impacted same-store sales 170 basis points.

Mr. Burke added, “Our core Midwest markets are performing quite well, while our Florida market remains challenged, particularly in the southern end of our franchise area. And, while restaurant-level margins were pressured during the period as a result of all-time high wing costs and promotional activity, we maintained our disciplined approach to managing costs, produced high operating margins and continue to achieve industry-leading restaurant performance.”

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First Quarter Results (Unaudited)
($ in thousands)	Q1 2017			Q1 2016			Change			% Change
Revenue	$	44,338.0		$	43,143.3		$	1,194.7		2.8	%
Operating income	$	2,366.6		$	3,116.0		$	(749.4	)	(24.0	)%
Operating margin	5.3		%	7.2		%
Net income from continuing operations	$	795.6		$	1,292.4		$	(496.8	)	(38.4	)%
Diluted net income per share (cont. ops.)	$	0.03		$	0.05		$	(0.02	)	(40.0	)%
Same-store sales	(0.3		)%	(2.2		)%
Restaurant-level EBITDA(1)	$	8,424.6		$	9,294.2		$	(869.6	)	(9.4	)%
Restaurant-level EBITDA margin	19.0		%	21.5		%
Adjusted EBITDA(1)	$	6,157.7		$	7,183.9		$	(1,026.2	)	(14.3	)%
Adjusted EBITDA margin	13.9		%	16.7		%

⁽¹⁾Please see attached table for a reconciliation of GAAP net income to Restaurant-level EBITDA and Adjusted EBITDA

Balance Sheet Highlights - Continuing Operations

Cash and cash equivalents were $5.4 million at March 26, 2017, compared with $4.0 million at 2016 year-end. Total debt decreased $1.6 million to $119.6 million at the end of the first quarter. Capital expenditures were $1.4 million and were primarily for one restaurant under construction and restaurant refreshes and remodels. Capital expenditures were $6.4 million in the first quarter of 2016.

Fiscal 2017 Guidance

The Company expects the following in 2017:

• Revenue of $173 million to $178 million

• Restaurant-level EBITDA of $33 million to $36 million

• Adjusted EBITDA between $23.5 million to $26.5 million

• Capital expenditures of approximately $4 million to $6 million

• One new restaurant: currently in development and expected to open in the second quarter

• Two to four remodels: planned at approximately $0.6 million each

Webcast, Conference Call and Presentation

DRH will host a conference call and live webcast on Friday, May 5, 2017 at 10:00 A.M. Eastern Time, during which management will review the financial and operating results for the first quarter, and discuss its corporate strategies and outlook. A question-and-answer session will follow.

The teleconference can be accessed by calling (201) 389-0879. The webcast can be monitored at www.diversifiedrestaurantholdings.com. A presentation that will be referenced during the conference call is also available on the website.

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A telephonic replay will be available from 1:00 P.M. ET on the day of the call through Friday, May 12, 2017. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13659679, or access the webcast replay at www.diversifiedrestaurantholdings.com, where a transcript will also be posted once available.

About Diversified Restaurant Holdings, Inc.

Diversified Restaurant Holdings, Inc. is the largest franchisee for Buffalo Wild Wings Grill & Bar with

64 BWW franchised restaurants in key markets in Florida, Illinois, Indiana, Michigan and Missouri. The Company routinely posts news and other important information on its website at www.diversifiedrestaurantholdings.com.

Safe Harbor Statement

The information made available in this news release and the Company’s May 5, 2017 earnings conference call 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 impact of economic and industry conditions, competition, food and drug 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 Contact:

Deborah K. Pawlowski

Kei Advisors LLC

716.843.3908

dpawlowski@keiadvisors.com

FINANCIAL TABLES FOLLOW

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DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTSOF OPERATIONS (Unaudited)

	Three Months Ended
	March 26, 2017			March 27, 2016
Revenue	$	44,337,964		$	43,143,252
Operating expenses
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food, beverage, and packaging costs	13,038,426			12,059,759
Compensation costs	10,965,530			10,520,246
Occupancy costs	2,893,852			2,766,459
Other operating costs	9,029,876			8,573,747
General and administrative expenses	2,356,966			2,174,291
Pre-opening costs	31,370			123,443
Depreciation and amortization	3,633,254			3,762,102
Loss on asset disposal	22,059			47,224
Total operating expenses	41,971,333			40,027,271
Operating profit	2,366,631			3,115,981
Interest expense	(1,575,954		)	(1,444,940		)
Other income, net	27,167			39,742
Income from continuing operations before income taxes	817,844			1,710,783
Income tax expense	(22,264		)	(418,354		)
Income from continuing operations	795,580			1,292,429
Discontinued operations
Income (loss) from discontinued operations before income taxes	36,535			(1,423,704		)
Income tax (expense) benefit of discontinued operations	(995		)	561,679
Income (loss) from discontinued operations	35,540			(862,025		)
Net Income	$	831,120		$	430,404
Basic earnings (loss) per share from:
Continuing operations	$	0.03		$	0.05
Discontinued operations	$	—		$	(0.03	)
Basic net earnings per share	$	0.03		$	0.02
Diluted earnings (loss) per share from:
Continuing operations	$	0.03		$	0.05
Discontinued operations	$	—		$	(0.03	)
Diluted net earnings per share	$	0.03		$	0.02
Weighted average number of common shares outstanding
Basic	26,629,974			26,298,034
Diluted	26,629,974			26,298,034

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DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

	March 26,			December 25,
ASSETS	March 26, 2017(UNAUDITED)			2016
Current assets
Cash and cash equivalents	$	5,382,263		$	4,021,126
Accounts receivable	88,456			276,238
Inventory	1,631,565			1,700,604
Prepaid and other assets	992,732			1,305,936
Total current assets	8,095,016			7,303,904
Deferred income taxes	16,410,956			16,250,928
Property and equipment, net	54,817,201			56,630,031
Intangible assets, net	2,586,563			2,666,364
Goodwill	50,097,081			50,097,081
Other long-term assets	231,455			233,539
Total assets	$	132,238,272		$	133,181,847
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	4,121,332		$	3,995,846
Accrued compensation	1,980,366			2,803,549
Other accrued liabilities	2,893,239			2,642,269
Current portion of long-term debt	11,313,759			11,307,819
Current portion of deferred rent	194,206			194,206
Total current liabilities	20,502,902			20,943,689
Deferred rent, less current portion	2,043,552			2,020,199
Unfavorable operating leases	571,171			591,247
Other long-term liabilities	3,570,054			3,859,231
Long-term debt, less current portion	108,263,169			109,878,201
Total liabilities	134,950,848			137,292,567
Commitments and contingencies (Notes 3, 11 and 12)
Stockholders' deficit
Common stock - $0.0001 par value; 100,000,000 shares authorized; 26,636,346 and 26,632,222, respectively, issued and outstanding	2,611			2,610
Additional paid-in capital	21,489,849			21,355,270
Accumulated other comprehensive loss	(769,778		)	(934,222		)
Accumulated deficit	(23,435,258		)	(24,534,378		)
Total stockholders' deficit	(2,712,576		)	(4,110,720		)
Total liabilities and stockholders' deficit	$	132,238,272		$	133,181,847

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DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended
	March 26, 2017			March 27, 2016
Cash flows from operating activities
Net income	$	831,120		$	430,404
Net income (loss) from discontinued operations	35,540			(862,025		)
Net income from continuing operations	795,580			1,292,429
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	3,633,254			3,762,102
Amortization of debt discount and loan fees	52,443			50,880
Amortization of gain on sale-leaseback	(34,794		)	(39,302		)
Impairment and loss on asset disposals	22,059			47,225
Share-based compensation	123,082			97,426
Deferred income taxes	23,259			317,225
Changes in operating assets and liabilities that provided (used) cash
Accounts receivable	187,782			(309,327		)
Inventory	69,039			(13,670		)
Prepaid and other assets	313,204			240,947
Intangible assets	(18,915		)	46,107
Other long-term assets	2,084			(8,792		)
Accounts payable	(208,157		)	(289,041		)
Accrued liabilities	(577,438		)	(942,775		)
Deferred rent	23,353			24,124
Net cash provided by operating activities of continuing operations	4,405,835			4,275,558
Net cash provided by (used in) operating activities of discontinued operations	35,540			(1,163,832		)
Net cash provided by operating activities	4,441,375			3,111,726
Cash flows from investing activities
Purchases of property and equipment	(1,430,201		)	(6,405,269		)
Net cash used in investing activities of continuing operations	(1,430,201		)	(6,405,269		)
Net cash used in investing activities of discontinued operations	—			(1,101,142		)
Net cash used in investing activities	(1,430,201		)	(7,506,411		)
Cash flows from financing activities
Proceeds from issuance of long-term debt	1,217,621			3,311,231
Repayments of long-term debt	(2,879,156		)	(7,500,000		)
Proceeds from employee stock purchase plan	11,498			10,707
Net cash used in financing activities	(1,650,037		)	(4,178,062		)
Net increase (decrease) in cash and cash equivalents	1,361,137			(8,572,747		)
Cash and cash equivalents, beginning of period	4,021,126			13,499,890
Cash and cash equivalents, end of period	$	5,382,263		$	4,927,143

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DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation between Net Income and Adjusted EBITDA and Adjusted Restaurant-Level EBITDA
	Three Months Ended (Unaudited)
	March 26, 2017			March 27, 2016
Net lncome	$	831,120		$	430,404
+ (Income) loss from discontinued operations	(35,540		)	862,025
+ Income tax expense	22,264			418,355
+ Interest expense	1,575,954			1,444,940
+ Other income, net	(27,167		)	(39,743		)
+ Loss on asset disposal	22,059			47,224
+ Depreciation and amortization	3,633,254			3,762,102
EBITDA	$	6,021,944		$	6,925,307
+ Pre-opening costs	31,370			123,443
+ Non-recurring expenses (Restaurant-level)	14,300			71,184
+ Non-recurring expenses (Corporate-level)	90,097			63,954
Adjusted EBITDA	$	6,157,711		$	7,183,888
Adjusted EBITDA margin (%)	13.9		%	16.7		%
+ General and administrative	2,356,966			2,174,291
+ Non-recurring expenses (Corporate-level)	(90,097		)	(63,954		)
Restaurant–Level EBITDA	$	8,424,580		$	9,294,225
Restaurant–Level EBITDA margin (%)	19.0		%	21.5		%

Restaurant-Level EBITDA represents net income (loss) plus the sum of non-restaurant specific general and administrative expenses, restaurant pre-opening costs, loss on property and equipment disposals, depreciation and amortization, other income and expenses, interest, taxes, and non-recurring expenses related to acquisitions, equity offerings or other non-recurring expenses. Adjusted EBITDA represents net income (loss) plus the sum of restaurant pre-opening costs, loss on property and equipment disposals, depreciation and amortization, other income and expenses, interest, taxes, and non-recurring expenses. We are presenting Restaurant-Level EBITDA and Adjusted EBITDA, which are not presented in accordance with GAAP, because we believe they provide an additional metric by which to evaluate our operations. When considered together with our GAAP results and the reconciliation to our net income, we believe they provide a more complete understanding of our business than could be obtained absent this disclosure. We use Restaurant-Level EBITDA and Adjusted EBITDA together with financial measures prepared in accordance with GAAP, such as revenue, income from operations, net income, and cash flows from operations, to assess our historical and prospective operating performance and to enhance the understanding of our core operating performance. Restaurant-Level EBITDA and Adjusted EBITDA are presented because: (i) we believe they are useful measures for investors to assess the operating performance of our business without the effect of non-cash depreciation and amortization expenses; (ii) we believe investors will find these measures useful in assessing our ability to service or incur indebtedness; and (iii) they are used internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors.

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Additionally, we present Restaurant-Level EBITDA because it excludes the impact of general and administrative expenses and restaurant pre-opening costs, which is non-recurring. The use of Restaurant-Level EBITDA thereby enables us and our investors to compare our operating performance between periods and to compare our operating performance to the performance of our competitors. The measure is also widely used within the restaurant industry to evaluate restaurant level productivity, efficiency, and performance. The use of Restaurant-Level EBITDA and Adjusted EBITDA as performance measures permits a comparative assessment of our operating performance relative to our performance based on GAAP results, while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. Companies within our industry exhibit significant variations with respect to capital structure and cost of capital (which affect interest expense and tax rates) and differences in book depreciation of property and equipment (which affect relative depreciation expense), including significant differences in the depreciable lives of similar assets among various companies. Our management team believes that Restaurant-Level EBITDA and Adjusted EBITDA facilitate company-to-company comparisons within our industry by eliminating some of the foregoing variations.

Restaurant-Level EBITDA and Adjusted EBITDA are not determined in accordance with GAAP and should not be considered in isolation or as an alternative to net income, income from operations, net cash provided by operating, investing, or financing activities, or other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Neither Restaurant-Level EBITDA nor Adjusted EBITDA should be considered as a measure of discretionary cash available to us to invest in the growth of our business. Restaurant-Level EBITDA and Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies and our presentation of Restaurant-Level EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual items. Our management recognizes that Restaurant-Level EBITDA and Adjusted EBITDA have limitations as analytical financial measures.

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EX-99.2

Q1 2017 Financial Results May 4, 2017

2 Safe Harbor The information made available in this presentation contains forward-looking statements which reflect the Company’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 and the Company's 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 impact of economic and industry conditions, competition, food and drug 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 our 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.

Who We Are NASDAQ: SAUC IPO: 2008 Market capitalization $76M Largest Buffalo Wild Wings Franchisee › Leading operator › Strong cash generator › 64 BWW locations › Recent share price $2.87 › 52 week range $0.70 - $2.96 › Insider ownership 49% › Institutional ownership 12% › Shares outstanding 26.7M 3 Pure play franchisee with scale and track record of accretive acquisitions Market data as of May 1, 2017 (Source: Bloomberg, LP); Ownership as of most recent filing

First Quarter Highlights Sales up 2.8% to $44.3M Two new Florida restaurants in 2017 vs. 2016 Same Store Sales off 0.3%, compared to industry decline of 1.7% Adjusted EBITDA of $6.2M, 13.9% of sales Restaurant-level EBITDA of $8.4M, 19.0% of sales Strong cash from operations and FCF Net cash from operations of $4.4M and free cash flow of $3.0M for the quarter Cost of sales up 140 basis points vs. Q1 2016 as wing prices were high throughout the quarter (some relief expected in Q2) and traffic-driving promotional activity weighed heavily on margins Lower margin on higher restaurant-level expenses Substantial improvement vs. prior 4 quarters driven by improved traffic but partially offset by declining average check resulting from increased discount activity; aided by favorable calendar 4 Sales S-S-S EBITDA Margins Cashflow

Sales and Traffic 5

6 Traffic was a strong positive in Q1 2017 – driven in part by increased promotional activity resulting in a negative effect on average check NOTE: Average check is predominantly driven by price but is also influenced by product mix and, to a lesser extent, average guests per check. 2.6% 2.9% 5.5% 5.9% 7.7% 4.1% 1.3% 0.8% -2.2% -2.7% -1.8% -5.4% -0.3% 4.3% 3.0% -3.1% 0.9% 1.1% 2.2% 0.2% 0.6% -2.5% -1.8% -2.0% -2.0% -3.0% -3.3% -4.3% 2.0% 1.1% -3.0% -3.2% 1.7% 1.7% 3.3% 5.7% 7.1% 6.6% 3.1% 2.8% -0.2% 0.2% 1.4% -1.1% -2.3% 3.2% 6.1% 0.1% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 FY 2014 FY 2015 FY 2016 SSS% Traffic % Avg Check % Average Check and Traffic Trends

 Delivery • Delivery available at nearly half the system in Q2 (29 locations) • Implementing increased menu pricing for delivery in Q2  Blazin’ Rewards • Completed roll out across entire network in Q1 2017 • Aggressive training and education initiatives • Bounce back coupon for sign-up  Other initiatives • Promotions (Half-Price Wing Tuesdays, BOGO Blitzes) • Large parties and catering • 15-Minute lunch 7 Sales and Traffic-Driving Actions

8 Delivery External Sales as % of Total 26 Locations In Q3 2016, DRH aggressively pursued partnerships with regional and national delivery services to increase kitchen utilization and drive incremental sales – delivery channel is showing strong growth and to date we see no evidence that delivery sales cannibalize carry-out sales Delivery Drives Incremental Sales  2017 delivery sales expected to reach $1.5-$2M; 26 Q1 delivery locations with an additional 3 in Q2  Average delivery check is 13% higher than dine-in and 17% higher than carry-out 20.6% 19.3% 19.5% 20.4% 21.9% 1.9% 2.7% 2.8% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 % of Carry-Out Sales % of Delivery Sales

9 Blazin’ Rewards Loyalty Program Blazin’ Rewards Members After a strong pilot of the new Blazin’ Rewards program in our 18 St. Louis area locations, we rolled out the program to all 64 locations in Q1 2017 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 29 31 33 35 37 39 41 43 45 47 49 51 1 3 5 7 9 11 13 15 Week 2016 2017 Successful Pilot Leads to Full Rollout  Blazin’ Rewards pilot program rolled out in 18 St. Louis area locations in July 2016  In Q1 2017 all remaining locations rolled out the Blazin’ Rewards program  As of April 2017, over 44,000 DRH guests were enrolled in the program  Average loyalty check currently 20% higher than non-loyalty

10 Half-Price Wing Tuesday Promotion Tuesday SSS % Trends Half-Price Wing Tuesday Promo -3.4% 8.9% 15.5% 6 Week Prior to Promo Post Promo 2016 Post Promo 2017 YTD The half-price wing Tuesday promotion has proven to drive significant traffic throughout all dayparts on an otherwise lower volume day – contribution margin on incremental sales over 50% Leveraging various media to promote:  Sport, Talk and Music Radio  Pandora®  Digital Media  Outdoor  In-store digital (Rockbot®) & POP

Margins and EBITDA 11

12 Quarterly Restaurant EBITDA Trends 1 – On June 29, 2015, we acquired 18 locations in the St. Louis market to add to our existing 44 units, which had a dilutive AUV of $2.3 million 2 – FF = Franchise-related fees which includes 5.0% royalty and 3.0 – 3.15% NAF (national advertising fund) Both margins and AUV’s sequentially improved in Q1 2017; cost of sales up on increased promotional activity and higher wing costs AUV ($M) $3.1 $2.8 $2.7 $2.7 $2.7 $2.6 $2.6 $2.6 $2.8 $2.8 $2.8 $2.6 21.8% 20.6% 19.4% 20.3% 21.5% 20.0% 19.6% 16.5% 19.0% 21.2% 20.4% 19.4% 5.5% 5.9% 6.4% 6.6% 6.5% 6.8% 7.0% 7.2% 6.5% 5.2% 6.2% 6.8% 8.0% 8.0% 8.0% 8.0% 8.2% 8.1% 8.1% 8.1% 8.0% 8.0% 8.0% 8.1% 12.6% 13.4% 13.0% 12.7% 11.5% 12.1% 13.3% 14.0% 12.3% 13.2% 12.9% 12.7% 23.3% 23.9% 25.1% 24.8% 24.4% 25.2% 24.7% 25.0% 24.7% 23.8% 24.4% 24.8% 28.8% 28.1% 28.1% 27.6% 28.0% 27.9% 27.4% 29.2% 29.4% 28.5% 28.1% 28.1% KEY Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 FY2014 FY 2015 FY 2016 C O S LA B O R OPE X FF2 OCC R ES T. EB IT D A 1

13 Cost of Sales Impacts Q1 2016 COS % Bone-In Wing Costs Wing Yield 1/2 Price Promo St. Louis Boneless Promo Boneless Wing Costs Alcohol Costs Sales Mix/ Waste/Other Food Costs Q1 2017 COS % 28.0% 0.35% 0.25% 0.43% 0.30% 0.24% 0.35% 29.4% 0.08% Historically high traditional (bone-in) wing costs and lower yields, coupled with the Half-Price Wing Tuesdays promotion, drove 103 of the 140 basis point increase in COS % in Q1 2017

28.8% 28.1% 28.1% 27.6% 28.0% 27.9% 27.4% 29.2% 29.4% 28.5% 28.1% 28.1% 21.7% 20.1% 20.4% 19.5% 20.3% 20.9% 19.5% 23.5% 24.0% 18.4% 20.4% 21.1% $1.89 $1.77 $1.80 $1.79 $1.92 $1.92 $1.70 $1.95 $2.02 $1.53 $1.81 $1.87 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 FY 2014 FY 2015 FY 2016 Total COS % Wing Cost % of Total COS Wing Cost/Lb 14 COS Trends and Wing Impact NOTE: Wing prices are the average price paid per pound of fresh, jumbo chicken wings – including distribution costs (approximately $0.29 per pound) Traditional wing costs hit record highs in Q1 2017 and have trended higher in early Q2; wings as % of total COS spiked to 24.0%

15 Historical Wing Prices Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $ / lb. Fresh Jumbo Chicken Wing Spot Prices Source: Urner Barry Comtell™ UB Chicken – Midwest Jumbo Wings NOTE: Logistics cost to restaurants is $0.29 / lb. over the spot price Volatile fresh wing prices have ranged between $1.41 and $1.87/lb. since 2015; early Q2 upward trend is not typical $0.75 $0.95 $1.15 $1.35 $1.55 $1.75 $1.95 2014 2015 2016 2017

16 Cost of Sales Actions  Testing revised Wing Tuesday promotion in markets we control (40 stores - Tampa, St. Louis, N. Michigan) • Eliminating the “half-off” concept • Introducing “BOGO” (buy one / get one free) • Limiting to two sizes with higher margin – snack and small  Discontinued the “Half-off Boneless Thursdays” promotion that was tested in the St. Louis market (return to “70¢ Boneless Thursdays”) • Incremental traffic on an already stronger day not sufficient to justify the higher cost of the “half-off” promotion • “70¢” per wing price reduces the cost of the promotion  Menu price increase of 1.8% effective May 2017  Increasing all prices on delivery menu by 10% effective May 2017

17 Total Labor Trends NOTE: OH = Overhead labor costs including payroll taxes, FUTA, SUTA, health benefits and retirement plan. Bonus is typically between 1.0-1.2% of sales. Hourly and total labor costs continue to be held in check as we push productivity initiatives as a means of offsetting wage inflation 23.3% 23.9% 25.1% 24.8% 24.4% 25.2% 24.7% 25.0% 24.7% 23.8% 24.4% 24.8% 12.5% 13.2% 13.8% 13.3% 13.1% 13.6% 13.3% 13.6% 13.1% 12.9% 13.2% 13.4% 5.6% 6.0% 6.4% 6.4% 6.2% 6.4% 6.6% 6.6% 6.6% 5.8% 6.1% 6.5% 5.2% 4.7% 4.9% 5.2% 5.1% 5.1% 4.8% 4.8% 5.1% 5.1% 5.0% 4.9% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 FY 2014 FY 2015 FY 2016 Hourly Labor % of Sales Mgmt Labor % of Sales Bonus & OH % of Sales

18 Adjusted EBITDA Trends 21.8% 20.6% 19.4% 20.3% 21.5% 20.0% 19.6% 16.5% 19.0% 21.2% 20.4% 19.4% 4.3% 8.0% 5.8% 5.1% 5.0% 5.7% 5.7% 5.8% 5.3% 5.1% 5.7% 5.6% Key Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 FY2014 FY 2015 FY 2016 G& A R ES T. EB IT D A G&A expenses increased with the St. Louis acquisition in 2015 and we have not yet driven leverage against the higher costs – plan to drive G&A toward 5.0% by 2H 2017

19 G&A Impacts G&A expenses were higher than our target of 5% of net sales in Q1 2017 as sales slightly lagged expectations – initiatives in place to drive reduction toward targeted range for remainder of 2017 Q1 2016 G&A % Support Expense Support Salaries Marketing Q1 2017 G&A % 5.0% 0.4% 0.5% 5.3% 0.2%

20 G&A Actions  Targeting second half run rate of 5% even at low end of sales guidance • $1 million run rate savings target  Post – Bagger Dave’s spin-off overhead restructuring coupled with tight spending controls • Reductions in salaries and support office expenses  Reduced (more targeted) local marketing spend • Better leveraging of National Ad Fund spend • More targeted local spend

The Future 21

22 Value Creation – Going Forward Value Proposition • Best in class operations • Proven integration skills • Strong positive cash flow • Financial strength and flexibility • Tax benefits to offset over $50 million in pre-tax income Current Environment • Roll-up of other BWW franchisees ready for exit as cycle turns • Potential for BWLD re-franchising activity • Opportunities with new franchised concepts Growth Strategy • Disciplined, value-accretive growth through acquisition • Supplemented by opportunistic new unit development

23 Reiterating Fiscal 2017 Guidance1  Revenue of $173 million to $178 million  Restaurant-level EBITDA of $33.0 million to $36.0 million  Adjusted EBITDA between $23.5 million to $26.5 million  Capital expenditures of approximately $4 million to $6 million • One new restaurant under construction – opening June 2017 • At least two remodels planned for 2017 – targeted at ~$0.6 million each 1 2017 guidance provided as of May 4, 2017

24 Free Cash Flow and Net Debt Net debt / EBITDA target in the range of 4x by the end of 2017 and 3x by the end of 2018

Citi Restaurant Seminar Marcum MicroCap Conference – New York City Q2 2017 earnings release (call on August 4th) Dougherty Conference – Minneapolis 25 May 22nd June 15th August 3rd September 19th Upcoming Investor Relations Calendar

Exhibits 26

27 EBITDA Reconciliation

28 EBITDA Reconciliation cont. Restaurant-Level EBITDA represents net income (loss) plus the sum of non-restaurant specific general and administrative expenses, restaurant pre- opening costs, loss on property and equipment disposals, depreciation and amortization, other income and expenses, interest, taxes, and non-recurring expenses related to acquisitions, equity offerings or other non-recurring expenses. Adjusted EBITDA represents net income (loss) plus the sum of restaurant pre-opening costs, loss on property and equipment disposals, depreciation and amortization, other income and expenses, interest, taxes, and non-recurring expenses. We are presenting Restaurant-Level EBITDA and Adjusted EBITDA, which are not presented in accordance with GAAP, because we believe they provide an additional metric by which to evaluate our operations. When considered together with our GAAP results and the reconciliation to our net income, we believe they provide a more complete understanding of our business than could be obtained absent this disclosure. We use Restaurant-Level EBITDA and Adjusted EBITDA together with financial measures prepared in accordance with GAAP, such as revenue, income from operations, net income, and cash flows from operations, to assess our historical and prospective operating performance and to enhance the understanding of our core operating performance. Restaurant-Level EBITDA and Adjusted EBITDA are presented because: (i) we believe they are useful measures for investors to assess the operating performance of our business without the effect of non-cash depreciation and amortization expenses; (ii) we believe investors will find these measures useful in assessing our ability to service or incur indebtedness; and (iii) they are used internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors. Additionally, we present Restaurant-Level EBITDA because it excludes the impact of general and administrative expenses and restaurant pre-opening costs, which is non-recurring. The use of Restaurant-Level EBITDA thereby enables us and our investors to compare our operating performance between periods and to compare our operating performance to the performance of our competitors. The measure is also widely used within the restaurant industry to evaluate restaurant level productivity, efficiency, and performance. The use of Restaurant-Level EBITDA and Adjusted EBITDA as performance measures permits a comparative assessment of our operating performance relative to our performance based on GAAP results, while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. Companies within our industry exhibit significant variations with respect to capital structure and cost of capital (which affect interest expense and tax rates) and differences in book depreciation of property and equipment (which affect relative depreciation expense), including significant differences in the depreciable lives of similar assets among various companies. Our management team believes that Restaurant-Level EBITDA and Adjusted EBITDA facilitate company-to-company comparisons within our industry by eliminating some of the foregoing variations. Restaurant-Level EBITDA and Adjusted EBITDA are not determined in accordance with GAAP and should not be considered in isolation or as an alternative to net income, income from operations, net cash provided by operating, investing, or financing activities, or other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Neither Restaurant-Level EBITDA nor Adjusted EBITDA should be considered as a measure of discretionary cash available to us to invest in the growth of our business. Restaurant-Level EBITDA and Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies and our presentation of Restaurant-Level EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual items. Our management recognizes that Restaurant-Level EBITDA and Adjusted EBITDA have limitations as analytical financial measures.