Bagger Dave’s® franchises now available in Illinois, Michigan, Ohio and Indiana

SOUTHFIELD, Mich.  (RestaurantNewsRelease.com)  Diversified Restaurant Holdings, Inc. (OTCBB: DFRH) (“DRH” or the “Company”), the owner/operator and franchisor of the unique, full-service, ultra-casual restaurant and bar, Bagger Dave’s Legendary Burgers & Fries® (“Bagger Dave’s”), today announced that its registration to offer and sell Bagger Dave’s franchises in the State of Illinois has been approved. Illinois is the fourth state in which DRH has the ability to offer franchising of its Bagger Dave’s concept.

Michael Ansley, President and Chief Executive Officer of DRH, commented, “Building upon our already established agreements in Michigan, Ohio and Indiana, the ability to franchise in Illinois is the next logical step in our growth strategy. It is contiguous to and shares the same Midwestern culture as our existing franchising area. It is also the fifth most populous state in the U.S., with Chicago being the nation’s third largest metropolitan area. There are also several other Illinois cities whose demographics provide viable franchising locations.”

DRH launched the successful Bagger Dave’s concept in 2008. It has proven to be a popular neighborhood destination in the three Michigan cities in which DRH currently operates Company-owned stores: Berkley, Ann Arbor and Novi. A fourth DRH-owned Bagger Dave’s is scheduled to open in Brighton, Michigan, later this year.

Bagger Dave’s is reminiscent of the old fashioned, family-operated neighborhood bars that offered burgers worth bragging about in a warm, inviting, home-like atmosphere. Starting with fresh, never frozen burgers, customers can select from among several bun and cheese options and an assortment of more than 30 tasty toppings and a variety of house-made sauces. The unique menu is complemented by hand-cut Idaho potato fries, sandwiches, hand-dipped milkshakes, and a full service bar that features wine and Michigan craft beer.

“As we focus on expanding our Bagger Dave’s concept through franchising, we seek partners who share our philosophy of providing a superior and consistent guest experience. In return, they will draw on our proven restaurant-management experience, track record of successful concept expansion and in-place advertising, marketing, purchasing and general back office support. Faster-service restaurants are expected to be one of the few bright spots on the franchising landscape over the next few years as the country continues to experience the lingering effects of the economic downturn, making this an excellent time to further grow our Bagger Dave’s concept with qualified franchise partners,” Mr. Ansley concluded.

DRH is also a leading franchisee for Buffalo Wild Wings® (“BWW”) and currently operates 12 BWW stores in Michigan and five in Florida with three new stores scheduled to open through the first quarter of 2011, in Chesterfield, Michigan (August 22, 2010), Fort Myers, Florida (fourth quarter, 2010) and Traverse City, Michigan (first quarter, 2011).

About Diversified Restaurant Holdings

DRH is a leading BWW® franchisee, currently operates 17 BWW restaurants (five in Florida and 12 in Michigan), with the 18th scheduled to open in the third quarter of 2010, the 19th scheduled to open in the fourth quarter of 2010, and the 20th scheduled to open in the first quarter of 2011. DRH is also the recipient of many franchise awards, including an award for the Highest Annual Restaurant Sales.

The Company also owns and operates its own unique, full-service, ultra-casual restaurant and bar concept, Bagger Dave’s, which was launched in January 2008. The concept focuses on local flair with the interior showcasing historic photos of the city in which it resides. Bagger Dave’s offers a full-service, family-friendly restaurant and bar with a casual, comfortable atmosphere. The menu features freshly made burgers (never frozen), accompanied by more than 30 toppings from which to choose, fresh-cut fries, hand-dipped milkshakes, and a selection of craft beer and wine. Signature items include Sloppy Dave’s BBQ®, Train Wreck Burger®, and Bagger Dave’s Amazingly Delicious Turkey Black Bean Chili®. There’s also an electric train that runs above the dining room and bar areas. All current and future locations will be smoke-free. Currently, there are three locations in the State of Michigan, with the fourth scheduled to open in the fourth quarter of 2010. DRH has filed for rights, and has been approved, to franchise Bagger Dave’s in the States of Michigan, Indiana, Ohio and Illinois. . For more information, please visit www.baggerdaves.com.

DRH routinely posts news and other important information on its Web site at www.diversifiedrestaurantholdings.com.

Safe Harbor Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could,” and other similar words. Forward-looking statements are based upon the current beliefs and expectations of management. All statements addressing operating performance, events, or developments that DRH expects or anticipates will occur in the future, including but not limited to franchise sales, restaurant openings, financial performance, and adverse developments with respect to litigation or increased litigation costs, the operation or performance of the Company’s business units, or the market price of its common stock are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. Actual results may vary materially from those contained in forward-looking statements based on a number of risk factors and uncertainties including, without limitation, our ability to operate in new markets, the cost of commodities, the success of our marketing and other initiatives to attract customers, customer preferences, operating costs, economic conditions, competition, the availability of financing for franchisees and the Company, and the impact of applicable regulations. These and other risk factors and uncertainties are more fully described in the Company’s most recent Annual and Quarterly Reports filed with the Securities and Exchange Commission. Undue reliance should not be placed on the Company’s forward-looking statements. Except as required by law, DRH disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this press release.