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Item 1.01 Entry into a Material Definitive Agreement.

On Tuesday, October 20, 2009, two wholly-owned subsidiaries of Diversified Restaurant Holdings, Inc. (the “Company”), each entered into a Buffalo Wild Wings Franchise Agreement for the purpose of operating a Buffalo Wild Wings restaurant (each a “Franchise Agreement”). The first Franchise Agreement was entered into by AMC Marquette, Inc., for a restaurant to be located at 2942 US Highway 41 West, Marquette, MI 49855. The second Franchise Agreement was entered into by AMC Chesterfield, Inc., for a restaurant to be located at 51364 Gratiot Avenue, Chesterfield Township, MI 48051. Each Franchise Agreement was guaranteed by the Company, Inc. and T. Michael Ansley, who is President, CEO, Chairman of the Board of Directors, and a principal shareholder of the Company.

In each Franchise Agreement, the Franchisor is:

Buffalo Wild Wings International, Inc.
5500 Wayzata Blvd., Suite 1600
Minneapolis, MN 55416

The term of each Franchise Agreement is 20 years plus two optional renewal terms (the first renewal term is for 10 years and the second renewal term is for 5 years).

The franchise fees associated with each Franchise Agreement consist of an initial franchise fee of $10,000 payable at execution of the agreement, plus an ongoing royalty fee that is measured as a percentage of gross sales payable weekly. The royalty fee is fixed at 5% for the first half of the initial term and may not be increased by more than ¹/2% during the second half of the initial term. Royalty fees during any renewal term will be set by agreement of the parties. Each Franchise Agreement also contains an advertising fee of 3% of gross sales payable weekly. Buffalo Wild Wings International may increase the advertising fee upon 60 days prior notice. However, the advertising fee may not be raised more than ¹/2% during any given year and may not exceed 4% during the initial term.

The Marquette and Chesterfield franchises will be the 11^th and 12^th restaurants to open under the terms of a 32 restaurant area development agreement between Diversified Restaurant Holdings, Inc. and Buffalo Wild Wings International, Inc.

Item 2.03  Creation of a Direct Financial Obligation or An Obligation Under an Off Balance Sheet Arrangement of a Registrant.  

The information required by this item 2.03 is set forth in item 1.01 above, which is incorporated herein by reference.

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Item 9.01  Financial Statements and Exhibits

(d) The following exhibits are included with this Report.

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.

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