The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in Item 1 of Part 1 of this Quarterly Report and the audited consolidated financial statements and related notes and Management's Discussion and Analysis of Financial Condition and Results from Operations contained in our Form 10-K for the fiscal year ended December 31, 2008. This discussion and analysis contains certain statements that are not historical facts, including, among others, those relating to our anticipated financial performance for 2009 and our expected store openings. Such statements are forward-looking and involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors including, but not limited to, those discussed in this Form 10-Q under the heading "Cautionary Statement for Forward-Looking Statements".
CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES In the ordinary course of business, we have made a number of estimates and assumptions in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. We frequently reevaluate these significant factors and make adjustments where facts and circumstances dictate.
The Company believes the following accounting policies represent critical accounting policies. Critical accounting policies are those that are both most important to the portrayal of a company's financial condition and results and require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. We discuss our significant accounting policies in Note 1 to the Company's consolidated financial statements, including those policies that do not require management to make difficult, subjective or complex judgments or estimates. FASB Codification Discussion
We follow accounting standards set by the Financial Accounting Standards Board, commonly referred to as the "FASB." The FASB sets generally accepted accounting principles (GAAP) that we follow to ensure we consistently report our financial condition, results of operations and cash flows. Over the years, the FASB and other designated GAAP-setting bodies have issued standards in the form of FASB Statements, Interpretations, FASB Staff Positions, EITF consensuses, AICPA Statements of Position, etc. One standard that applies to our business is FASB Statement No. 13, Accounting for Leases. That standard, originally issued in 1976, has been interpreted and amended many times over the years.
The FASB recognized the complexity of its standard-setting process and embarked on a revised process in 2004 that culminated in the release on July 1, 2009, of the FASB Accounting Standards Codification,™ sometimes referred to as the Codification or ASC. To the Company, this means instead of following the leasing rules in Statement 13, we will follow the guidance in Topic 840, Leases. The Codification does not change how the Company accounts for its transactions or the nature of related disclosures made. However, when referring to guidance issued by the FASB, the Company refers to topics in the ASC rather than Statement 13, etc. The above change was made effective by the FASB for periods ending on or after September 15, 2009. We have updated references to GAAP in this quarterly report on form 10-Q to reflect the guidance in the Codification. Property and Equipment
We record all property and equipment at cost less accumulated depreciation and we select useful lives that reflect the actual economic lives of the underlying assets. We amortize leasehold improvements over the shorter of the useful life of the asset or the related lease term. We calculate depreciation using the straight-line method for consolidated financial statement purposes. We capitalize improvements and expense repairs and maintenance costs as incurred. We are often required to exercise judgment in our decision whether to capitalize an asset or expense an expenditure that is for maintenance and repairs. Our judgments may produce materially different amounts of repair and maintenance or depreciation expense if different assumptions were used.

We perform an asset impairment analysis on an annual basis of property and equipment related to our restaurant locations. We also perform these tests when we experience a "triggering" event such as a major change in a location's operating environment, or other event that might impact our ability to recover our asset investment. This process requires the use of estimates and assumptions which are subject to a high degree of judgment. Our analysis indicated that we did not need to record any impairment charges during the three months ended September 30, 2009 or the nine months ended September 30, 2009 and thus none were recorded. If these assumptions or circumstances change in the future, we may be required to record impairment charges for these assets. Deferred Tax Assets
The Company records deferred tax assets for the value of benefits expected to be realized from the utilization of state and federal net operating loss carry-forwards. We periodically review these assets for realizability based upon expected taxable income in the applicable taxing jurisdictions. To the extent we believe some portion of the benefit may not be realizable, an estimate of the unrealized portion is made and an allowance is recorded. At September 30, 2009, we had no valuation allowance as we believe we will generate sufficient taxable income in the future to realize the benefits of our deferred tax assets. This belief is based upon the Company's option to purchase the nine affiliated restaurants currently managed by DRH. Realization of these deferred tax assets is dependent upon generating sufficient taxable income prior to expiration of any net operating loss carry-forwards. Although realization is not assured, management believes it is more likely than not that the remaining recorded deferred tax assets will be realized. If the ultimate realization of these deferred tax assets is significantly different from our expectations, the value of its deferred tax assets could be materially overstated.
LIQUIDITY AND CAPITAL RESOURCES
Our current consolidated cash flow from operations for the nine months ended September 30, 2009 was $1,387,338 compared to $325,678 for the nine months ended September 30, 2008. We anticipate that new restaurant construction will be funded by debt financing, which we had planned to be provided by our existing lenders or another lending institution. These new restaurants include:
• Novi, Michigan - Bagger Dave's - construction to begin in the fourth quarter 2009 and restaurant opening to occur in the first quarter 2010. The estimated cost of construction and equipment is approximately $650,000. We anticipate borrowing 50% of the necessary funds and paying the remaining balance through cash from operations.

• Marquette, Michigan - Buffalo Wild Wings - construction expected to begin in the second quarter 2010 with an estimated opening in the third quarter 2010. The estimated cost of construction is approximately $1,037,000. We anticipate borrowing 50-70% of the necessary funds and paying the remaining balance through cash from operations.

• Chesterfield, Michigan - Buffalo Wild Wings - construction expected to begin in the second quarter 2010 with an estimated opening in the third quarter 2010. The estimated cost of construction is approximately $950,000. We anticipate borrowing 50-70% of the necessary funds and paying the remaining balance through cash from operations.

At this time, we have not obtained the debt financing that we planned to secure due to the severe tightening of the credit markets. We are pursuing alternatives to traditional debt financing, including equipment leasing and mezzanine debt financing. There are no assurances that we will be successful in our efforts to obtain adequate financing for new store openings. Management believes that emphasis on prime locations is now more critical than ever to create stronger store openings and earlier positive cash flows to decrease our dependency on third-party financing.
OFF BALANCE SHEET ARRANGEMENTS
An off balance sheet arrangement exists between TMA Enterprises of Novi, Inc., which is a Buffalo Wild Wings unit managed by AMC Group, Inc., and AMC Group, Inc., one of our wholly owned subsidiaries. On April 5, 2007, TMA Enterprise of Novi, Inc. entered into a loan for $719,950. That loan was used to refinance the existing debt of $369,950 and it provided an additional $350,000 to help finance a five year remodel of that restaurant. The principal outstanding at September 30, 2009 is $524,011. AMC Group, Inc. is a guarantor of this debt.

An off balance sheet arrangement exists between TMA Enterprises of Ferndale, LLC, which is a Buffalo Wild Wings unit managed by AMC Group, Inc. and Diversified Restaurant Holdings, Inc. (DRH), AMC Burgers, Inc., AMC Wings, Inc., AMC Grand Blanc Inc. and AMC Petoskey, Inc. (the last four being wholly owned subsidiaries of DRH). On August 10, 2007, TMA Enterprises of Ferndale, LLC entered into a loan for $720,404. That loan was used to refinance the existing debt of $704,419 and it provided $15,985 additional cash for operations. The outstanding principal as of September 30, 2009 is $544,518. Diversified Restaurant Holdings, Inc. (DRH), AMC Burgers, Inc., AMC Wings, Inc., AMC Grand Blanc Inc. and AMC Petoskey, Inc. are guarantors of this debt. An off balance sheet arrangement exists between Flyer Enterprises, Inc., a Buffalo Wild Wings unit managed by AMC Group, Inc. and Diversified Restaurant Holdings, Inc. (DRH), AMC Wings, Inc., AMC Group, Inc., AMC Grand Blanc, Inc., AMC Troy, Inc. and AMC Petoskey, Inc. (the last five being wholly owned subsidiaries of DRH). On February 12, 2008, Flyer Enterprises, Inc. entered into a loan for $223,622. The loan was used to refinance existing debt. The principal outstanding at September 30, 2009 is $166,020. Diversified Restaurant Holdings, Inc., AMC Group, Inc., AMC Wings, Inc., AMC Grand Blanc Inc., AMC Troy, Inc. and AMC Petoskey, Inc. are guarantors of this debt.
An off balance sheet arrangement exists between AMC Warren, LLC, a Buffalo Wild Wings unit managed by AMC Group, Inc. and AMC Group, Inc., a wholly owned subsidiary of DRH. On June 12, 2006, AMC Warren, LLC entered into a loan for $791,598. The loan was used for leasehold improvements, equipment and furniture and fixtures prior to opening. The original note was guaranteed by AMC Group, LLC, the predecessor to AMC Group, Inc. In March of 2009, loan modification documents were signed listing AMC Group, Inc. as a guarantor. The principal outstanding as of December 31, 2008 was $586,937. The principal outstanding at September 30, 2009 is $509,432. AMC Group, Inc. is a guarantor of this debt. An off balance sheet arrangement was created in March of 2009 between Anker, Inc., Bearcat Enterprises, Inc., MCA Enterprises, Inc., Buckeye Group, LLC, Buckeye Group II, LLC (all Buffalo Wild Wings units managed by AMC Group, Inc.) and Ansley Group, LLC (related party landlord of affiliated restaurant) and AMC Group, Inc. a wholly owned subsidiary of DRH. On March 27, 2009, the Company agreed to its subsidiary, AMC Group, Inc., becoming a guarantor for the related parties mentioned above in exchange for covenant waivers for AMC North Port, Inc. and AMC Riverview, Inc. (wholly owned subsidiaries). The approximate aggregate principal outstanding for the six entities was $3,055,000 as of December 31, 2008. The principal outstanding at September 30, 2009 is $2,677,960.
Area Development Agreement
The Company assumed from a related entity an "Area Development Agreement" with Buffalo Wild Wings to open 23 Buffalo Wild Wings restaurants by October 1, 2016 within the designated "development territory", as defined by the agreement. Failure to develop restaurants in accordance with the schedule detailed in the agreement could lead to potential penalties of $50,000 for each undeveloped restaurant and loss of rights to development territory.
On December 10, 2008, through our wholly owned subsidiary, AMC Wings, Inc., we entered into an amendment to the Area Development Agreement (the "Amended Agreement") with Buffalo Wild Wings International, Inc. The Amended Agreement expanded our exclusive franchise territory in Michigan and extended by one year the time frame for completion of our obligations under the initial terms of the Area Development Agreement.
The Amended Agreement includes the right to develop an additional nine
(9) Buffalo Wild Wings Restaurants, which increases to thirty-two (32) the total number of Buffalo Wild Wings Restaurants we have a right to develop. Under the Amended Agreement, we have paid to Buffalo Wild Wings International, as Franchisor, a development fee of $31,250. Franchise fees for the nine (9) additional restaurants will be $12,500 each. We have until November 1, 2017 to complete our development obligations under the Amended Agreement. As of September 30, 2009, ten (10) of these restaurants had been opened for business under the Amended Agreement, leaving 22 remaining under the Amended Agreement. Three (3) of the restaurants opened under the Amended Agreement are affiliated and seven (7) are Company owned. The other six
(6) affiliated restaurants were opened prior to the initial Area Development Agreement and do satisfy of our obligations to construct restaurants under the Amended Area Development Agreement.

EXERCISE OF OPTION TO PURCHASE
We have an option to purchase the restaurants we currently manage. This option may be exercised up to and including thirty days following the two year anniversary date of the completion of the Initial Public Offering. That date is August 1, 2010. We have decided to exercise the option early, anticipated to be effective February 1, 2010. We expect to acquire these restaurants by granting a promissory note in favor or the sellers in the principal amount of the purchase price, with principal and interest at 6% per annum fully amortized over six years.
We believe that the effect of the exercise of such option to purchase on our financial statements will be as follows:
Balance Sheet
The following balance sheet elements are subject to significant changes in preparing our consolidated financial statements when the purchase option is exercised:
a. Cash and cash equivalents (expected increases from operations).

b. Inventories (food and supplies expected to increase).

c. Prepaid expenses (potential increase for normal operating costs such as rent, insurance, etc., depending on timing of payments).

d. Property and equipment (value assigned to restaurant equipment, furnishings and improvements upon acquisition).

e. Intangible assets (value assigned upon acquisition).

f. Trade accounts payable and accrued expenses (such as compensation costs and amounts due to vendors expected to increase).

g. Debt (existing debt carried by the acquired restaurants and debt to be incurred to finance the purchases).

h. Common or Preferred stock (if issued to fund the purchases).

Income Statement
The following income statement elements are expected to show significant changes in preparing our consolidated financial statements when the purchase option is exercised:
a. Management and advertising fee revenue (will be eliminated).

b. Food and beverage sales (expected increases as purchase options are exercised).

c. Cost of food and beverage sales (expected to increase in proportion to increased food and beverage sales from acquired restaurants).

d. Depreciation and amortization (expected to increase due to allowances for depreciation and amortization of assets acquired from exercise of purchase options).

e. Interest expense (will increase as debt financing is required to finance the acquisition costs).

f. Other operating costs (expected increases in numerous operating costs such as rent, utilities, compensation costs, etc.).

Cash Flows Statement
We expect cash flows from operating (resulting from the balance sheet and income statement changes discussed above) and investing (normal ongoing purchases of equipment and improvements for the acquired restaurants) activities to show significant increases upon exercise of the purchase option.
OPERATING AND FINANCIAL REVIEW
For the three months ended September 30, 2009 and for the nine months ended September 30, 2009, revenue was generated by the collection of management and marketing fees from service agreements with nine (9) affiliated Buffalo Wild Wings restaurants managed by AMC Group, Inc. and from the operations of seven
(7) Buffalo Wild Wings restaurants and two (2) Bagger Dave's Legendary Burgers and Fries restaurants. For the three months ended September 30, 2008 and for the nine months ended September 30, 2008 our revenue was generated from management and marketing fees charged to the nine (9) affiliated Buffalo Wild Wings restaurants and from the operations of five (5) Buffalo Wild Wings restaurants and two (2) Bagger Dave's restaurants.

Nine Months ended September 30, 2009 and 2008 Since the following locations greatly impacted our performance, listed below are the locations and opening dates of the stores not open the full period ended September 30, 2008 but fully reporting for the period ended September 30, 2009. (BWW=Buffalo Wild Wings, BD=Bagger Dave's).

   Berkley Burgers, Inc.     Berkley, Michigan       BD    Opened January 13, 2008
   AMC Grand Blanc, Inc.     Grand Blanc, Michigan   BWW   Opened March 16, 2008
   AMC Troy, Inc.            Troy, Michigan          BWW   Opened July 20, 2008
   AMC Petoskey, Inc.        Petoskey, Michigan      BWW   Opened August 17, 2008
   Ann Arbor Burgers, Inc.   Ann Arbor, Michigan     BD    Opened August 30, 2008
   AMC Flint, Inc.           Flint, Michigan         BWW   Opened December 21, 2008
   AMC Port Huron, Inc.      Port Huron, Michigan    BWW   Opened June 7, 2009

REVENUE - Total revenue increased $6,658,432 or 87% for the nine months ended September 30, 2009 over the same period in 2008. The difference in revenue from the above listed restaurants for the same time period was an increase of $6,773,464 in revenue. Our other restaurants opened prior to July 1, 2008 posted a decrease in revenue of $61,226 for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008.
COST OF SALES - Cost of goods sold (food and beverage), as a percentage of food and beverage sales, increased one percentage point from 30% in 2008 to 31% in 2009 due to the increasing market prices of chicken wings. The increase of $2,151,386 or 115% for the nine months ended September 30, 2009 compared to the same period in 2008, is due to the opening of the additional restaurants. PAYROLL COSTS - Payroll costs increased $1,603,942 or 59% for the nine month period ended September 30, 2009 over the same period in 2008. This increase is primarily due to the additional personnel costs related to newly opened restaurants.
OPERATING EXPENSES - Total operating expense rose $5,635,107 or 71% for the nine month period ended September 30, 2009 compared to the same period in 2008. This increase in expenses reflects the inclusion of the expenses of new restaurants that were not open in the prior period.
OPERATING PROFITS - Operating profit for the nine month period ended September 30, 2009 increased $1,023,325 to $787,214 from $(236,111) recorded in the same nine month period of 2008. Our profit margin has increased largely due to the new restaurants improving their efficiency.
INTEREST EXPENSE - Interest expense increased $152,766 or 84% for the nine months ended September 30, 2009 compared to the same period in 2008. This increase is due to additional debt taken on to open new restaurants. OTHER INCOME AND EXPENSE - Other income increased $95,022 to $74,366 for the nine month period ended September 30, 2009 compared to an expense of $20,656 for the same period ended September 30, 2008. Of this increase, $67,057 is due to the reduction of the swap liability in the first nine months of this year. INCOME (LOSS) BEFORE INCOME TAXES - Our income before taxes increased $965,581 to $526,948 for the nine month period ended September 30, 2009 as compared to a loss of $(438,633) for the nine month period ended September 30, 2008. See the discussion above for the various causes.
INCOME TAXES - For the nine months ended September 30, 2009, there is an income tax expense recorded in the amount of $203,453 compared to an income tax benefit of $68,564 recorded for the same period of 2008.
NET INCOME (LOSS) - For the nine month period ended September 30, 2009 compared to the nine month period ended September 30, 2008, net income increased $693,564 to $323,495 from a loss of $(370,069). See the discussion above for the various causes.

Three months ended September 30, 2009 and 2008 Since the following locations greatly impacted our performance, listed below are the locations and opening dates of the stores not open the full period ended September 30, 2008 but fully reporting for the period ended September 30, 2009.

   AMC Troy, Inc.            Troy, Michigan         BWW   Opened July 20, 2008
   AMC Petoskey, Inc.        Petoskey, Michigan     BWW   Opened August 17, 2008
   Ann Arbor Burgers, Inc.   Ann Arbor, Michigan    BD    Opened August 30, 2008
   AMC Flint, Inc.           Flint, Michigan        BWW   Opened December 21, 2008
   AMC Port Huron, Inc.      Port Huron, Michigan   BWW   Opened June 7, 2009

REVENUE - Total revenue increased $1,620,438 or 48% during the three months ended September 30, 2009 compared to the three month period ended September 30, 2008. The difference in revenue from the above listed restaurants for the same time period accounted for approximately the entire increase.
COST OF SALES - Cost of goods sold (food and beverage) increased $547,803 or 64% for the three months ended September 30, 2009 over the same period in 2008. This relates primarily to the opening of the additional restaurants. The cost percentage of food and beverage sales, as a whole, was 31% in 2009 compared to 29% in 2008. The reason for this increase is that costs associated with fresh traditional chicken wings are up 43% year to date which encompasses 28.5% of total food and beverage sales.

PAYROLL COSTS - Our payroll costs increased $291,490 or 25% for the three months ended September 30, 2009 compared to the same period in 2008. Again, this increase is due to the addition of two additional restaurants in operation in 2009 versus 2008.
OPERATING EXPENSES - Total operating expense rose $884,874 or 24% for the three months ended September 30, 2009 compared to the same period in 2008. Operating expenses were higher due to the additional restaurants and, to a lesser extent, increased professional fees related to being a public company.
OPERATING PROFITS - Operating profit for the three months ended September 30, 2009 increased $735,564 to $443,871 from $(291,693), the profit recorded in the same period of 2008. This is largely due to efficiency improvement at the restaurants as they mature and at AMC Group as the management company is absorbing the growth at this time without adding personnel.
INTEREST EXPENSE - Interest expense increased $21,332 or 22% for the three months ended September 30, 2009 compared to the same three month period in 2008. Debt associated with the four additional restaurants is the reason for this increase.
OTHER INCOME AND EXPENSE - Other expense increased $12,457 to $16,148 for the three months ended September 30, 2009 from $3,691 for the three months ended September 30, 2008. The effect of the swap valuations resulted in other expense recognized of $11,286 for the three month period ended September 30, 2009. Swap valuations tend to decrease as LIBOR rates increase (record income) and increase as LIBOR rates decrease (record expense). LIBOR decreased approximately six basis points between June 30, 2009 and September 30, 2009.
INCOME (LOSS) BEFORE INCOME TAXES - Our income before taxes increased $701,775 to $308,983 from a loss of $(392,792) for the three month period ended September 30, 2009 compared to the same period of 2008.
INCOME TAXES - For the three months ended September 30, 2009, there is an income tax expense recorded in the amount of $135,024 compared to income tax benefit of $53,852 recorded for the same period of 2008.
NET INCOME (LOSS) - Net income increased $512,899 to $173,959 from a loss of $(338,940) for the three months ended September 30, 2009 compared to the same period in 2008.

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS
Statements contained in this "Quarterly Report on Form 10-Q" may contain information that includes or is based upon certain "forward-looking statements" relating to our business. These forward-looking statements represent management's current judgment and assumptions, and can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are frequently accompanied by the use of such words as "anticipates," "plans," "believes," "expects," "projects," "intends," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, including, while it is not possible to predict or identify all such risks, uncertainties, and other factors, those relating to:
• our ability to secure the additional financing adequate to execute our business plan;

• our ability to locate and start up new restaurants;

• acceptance of our restaurant concepts in new market places;

• the cost of food and other raw materials.

Any one of these or other risks, uncertainties, other factors, or any inaccurate assumptions may cause actual results to be materially different from those described herein or elsewhere by us. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. Certain of these risks, uncertainties, and other factors may be described in greater detail in our filings from time to time with the Securities and Exchange Commission, which we strongly urge you to read and consider. Subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above and elsewhere in our reports filed with the Securities and Exchange Commission. We expressly disclaim any intent or obligation to update any forward-looking statements.
Item 3. Quantitative and Qualitative Disclosure About Market Risks.

Not Applicable.