RCI's Bombshells Formally Launches Franchise Marketing Program

“Bombshells Loves America, and America Loves Bombshells!”

HOUSTON—April 20, 2017—RCI Hospitality Holdings, Inc. (NASDAQ: RICK) announced the formal launch of its multi-channel Bombshells restaurant and sports bar franchise marketing program.

Actions include:

·         Production of a promotional video on the Bombshells Franchise site. Click here to watch.

·         Development of a marketing brochure, also on the site. Click here to read.

·         Initiation of a direct mail solicitation program aimed at multi-unit restaurant franchise operators in specific markets targeted for growth.

·         Launch of an industry-wide advertising campaign through Nation’s Restaurant News and Multi-Unit Franchisee Magazine trade publications and websites.

·         Appearance next week at the 2017 Multi-Unit Franchising Conference in Las Vegas April 23-26 (booth 505). Contact Shannon Glaser at Shannon@BMBFran.com to schedule a meeting at the show.

This is in addition to ongoing meetings with franchise operators that began late 2016.

Positioning & Targeting

“Bombshells fills a critical void in the market for the ‘social dining experience,’” explained Shannon Glaser, Vice President of Franchising and Concept Development of the fast-growing Bombshells brand.

“As a result, it attracts customers throughout the day and night, and generates substantially higher beverage and total sales compared to other casual dining concepts.

“We are targeting multi-unit restaurant operators because Bombshells are large—7,500 to 10,000 square feet with an outdoor patio—and multiple units in an area can meaningfully leverage advertising and marketing.

“Our objective is to open 80-100 units, with 70-80% of them franchised.”

Three new company owned units are in development in Houston, the first of which is expected to open in May.

Concept & Financials

With its military theme, Bombshells Girls, and fun, energetic environment—which includes more than 75 hi-def TVs for sports, DJs, full bars with premium brands and craft brews, an extensive menu and scratch kitchen—the concept attracts a wide and diverse demographic of men and women—from millennials to seniors—as well as families with children.

Average annual unit volume was more than $4 million for Bombshells open at the end of its Fiscal 2016, with a high average price per person and beverage/food ratio. Same store sales were up more than 10% for the year versus a down year for the casual dining industry.

The brand is also building a reputation for honoring veterans through special discounts, promotions and other activities. Bombshells is a growing supporter of Folds of Honor scholarships for children and spouses of fallen/disabled service members and is developing a veterans recruiting program.

“As we say in our materials, ‘Bombshells loves America, and America loves Bombshells,’” Ms. Glaser said.

About RCI Hospitality Holdings, Inc. (Nasdaq: RICK)

With 41 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis and other cities operate under brand names, such as “Rick's Cabaret,” “XTC,” “Club Onyx,” “Vivid Cabaret,” “Jaguars” and “Tootsie’s Cabaret.” Sports bars/restaurants operate under the brand name “Bombshells.” Please visit http://www.rcihospitality.com/

Forward-Looking Statements

This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the company’s actual results to differ materially from those indicated in this press release, including the risks and uncertainties associated with operating and managing an adult business, the business climates in cities where it operates, the success or lack thereof in launching and building the company’s businesses, risks and uncertainties related to cybersecurity, conditions relevant to real estate transactions, and numerous other factors such as laws governing the operation of adult entertainment businesses, competition and dependence on key personnel. The company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances.

Media & Investor Contacts

Gary Fishman and Steven Anreder at 212-532-3232 or gary.fishman@anreder.com and steven.anreder@anreder.com