Exclusive: Twitter Spaces 'Bulls vs. Bears' Debate With RCI Hospitality And Edwin Dorsey

Edwin Dorsey, founder and writer of "The Bear Cave," shared some criticism about a company that provoked more than the usual reaction. 

Dorsey released a scathing report on his website on June 2 about RCI Hospitality Holdings Inc RICK that stated that he finds "RICK’s new ventures may be more bark than bite." 

“I thought just based on all the social media chatter that this was a fast-growing restaurant chain that was just getting into franchising and had huge potential. And then when you dug a little deeper you know it was less than meets the eye," Dorsey noted.

The restaurant he is referring to is Bombshells, owned and operated by RCI Hospitality Holdings, a company encompassing strip clubs, nightclubs, and sports bars and restaurants, as well as a media and convention business that serves the adult club industry.

RCI Hospitality CEO Eric Langan; Adam Wyden, who is the founder of ADW Capital and RCI Hospitality's largest individual shareholder; and Dorsey teamed up with Litquidity and Benzinga to host a “Bulls vs. Bears Debate” on Twitter Inc TWTR Spaces Wednesday afternoon to settle the debate about Dorsey’s damning report.

“Yeah, well let's start with Bombshells franchising. We jumped into franchising way too early — we're new to the restaurant business, we had no clue what we were doing,” Langan said. “We were thinking of strip club terms: build it and they will come.

"Now when you talk about franchising, we hired somebody who we brought in early who had made these big promises on what they could deliver they were unable to deliver and we ended up letting that person go.” 

Langan mentioned the company now has signed its first franchise group, which includes a franchisee that owns more than 60 pizza restaurants.

“Ultimately the sum total of what he has done, going from $1 million to $100 million of EBITDA, and creating a huge company-owned real estate portfolio, and then effectively 'de novo' creating a scratch kitchen restaurant concept, I think is pretty remarkable,” said Wyden, who was the latter part of the discussion. 

The debate on Twitter was the first of its kind for Benzinga and was meant to be an informative and educational event. RCI Hospitality is a small-cap company with a market cap of just $529.3 million, which does not receive much media coverage.

“This [Twiter Spaces] is something that's much needed for small-cap companies. The SEC changed all the rules and we can't get coverage anymore,” said Langan.

Litquidity and Benzinga intend to host more events like this one, if you’re interested in listening to the discussion, you can here.

Photo: Sittipong Phokawattana via Shutterstock