During the United States' failed attempt at temperance, the owners of a funeral home in Salem, Massachusetts, like many other thirsty individuals of the era, ran a drinking establishment in the basement. Patrons of the secret watering hole drank their fill in the same place where bodies were embalmed for burial.
To keep it on the down-low, it was referred to as "the bunghole", which unlike today, had a very benign slang meaning - the bunghole was a hole in a cask or a keg.
When Prohibiton was lifted in 1933, the owners applied for and received a liquor license, and began converting the funeral home into a package store. Pressed for a name, the owners took the advice of relative, a Polish priest, and officially named it The Bunghole.
The basement of the Salem location still contains embalming tubes and other materials used for the building's original purpose. A second location was opened in nearby in Peabody in June of 1995 and has performed marvelously since that time. Because the word "bunghole" means something entirely different now, the proprietors have made a fortune selling various double-entendred items like t-shirts and can koozies with their logo and slogans such as "We're Not #1, BUTT We're Right Up There!"