Green’s Dictionary of Slang

a cheap brothel, an ‘escort agency’.

1985		B. Humphries Traveller’s Tool 8: Pick an escort agency or a rub-and-tug shop with a name like a restaurant.
1997		Roger’s Profanisaurus in Viz 87 Dec. n.p.: rub-a-tug shop n. Down market brothel; house of ill repute.