DICKEY’S BARBECUE PIT: How to Lose Everything in 5 Years or Less (Part 2)
A Dickey’s franchise owner states the Dickey’s Barbecue Pit franchise is “like a glorified pyramid scheme that takes all your money, sues you for more, and leaves you homeless and penniless.”
UnhappyFranchisee.Com recently received a very compelling account from an anonymous Dickey’s Barbecue Pit franchise owner entitled:
Dickey’s Barbecue Pit: How to lose everything you own (and your livelihood) in 5 years or less.
See Part One of this first-hand account here:
DICKEY’S BARBECUE PIT: How to Lose Everything in 5 Years or Less (Part 1)
In Part One, Anonymous Dickey’s Franchisee alleged that Dickey’s Barbecue Pit franchise personnel lie to franchisees about unit profitability, use underhanded techniques to extract additional monies from franchisees, and get vendor kickbacks at franchisees’ expense.
In Part Two (below), Anonymous Dickey’s Franchisee states alleges that Dickey’s provides inadequate franchise support, ineffective marketing and is indifferent to the plight of its failing franchise owners.
Allegation: Dickey’s Provides Little to No Franchise Support
Anonymous Dickey’s Franchisee writes:
For the first couple of years of owning a franchise, there was little or no support at the local level. We would see someone from the corporate office about once every three months. We often wondered what they did with the 9% we were paying them weekly.
We very rarely seen local advertisements, and when we did, there were usually misprints. I received one in my mail yesterday that listed only two Dickey’s in this state when there are several more.
They also listed a few in neighboring states, but not all of them. If you are taking the time and spending the money to advertise, wouldn’t you want to get it right and maximize your exposure?
As of last year, we could request some of our ad money be allocated to specific local vendors, but that was usually declined. Nobody I know (and I know a lot of people at Dickey’s) could effectively tell me how and where the money is spent.
I know factually that several heads of the marketing department have been fired for overspending. Believe it or not, when that was happening, most restaurants were producing record sales. But when the department goes “upside down” (Dickey’s phrase, not mine) then they have to stop spending for months just to catch up.
I have taken more than my share of calls from local ad vendors looking for payments months overdue that DBRI has owed.
Share your opinion below: Does Dickey’s provide valuable support and effective marketing that justify 9% of gross sales?
Allegation: Dickey’s Knowingly Sells to Undercapitalized Franchisees
Anonymous Dickey’s Franchisee writes that Dickey’s Barbecue Pit will knowingly sell franchises to those with inadequate capital or experience.
This same allegation made regarding Dickey’s sale to and termination of registered sex offender and undercapitalized franchisee James Neighbors (Read DICKEY’S BARBECUE PIT Franchise: Roland Dickey Sells to, Then Sues, Registered Sex Offender)
According to Anonymous Dickey’s Franchisee:
I read a comment on unhappyfranchisee.com that says DBRI is overselling. This is partly true, but I will tell you what I was told by a member of the Franchise Development Team.
I asked why they were selling franchises to some questionable people with sketchy backgrounds and questionable finances and ethics.
This individual replied: “We have to sell to undercapitalized bottom feeders in order to grow. Our magic number is 500 restaurants, which is the point where we start attracting serious buyers with endless capital that will buy up entire states”.
I don’t know about you, but that is the first time I realized for sure that this Franchise was not for me.
Does Dickey’s knowingly sell to unqualified franchisees just to pad its numbers and collect fees? Comment below.
Allegation: Dickey’s Sets Up Franchisees for Failure Then Sues Them
If these allegations are true, Dickey’s Barbecue Pit is one of the most insidious and evil franchise organizations of recent times (and that’s saying something).
Anonymous Dickey’s Franchisee alleges that Dickey’s sets up franchisees for failure, then either resells their franchises or sues them for hundreds of thousands in damages.
It was around that time that the final straw came for me. In a state with exactly two Dickey’s restaurants in it (approximately 20 miles apart), DBRI had the testicular fortitude to open a third Dickey’s exactly 3.1 miles from my location on the same street! I was approached by Richard Phillips (director of sales) and Lauren Parker (assistant director of sales) who informed me of the sale.
Richard put his hand on my shoulder and said “don’t worry about it, they have absolutely no restaurant experience, you will own that restaurant within a year”.
My restaurant is now closed and the new restaurant remains open. The new restaurant took 20% of my business in a brand new market with little competition.
DBRI forced the competition down my throat and I lost because the new store had more capital than I did.
When the new store opened I dropped below my break-even point and stayed there for over a year hoping it would change, but it didn’t.
I received numerous emails and phone calls from the corporate office saying my sales are down, what are you going to do about it? I asked that they help with some extra advertising and it never happened.
DBRI watched me fail for over a year and never once offered a solution to the problem they caused. I received a letter the other day following an email to my attorney stating DBRI would be suing me for liquidated damages for just under $500,000.
I am already in the hole to debt collectors for $200,000 and the bank has filed a suit requesting they take immediate possession of my house.
No one needs to go through what I am going through right now, please don’t believe a word DBRI says to you, Roland Dickey Jr. would sell his grandmother to make a dime.
What do you think? Is the Dickey’s franchise a predatorial scam that preys on franchisees?
Allegation: Dickey’s is a Dictatorial Pyramid Scheme
Anonymous Dickey’s Franchisee concludes:
I leave you with these thoughts: DBRI, to me, resembles a narcissistic dictatorship that is chasing the almighty dollar into purgatory.
In reality, it feels more like a glorified pyramid scheme that takes all your money, sues you for more, and leaves you homeless and penniless.
What do you think? Is Dickey’s a “glorified pyramid scheme” or a legitimate opportunity?
Also read:
DICKEY’S BARBECUE PIT Franchise Complaints
DICKEY’S BARBECUE PIT Franchise Warning
DICKEY’S BBQ Is Dickey’s Overselling its Franchise Opportunity?
DICKEY’S BARBECUE Franchise, Jerrel Denton, Roland Dickey Jr. Sued for Fraud
DICKEY’S Franchise: Open Letter to Roland Dickey, Jr.
DICKEY’S BARBECUE PIT Franchise: Roland Dickey Sells to, Then Sues, Registered Sex Offender
DICKEY’S BARBECUE PIT Makes an Unhappy Franchisee Happy… Then Sues Him
ARE YOU FAMILIAR WITH THE DICKEY’S BARBECUE PIT FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
Tags: Dickey’s Barbecue Pit, Dickey’s Barbecue Pit franchise, Dickey’s franchise lawsuit, Dickey’s Barbecue Pit franchise complaints, Dickey’s Barbecue Pit franchisee lawsuit, Roland Dickey Jr., Roland Dickey, Dickey’s Barbecue Pit closed, Dickey’s complaints, Dickey’s lawsuits
Dickey’s BBQ has an Franchise Disclosure Document which all franchisors must have before they can offer franchises.
Dickey’s BBQ has a lot of stores.
Dickey’s knows how much each Dickey’s makes and yet they do not have an Item 19 Earnings Claim.
That’s all anyone needs to know about Dickey’s confidence in their concepts financial performance. Shame on you Roland for shame.
Dickey’s Franchise Agreement has an especially onerous termination clause that entitles Dickey’s to a single lump-sum payment for liquidated damages of future royalties for the ENTIRE duration of the term… even if the restaurant never opened.
That is why you see franchisees whose locations failed or were terminated being sued by Dickey’s for $500,000, $600,000 or more. Other franchises might require future royalties for a few years, but not for the entire term of 20 years.
Here’s why it’s worth paying an experienced franchise attorney to review your FDD and FA.
The Dickey’s Franchise Agreement reads that upon termination:
“…You shall pay to Dickey’s in a single lump-sum payment, and not as a penalty, Royalty fees for the remaining term of the Agreement (or renewal term, if applicable) based on the average Net sales of your Restaurant… If, at the time of termination, your Restaurant had not yet opened for business or had operated for less than twelve (12) months, liquidated damages will be calculated based upon the average Net Sales of all Dickey’s restaurants in operation for less than twelve (12) months.”
Dickey’s is aggressively exercising this clause.
A little more than 3 months after his Grand Opening, on July 17, 2014, Dickey’s Barbecue Pit, Inc. terminated James Neighbor’s franchise agreement $1205.58 behind in his royalty payments and ordered him to cease doing business.
From what we understand, Dickey’s demanded $675,122.55 in liquidated damages.
The termination meant that he was ordered to immediately close the restaurant and not reopen it. He’s forbidden from opening a barbecue restaurant within 5 miles. So while he has no restaurant to generate gross sales, he still owes Dickey’s royalties on those non-existent sales for 20 years…
I read their agreement when I was considering the franchise. I could not get past the 20 year term and even though I read the clause saying all royalties would be due if the restaurant closed before the end of the agreement I did’t believe it could be enforced. Maybe that’s why people sign it and open a restaurant anyway.
I never got past the 20 years because it sounded like they were trying to tie you to the
company for life. Or guarantee at least the $600,000. Even if you failed.
To me this means automatically filing bankruptcy to get out of it. Because you can’t even sell the equipment and fixtures if you close. You could not liquidate to settle things best as possible., because you owe the company first.
Where is our protection from government agencies for this? It’s really a million dollar commitment, is’nt it? Equipment, fixtures, opening cost, and the 20 year contract for royalties.
Very scary.
Good points, guest. Glad you read the agreement.
Another scary thing is that many of the stores that closed are reopened with new owners. So actual failed stores that were passed on to new buyers would not show up as failures, but “transfers.”
So hypothetically, a franchise store that was passed between 5 owners who each lost money would not show up as a failure despite the fact that 5 people lost their investments and passed it on to number 6.
Admin, when I was there there was a store in Florida that had at least 3 owners in less than two years. It was a bad location, far off the highway but they kept telling new franchisees that it was the previous owner’s fault and that they could easily turn that store into a success!
Don’t sue me –
Why did the Dickey’s General Counsel Sarah Walters quit in July 2014?
Sarah Walters left a high position as GC at Dickey’s to be an associate at Perkins Coe. It doesn’t make sense.
Don’t Sue Me:
Thanks for the clarification on how they work with Landlord’s of closed stores.
Which store in Florida had three or successive owners? Is it still open?
I would like to document franchise stores that have had multiple owners. If anyone can provide such info on this or another franchise location, please email me in confidence at unhappyfranchisee[at]gmail.com.
Thanks
Hancock- I don’t know why Sarah Walters left. Turnover was very high in the 4 years I worked there. People would just… not be there in the morning. And then you ask where they went and nobody would know. OR, your department all would get taken to lunch, which you’d think was nice, but then you’d come back and someone’s desk would be cleaned out. Lol.
Don’t sue me –
Thanks.
Does Roland care about franchise sales rules?
They don’t have an earnings claim in their franchise disclosure doc. But people seem to be getting numbers from Dickey’s franchise sales.
Does Roland know that his franchising people can’t do that?
Hancock:
Roland Dickey has been named in at least 2 lawsuits for illegal earnings claims.
Trouard lawsuit posted here:
http://www.unhappyfranchisee.com/dickeys-barbecue-franchise-fraud/
Chorley lawsuit posted here:
http://www.unhappyfranchisee.com/dickeys-barbecue-pit-franchise-warning/
Each time we post about Dickey’s we send a link to Roland Dickey, Jr. and request a clarification, rebuttal or correction. We have not received a reply, though his emails don’t bounce back either.
I’d say it’s likely Mr. Dickey is aware of the earnings claims Mr. Denton has allegedly shared, though its not clear whether he has taken any steps to prevent such practices moving forward.
Sean (aka Admin) –
Dickey’s is using the Quizno’s method of franchise selling.
1. Make illegal earnings claims to get franchises sold.
2. Failed franchise locations resold to new franchisees.
Dear Hancock, Don’t Sue Me and all others “curious” about my personal career choices:
I left my position as General Counsel of Dickey’s because I had the opportunity to work with Joyce Mazero, one of the most highly regarded franchise attorneys in the country, and gain experience in international law, an area of law that always has been of interest to me. I am certain that I would not have had the opportunity to work with Joyce without the invaluable experience I gained at Dickey’s, in particular the business expertise I gained under Roland’s mentorship. I continue to love the Dickey’s brand and embrace the Dickey’s story, and I look forward to Dickey’s continued growth and success.
I hope my response has sufficiently satisfied the curiosity of all interested in my career path and quelled any further speculation about the reasons for my move to an Am Law 200 firm.
Regards,
Sarah
Sarah –
Thanks for explaining your move.
Joyce has a terrific reputation.
I do think that Dickey’s franchise sales team is in need of franchise compliance training and that they really should have an Item 19 FPR in Dickey’s FDD. These are serious failings they should take steps to correct.
I understand that you may not be able to comment on my opinions.
Again thanks for jumping in and chatting.
Regards,
Hancock
Sarah was one of many DBRI/Dickeys Corporate legal team members. In my 3.5 years of knowing them there have been 3, maybe 4, heads of the “legal” department. So, I wouldn’t take her positive views of Roland to heart.
Sarah made comments that were safe and did not betray privilege. I get it.
I’ve read with interest the comments on Dickeys and would like to add my thoughts as a franchisee. The primary intent of my statements is to provide information to anyone considering a Dickeys franchise. Take them for what they are worth.
By any measure our store is considered a success when measured against other Dickeys. Let me be clear: we are still open and have been for a couple of years. That’s a success for Dickeys! While it is difficult to derive hard numbers, I believe Dickeys has opened about 1000 restaurants over the years. Dickeys numbers each restaurant sequentially and the number is approaching 1000. With 400 stores in operation, I believe the failure rate is well north of the 35% reported on this website. My guess is closer to 70%. Every other owner we “trained” with is out of business. I can cite dozens of other stores that have opened and closed over the last few years. Again the failure rate is high. For those considering the “opportunity” to open a Dickeys:
1) Do not, under any circumstances, sign the franchise agreement. Make this decision right now. After the decision is made, go hug every friend or family member you can find because this will be the single greatest decision of your life;
2) In my view the mission of Dickeys in singular. To legally transfer the wealth of the franchisee to the franchisor. Dickeys is not in the restaurant business business. It is in the wealth transfer business;
3) Re-read point #1;
4) The customers of Dickeys are not those who frequent a restaurant. It is the franchisee. I firmly believe that Dickey’s corporate spends every moment of every day trying to figure out how much extra wealth can be extracted from the franchisee. The carnage left in their wake is meaningless;
5) Re-read point #1;
6) The majority of the higher up brass at Dickey’s are highly skilled liars. You will not find a more skilled set of liars on this planet outside of North Korea. Much like others we were given highly inflated sales numbers and promises of support, etc. Such a lie. It doesn’t take long to figure out the lies once you start running the business. Zero technical and marketing support. If you live outside of Dallas then marketing is zero. The funds provided by the franchisee are used to provide funds for the Dallas stores. That’s great if you have a store in Dallas (like the corporate stores) but not good if your store is outside of Dallas;
7) Re-read point #1;
8) Owning a Dickey’s is like being is prison. There is this gnawing feeling of supporting a corrupt busiess. I’m embarrassed to be associated with Dickeys. After reading the comments on this board, I’m even more embarrassed. Such a shame because the food is good but the corporate office is so corrupt that success is almost impossible;
9) Re-read point #1;
10) My last comment is reserved for the current franchisee. Guys we got taken. It’s that simple. I firmly believe my family could make any business a success. That’s why we bought a franchise. The one variable I never considered was buying into a business model that sponsors a corrupt regime. We also need to re-read point #1. The part about hugging family and friends. It’s the only thing that get me through each and every day.
Guest writes – “Much like others we were given highly inflated sales numbers and promises of support, etc. Such a lie.”
Dickey’s does not make an earnings claim FPR in its FDD how did they give you numbers?
It’s hard to figure out what the problem is. I go to a Dickey’s that’s a new location. This week they finally had a few families dining in. The dining area was too dark. I wondered who would come back after trying to feed kids in a dark restaurant. Also no coupons in our area and food for two is $25.00. A family of 4 can only afford kids on Sunday when free.
guest1:
I agree that pricing/value is likely a problem. I think the food is (mostly) pretty good and it’s a welcome alternative to other fast food. But if I wasn’t writing about Dickey’s and trying to support the local franchisee I’d probably go elsewhere. Just seems too expensive for what you get, especially if you’re feeding a family.
I agree, the menu prices at some restaurants are a bit high. A little of that is to be blamed on the problems with beef and pork over the past 1-2 years and droughts, prices skyrocketed which meant we had to increase menu prices.
However, at Dickeys, the roots of the problems are at the top. Dickeys does not support pricing for their franchisee’s. They receive kickbacks on everything. Franchisee’s are forced to buy products from certain suppliers with certain prices. Many times owners could find cheaper prices at the local grocery store or restaraunt supply store but you with get threatened with non compliance letters for buying off program. Franchisee’s are forced to keep their costs under control by increasing prices.
Keep in mind, catering profit is much more lucrative for an owner. Dickeys controls a lot of the catering sales through their website and 866-barbecue line which they market on everything. The customer comes to them and they distribute out to individual stores. In my opinion, they send sales to certain “key” owners stores. It works well for them because they need these “key” owners for other things (more on that later).