DICKEY’S BARBECUE PIT Franchise Complaints

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• The Gunny wrote:

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  The company that sells the smoker to Dickey’s franchisees offers cooking classes.
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  What company sells the smoker to Dickey's?

• i owned one for a year and a half im out about $175,000 all lies from dickies there closing everywhere i felt raped dickies doesnt have a clue how to run a business dont walk away run call some of them if there still open i ran a business for 20 years theres no money for you. dickies is in the dark ages thats why theres store # 600 but only 200 still open all those stores lost the homes and retirements for all those good people who believed dickies they prey on people like you.

• What happened? Did you just have a slow restaurant or was it mostly because of the cost to run it?

  Thanks

• Dickey's 2014 FDD shows 406 units open. 8 ceased operations, 1 reacquired and 1 termination.

  Are you saying that their will be a cascade of closures of Dickey's franchises?

• I ate at the first Dickey's restaurant in Seminole, Texas. The food was fantastic. I had never tasted such wonderful barbecue. I live in Hobbs, NM and was extremely excited to learn a Dickey's would be built there. I have been through the drive through on several occasions. The service was a little slow but that is understandable within a 2 week opening.

  I have read all of these posts of the individuals that have been lied to time after time and have spent their entire life savings to get screwed by the corporate offices. Most people are looking for a way to make a living....not a way to go broke. I can't believe that corporate has the gall to threaten lawsuits against these people. These same people should sue Dickey's corporate. It is not just a coincidence that this many people have been lied to and cheated out of their life savings. I don't think even Dickey's attorneys are smart enough to win on that one. Yes, a class action lawsuit is warranted in these situations.

  As I said, I love Dickey's barbecue but will never step foot into a restaurant that corporate has literally stolen their money and continue to steal from them every month the owner has to write a check for his franchise percentage.

  Dickey's does not even deserve to be in business. With all of the lies being told, they better look up to the sky and ask for forgiveness for this because at this rate, they will be in a place much warmer than the so called 'smoker' they use for their meat. Think long and hard about that Mr. Dickey and recover the good things you had when you began.

• I'm 64 years old and I've been an entrepreneur for most of my life. I started my first business at age 12 selling worms and minnows to fishermen at our local marina. I've survived failed businesses and enjoyed success at others over the years. I've owned two franchises businesses during this journey. One was a success, the other wasn't. Here's what I've learned, for what it's worth.
  #1 Do your own leg work. DO NOT depend on anyone else to do this for you. It's your future at stake.
  #2 Owing your own business, as enticing as it may be, is extremely hard work! You have to wear a lot of hats and be prepared to spend 60 to 70 hours per week, minimum. Your customers will want to see you in your store. They feel better when they "know the owner." It's kind of a status symbol for them and for you it's a chance to build repeat business. If you can't commit to that kind of work schedule don't proceed any further.
  #3 You can do everything right and still fail. Yes, that does happen. That's part of the risk all business owners take.
  #4 When you come up with a set of numbers, doesn't matter who prepares them, double it when it comes to cost. That's the kind of capital you need. Maybe your numbers will prove to be accurate, but what you want is a cushion to cover unexpected expenses. Don't plan everything to the penny and have no money set aside for things you don't see coming.
  #5 Talk to other business or franchise owners before you sign anything. Once you initiate contact with a franchise company they will be all over you to move forward and to sign their FA. That's what they are in business for. Most business owners are more than happy to talk to you, unless you're bugging them during the rush or at other inappropriate times. Make an appointment to see them. Don't just barge in and expect to get their undivided attention.
  #6 Owning a business is the most exhilarating experience you'll ever have. It gives you such a sense of pride and accomplishment, and a secure and stable income, if you are willing to invest your time as well as your money.
  #7 One last suggestion. This new business of yours better be something you like doing. To be successful you're going to be doing it a lot! One of my businesses was a bar/restaurant. I'm here to tell you, it was a lot more fun to be a patron of a bar than an owner. The point is, being a customer of your favorite hangout might not be the best way to decide you'd like to be the owner of that kind of business.

  Work hard, sell your soul to your new venture and most will make it. Good luck to all! Small businesses are the backbone of our country. God bless them all.

• I have an MBA, ran a successful small company (different industry) before the 2008 recession and really looked up and down at dozens of options before settling on Dickey's. I am a savvy businessperson but even I got hoodwinked by Dickey's projections. It's easy for them to do because each situation is so unique, you have to rely on their numbers to some extent, even if you know they are going to be in a favorable light.

  My total investment was $310K for a new unit in a second-generation space. They make the claim that they are opening units under $100K (one as low as $69K), but I have not located another franchisee that got it done for under $250K. Second- gen space they claim as the big saver is bunk, because to meet the equipment layout requirements, you need to move the gas, electric, water supply and drains to match up with the locations of the equipment. In a concrete floor, that means cutting it, laying all new utilities and putting back the concrete. Electric and gas need to be re-routed within the walls. Because of the smoker and fryers, the hood system is often much more extensive than a regular restaurant, and all these things add up to almost as much cost as taking a vanilla shell out through TI. About the only possible savings is having a grease trap and bathrooms. Otherwise, expect to remove and re-do a big part of what's there.

  Margins - I have been on successful management teams (in another industry) that knew our costs and tightly managed margins for good profits, and made good money in it when on my own. I understand that aspect of the business forward and backward. Their claim of "13-18 percent net pre-tax" was WAY over the reality. The average store is said to gross $600K-$800K. Our first year we were near the top of that range, but only broke even on the P&L and the cash flow from depreciation only got us to 4.8%. The second year, we lost a little in P&L and depreciation got us to breakeven. I was only doing this store, working actively in it, marketed it and have managed businesses before, so there has to be a problem with the business concept based on my experience and that of others from talking with franchisees in the area.

  I finally listed the business for sale with a well-known local restaurant brokerage and got hardly an inquiry over 4 months. I learned that BBQ is such a niche market that it scares off a lot of buyers. The net result is that I sold out to the Area Developer for 20 cents on the dollar invested, lost all that I put into it and am in a Chapter 13 Bankruptcy.

  Also, look not just at the closure stats but also the fact that they keep selling units but the openings don't keep pace. Like I did in taking out two units, many franchisees appear to get the first one open, wind up in a bind and don't open the subsequent units.

  Also, the training and follow-up support is stretched way too thin, so you will be left to your own devices to figure out a lot of the issues that crop up. It's honestly pretty poor and the "proper procedure" depended on who you talked to. So, if they were to open all those units, how are they going to manage keeping the consistency and quality? The answer is that Dickey's isn't getting it done now and would fail even that much worse in trying to deliver on those units, further increasing the odds that the franchisees would be hung out in the process and wind up on the rocks.

  The whole power equation in the deal hinges on two events: when you sign the FA and when you guaranty the lease and/or loans. At those points, all the risk transfers to you and Dickey's is in the driver's seat. That is the reason for others' experience with the various departments trying to strongarm them through the process. My background is in real estate/development/construction, so I could push back on what was a joke of an analysis of the strength of a site and what it would cost to build out. However, I knew others would not be so fortunate and the testimony elsewhere proves it.

  There are plenty of good opportunities out there, but for people looking at Dickey's today, it is not one of them. If you are going to risk your savings or make an investment, there are better concepts with MUCH better operating records and financial rewards.

• Tom O.

  Did the Dickey's or the Area Developer tell you or show you "Their claim of “13-18 percent net pre-tax” was WAY over the reality"?

  Dickey's doesn't have an Item 19 earnings claim. If they did they made an illegal earnings claim. The Area Developer has to abide by the law and anything they say goes against the franchisor as well.

  You may be able to sue the franchisor while you are in bankruptcy. Check with an attorney a franchisee lawyer.

• It's a sensible expectation that an $600 to $800k gross would net at least $60 to $100k net profit before debt repayment. But even with that you would not be able to pay the bank/finance company for the equipment if you borrowed the $310k. But if the AD buys you out for 20 cents on the dollar and flips your restaurant, he or she will make a killing.

• I am curious as to how Dickey's has managed to be in the position to re-sell franchisee locations to new franchisees? Are they on the leases or do they work out something with the landlords on a case-by-case basis? Or are the failed/terminated franchisees put in a position to go along with the resale?

  The current FDD shows a substantial number of "transfers" (88) to new owners in the last few years. News stories refer to closed restaurants as "temporarily closed" while Dickey's searches for a new franchisee.

  7-Eleven does this continuously because the company holds the lease, utility accounts, fixtures, etc. but I'm sure Dickey's isn't assuming those costs. How can they assume control of a closed location and re-sell it?

  Anyone?