DICKEY’S BARBECUE PIT Franchise Complaints

Dickey’s Barbecue Pit franchise opportunity:  Are you considering it?

You should be aware that data released by the Small Business Administration (SBA) indicates that Dickey’s Barbecue Pit franchise owners who qualified for SBA-backed franchise loans have a very high loan failure rate of 36%.


Dickeys logoThat qualifies Dickey’s Barbecue Pit for inclusion in UnhappyFranchisee.com’s list of WORST FRANCHISES IN AMERICA (by SBA loan defaults)

Are you familiar with the Dickey’s Barbecue Pit franchise opportunity? If so, please share your experience, opinions or insights with a comment below.

If you are a Dickey’s Barbecue Pit franchise representative or employee, please leave a comment or email us at UnhappyFranchisee[at]gmail.com.

Dickey’s Barbecue Pit franchise owners have a 36% SBA loan default rate.

The inability to repay an SBA-backed loan (or any franchise loan, for that matter) indicates a serious situation for the franchisee.

It’s likely that Dickey’s Barbecue Pit franchise owners who received SBA loans may have collateralized their franchise loan with their homes or other personal assets, and many were unable to repay those franchise loans… despite the serious incentive to do so.

It’s notable that the number of loan failures may have been obscured by the outward appearance of a growing, failure-free franchise chain.

According to its Entrepreneur franchise listing, between 2008 and 2011, the Dickey’s Barbecue Pit chain grew by 42%, adding a total of 114 franchises.

Dickey’s Barbecue Pit

U.S. franchises in 2011: 195
Growth in franchise units 2008 – 2011 (#) 114
Growth in franchise units 2008 – 2011 (%): 42%
SBA loans granted since 2001: 83
SBA loan failure rate: 36%
Sources: Entrepreneur (growth), Coleman report (SBA)

However, according to Dickey’s Barbecue Pit’s Franchise Disclosure Document 2011, 60 Dickey’s franchises (30% of the total franchises opened) were either terminated or ceased operation during that same period.

Dickey’s Barbecue Pit terminated/closed 60 franchises (30%) between 2009-2011

The relatively high franchise termination rate of Dickey’s Barbecue Pit seems to be a franchise red flag.

Dickey’s Barbecue Pit Franchises 2008-2011
Franchises open January 2009: 89
Franchises added 2009-2011: 112
Franchises terminated/reaquired 2009-2011 60
Franchises terminated/reaquired (%) 30%
Sources: Dickey’s Barbecue Pit Franchise Disclosure Documents (FDDs)

According to the 2011 FDD, Dickey’s Barbecue Pit would appear to have a termination/closure percentage of 30%, which (we believe) could reasonably be called a failure rate. (The 36% figure is a default on SBA loans since 2001, so it may be that the actual failure rate earlier in the decade was even higher than in recent years.) Perhaps the company can clarify.

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What do you think of the Dickey’s Barbecue Pit franchise?

Are you familiar with the Dickey’s Barbecue Pit franchise opportunity?

What do you think accounts for the high SBA loan failure rate of Dickey’s Barbecue Pit franchise owners?

What steps should Dickey’s Barbecue Pit be taking to stop further franchise failures?

Has Dickey’s Barbecue Restaurants, Inc. taken serious action to address the problems that led to these loan failures?

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Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.

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78 thoughts on “DICKEY’S BARBECUE PIT Franchise Complaints

  • November 4, 2014 at 3:04 pm
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    Masking tape on fraud?

  • November 6, 2014 at 12:16 pm
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    Admin, to answer your question re: transfer stores, they usually work out something with the landlord on a case by case basis. A lot of the time Dickey’s will temporarily take over the store and lease until they can transfer it to a new or existing franchisee. Or, they negotiate with the landlord to allow the new franchisee to assume the lease from the failed owner.
    Often, when a store fails, the landlord is owed a large amount of money, so keeping the restaurant open gives them hope they’ll get paid back at least some of the money. If they just lock the owner out, they would then have to sue to get paid and at that point the owner is usually bankrupt.

  • November 11, 2014 at 10:33 am
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    I can only wish that I had know about the “unhappy franchisee” BEFORE I bought my franchise. I would have never gone in it I had.

    Their corporate slogan is “we are passionate about the art of great barbecue”. I believe that was once true. Under the current management of Roland Dickey Jr. the slogan should read “we are passionate about the art of making money”. Nothing else seems to matter.

    For example, the real estate team is entirely focused on closing leases as quickly as possible (I suspect they are under a quota of some type). They should know the three Ls of retail. If they do they simply ignore them in favor of closing a deal. In my FA they were obligated to make 3 site visits to view potential sites BEFORE signing a lease. They refused to make any visits and “forced” me to sign a lease on a property has significant access issues.

    You notice that I used “forced” in the sentence above. Of course they didn’t actually force me to sign. They did however mention that they would not approve any other site. If I pressed the matter they would have to make a case for it with “upper management” and could not guarantee anything. They also mentioned the FA had restrictions on how long I had to find a location and that I could be sued for $500,000 even if I never opened the restaurant.

    Poorly performing stores are generally dismissed as absentee owners who don’t care. It is far more likely that it is restaurants that have poor location. But Dickey’s would never know or care. As long as they can resell the restaurant.

    Dickeys does not accurately state the costs associated with opening a restaurant. There is no way they can actually do this since they don’t get any feedback from store owners on what things actually cost. For example, they state that the architect will cost ~$2000. My architect cost over $12000. Turns out that figure is what others have paid. How much does it cost to rehabilitate an second generation restaurant? Again the FDD gives a figure. That figure didn’t come from actual owners since Dickey’s has no idea what any owner actually spends. I spent well over $200,000 on my place.

    In other words, if you plan to purchase a Dickey’s franchise GET A LAWYER of your own choosing. Do NOT trust anyone at Dickey’s. They are either lying or don’t know any better.

    I would simply recommend that you figure it all out on your own or hire a restaurant consultant to help. Don’t go with this franchise – the “help” you get won’t be worth the price you pay for it.

  • December 28, 2014 at 11:03 am
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    There is a recurring problem with the store located at Middletown Mall in Fairmont, WV. I work in an office next door and even though there is a conference room and two walls between my office and the restaurant, they have the music turned up so loud every weekend it is difficult to take phone calls with a headset on because the noise is so loud. They have been asked several times to turn it down but I am getting tired of having to leave my office and go ask them to please turn it down. This occurs mainly on the weekends, but I am tired of their inconsiderate behavior. Maybe you should take out the music. I like the food but the noise is overwhelming, if they are deaf and can’t hear it then let them get hearing aides.

  • January 6, 2015 at 8:47 pm
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    smartin up all these people that invested lost all there money and are in debt. the people who buy a closed dickies are going to lose all there money the reason theres not as many closed is because they keep reopening them making more money off more poor souls if you opened a dickies you will be sued if you have a 20 year contract with dickies which is standard and you lose all your money in 2 years dickies wants the money they would have earned from your restaurant and will sue you for the other 18 years left on your contract believe it they want your house and anything you own .

  • January 7, 2015 at 10:54 am
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    Caution Dickey’s franchise owners past and present.

    Do not listen to Dickey’s officials when it comes to the post-term obligations of the franchise agreement after you close.

    Your local general attorney cannot help you since they do not know what to look for.

    Dickey’s contract provisions may not be enforceable in your state or the United States.

    This is fact-specific and you need a franchise attorney to help you.

  • January 17, 2015 at 1:36 am
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    This concept does not work. I was an area manager for them and know 1st hand about the lies. Dirty secrets and smug upper level management. I saw so many owners lose everything because of this company! Just disgusting.

  • January 17, 2015 at 10:59 am
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    Ask Dickey’s franchise guys Corby Cronin and Roland Dickey what they tell franchise prospects before they buy on how much money they can make?

    Emails at Dickey’s are first initial + last name [at] dickeys [dot] com.

    Ask them why they told people this was a great investment. Scoundrels.

    Corby and Roland you should be ashamed but you’re not.

  • May 8, 2015 at 10:59 am
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    Dicky’s BBQ Pit is by far the worst company ever. They do not back the people that work the hardest for them. They will let any Tom, Dick or Joe open a franchise without checking into any financials. After the franchise is up and running the owner does not pay who he needs to and every body who worked there ass off to get the place up and running gets screwed. If I never see another Dicky’s BBQ Pit again would be to soon for me!!!!

  • July 23, 2015 at 7:14 am
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    How can I get information on all the owners that closed sold or still in business? I to own a dickeys and every thing being said is the truth. We are barley keeping our doors open. The reason behind trans web departure could be corporate owned stores did not pay their bill?

  • August 27, 2015 at 2:17 pm
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    Anyone know the best way to get out of your franchise? I own one now and am ready to be done with this crooked company. I refuse to sell to yet another unsuspecting buyer with money and a dream (like myself).

  • November 4, 2015 at 10:05 am
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    Boys and Girls, I own more than 1 Dickey’s but selling off ALL of my stores. Some stores do make money but more than half of the system is struggling. They make enough to ONLY pay themselves a manager salary of 25K – 30K/year working 60-80 hours a week. (Corporate employee confirmed me this). They are thieves, You are suppose to have 2 certified managers at all times which, costs the owners $600.00 to certify. That same 8.00/hr employee then quits the following week, so you are then required to pay that fee again! So multiply that by ALL the stores, Its a fucking pyramid scheme guys! Wake up! DO NOT BUY THIS FRANCHISE!

  • November 7, 2015 at 11:43 am
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    I am was looking at a dickeys franchise, but am have some second thoughts, I am wondering if any of the franchisee who are having problems did a business plan. I know you can go to the SBA and they will work with you for free and get a business plan. I have not returned my application so I have not gotten the franchise disclosure document. Were there red flag in there or are they leaving the information out. I have many years experience owning QSR and this would be an addition to what I have. All franchise paint a picture of the bright future of being a business owner, it is a hard road to travel but can be very rewarding.

  • November 7, 2015 at 4:11 pm
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    Judy:

    Here is the Dickey’s Franchise Disclosure Document for 2015 filed in Wisconsin:

    Dickey’s Franchise Disclosure Document (FDD) 2015

    Red flags? I would consider this a red flag:

    http://www.unhappyfranchisee.com/dickeys-franchise-lost-a-1m-sale-today-heres-why/

    It’s a clause that says if you fail or if you sign and don’t get open you must immediately pay Dickey’s all the royalties that would be due for the rest of the 20 year term… There’s a franchisee who was undercapitalized, failed shortly after opening and was sued by Dickey’s for over $600K.

    You can see mention of liquidated damages in Item 5 and the James Neighbors lawsuit in Item 3

    Red flag #2: Item 3 Litigation – 5 lawsuits

    Red flag #3: Item 8 Sources of Product – rebates and what some call “kickbacks” on your purchases

    Here’s an excerpt:

    “During the 2015 fiscal year, our affiliate, Wycliff, received a total of $7,486,847 from indirect purchases by franchisees of certain paper and food products…

    “…Currently, approved suppliers pay to Dickey’s and its affiliates the following sales incentives or rebates: (1) food and beverage items, paper goods and cleaning products: either (i) a flat amount per pound or case (or other specified measure) purchased by Dickey’s franchisees or (ii) a percentage of the supplier’s total sales to Dickey’s franchisees; (2) credit card processing services: a flat amount per credit card transaction processed; (3) firewood: a flat amount per case purchased; (4) Restaurant equipment: a percentage of the supplier’s total sales to Dickey’s franchisees; and (5) insurance: a percentage of the insurance broker’s commission realized on each policy purchased by Dickey’s franchisees. During the 2015 fiscal year, Dickey’s and its affiliates received a total of $8,086,070 from these vendor rebate credits.”

    Aren’t franchisors supposed to be providing the benefit of group buying on to franchisees?

    Red flag #4: Item 20 Outlets and franchisee information shows franchisee turnover of 26%

    If you add up all the outlets opened, closed or transferred there were 670 franchise agreements in the past 3 years. 171 of those appear to have been terminated, reacquired by the franchisor, ceased operation or were transferred to new owners.

    Franchise salesmen will often say transfers to new owners can mean they sold out for a profit, but often a high transfer rate indicates “churning” of franchises that weren’t viable at the original investment.

    Buyer beware.

    What do others see as interesting in the Dickey’s FDD?

  • November 11, 2015 at 11:39 pm
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    Judy, of course I have business plans, I own 5 other concepts and none are anything like this. This portion below reaffirms their greed. The charge a lesser franchise fee of 15k but stick it to you on the back end.. kind of like Quiznos and look where they are now. NONE of my other brands are on this site. Must be a reason.

    Alternate Architect or General Contractor Fee. You are required to use an architect and general contractor we approve for the planning, design and construction of your Restaurant. Dickey’s will provide you with a list of approved architectural firms and general contractors. If you prefer to use an architect or general contract that is not on our approved list, you must submit the architect’s or general contractor’s
    information for Dickey’s prior approval. Any franchisee requesting an alternate architect or general contractor must submit its proposal to Dickey’s along with a $2,500 non-refundable evaluation fee and any other information Dickey’s requires in order to have the proposal evaluated. The alternate architect and/or general contractor will be required to sign Dickey’s then current form of agreement for alternate architects or general contractors (which may require the architect or general contractor to pay an additional fee for its approved status).

    Insurance Fee.
    You must obtain all required insurance policies solely from insurance agents/brokers or other providers Dickey’s approves. If you desire to purchase the required insurance policies from an unapproved insurance agent/broker or provider, you shall submit to Dickey’s a written request for such approval. If approval is granted by Dickey’s for the use of an unapproved insurance agent/broker or other provider, you must pay to Dickey’s a $350 fee to cover the costs of reviewing the insurance coverage procured by the unapproved vendor.

  • November 14, 2015 at 6:42 pm
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    They are crooks. Sold me a failing store. It’s up n running and barely making it and probably losing money..dont think I can keep it open. I dont think I ever signed the ITEM 23 either. Apparently, this is a NO NO. I’m thinking i will report this to the FTC. I’ll keep it in my back pocket until I feel im ready.

  • April 9, 2016 at 7:00 pm
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    We had been wanting to try Dickeys BQ but when we did we both got the runs later in the evening my son came home from work and had eaten at the same place he also got sickI called the manager to complain he just brushed me off. We’ll not try it again terrible service it’s in Ventura ca

  • May 18, 2016 at 7:42 pm
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    I currently got approved for 2 locations. Did any of you pay a SOGO fee of $8000? I have paid about $18k so far but we have not built anything or moved forward. I feel like they keep asking for more money. Before i start training they want the SOGO fee.

  • June 6, 2016 at 12:30 pm
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    What a terrible brand. From the top down. I was a franchisee with Dickey’s around 2012-2013 (and I am a successful franchisee of another brand). Everything I’ve read here is absolutely correct. If you’re looking to open a dickey’s… RUN.

  • June 24, 2016 at 1:42 pm
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    Franchisee from 2010-2013. Educated, CPA/MBA and have run successful businesses before. Did extensive due diligence, but when people are lying to you, it’s hard to pull out the truth. I lost my entire IRA to this deal and had to take a Chapter 13 Bankruptcy to get past this experience. Here are facts from my case that refute their claims and tht give you and idea of the real story:

    – $310K cost on 2nd-gen space (about 2300 sf/50 seats)
    – Sales of about $750K first year (pretty good) but learned few if any franchisees were hitting purported margins on food (38%) and labor (14%). Net pre-tax was ($4K) loss, but info provided was that “13%-18% net pre-tax” was likely. If that were true, I would have made about $100K (not bad).
    – I signed up for 2 stores and when we went to do the second, the experience others have written about regarding real estate are true. Since I came out of a real estate background, I knew what was and was not a good site. There was immense pressure from a young woman who knew almost nothing about the specific sites or real estate in general to get a Letter of Intent on a site. There was clearly some measurement of her performance that drove the emphasis on getting LOI’s on spaces. My broker and I joked that if we sent her a site with a doghouse at the North Pole she’d be quick to say that it was “a perfect site and get an LOI on it right away”.
    – Despite the pressure to get the second store going right on the heels of the first, based on the performance of #1, I let them take the $10K fee we had paid instead of setting myself up for an even bigger problem if I went forward. Sometimes the best deals are the one s you didn’t do and I definitely feel that way about Dickey’s. Liars and cheats is the nice way to describe them. The business model FOR THE FRANCHISEES does not work as represented but I am sure the Dickey’s are doing fine in their nice house not too far from Jerry Jones (Dallas Cowboys owner). Yes, they live at THAT level off the business model the have for DBRI and sticking it to their franchisees.

    Yes, they will say that they did not make anyone sign an FA, etc., so they are not responsible. So then we should thank Roland Dickey and his gang for providing the clear answer to the situation: DON’T SIGN A FRANCHISE AGREEMENT WITH DICKEY’S.

  • June 24, 2016 at 11:22 pm
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    Thank you for the information because there are what look like good locations in my area and I was tempted.
    I don’t understand how $750K is not profitable. That’s a lot of money and it had to really be bad knowing it would lose money at that level. I will assume the meats are overpriced at the wholesale level. Even if you clear $100K profit, the cash flow would be low if you borrow a couple hundred thousand to set up.

  • July 7, 2016 at 7:03 am
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    Franchise is like film business. It has all the glam and stardust, but if you plan to invest in it, you are doomed if you don’t know the inside mechanisms.
    Many people fail in franchise because they think it is easier to own it. I had a friend who owned a franchise ( not disclosing the franchise) and in an year he was almost bankrupt. The agreement was dissolved through franchise arbitration by Law Works Professional Corporation. Only an experienced businessman has high probability to be a successful franchisee.

  • August 7, 2016 at 4:48 pm
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    i do not like the rewards system. i spend $4.50 every visit but only get credit for $4.00 on the yellow cup reward system. i should get credit for all the money i spend in your store

  • October 27, 2016 at 3:43 pm
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    I would love to hear from
    Other franchisees that have closed. As of this week we closed both of our stores for all the named reasons and then some.

  • October 28, 2016 at 7:54 pm
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    Something is really wrong with dickeys restaurant in my state. I’m a regular customer but will not go back because it’s a waste of time and money. The menu has been changed and is very confusing. Everything is a combination that comes with a big cup. The ribs were burnt, that’s right I said burnt and the brisket changed. No more potato salad with chives, just regular. Behind counter not very clean, new workers once again. It used to be a great dickeys but I don’t expect it to last much longer. Sad. The workers were nice but stuggling with major menu change. Sad. I usually spend around $30 per visit, carryout. Very grateful to this site because I didn’t borrow money to buy one. Thank you, tremendously.

  • January 17, 2017 at 1:30 pm
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    No one has mentioned the dismal, rushed and forced change over from US Foods to Sysco.

    We stopped using community coffee because of a failed agreement about kickbacks.

    We just closed ours (family owned and ran) right before Christmas. I’m worried about my father because I feel that he feels like a failure. Granted owning a food establishment is vastly different from running one, but my father has been in the food industry my ENTIRE life (i’m 28 yrs old). done everything from cooking all the way up to regional manager and partial partner in other restaurants.

    We were there running the place everyday open to close for 2 years.

    This company not only treats franchisees like garbage but their corporate employees aren’t treated any better.

    One of the best franchise directors we had (we went through 7 FD’s in 2 years) was fired two weeks before we closed.

    I wish I would have known these issues occurred before we opened. My family is in ruins. Cant even Fathom the heartache of others.

    Someone needs to take down this company and pay these owners what they deserve for mental and emotional anguish.

    I will gladly testify.

  • January 17, 2017 at 2:35 pm
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    Dear Court:

    Thanks for joining the conversation at UnhappyFranchisee.com

    I am sorry to hear what you, your dad and your family are going through.

    I am in touch with many franchisees and former franchisees.

    I will be happy to interact with your Dad if he’s interested. I speak with many distraught, failed franchisees and help them put things in perspective so they can move on.

    What your dad is going through is tough because on the one hand failed owners have to take responsibility for the decision to buy the franchise and the decision they made to take the risk. The most unhappy are those who put 100% of the blame on others. However, they also (especially in your Dad’s case) have to acknowledge that they may be victims of professionals who have worked extremely hard to create a deceptive and illusory “opportunity” that has tricked many many intelligent, professional people including law enforcement pros and attorneys, foodservice professionals, even a judge. The illusion is reinforced by the franchise magazines, restaurant trade magazines and other “credible” media we’ve put our trust in but who simply publish whatever press release Jr. is sending out that day, and never, ever peek behind the curtain and report the truth.

    Earlier this year, Franchise Times named Dickey’s to their Fastest & Smartest rising franchise chains. Franchise Times is based in Minnesota, a state where just as many Dickey’s have closed as are currently open. Unfortunately, many will take the word of slick ad-driven publications and discount a nasty little blog with a smartass publisher.

    Your Dad is likely old enough to remember a movie called The Sting with Robert Redford and Paul Newman. Ask him if that victim ever had a chance when everyone around him was in on creating the illusion. I’m not saying Dickey’s is an out-and-out scam – I am not convinced that is necessarily the case. But I will say that the concept is very appealing and that if they stopped working so hard to create the illusion and put that energy into fixing – not hiding – their shortcomings, they wouldn’t have to spend so much effort hiding failures and bullying failed franchisees.

    Feel free to share more of your experience and to have your dad contact me at UnhappyFranchisee[at]gmail.com

    Tell him to spend some time on this blog and speaking to other owners. It’s imortant for him to know he’s not alone.

    ADMIN

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