President Roland Dickey, Jr. assigned the Dickey’s franchise for Johnson City, TN to an undercapitalized franchisee who had no foodservice experience and is a registered sex offender. Three months after opening, when the franchisee fell $1205.58 behind in his royalty and marketing fees, Dickey’s terminated the franchise and demanded $675,122.55 in liquidated damages.
(UnhappyFranchisee.Com) What was it that convinced Dickey’s Barbecue Pit President Roland Dickey, Jr. that James Neighbors was the right franchisee to operate his Johnson City, Tennessee restaurant?
Was it Neighbors’ complete lack of foodservice experience?
Was it Neighbor’s 2007 Chapter 7 bankruptcy filing, or his inability to finance the huge investment necessary to open a Dickey’s?
Was it the fact that Neighbors is a registered sex offender whose publicly available profile includes a classification of “violent”?
Did ace franchise salesman Jerrel Denton assure Roley that Neighbors passed their high level of scrutiny, since both the mirror fogged and the check cleared?
Or was it a combination of factors (inexperience, undercapitalization, violent criminal past, Jerrel Denton) that made Roland Dickey, Jr. say: Mr. Neighbors is the right franchisee to represent us in Johnson City!?
And how could anything go wrong with a screening process like that?
Roland in the Dough…
According to the lawsuit DICKEY’S BARBECUE PIT, INC. AND DICKEY’S BARBECUE RESTAURANTS, INC. v. JAMES L. NEIGHBORS filed July 28, 2014 in the United States District Court for the Eastern District of Texas, Sherman Division, Roland Dickey, Jr. and James Neighbors entered into a franchise agreement August 17, 2013.
We assume James Neighbors handed over a check for at least the $15,000 franchise fee at that point.
According to Dickey’s suit:
In his application for a franchise and during the franchise development talks, Neighbors failed to disclose to Dickey’s Restaurants that he had previously filed for bankruptcy and was a registered sex offender convicted of aggravated sexual assault. Neighbors’ failure to disclose his registered sex offender status coupled with his credit history, made it difficult to obtain financing for the franchise finish out. Neighbors complained about the inability to obtain financing and tried to ascribe the duty and inability to find financing upon Dickey’s Restaurants. In a letter dated May 22, 2014, Dickey’s Restaurants indicated that it had found a lender – although Dickey’s Restaurants had no obligation to find financing – but that Neighbors would have to have 90 days of franchise sales history before the lender would consider an application for financing.
The lawsuit exhibits include a checklist signed by Mr. Neighbors, but none of the questions asked about prior bankruptcies or felony convictions.
Apparently, Dickey’s franchise approval department has never heard of credit checks or even Google. Both Neighbors bankruptcy information and his Sex Offender Registration status are available with basic Internet searches. They DO have the InterWebs in Texas, right?
And while the suit states Dickey’s “had no obligation to find financing” for Neighbors, the franchisee has claimed that he never would have proceeded without Jerrel Denton’s representations that they could find him financing. (See DICKEY’S BBQ Is Dickey’s Overselling its Franchise Opportunity?)
Dickey’s Throws Franchisee into the Pit for $1205.58
Neighbor’s Dickey’s restaurant opened in Johnson City, TN on April 10, 2014.
According to a story in the Johnston City Press, James Neighbors went $200,000 in debt to open his Dickey’s Barbecue Pit restaurant.
A little more than 3 months after his Grand Opening, on July 17, 2014, Dickey’s Barbecue Pit, Inc. terminated Neighbor’s franchise agreement and ordered him to cease doing business.
The lawsuit alleges that the Dickey’s franchisor terminated Neighbors franchise for falling just $1205.58 behind in his royalty payments, and that he now owed $675,122.55 in liquidated damages.
The termination meant that he is ordered to immediately close the restaurant and not reopen it.
In fact, he’s forbidden from opening a barbecue restaurant within 5 miles.
So, James Neighbors’ decision to open a Dickey’s Barbecue Pit restaurant has left him nearly $1,000,000 in debt and under the crushing weight of a lawsuit he can’t afford to fight.
Dickey’s Barbecue: How to Lose $1M in 4 Months or Less!
Seriously, what does Roland Dickey, Jr. and Dickey’s Barbeque Pit hope to gain by suing James Neighbors?
Do they really think they do not look remarkably stupid and grossly incompetent when they claim that they didn’t check to see if their prospective franchisee had a recent bankruptcy or a criminal past?
Do they really think that they are going to obscure their parade of mistakes by further crushing a 54-year-old franchisee and his wife, both emotionally and financially?
In our opinion: They sold a franchise that shouldn’t have been sold to someone they shouldn’t have sold to… and instead of acknowledging their mistakes and trying to clean up their mess they go into attack mode and demand hundreds of thousands of dollars that Mr. Neighbors can never pay in his lifetime.
In our opinion, the moral of this story is… unless you need to to show a million dollar loss for tax purposes and don’t have years to do it, you should approach the Dickie’s Barbecue Pit franchise and the people selling it with extreme caution.
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, Jerrel Denton, Dickey’s Jerrel Denton, James Neighbors, James Neighbors lawsuit, James Neighbors sex offender