Dickey’s franchise owners can anonymously share their views with franchisor DBRI on Dickey’s threats, bullying, churning of franchise locations and other important issues through the Letters to Dickey’s Program.
(UnhappyFranchisee.Com) LETTERS TO DICKEY’S is a collaborative, interactive series that invites Dickey’s Barbecue Pit franchise owners to candidly (and anonymously) tell their franchisor (DBRI) what they think and how they feel about the franchise issues and challenges facing them.
This post is dedicated to allegations of DBRI’s threats, bullying, churning of franchise locations, and the effect of such practces on Dickey’s franchisees and former franchisees.
If you would like to read or add comments on other issues, please go to:
You can also view and provide input on the issue-specific pages:
This page is a work-in-progress. We have posted comments from anonymous Dickey’s franchisees and will continue to update it as we receive new comments.
Dickey’s Barbecue Pit has an extremely high turnover rate of franchise owners.
Through analysis of the past ten years of disclosure documents and a collaborative effort with Dickey’s franchisees, we continue to post store closure and franchise transfers to new owners here:
We have received dozens, if not hundreds, of comments from Dickey’s franchisees and only one that we can recall stated that franchisor Dickey’s Barbecue Restaurants, Inc. (DBRI) is a nice company that respects its franchisees’ investments and, in the end, has the franchise owner’s best interest at heart. Franchisees who believe that DBRI is simply misunderstood in that regard are invited to share.
However, we’ve been told that DBRI:
- pressures Franchise Directors & Retention staff to never allow Dickey’s locations to close, and that Franchise Directors have been fired for allowing a failed store to close
- uses the threat of lawsuits for hundreds of thousands of dollars in order to get struggling franchisees to turn failed stores over to new franchisees, often for free.
- requires failed owners to sign non-disparagement agreements to keep them from sharing their experiences
- pressures franchisees into taking over failed or failing locations, and are willing to misrepresent the opportunity to do so.
- Churns failed stores through multiple owners, with some locations having as many as 5 unsuccessful owners before closing. Allegedly, DBRI does no market analysis for why a particular store failed or tries to address reason for failure (other than general operations) before turning it over to the new owner
- viciously retaliates against owners who close, hitting them with legal demands and threats. In one case, DBRI allegedly paid a sign company to remove and destroy a franchisee’s property
Dickey’s franchisees: Please share your opinions and experiences with threats, bullying, intimidation and the process of reselling failed and failing stores (churning) to new owners.
If you disagree with these opinions, please share yours via a comment below of email to UnhappyFranchisee[at]gmail.com.
Here’s what Dickey’s franchisees have told us so far
An anonymous Dickey’s franchise owner wrote:
After I received the threatening letter from dickey’s stating they were going to sue me for breach of contract, I spent more money on a lawyer to try to fight it. .. they ended up suing me for almost a half million dollars. My landlord joined them in the fun and sued me for another half million dollars for not fulfilling the lease that Dickey’s brokered for me, it was a 20 year lease.
So my LLC, my wife and I, and our two partners had to file for bankruptcy. My house will be up for sale at the Sheriffs auction in early January 2017 and my wife and I will have to find a new place to live. I sleep a whole lot better at night knowing I am not living in someone’s Ponzi scheme and trying to talk others out of their money.
As far as other franchise owners go… It seems the only real way to get out of this deal is to find some poor unfortunate schmuck chasing the dream of owning his or her own franchise restaurant. I tell the owners to sell the place for a dollar if you have to, but get your name off of everything you signed with Dickey’s and leave the problems with someone else. That is truly the only way to get out with any amount of dignity and money in the bank…
There is one other way to get out, and that is to sign the business over to Dickey’s corporate. They will negotiate away the back debt with all vendors and landlord and they will bring in a corporate person to run the store until they can sell it for a profit for themselves. The original owner will get nothing, the debtors take it on the chin but Dickey’s prevails once again and starts getting their 5 and 4 percent’s again. They claim it is profitable because of the low overhead, meaning corporate doesn’t pay the 9% that all franchise owners do and that is the difference between profitable and not profitable.
I have seen where they sell a store that was taken over by them and let the new owner build his business for six months without any royalty or ad money being paid. That is just not fair considering everyone before them did not get that luxury.
A long-time Franchise owner wrote:
…I was told that the franchisee fees are negotiable, and that certain Franchisees (especially in Dallas) are able to purchase stores for 4% Royalty and 2% Marketing. I was also told that for locations that can’t stay open anymore, the family will waive royalties, calling it royalty relief until they can find someone to assume your store (for free) so that they don’t have a high store closure rate, your reward for this is that you don’t have to pay them the $800,000 they threaten to sue you with.
A Dickey’s franchisee wrote:
Once a store gets in trouble, the owners will usually ask Dickey’s to help them find a buyer (something they and I were promised that Dickey’s would do if you ever wish to or are forced to sell). They will string you along, making promises that turn out to be lies until you have no more money, and most of the time they won’t find a buyer for you within that time. Then when you absolutely have to close, they come in and take the restaurant from you and run it as a corporate store; you get nothing.
Then they threaten you with a lawsuit for breaking the franchise agreement. “Damages” they call it (really penalties) are high…hundreds of thousands, because it’s for the rest of the 20 years! Of course, the former owners are completely freaked out…”are they going to take my life away”? etc. etc. until they are willing to give up everything just to get a release of the penalties. That’s when Dickey’s has the former owner sign that good old confidentiality agreement (so now you can’t talk to the many other owners who are in the same boat or sue Dickey’s) if you give up all rights to the assets and let them have them .
Dickey’s will let about a month or six weeks go by then, lo and behold, a buyer will appear (which they really knew about all along). And guess what, now Dickey’s, not the seller, gets the money from the buyer…and that buyer is one of their Area Developers, or one of his buddies that he has set up to go into business. And that Area Developer also sits on the “NFAAC” board, which is, supposedly, elected by owners to represent them (I don’t know how long they serve, but I never met or voted for mine). So Dickey’s is taking care of its own, you see, and the buyer gets a fairly new store and equipment for next to nothing. Does Dickey’s get another franchise fee out of it too? Probably. Does that Area Developer now vote for whatever Dickey’s wants to impose on the owners for specials/giveaways/etc. to ramp up sales figures…I’m sure yes is the answer. Do those specials and giveaways mean stores sales are higher (so royalties are higher) but the cost of giving away that extra product means they have less TRUE “net?” Yes.
This is wrong. It is fraudulent. And the cause comes from the top…Roland Dickey, Jr. He is a tyrant and does not care the least bit about ruining numerous good, hardworking peoples’ lives, as long as he gets more money for doing it.
Dickey’s franchise owner wrote:
The corporate climate is one that is full of threats. Corporate employees get fired regularly. You start out dealing with someone for a piece of your project and *poof*, they’re gone. You have to start over with someone new, that is no more competent than the last one. The ones with the longest tenure have the strongest vapor lock on Roland Dickey Jr’s ass.
During Barbecue U, the school all franchisees are required to attend, it was two weeks of getting my name and location wrong, and daily threats to “fire” all of us. I never could figure out how an owner gets “fired”, but I fell for it.
A recently closed Dickey’s franchisee wrote:
My field director was emotional that we did not reopen. Says that DBRI had all the directors verifying that the stores in their areas were open. Lead me to believe that more than My store did not reopen, just guessing. He was in a panic and was driving 2.5 hours to verify store was closed. I let him off the hook and told him we were not open. He said that DBRI directed him to go any way. I did inform the area director of our closing, informed him to talk with the attorney. Have heard nothing back.
Another franchisee heard that 90 stores are on the cusp of closing! I think dbri knows a bunch of stores are closing and they are trying to get ahead of it.
In January, 2017, Dickey’s franchise owner wrote:
Franchisees have been getting messages from FDs and others from corporate asking if their rent was paid up to date.
Some have reported getting calls from a Colorado number, and some have been contacted by a James Crane, Director of Franchise Administration whose email said “Please submit confirmation of rent payment for this location at your earliest convenience.”
One FD claimed it was because Dickey’s wants to know who’s having trouble so they can get marketing and purchasing to help them out. If that’s the case, why not just ask if they need help?
Supposedly they have a list of 70 or stores that are in trouble. Most agree they are expecting a bunch of store failures and want to get a head start on transitioning them.
A recently closed franchisee wrote:
Bryan Pelt, who is now Dickey’s Vice President of Retention/Transition, contacted us to say that it looked like a nearby Dickey’s franchise might close.
A month later he contacted us and said we could basically take over the store “free and clear” but we only had until 4 pm THAT DAY to decide if we wanted the store or not. We were not given the opportunity to contact an attorney to review anything.
It had been represented to us that the store had been neglected operationally and good operators like us could turn it around. We felt we were being pressured, but Brian Pelt had clearly represented that the store was debt-free.
In fact, it stated in the assumption agreement that we didn’t owe any outstanding bills
After we signed the assumption, Bryan Pelt started emailing us trying to negotiate the lease with the landlord. Suddenly, he was trying to get us to pay $23,000 in back rent and escrow so this landlord would let us rent.
After we signed the franchise agreement for the failed store, the creditors came out of the woodwork. We were getting calls about threats to take down signage ($21,000 owed) and from a bank who had a lien against the equipment threatening to take it ($75,000).
We reached out to Bryan Pelt and [Dickey’s corporate counsel] Christine Johnson and their answer? If you close because you have no signage or equipment we will sue you for closing.
We said “but you told us it was debt-free!” No, they said, we told you they didn’t owe DBRI anything.
That was clearly not the impression they gave to get us to take the store.
We were also promised repayment for 10-12 events that had been pre paid. We took on the events and never were repaid for any of them. This is how they kept the store open for one more owner.
We were later told by the former owner that he was basically forced into signing over the store. He was told if he didn’t sign it over to us, DBRI would sue him for $350,000. So, in fear of losing everything, he signed it over to us.
The same franchisee, who ended up closing that and another location, wrote:
When we closed that store, we didn’t notify Dickey’s until they contacted us. We didn’t want them to put another owner in two failing stores and six months later they have this same story.
Also, our bank has liens and first rights to the equipment, so we were not going to have them come after us and lose the collateral in it.
[Dickey’s Associate Director – Retention & Lease Administration] Scott Musch called and was actually swearing at [the franchise owner] over him closing. I am sure it’s because these retention guys jobs are on the line if they can’t turn over a store.
First we received a complaint they wanted to file in federal court for $800,000… Then they decided they would file for mediation and only go for $200,000. They are trying to push this through arbitration super fast compared to others in an attempt to silence “us” mainly me.
… I drove by the [Original] location on my way to lunch and noticed our signage had been taken down… all 4 signs in [our 2nd location] had been removed. We filed police reports on the missing signage…. we confirmed DBRI contracted with a company not only take down the signs but to destroy them… Jeff Gruber who authorized this. Per our Franchise agreement corporate was supposed to purchase these signs from us, if we could not agree upon a price we were to hire an appraiser, none of which happened. These are a bunch of entitled people who think they are entitled to everything you own.
…We are going to fight. It’s not even a fight about money it’s a fight about rights and wrong.
Owners and ex-owners are made to feel they are the only ones out there struggling. The one thing about our news article I can say was it let owners know they were not alone. I’ve had so many owners reach out to me and thank me for it. They were made to feel they were/are a failure and that they are the only ones out there struggling, when in reality about 70% are probably in the same struggle if not more.
Dickey’s franchisees please share:
Dickey’s franchisees your opinions will go here. What do you want DBRI to understand about the tactics of bullying, threatening and churning stores?
DICKEY’S FRANCHISE OWNERS: ADD YOUR VOICE! COMMENT BELOW OR SEND US AN EMAIL IN CONFIDENCE TO UNHAPPYFRANCHISEE[AT]GMAIL.COM.
ARE YOU A DICKEY’S FRANCHISE OWNER? PLEASE SHARE A COMMENT, OPINION OR REQUEST WITH DBRI. COMMENT BELOW OR EMAIL IN CONFIDENCE TO UNHAPPYFRANCHISEE[AT]GMAIL.COM
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