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%.
That 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.
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?
Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.
ARE YOU FAMILIAR WITH THE DICKEY’S BARBECUE PIT FRANCHISE OPPORTUNITY? ARE YOU A CURRENT OR FORMER DICKEY’S BARBECUE PIT FRANCHISE OWNER? PLEASE SHARE A COMMENT BELOW.
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