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%.


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.

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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.

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.

Contact UnhappyFranchisee.com

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unhappyzee

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  • I used to love Dickeys in Cary NC, but now it is shabby and run down, the seats are ripped and torn the place is always a mess. To bad.

  • A Dickeys opened in Kerrville tx a week ago. I got the. Chicken plate and it was delicious even though th e servings were skimpy. I am. Used to the full sized Dickeys in Dallas..I returned toda y and doubled the meat and could hardly swallow the chicken it was so dry I don't know if I will return. &11.00 was a lot of money for what I got. I was so disappointed.
    Thihank you, Betty Gambrell

  • Bought a ham and turkey from Alpharetta GA store. Advertised as smoke turkey and smoked ham - what we got was a butterball precooked turkey in the package and a tyson ham. They charged 117.00 for the pair. Realized what we got when we got home. Went straight to Kroger to find the EXACT same thing (butter ball precooked smoked turkey - same package and ham) for 60.00 total.
    What a total scam. WE will be waiting at the store for the manager return their store bought crap and get our money back.
    Their web site talks about their history of smoking hams and turkeys. Bull.

  • I am a new Dickey's Franchisee, I was very excited to be a part of the Organization.

    I grew up eating Dickey's Barbecue in Texas. We moved to another state and wanted to bring good barbecue to the area. Most Franchises have good and bad locations. I was sold on Dickeys because of their "promises"

    Let me tell you my story.

    I first inquired about Dickeys and spoke with Jerrel Denton their salesman. He told me they opened over 100 stores a year. No problems. Could be done with as little as 45k and could be open in 3 to 4 months. When I inquired about the financing he said anyone with my credit score (740) which I found out later was actually 640 would have no problem. He said they work with people with worse credit history than mine and specifically stated if we had the money we said we had we would have no problem getting our store open.

    On several at least 5 conversations with Him he reiterated the fact that they gave us full support and had a team of people to help with our financing and that we would not need a business plan because they had a standard plan they used with their finance companies and they pushed through so many loans they had no problem getting us financing.

    Keep in mind he was made aware of my credit history, personal history and cash etc. He stated this over and over making me feel comfortable about getting financing. I even asked him about getting financing first. He said no Dickeys does not do that. Their system works better and they have a whole team to work on our financing. On two phone conversations with two other Dickeys representatives One was in the finance department and Mr Denton I again asked about the Financing and was again told by the finance department and Denton that it was not necessary, no business plan needed etc.

    We moved forward,signed franchise agreement and was pushed very hurriedly into signing a lease (another disaster in the making) Giving specific instructions on what to buy and when to buy it I have now invested over $60k and need another $155k to get the restaurant opened. I have no financing at this time.

    I was told by the Dickeys finance department (that consist of 2 people to the best of my knowledge) that I was turned down 2 times. They submitted my application to a single company outside of the organization. Then the company required a business plan. I spent over 20 hours preparing one since I have never completed one before. Their explanation was they do not require one but some companies do and they use a standard Dickeys business plan which consisted of an outline that could have been obtained off the internet.

    I have since submitted my business plan and application to three banks that are sba lenders and 3 banks that are not sba lenders and have been turned down by all. Main reasons are:

    1) Lack of funds in personal accounts - i have spent it on following Dickeys plan to the letter.

    2) Low credit score and credit history - Dickeys was given this info up front before we signed and they stated just the opposite, there would be no problem.

    3) Restaurant Startups are too risky and I do not have the expereince - Dickeys has on several occasions told me you do not need experience we train you and our lenders like to see you involved. A lot of BS.

    Long Story Short.....I feel I was misled by someone that was acting like a used car salesman. I should have known better but I felt that the Dickeys name and the people were different, not just a bunch of wealthy, greedy corporate types. I must have been wrong.

    I am over $60k out of pocket and they tell me "You will have to find your own financing" with no job, no money in the bank, they now have pushed me into a corner. My only option is to use my Home and I am reluctant. I am in a binding lease and have purchased a sign, smoker, etc.

    Any one have any suggestions?

    Know a good Lawyer?

  • You might consider a partner or selling your location and equipment to someone else. Do you know what other franchisees are making? How did you base your business plan projections? Dickeys is expanding fast.

  • Guest2,

    Are you missing the point?

    Dickey's should never have taken James Neighbors money. They sold him a franchise and knew he was not financially qualified.

    Shame on Dickey's. Sounds like Dickey's has untrained people doing franchising. who are their sales people?

    Coulter

  • No, I'm not missing the point. I would want to get out now then deal with the rest of it. Clocks ticking on the lease.

  • If what Mr. Neighbors alleges is accurate... it seems to me this is a moment-of-truth for Dickey's to show what they are really all about.

    First thing they could do is give him his $15K franchise fee back.

    Another thing would be to team him up with a financial partner or another franchisee... Many restaurant franchises operate with a financial partner and an operating partner (often a manager).

    Dickey's could also take it over as a corporate restaurant and hire Mr. Neighbors as the manager... or make him a JV partner.

    If it's a lost cause, Dickey's could have their legal team negotiate to get him out of the lease and make him whole... at their expense.

    Or they could just blow it off and risk a bunch of bad press and/or a lawsuit that would damage their family-oriented brand image and impede their ability to sell franchises.

    Either way, UnhappyFranchisee.Com plans to follow this story through. Hopefully Dickey's will emerge as the caring franchisor that didn't let an older gentleman and his family go bankrupt because of their mistake.

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