The food business has always been tough, but 2024 has shown that even a history of success doesn’t mean things will go smoothly in the future. Dickey’s Barbecue Pit recently went through big changes. It used to be one of the fastest-growing barbecue chains in the U.S.
The chain closed almost 100 stores in the fiscal year that ended on May 31, 2024. This cut its position in the country by a large amount. What made them make this change? How does it affect the brand? What does the future hold for Dickey’s Barbecue Pit?
How Wide the Closures Are
From June 2023 to May 2024, Dickey’s Barbecue Pit closed 97 restaurants, a 19% drop in the number of locations. Even though they opened a few new restaurants, the company lost 85 restaurants in the US. This was a big setback for a brand that used to grow quickly.
These numbers were found in the company’s most recent Franchise Disclosure Document (FDD), which showed how hard things have been for the chain. It closed 106 stores and sold them to other partners at the same time. 46% of Dickey’s sites either closed or changed hands during the course of the year.
By the end of the fiscal year, the business had 385 stores around the world, including 366 in the United States and 19 in other countries.
How Dickey’s Grew Over the Years
How Dickey’s Grew (And Fought) Over the Years, things weren’t always so rough at Mickey’s. The chain grew very quickly after the Great Recession, mostly by selling the rights to lease other businesses.
The most places Dickey’s Barbecue Pit had at its peak were 564 in 2017. BBQ that was both tasty and easy to enjoy, along with a business plan that was easy to understand, drew owners from all over the U.S.
It did, however, bring problems because of its fast growth. In the past few years, the company has had problems, such as money problems and problems with franchisees. Restaurant Business Magazine says that from 2022 to 2023, system sales in the U.S. fell by more than 5%. During the same time period, unit numbers also went down by 3.6%.
Dickey’s had to deal with problems with franchisees, which added to the financial stress. Smokin’ Dutchman Holdings, a company with four locations that filed for bankruptcy earlier this year, was one of the most important cases. Individual owners’ problems point to bigger problems in the chain, which made Dickey’s bosses rethink their plan.
Dickey’s Choice to “Clean Up” Operations
Instead of moving quickly to grow, Dickey’s chose to stop and clean up its business. Senior vice president of business relations Jeff Gruber said that Dickey’s has been working on system changes for the past year.
For many of its internet restaurants, which had sprung up during the pandemic’s service boom, the company shut them down. These fake restaurants were only available online and didn’t have any real sites. However, they didn’t always meet the standards set by the company.
Dickey’s also ended business deals with places that weren’t following the rules or not doing what was expected of them. According to Gruber, the chain tried to make sure that shops were run by people who knew how to do a good job.
It was important to Gruber that Dickey’s goal was to “strengthen [its] core before growing again.” The company wanted to put quality over numbers, so it merged with multi-unit owners. Dickey’s thinks that these managers are important for long-term growth because they often have the knowledge and resources to keep restaurants running smoothly.
The Change in Who Owns Franchises
The sale of 106 Dickey’s sites to other owners was one of the most important events of this time. Because of this change, almost half of the brand’s restaurants either closed or changed hands during the fiscal year of 2024.
This might sound like a bad thing, but it also shows that the chain is trying to give stores to managers who are better at running them. Dickey’s saw this as a chance to make its reach more stable by giving franchisees better tools to run and grow their shops.
Plans for New Locations and Help for Franchisees in the Future
Even though some stores have closed and new owners have taken over, Dickey’s has no plans to get any smaller. The business has even laid out a few important plans for future growth and help. During the fiscal year of 2024, Dickey’s plans to open four new restaurants. This is a slow comeback to growth.
The company is also providing more help to its current partners. This includes helping to improve the shop, putting out a new menu to get more customers, and spending money on ads to boost sales. Dickey’s also promised to pay operators 1% of their monthly sales when those numbers go up.
Gruber said that Dickey’s is trying to reopen some locations that were briefly closed. This shows that the company is hopeful about making up for lost ground. It sounds like Dickey’s is sure of its next steps because Gruber said, “We do not anticipate further closures.”
The Broader Context: Other Chains Facing Similar Struggles
Dickey’s Barbecue Pit isn’t the only food company that’s been having a rough time lately. There are problems in the food business, like a lack of workers, rising prices, and shifting customer tastes, which has made some brands rethink their plans.
One example is the Italian chain Buca di Beppo, which closed 13 stores earlier this year because they weren’t making enough money. Soon after, the business filed for Chapter 11 bankruptcy, which showed that it was having serious money problems.
The fast-casual company Noodles & Company, which is known for its pasta dishes, also plans to close 10 to 15 stores in 2024 in order to make its business healthier.
These closings are part of a larger trend in the industry to merge and streamline. Chains are putting more emphasis on quality and making money, even if that means closing or selling off sites that aren’t doing well.
Conclusion
Dickey’s Barbecue Pit is about to change. The chain knows that fast growth isn’t enough to guarantee long-term success. Instead, it’s working to improve its business, help franchisees, and make sure that shops are run by skilled, experienced managers.
Even though Dickey’s has had to close many stores and change owners, it’s clear that the company is determined to rebuild and move on. As Dickey’s plans to open new stores, introduce a new menu, and offer more help to partners, the company is building a more stable future.
As the food business changes, Dickey’s Barbecue Pit will have to deal with the problems that come with running a national chain. But if the chain puts more effort into quality and running its business well, it might be able to get back to growth and success.
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