Texas-Based Dickey’s Barbecue Pit Grapples with Franchisee Backlash

Texas-based Dickey’s Barbecue Pit is under fire from some former franchisees who say the brand’s business model left them deep in debt, while the company insists these accounts do not reflect the experience of most operators.

A recent article from Morningstar reported that Dickey’s took issue with New York media coverage that, in its view, “misrepresents the brand’s long-standing success and the collaborative relationships” with its franchisees. The company said most of its owner-operators “find great success” and that “franchisee success is the norm.”

Several former Long Island franchisees interviewed by the New York Post painted a different picture. Scott Raifer, who opened a Dickey’s in Freeport during the pandemic, said, “It was the worst financial decision I ever made.” Raifer told the Post he is $500,000 in debt and facing foreclosure, adding, “If they did well, it was at the franchisee’s expense.”

Another operator, Jerry Stephan, said he invested about $20,000 into opening a Centereach location but claimed the chain later “circumvented” their development agreement.

According to the Post, franchisees also criticized Dickey’s for high royalty and marketing fees, as well as restrictions on sourcing less expensive supplies. They said these practices made it difficult to achieve profitability.

Dickey’s maintains that its franchise model works for the vast majority of its operators and that it has a history of supporting its network. The company said running a restaurant “isn’t easy” and that any brand will have “some who do not succeed.”

Implications for Franchising

The clash highlights a familiar challenge in franchising — the difference between how a brand presents itself and what franchisees actually experience. Disputes that spill into public view can make it harder to recruit new owners and may prompt stronger demands for clarity on earnings and operational rules.

While Dickey’s and its critics tell sharply different stories, the situation illustrates the high stakes for both sides in a franchise relationship — and how quickly disputes can spill into public view.

Read the original Morningstar article here.
Read the original New York Post article (served up by MSN) here.

Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit www.1851growthclub.com and start your journey.