America's Largest BBQ Chain Has Shuttered Nearly 100 Restaurants—Here's Why
If there's anything that's becoming increasingly clear about the restaurant industry in 2024, it's that past success doesn't necessarily guarantee long-term success. Case in point: the country's largest barbecue chain shuttered close to 100 restaurants last year in a move that shaved 19% off of its American footprint.
The most recent franchise disclosure document (FDD) for Dickey's Barbecue Pit revealed that the chain's operators shuttered 97 locations during the 2024 fiscal year, which ended on May 31, Restaurant Business Magazine reported. Dickey's closed a net total of 85 locations with new openings factored in, which is about 19% of the restaurants it operated in the United States at the start of the fiscal year.
Additionally, the FDD revealed that 106 Dickey's locations were sold to other franchisees during the time period. Coupled with the closures, this means that 46% of Dickey's restaurants were either shuttered or changed hands during the 2024 fiscal year. The chain ended the period with 366 U.S. locations and 19 international locations for a grand total of 385. Dickey's currently operates 866 locations across all eight of its restaurant brands, which include Wing Boss, Big Deal Burger, and Trailer Birds in addition to its flagship Dickey's Barbecue Pit concept.
When contacted for comment on the closures, Jeff Gruber, senior vice president of franchise relations, said in an email to Eat This, Not That! that Dickey's has been working to "clean up" and strengthen its system of restaurants over the past year. The company shuttered most of its virtual restaurants, "terminated" franchise agreements with some non-compliant locations, and worked to ensure its stores were being run by the right people, Gruber said.
"We listened to our operators and we made the strategic decision to strengthen our core before growing again. On transitions alike, we put our energy into ensuring the right operators are in each location and completed several consolidations with multi-unit operators who were wanting to expand."
Though Dickey's was able to grow at a rapid pace after the Great Recession through franchise sales and peaked at 564 locations in 2017, the chain has faced some obstacles and financial woes over the past few years. For example, U.S. system sales dropped more than 5% and unit volumes dropped 3.6% from 2022 to 2023, Restaurant Business Magazine reported. Dickey's has also experienced issues with some of its franchisees, including a bankruptcy filing from the four-unit operator Smokin' Dutchman Holdings last month.
Looking ahead, the chain plans to open four new restaurants this fiscal year and ramp up support for its franchisees by assisting with store upgrade costs, launching a new menu, paying for advertising, and reimbursing operators 1% of their sales when sales are up monthly.
"We do not anticipate further closures," Gruber said. "We are working with many new and existing owners on opening new locations, and even reopening some locations that are temporarily closed."
Dickey's is far from the only restaurant chain that's dealt with closures recently. The Italian chain Buca di Beppo shuttered 13 struggling locations over the summer, shortly before it filed for Chapter 11 bankruptcy protection. Additionally, Noodles & Company anticipates closing 10 to 15 restaurants during its 2024 fiscal year to improve the health of the overall business.
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