Do you have a passion for Texas-style BBQ, but don’t want to come up with your own brand and concept for a restaurant? Well, getting involved in the Dickey’s Barbecue Pit franchise could be the answer.
How much does it cost to open a Dickey’s Barbecue Pit?
You’ll need to invest between $256,360 – $323,789 to open the doors to your first restaurant. You’ll also need $100,000 in liquid capital and a net-worth of $300,000. The financial barrier to entry for this food franchise is much lower than other concepts like McDonald’s where you’ll need at least $500,000 in liquid capital to be considered.
While most fast-food restaurants offer the classic hamburger and fries, Dickey’s Barbecue pit sets itself apart with its Texas-style barbecue and sides. If you are passionate about barbecue, you may want to know more about owning a Dickey’s BBQ Pit franchise. I outline everything I would want to know before opening a franchise, including the pros and cons of the concept.
Financial Requirements and Fees
See Also: Starbucks Franchise in USA
Here are some base amounts that you will need in order to be considered for a Dickey’s Barbecue Pit franchise. To help you better understand what you will need, we will first define two important terms. The first is liquid capital, which refers to the total amount of cash you will need to have at hand ready to use at any time.
The second is net worth, which refers to the total amount in all your assets combined. This can be in different forms including property and investments. Dickey’s Barbecue Pit also has a franchise fee of $20,000, which is relatively low compared to other fast-food chains. Make sure to note that these are only base amounts, and the total cost you will actually spend to own a Dickey’s Barbecue Pit franchise will vary depending on a number of different factors.
|Fees/ Expenses||Financial Amount|
|Total Investment||$256,360 – $323,789|
Below are some additional fees and costs that you may need to make for the initial investment. While just an estimate, these numbers can help you get a better idea of what you may need. The fees range from the low end to a higher end, which can depend on a number of different factors including location, type of restaurant, and more.
|Name of Fee||Low||High|
|Digital Menu Boards/Signage||$0||$8,000|
|Furniture, Fixtures, Audio/Visual System, Equipment and Smallwares||$25,000||$104,,000|
|Point-of-Sale Register, Kitchen Display, Hardware and Software||$5,000||$7,000|
|Additional Funds – 3 months||$5,000||$8,000|
Here is a list of other fees you may encounter other than costs for the initial investment. Again, these numbers are merely an estimate and can range depending on the type of store or location.
|Type of Fee||Amount|
|Royalty||5% of net sales.|
|Ad Fund||4% of net sales for traditional locations and non-traditional locations not in gas stations. 2% of net sales for other non-traditional locations.|
|Spark POS Fee||$149 per month|
|Tech Support Fees||$251-304 per month|
|Insurance||As provided in the operations manual since it depends on the location.|
|Smokestack Sales Reporting System Software Fee||$58 per month for the first location. $40 per moth for each additional store and manager that is able to access the system. Plus, an additional $100 per restaurant for infrastructure support.|
|Additional Spark Fees (Processing, Online Ordering, License Fee)||$300 per month|
|Mobile Unit Franchise Hardware||$2,500|
|Training Material and Instruction||$1,150 for each wonder of the franchisor or other attendee. $1,750 for online and onsite training for manager certification (up to three)|
|Site Evaluation Fee||$1,000 plus all of the franchisor’s reasonable costs|
|BUO Training Program||$99 per month|
|Transfer Fee||Reasonable costs and expenses or greater of $15,000.|
|Interest||15% or maximum rate depending on law|
|Product and Service Purchases||Varies, depending on location|
|Management Fee||5% or net sales, plus additional fees|
|Indemnification||Fees depending on actual legal fees and additional costs|
|Late Fees||Depending on legal fees and expenses|
|Insufficient Funds Processing Fee||$40|
|Testing and Inspection||Dependent on other factors|
|Legal Fees||Dependent on actual legal fees|
|Termination of contract||Liquidated damages equal to value of royalty depending on number of months remaining in the agreement (may not exceed 60 months)|
While it may seem like an overwhelming amount of never-ending fees, it is important to note that these are fees typically seen with any type of franchise. Dickey’s on the other hand actually has relatively low fees compared to other fast-food restaurants.
Average Sales / Revenue per Year
See Also: Mr. Shawarma Franchise
While dependent on different factors, Dickey’s Barbecue Pit has made the top 200 largest restaurant chains coming in with total sales of $347.6 million in 2020. With its name becoming more well-known, this Texas-style barbecue joint has plenty of room to grow even more.
Dickey’s Barbecue Pit Franchise Facts
|Incorporated Name:||Dickey’s Barbecue Pit|
Dickey’s BBQ Pit, first established in 1941, is now the largest BBQ franchise in the world that prides itself on serving true Texas BBQ. Dickey’s Barbecue Pit is known for a comfortable homestyle experience at a fraction of the cost.
Although technically a fast-food establishment, Dickey’s begins smoking their barbecue in hickory wood smokers at every single location. The slow-smoked meat is rubbed by hand with traditional family recipes that have been passed down for generations.
The company has combined authentic Texas-style BBQ and sides with innovative technology solutions to provide convenient online ordering, catering, contactless delivery, and more. With the first flagship store in Dallas, Texas, the company now has more than 500 stores all around the world.
Dickey’s BBQ Average Franchise Profit
You can expect to bring home an impressive $200,000 per year with this franchise on average. Of course, the profits for a Dickey’s Barbecue Pit is hard to determine since it can be dependent on a number of different factors like location, management, and marketing of the business.
See Also: Big Mart Franchise
While annual income will fluctuate, this estimate is much higher than other franchise names, including Steak ‘n Shake that has made a lot of noise industry wide with the promise new franchisee’s will make $100,000 in the first year of business. This is a concept that you could allow you to live comfortably with a single successful unit.
Advantages of a Dickey’s Barbecue Franchise
With most franchises there are benefits and challenges of each. Some advantages of owning a Dickey’s Barbeque Pit franchise include:
Multiple Streams of Revenue
With the company’s strong focus on bringing their homestyle barbeque to people all over the world, Dickey’s provides multiple streams of revenue that can be beneficial for franchisees. Dickey’s Barbecue Pit has kept its traditional business model, while adapting to new consumer trends. This helps to bring the familiarity of the home cooked barbecue experience in innovative ways to take advantage of newer opportunities.
Some different streams of revenue that Dickey’s creates include: Dine-in, online ordering, curbside and delivery, catering, and holiday offerings. Their dine-in stores offer traditional and non-traditional storefronts to help you decide the best one for you. While some people may prefer the newer innovations that Dickey’s has to offer, the dine-in option lets guests feel at home while enjoying the delicious slow-smoked barbeque. Having multiple streams of revenue helps Dickey’s appeal to more customers and drive up profits.
See Also: How To Start Pig Farming Business
Since some franchisees may not have all the necessary knowledge they need in order to run their own franchise, Dickey’s Barbecue Pit offers training and support to help their franchisees increase their profits. Some ways that Dickey’s offers support is through their Barbecue University which includes 4 weeks of hands-on training.
setting. Dickey’s also provides its franchises with access to their in-house marketing team, which can help with making successful marketing campaigns. Along with training, the company also provides ongoing support from the Operations Manager as well as the Field Marketing Manager, which can help keep the franchise thriving.
The Dickey Foundation is a non-profit organization that is dedicated to giving back to first responders. The company is passionate about giving back to the community and this is just one way that they are doing this. Dickey’s is passionate about not only doing well as a business, but also doing good in the community. By joining Dickey’s as a franchise owner, you can rest assured that the company values its business as well as its community.
- Multiple streams of revenue
- Training provided
- Quality company
- Low franchise Fee
Challenges of Dickey’s Barbecue Franchise
Along with some of the advantages of owning a Dickey’s BBQ Pit franchise, there are some challenges you may face. Owning any type of franchise will come with its own set of challenges, so it is important to compare, in order to see which one is right for you. Some of the challenges you may face in owning a Dickey’s Barbecue Pit franchise include:
See Also: Chaatkhao Franchise In USA
Although the franchise fee and other costs of the franchise are a bit low compared to other quick-bite restaurants, it is important to look at the financial assistance programs that the company offers. For those that are looking to own a franchise, but may not have the adequate funds to do so may need a reliable financial assistance problem.
Unfortunately, Dickey’s does not offer any direct financial assistance for its franchisees. They do however, offer indirect financing through third party lenders. This means that they may refer you to independent lenders that could help with financing, however, it is not guaranteed.
While the company is growing in popularity and in number, it is also important to look at the number of closures that Dickey’s has had. This can be a good indication of how successful the franchise can be.
Previously, Dickey’s has had to close some of its locations due to low profits, however, according to recent numbers, they seem to be doing alright. It is still important to note that there is risk in investing in this business model.
Although a smaller chain can also mean more room for growth, they may be lesser known than some of the other fast-food restaurants. Since the other brands are popular, it may require additional branding and marketing to help your franchise thrive and grow. While others may have loyal customers already, additional costs and resources may be needed to help advertise your location.
Finally, as with any BBQ focused menu the concept is more sensitive to increased product cost with protein like ribs or pulled pork. If price on meat increases, eventually franchise owners will be forced to pass these prices onto consumers in order to remain profitable.
See Also: Shake Chili Franchise
- No direct financial assistance
- Smaller chain needs more marketing
- Previous store closures
- Risk of product increases
Is the Dickey’s Barbecue Pit Franchise Right For You?
The focus of Dickey’s Barbecue Pit is different from other fast-food restaurant models, making it an appealing choice for many franchisees. If you are passionate about family-style dining made quick and convenient this chain might be for you.
The multiple streams of revenue not only appeal to traditional customers that want a comforting dine-in experience, but also appeal to younger generations that may want a quick and easy bite to eat. They are largely different from what other fast-food locations have to offer, which helps them stand out from others. They are reasonable fees and costs and room for growth, as it is still a growing company.
There are risks to owning a Dickey’s franchise, however, that is the case for most franchises. If you do not have the funds to meet the minimum requirements, the third-party financial assistance may not suffice for you. However, if you do have the funds, and authentic Texas-style barbeque is something you are passionate about sharing with others, Dickey’s BBQ Franchise may be the one for you.
As such an important decision, it is crucial to thoroughly weigh advantages and challenges to help you decide if this franchise is right for you.