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Transforming a Family Legacy

How a third-generation CEO grew his family’s franchise operation from 22 locations to 560.

Asked about his goals for the future of Dickey’s Barbecue Restaurants, CEO Roland Dickey, Jr. has a two-word answer: “World domination.” Given that his family’s 75-year-old franchising business has extended its reach to encompass 43 states over the last five years and continues to sign several single- or multiple-location franchising agreements a week, he’s only half joking.

Clearly, a lot has changed since the CEO’s grandfather, Travis Dickey, opened a Dallas storefront selling traditional Texas barbecue. But a lot has also stayed the same—and that’s a big part of how this slow-smoked barbecue company is succeeding on a fast-growth track. Dickey’s Barbecue has stayed true to the principle ingredient of its success—a simple menu devoted to delivering great barbecue— while adapting virtually everything else about the company.

dickeyA Fast-Casual Focus
“The easiest thing to do is to develop your model and then just grow it forever,” acknowledges Dickey, Jr., who has spearheaded a series of changes since succeeding his father as CEO in 2010. “That sounds good but it doesn’t really work because consumer tastes are changing and the market is changing. If you don’t adapt, your competitors will and, the next thing you know, you’re a tired, anachronistic brand that is beginning to struggle.” Setting the stage for what would become a nationwide franchise rollout, one of the first—and biggest— adaptations was a retooling of the original cafeteria-style Texas barbecue buffet into fast-casual-style locations that played better in new markets.

“When the recession hit, it really showed the vulnerability of having those big-footprint, high-overhead concepts,” explains Dickey, Jr. “So we came up with a much leaner, meaner and more profitable approach. It took two years to get it all proofed out, but by 2011 we were solid and we’ve been expanding ever since.”

Every Dickey’s Barbecue location still slow smokes all its menu items—beef brisket, pulled pork, St. Louis-style ribs, barbecued honey ham, polish sausage, spicy cheddar sausage, smoked turkey and marinated chicken—on-site and always will, he adds. “We will always be all about great barbecue. That’s our core. But with everything non-core—from the equipment and technology we use to our décor and the music we play—we need to continually improve to make sure we’re cooler, more energetic and more profitable than our competitors.”

This year, that mandate led to a “No B.S.” (aka No Bad Stuff) initiative toward using more wholesome, natural ingredients. Dickey’s now serves only antibiotic- and hormone-free chicken raised cage-free. The company will also be increasingly seeking out responsibly raised ingredients for the rest of its protein needs and removing harmful ingredients like nitrates. “It’s more expensive, but it’s the right thing to do—and it’s also what people want today,” says Dickey, Jr., who hopes to wield the company’s considerable protein-buying power to nudge market practices with the shift. “We have a bit of leverage to help transform the meat industry and we want to use it.”

Franchising Secret Sauce
While a hip image doesn’t hurt when it comes to appealing to prospective franchisees, ultimately it’s the potential for profitability that drives someone to plunk down their life savings to launch a barbecue restaurant.

Dickey’s looks to keep these newbie franchisees happy with constant communication and aggressive marketing and sales support, such as a call-center catering hotline that books catering jobs and hands them off to franchise-owned stores.

The company is in the midst of rolling out a proprietary new “Smokestack” enterprise management system developed over the last year to help its franchisees operate more efficiently and market more effectively. Among other things, the system will analyze usage patterns among loyalty club members so franchisees can tailor email marketing messages to specific customer types. Lunchtime regulars, for example, might get an attractive offer for a “meal replacement” family pack to lure them to buy dinner.

Ultimately, it’s efforts like these—plowing money back into “boots-onthe-ground” support for its stores—that drives expansion, notes Dickey, Jr. “We are restaurateurs, not financial people looking to squeeze every nickel out,” he says. “If our stores are doing well, they recommend us, we open more stores and the whole thing works.”

With annual revenues currently in the $480 million to $500 million range, Dickey, Jr. plans to continue pursuing domestic growth while also eyeing international opportunities. Wooed by potential partners in Europe, the Middle East and Asia, he’s homing in on Asia but plans to take a slow and steady approach.

“Having the right supply chain will be critical,” he says. “We want to make sure that when we expand we do it right.”


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