Dive Brief:
- Dickey’s Barbecue Pit will stop expanding five non-barbecue concepts and retire licensing agreements outside of its traditional franchising, the company said in a press release Monday.
- This move is part of four initiatives Dickey’s instituted in conjunction with its 83rd anniversary that will refocus Dickey’s on operational excellence and brand consistency, the chain said in the release.
- Coming out of the COVID-19 pandemic, Dickey’s quickly expanded into virtual brands, initially launching Wing Boss in 2021, followed by Big Deal Burger, Barbecue at Home and Trailer Birds Hot Chicken.
Dive Insight:
Many other brands, including Applebee’s, Red Robin, Maggiano’s and Chili’s have either ceased or trimmed virtual brand operations to refocus on core menus and the dining room experience in the last two years.
Dickey’s isn’t eliminating any brands in the “the classic sense” and sees “more concentrated future growth” with Dickey’s Barbecue, Trailer Birds and Wing Boss, Roland Dickey Jr., CEO of Dickey’s Capital Group, said in a statement.
“Our virtual concepts were initially launched as an additional revenue stream during the pandemic for our franchise operators,” Dickey said. “While our other concepts have grown in the past four years, none have achieved the success of Dickey’s Barbecue.”
Dickey’s Wing Boss evolved from a virtual to brick-and-mortar brand when Dickey’s opened its first physical location in July 2021. Wing Boss expanded to 70 locations as a virtual brand within just a few months. Dickey’s also expanded its virtual brands to 100 units through a partnership with Combo Kitchens it initiated in 2021. As of May 31, 2023, only six of the restaurants franchised by Combo Kitchen were offering Wing Boss menu items, and two restaurants offered Big Deal Burger items, according to Dickey’s franchise disclosure document.
From 2020 to May 2022, Dickey’s affiliate Virtual Brands Inc. allowed franchisees to offer concepts virtually or from within its branded restaurants. In May 2022, VB stopped offering franchises for Big Deal Burger, Wing Boss and Trailer Birds, per the FDD. As of May 31, 2023, VB had franchised 97 restaurants across these three brands. Through a partnership with Boost Virtual Concepts, 214 restaurants offered either Big Deal Burger, Wing Boss or Trailer Bird menu items.
Dickey’s said it will also opt to terminate and transition non-compliant restaurants in both traditional and licensed locations as part of its initiatives. For operators that meet brand standards and achieve operational, “barbecue excellence,” Dickey’s will give 20% back in royalties.
Refocusing on its core brands could help boost revenue and losses. Dickey’s has been operating with a net loss over the past three years, with losses declining to $5.6 million last year compared to $7.7 million in 2022, per its FDD. Total revenue, however, declined to $32 million in 2023 compared to $37 million in 2022.
“We see our guests continuing to evolve and want to follow suit. We also want to utilize limited resources in the best way possible,” Dickey said. “The post pandemic landscape has continued to change, so we are again prioritizing and expanding our menu within our core brand, Dickey’s Barbecue, instead of with our other concepts.”
That menu expansion will include crispy fried chicken, country fried steak, loaded mashed potatoes and gravy and three new loaded, stuffed baked potatoes, per the press release.
In addition to focusing on barbecue and expanding its menu, the chain is reinvesting in restaurants. The company will rework aspects of its traditional restaurants including new signage, digital menu boards, wraps on catering vans, drive-thru boards and store remodels, Dickey’s said.
