LI franchisees of Dickey’s Barbecue Pit roast chain for money woes in scathing lawsuit

A national barbecue chain is facing legal action from franchisees who claim they were misled about the profitability of their investments. Among them are Scott Raifer and Jerry Stephan, both New York-based investors who say they have suffered significant financial losses as a result of their franchise agreements with Dickey’s Barbecue Pit.

Raifer opened a Dickey’s location in Freeport, Long Island, in December 2020, only to close it less than two years later with $500,000 in debt. He claims that the company pressured him to open quickly and that he was misled about the costs involved. Raifer also had issues with a malfunctioning smoker he purchased from a Dickey’s-approved vendor, which further added to his financial woes.

Stephan, on the other hand, opened a Dickey’s location in Centereach, Long Island, in September 2020 but later sold it for much less than he believed it was worth. He had issues with the company backing out of a store development deal and found the requirement to buy from approved vendors and pay marketing fees to be financially burdensome.

Both Raifer and Stephan are among dozens of Dickey’s franchisees who have filed complaints and lawsuits alleging false or misleading statements from the company. Some franchisees have closed their shops within a year of opening, while others owe creditors significant amounts of money.

Despite the negative experiences of some franchisees, Dickey’s CEO Laura Rea Dickey maintains that the company has not acted improperly. She stated that some former franchisees failed to meet performance benchmarks and that the company does not profit from the sale of equipment or goods to franchisees.

While some franchisees like Gary Mulligan in Whiting, New Jersey, report positive experiences with Dickey’s, others like Raifer and Stephan are speaking out in the hopes of bringing more transparency to the franchise industry. This case serves as a cautionary tale for potential franchise investors to thoroughly research and understand the terms of their agreements before committing significant financial resources.