Two national barbecue chains are trying to cut out their segments of the Springfield restaurant market.
Dickey’s Barbecue Pit and Famous Dave’s have opened in Springfield, on the heels of regional chains Billy Sims BBQ and Whole Hog Café establishing their names here during the last two years.
On Nov. 8, Dallas-based Dickey’s Barbecue, which operates 200 restaurants nationwide, added a 1,600-square-foot restaurant at 1360 E. Republic Road, two weeks after opening in Nixa at 111 N. Massey Blvd.
On Dec. 5, Minneapolis-based franchisor Famous Dave’s of America Inc. (Nasdaq: DAVE), which operates in 37 states, added a Springfield restaurant to its lineup when it opened in the former Auto World location at 4406 S. Campbell Ave.
Area Dickey’s franchisee David Wells, who is the president of Undercover Truck Beds in Rogersville, said he bought into the fast-casual restaurant after exploring franchise opportunities.
“I looked at Golden Corral, Chick-Fil-A, In & Out Burger – just as another way to invest money aside from the erratic stock market,” he said, noting he sought staying power rather than a potential fad such as a cupcake or yogurt shop that might lose popularity.
Wells said companies in the fast-casual industry were the most appealing because of their growth in popularity, and he was familiar with the Dickey’s chain from business trips to Texas. After speaking to the owner of the Lebanon Dickey’s franchise, he was sold on buying in.
Corporate spokeswoman Kate Morganelli said Dickey’s franchise fees are $15,000 for the first location and $10,000 for each additional location, plus a monthly royalty of 5 percent of net sales.
According to restaurant industry tracker Technomic Inc., the fast-casual category outpaced the overall restaurant industry in 2010, with the Top 100 chains growing revenues by 6 percent to nearly $18.9 billion.
Billy Sims BBQ also falls within that category.
Les Harris and husband-and-wife Bob and Anita Smith brought the Tulsa, Okla.-based chain to town after they got out of the trucking business. They acquired franchise rights for southwest Missouri – a minimum $26,000 franchise fee – after visiting a corporate-owned store in Joplin in 2010.
“At the time, there weren’t that many barbecue restaurants here, especially on the south end of town,” Harris said of the Billy Sims at 3757 S. Glenstone Ave.
The team of David Jones, Dr. Mark Coburn and Joe Gira chose the south side for Springfield’s first Famous Dave’s Legendary Pit Bar-B-Que. Jones, the owner of Famous Dave’s at Branson Landing and Branson Airport, said Coburn approached him because he had the first right of refusal in the southwest Missouri market.
“The whole reason for working with Joe and Mark was their backgrounds in commercial real estate were just wonderful, and that makes a big difference,” Jones said.
Coburn, a neuroradiologist at Mercy in Springfield, said he owns several commercial real estate properties in town, and he began looking for ways to fill one of his buildings when a restaurant tenant on East Sunshine Street went out of business. He became a fan of Famous Dave’s during his fellowship in Madison, Wis., and investigated the operating model for the property he had available. But Coburn said the Sunshine Street site wasn’t large enough.
“We just wanted to do something bigger and better with more pop, so we bought the Auto World building,” Coburn said of the 12,000-square-foot site, half of which is the restaurant. The other half is being prepared for potential tenants.
Jones said the modern feel of the Auto World building goes against the grain for the company, but he said it has been well-received by corporate officials who have visited from Minneapolis. “They just think it’s the coolest-looking building,” Jones said.
The group now plans to open a St. Louis location this summer. Jones said the owners bought the St. Louis area franchise rights with a commitment to build four stores. Though the partners declined to disclose investment totals, Jones said Famous Dave’s assesses a $40,000 franchise fee and charges 5 percent royalties.
Dickey’s franchisee Wells said he is working with Mike Fusek of Sperry Van Ness/Rankin Co. to identify another site near the Mercy campus on South National Avenue, and he could have a third restaurant open by summer. He’s also purchased Dickey’s franchise rights for the Bentonville and Fayetteville, Ark., markets, with plans to open restaurants there by 2014.
Wells declined to disclose his startup costs, but he said he expects to hit his return on investment within 24 months from opening each restaurant.
Wells said he didn’t feel threatened by the local competition. “Springfield has a lot of restaurant opportunities,” he said. “There are more Chinese restaurants here than there are people. In my opinion, there are more than enough sit-down style restaurants. There are not a lot of the Chipotle-, Qdoba- and Dickey’s-style quality food.”
Another competitor is across from Bass Pro Shops Outdoor World. Partners Paul Sundy, Dave Warren, Mike Hesslin and Daniel Bryant shouldered $500,000 in startup costs to open Whole Hog Café in September 2009 in Sunshine Corners, 224 W. Sunshine St. The Little Rock, Ark.-based chain lists 13 restaurants in Arkansas, Louisiana, Missouri and New Mexico, with a 14th site on the way, according to WholeHogCafe.com
Harris said the menu at Billy Sims is enough to differentiate the restaurant from the crowd. “We have green beans, potato salad and cole slaw for sides but no French fries or okra, kind of like the old barbecue you’d think about on Sunday afternoons at a church picnic,” he said of the chain that carries the name of former University of Oklahoma running back and Heisman Trophy winner Billy Sims.
Billy Sims operates 20 sites, with 18 in Oklahoma, and two in Missouri, according to BillySimsBBQ.com
Though Harris said 2011 revenues of $750,000 were below expectations for the Billy Sims store, the owners are considering opening on the north side despite the recent influx of barbecue options.
If they do, they’d be competing against another newcomer, Wilson’s Chuckwagon BBQ Restaurant, which opened in early fall. It’s a new venture but not the first of its kind for owner Raymond Wilson, an area electrician who owned Pappy’s Place on North Main Street for four years in the 1990s.[[In-content Ad]]