Smokin’ Dutchman Holdings, which operates four units, blamed its parent company’s ‘extreme and unreasonable demands’
Smokin’ Dutchman Holdings, a Dickey’s Barbecue Restaurants’ franchisee, filed for Chapter 11 bankruptcy earlier this week in the United States Bankruptcy Court for the Western District of Michigan. The franchisee operates four restaurants in Holland, Jenison, Kalamazoo, and Rockford, Mich.
CEO Krage Fox wrote in a declaration that the company’s financial challenges “have been caused by the actions of Dickey’s, which have imposed extreme and unreasonable demands upon the financial resources” of his company and its employees. Smokin’ employs approximately 26 people across its four locations.
The franchisee said it has about $2.1 million in debt. It is seeking court approval to use its cash collateral, accounts receivable, and inventory to fund its ongoing operations and “preserve the going concern value” of its assets. If denied, the company said it will not be able to continue to operate.
Smokin’ opened its first Dickey’s location in 2018. It acquired the Rockford and Jenison locations in 2020, and the Holland location in 2022. Revenues were about $3.3 million in 2023.
According to Technomic Ignite data, Dickey’s ended 2023 with $322 million in sales, a 5.2% year-over-year decline, and 469 units, a 3.3% year-over-year decline. Average unit volumes for the company were $675,000, significantly lower than its fast-casual peers, which average about $2.6 million. City Barbeque’s AUVs last year were $3.1 million, while Bill Miller Bar-B-Q’s AUVs were $2.6 million.
Nation’s Restaurant News has reached out to Dickey’s for a statement regarding this filing.
Smokin’ joins a growing list of restaurant companies and franchisees that have recently filed for bankruptcy amid a challenging macroeconomic backdrop. Earlier this week, BurgerFi also filed for protection, while Red Lobster, Bucca di Beppo, Rubio’s, Tijuana Flats, Rōti Modern Mediterranean, Tender Greens, World of Beer, and several others have also filed this year.
Contact Alicia Kelso at [email protected]
