Famous Dave's Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$68,500 - $1,845,000
Franchise Fee
$8,000
Min Cash Required
$5,000
Total US Locations
109
Business Summary
Famous Dave's of America, Inc. franchises authentic, down-home barbecue restaurants that serve genuine smoked barbecue. Famous Dave's® Restaurants offer a variety of menu items including hickory-smoked spareribs, baby back ribs, beef brisket, herb-roasted chicken, barbecue sandwiches, char-grilled burgers, cornbread, potato salad, coleslaw, Wilbur™ beans, desserts, and specialty cocktails. Famous Dave's Restaurants operate with six different service models: full service, counter service, line service, flex service, or as an add-on ghost kitchen, or a cloud kitchen. Ghost kitchens operate out of existing restaurants or commercial kitchens and provide only delivery and to-go services, without dine-in options.
Corporate History
Famous Dave's of America, Inc. was formed as a Minnesota corporation on March 14, 1994, and began offering its franchise program in 1998. Famous Dave's operates under its parent company, BBQ Holdings, Inc., which merged with a wholly-owned subsidiary of MTY Food Group, Inc. on September 27, 2022. Following this merger, BBQ Holdings' parent company became MTY Franchising USA, Inc.
Financial Overview
Investment Range
$68,500 - $1,845,000
Franchise Fee (Low)
$8,000
Franchise Fee (High)
$35,000
Minimum Cash Required
$5,000
Royalty %
5%
Marketing %
1%
Equipment Costs (High)
$1,600,000
Working Capital
$7,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Famous Dave's financial statements show a net loss of $12,556,000 for the fiscal year ended November 30, 2024, following a net income of $16,978,000 in 2023. The independent auditors have issued an unqualified opinion, meaning the financial statements are presented fairly in all material respects in accordance with U.S. GAAP. No going concern qualifications or specific financial health concerns are noted in the auditor's report or the financial statement notes.
Financing Details
Famous Dave's does not typically offer direct or indirect financing to its franchisees. The franchisor also does not guarantee any notes, leases, or other financial obligations for franchisees.
Performance Metrics
Total US Locations
109
Franchised Units
77
Corporate Units
32
Avg Square Footage
4,300
Franchising Since
1998
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
20
Litigation Summary
Famous Dave's of America, Inc. and its affiliates have been involved in 20 distinct legal matters. These include concluded arbitration and litigation cases where Famous Dave's affiliates (such as Kahala Franchising, SFF, Fresh Enterprises, Wetzel's Pretzels, and Papa Murphy's International) were parties in disputes with franchisees or other entities. Common themes in these cases involved alleged violations of franchise laws, misrepresentation, or breach of contract, with many cases resulting in settlements. For example, Famous Dave's itself settled an arbitration with Arizona franchisees concerning franchise act violations and contract breaches. Famous Dave's also settled a lawsuit against former California franchisees for trademark infringement and contract breach. Additionally, several state administrative actions were concluded against Famous Dave's affiliates for non-compliance with franchise registration and disclosure laws, typically leading to consent orders and penalties. The FDD also discloses that Famous Dave's co-Chief Operating Officer, Adam Lehr, filed for personal Chapter 13 bankruptcy in 2018, which was discharged in 2021. More recently, in the fiscal year ending November 30, 2024, Kahala Franchising, an affiliate, filed two lawsuits against franchisees for breach of contract and forcible entry and detainer.
Bankruptcy History
Famous Dave's co-Chief Operating Officer, Adam Lehr, filed for personal Chapter 13 bankruptcy in the U.S. Bankruptcy Court for the District of Minnesota on January 30, 2018. This bankruptcy proceeding was successfully discharged on June 29, 2021.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise, Famous Dave's franchisees must give written notice 180 days before the agreement ends. They need to have complied with all terms and conditions of their current Franchise Agreement and paid all money owed to Famous Dave's. Franchisees must also agree in writing to remodel their location to meet the then-current Famous Dave's® image standards, ensure they have the right to occupy the location for the new term, and ensure their Management Staff has completed any required retraining. Finally, franchisees must sign Famous Dave's then-current standard franchise agreement and pay a Reacquisition Fee equal to 50% of the current initial franchise fee. The terms and conditions of the new agreement may be substantially different from their previous one, including different fee structures and territorial rights.
Training & Support Program
Franchisor Assistance
Famous Dave's offers various forms of support before and after a restaurant opens. Before opening, Famous Dave's provides a Site Model Report for proposed locations and offers an initial training program for the Operating Partner, General Manager, Multi-Unit Manager (if applicable), and 2-4 other management staff members at a certified training location. Famous Dave's also provides an Opening Team to assist with implementing the Restaurant System and training staff for a minimum of 14 consecutive days. During operation, Famous Dave's provides additional training for new management staff members, access to basic business and accounting procedures, and advertising and marketing recommendations. Famous Dave's also conducts periodic restaurant visits, legally protects its Marks, develops new Marks, provides advisory services by phone or in writing, furnishes sample menus and modifications, and provides lists of approved suppliers.
Initial Training Hours
355
Training Location
Certified training location designated by Famous Dave's
Ongoing Support
After opening, Famous Dave's provides ongoing support by requiring additional training for new Management Staff members at a certified location. Franchisees have access to basic business and accounting procedures and receive advertising and marketing recommendations, including local advertising requirements and guidelines for website content and social media. Famous Dave's periodically visits and reviews restaurants, rendering written reports as deemed appropriate. The franchisor also legally protects its Marks and develops new ones. Advisory services are available by telephone or in writing, and franchisees receive updates to the standard Famous Dave's menu and lists of approved suppliers.
Franchise Requirements
Ideal Candidate Profile
Famous Dave's seeks franchisees whose Operating Partners have at least five years of restaurant management experience and are committed to full-time involvement in the restaurant's operations. If operating multiple locations, a Multi-Unit Manager with at least five years of multi-unit restaurant management and operations experience is required. Owners and Personal Guarantors are expected to devote their business efforts to Famous Dave's restaurants and avoid involvement in competitive businesses. Franchisees must also meet financial requirements for the initial investment and working capital.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Min Years Experience
5
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Protected
Territory Size Requirements
Famous Dave's defines each franchisee's Designated Area as a geographical area around the Franchised Location. The size of this area is determined by Famous Dave's based on market research materials and the specific service model of the restaurant. The boundaries can be identified using a radius, roadways, natural or man-made landmarks, or other identifiers chosen by Famous Dave's. For rural areas, the size is determined by Famous Dave's business judgment. This precise Designated Area is detailed in an exhibit to the Franchise Agreement and typically consists of one or more cities or counties.
Staffing Notes
Famous Dave's franchisees are required to have an Operating Partner with extensive restaurant management experience who participates full-time in the restaurant's operations. For multi-unit agreements, a Multi-Unit Manager with at least five years of multi-unit restaurant management and operations experience is required. The initial training program for a standard restaurant includes training for the Operating Partner, General Manager, and a minimum of two to a maximum of four other management staff members. Franchisees must ensure sufficient management and other personnel are on duty during business hours to supervise operations and provide efficient customer service, and all employees must wear standard uniforms. Staff and kitchen employees also receive training from an Opening Team. During training, it is noted that all Management Staff members must successfully complete the program before being allowed to participate in the restaurant's operations.