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Famous Dave’s Founder Back in the Game with New Concept

Dave Anderson is back in the barbecue game with a new quick-service concept called Jimmie’s Old Southern BBQ Smokehouse.

For Dave Anderson, the barbecue pitmaster and franchisor formerly known as Famous Dave, a second chance came wrapped in a heartbreaking wrapper. After seeing the namesake company he founded in 1994 and took public grow to around 200 units at its peak, he recently severed ties with the company and now has nothing to do with the restaurant still bearing his name.

As Famous Dave’s continues to shed stores, its flagship location burned to the ground last fall and Anderson formally walked away from the business. He’s back in the barbecue game with a new quick-service concept he plans to grow even bigger than Famous Dave’s ever was. 

It’s called Jimmie’s Old Southern BBQ Smokehouse, an homage to his late father, and one of its raisons d'être is avoiding the errors of Famous Dave’s, whose IPO Anderson calls the worst mistake he ever made. 

Located in Hayward, Wisconsin, a small tourist town that’s the original birthplace of Famous Dave’s, this Jimmie’s is the first of what he hopes to grow into a 1,000-unit international concept.

“I think we have something really exciting here—you can feel the energy, and we’re just in a town of 2,000 people,” Anderson said. “If you can prove yourself in a small town, I think the concept really has legs to travel.”

Small-batch ambiance

Whereas Famous Dave’s is a casual sit-down restaurant, Jimmie’s has a quick-service format Anderson likens to a picnic where everybody lines up to fill their plates. 

He also compares the 60-seat, 2,500-square-foot restaurant to an old-fashion barbecue storefront, the kind his dad used to patronize on the south side of Chicago. 

There’s a stack of cut maple wood by the front door, like you’d find in basements and outbuildings throughout Wisconsin’s northwoods, which is used as its smoking wood, rather than the go-to hickory. 

“We think the maple is what differentiates us from all other barbecue joints,” Anderson explained. “I’ve found that sweet maple wood gives a very distinct flavor.”

Proteins include pulled pork, chicken, Texas-style brisket, smoked sausage and smoked ribs that use the whole spare, rather than smaller St. Louis cuts. Sides such as barbecue beans, rice, mac and cheese, and various slaws are made in small batches throughout the day. 

Keeping the sides coming without delay has been a challenge while ramping up the first location, said Dave Von Rueden, a former Famous Dave’s franchisee who as part of the Jimmie’s corporate team is focused on food and beverage operations. 

“We didn’t know what we were doing the first time; I didn’t, at least,” he said. “We want to make it successful across the country and do what we should have done with Famous Dave’s.”

While discussing what’s different between the two chains , Anderson strongly brushed off any direct comparisons. 

“I wouldn’t say this is a changed version of Famous Dave’s, there are a lot of things that are very different,” he said, with a trace of umbrage. “My barbecue sauce is gluten free and no high fructose corn syrup, all of my product is traceable sourcing. I’ve visited every farm and know personally where my pigs are coming from.”

As the line extended out the door on Friday of Memorial Day weekend, Anderson said those in cue were locals, not the tourists who would start arriving in the afternoon. He expected to sell out of several items before closing time. 

Lean meats

Charting a different course than he did with Famous Dave’s, Anderson hopes to avoid Jimmie’s feeling like a chain. His approach means no corporate office this time around. His four HQ staffers, including Von

Dave Anderson

At Jimmie’s, maple wood is used as the smoking wood instead of hickory, Anderson says, giving the meats a distinct flavor.

Rueden, work out of their homes and use Skype and cloud-based accounting to stay in touch. 

“Our plan is to be lean and mean,” he said. “We’re all home based, working out of briefcases, that way we can put all the energy back out into the restaurants, not sitting in some corporate office.”

When he’s not in the store or working on recipes, Anderson does his own site selection. The second location is planned for Rice Lake, 50 miles south of Hayward, opening later this summer. 

He feels small towns are an underserved market, and is searching for communities with a big-box home improvement store, hospital and some type of higher education—all signs of disposable income. Favorable unit economics allow Jimmie’s to be successful in rural environments, he added, with the caveat that he’s also interested in the Minneapolis and Chicago markets. The first Jimmie’s is on track to do approximately $1.5 million in sales during its first full year. He envisions franchisee entry costs between $300,000 to $350,000.

Famous Dave no more

As we sampled the menu, a stream of customers came up to congratulate Anderson on his new venture. “I’m really happy for you,” said one after dropping his tray off near the trash. “We used to go to your other place on the lake—keep ‘er going, it was excellent.” 

Anderson cut off chunks of meat, dipping them in one puddle or another, explaining the nuances between Dixie Red and Chicago Blue barbecue sauces. 

“Do I have a winner?” he asked with a smile, noting my approval.

It was an opening to dig into the tough stuff—leaving his namesake company and the late-fall fire that burned down the original Famous Dave’s store 10 minutes east of Hayward, a hand-hewn log building that was one of northern Wisconsin’s most well-known destinations.

“There’s no way that you could ever replace that building,” he said. “I never thought that the original Famous Dave’s would be lost to a fire—there were so many antiques in that building.”

He laments losing control of recipes through his “divorce” with Famous Dave’s corporate, and of a business he hoped to, at least in part, pass on to his children. 

“I realized that the Wall Street people were running the brand, not the people who were passionate about barbecue,” he said. “At that point, I said if Wall Street wants to run Famous Dave’s, let them, I’ve got to do my thing and be true to who I am and what I believe makes good barbecue.” 

Anderson stepped down as CEO in 2004, when he was sworn in as assistant secretary of the Bureau of Indian Affairs. He remained on the Famous Dave’s board as chairman emeritus, a non-management role he officially walked away from in 2014, incensed with the company’s poor performance and, as he puts it, an over-reliance on Wall Street managers.   

Embracing change

Anderson says business, not barbecue people are now running Famous Dave’s, and the street has been unimpressed. After closing above $34 per share in late February, its share price has since fallen approximately 40 percent into the high teens, a 52-week low. Following Q1 2015, Famous Dave’s announced it closed four company-owned restaurants and saw declines in revenue and same-store sales. Former CEO Ed Rensi, the latest short-lived CEO who departed the post in late June, cited an ongoing discounting strategy, “unusual weather patterns” and a later start to Lent compared with 2014. Activist investor Adam Wright is serving as the interim CEO while the company looks for a permanent replacement. 

Mark Smith, a senior analyst with Minneapolis-based Feltl & Company, has followed Famous Dave’s for more than 10 years. His firm recently downgraded the stock to “sell” from “hold,” and he said it hasn’t delivered back-to-back same-store sales increases any time during his watch of the company. 

“They’re working on a turnaround and I think they’re making some good decisions, but I think they have a long road ahead of them, a lot of work to do and a concept that I think is tired,” he said. 

Listing the company’s primary stumbles, he cited infrequent menu updates, high average-ticket prices, poor relations with its franchisees and a general lack of evolution. 

Referencing a previous test of a Famous Dave-branded fast-casual concept, Smith said morphing into fast casual could cure some of its ills, especially related to pricing. 

“Looking at the success of Dickey’s (Barbecue Pit) seems to show that you could do something trimmed down, easier and faster with lower price points that could make sense,” he said. “It will be interesting to watch what Dave does.” 

Acknowledging that his legacy will forever be tied to the chain still bearing his name, Anderson said the successful launch of Jimmie’s means he is officially ready to focus on a concept that’s designed to be different from his first franchised venture. 

“I’ll never lose the deep pride that I have that I founded Famous Dave’s, and I think that I’ll always be able to say that I was the founder,” he said. “With that being said, I’ve moved on. We all come to a realization that life is about change, and in order for me to grow I had to move on.” 

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