Famous Dave’s is looking toward the future with the help of its past.
Founder Dave Anderson opened the first Famous Dave’s restaurant, a full-service barbecue concept, more than 30 years ago in a small northwestern Wisconsin town. The brand expanded into counter service with its next few locations in the Minneapolis market; today, Famous Dave’s operates 107 restaurants in 30 states.
The company’s growing digital presence via takeout and catering orders has driven interest beyond full-service restaurants, testing smaller prototypes over the years in Arizona, Minnesota, Nevada and Utah.
Counter service is at the forefront yet again. Famous Dave’s launched a smaller prototype tying back to its original barbecue shack model.
“I think it really is the core root of what Famous Dave’s was founded on,” Chief Operating Officer Al Hank said.
Rather than traditional table service, customers place an order at the counter and either pick up their food or have it brought out by a team member when ready. For takeout, a dedicated pickup station is available for customers to grab their orders and go.
The smaller prototype can sit between 1,500 and 3,000 square feet, a departure from the brand’s typical 6,500- to 7,500-square-foot standalone buildouts. This allows Famous Dave’s to take advantage of nontraditional locations such as endcaps, inline spaces and multi-concept buildings.
The first location is set to soft open later this week in Brookfield, Wisconsin, with a grand opening event scheduled later this month.
Providing a “palatable and far more reasonable” option should build interest among existing and prospective franchisees, Hank said.
Al Hank
The total investment to open a Famous Dave’s standalone restaurant ranges from $481,750 to $2.9 million for leasing the premises and from $1 million to $6.1 million for purchasing the land and building, according to the company’s franchise disclosure document.
“We believe, at a minimum, we’ll be able to shave the pure investment up front by roughly $1 million,” Hank said about the new model, estimating the total investment cost to sit around $600,000.
This model, he continued, makes more sense from an investment perspective as franchisees face rising buildout and real estate costs. With a lower point of entry, Famous Dave’s can better compete in its segment.
“I think it allows us to get into a whole different investment class in the restaurant space, and for people that are wanting to do that, it’s far more approachable than maybe some of our older economics,” Hank said. “You want to be competitive in your cash-on-cash returns with what other franchisors are putting out there. We feel pretty confident in the model we’re building out right now that we’ll be able to achieve some really great returns for our franchisees.”
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This isn’t the brand’s first rodeo with small-scale models. Famous Dave’s started testing out a smaller, fast-casual concept called Famous Dave’s BBQ Shack in 2011; years later, it rolled out a handful of smaller-footprint units, halving the traditional model’s size with 3,000-square-foot restaurants touting smaller dining rooms and counter service. Drive-thru and visual components such as a line-service model were also tested.
But Hank said this time is different, learning from previous prototype iterations that counter service “seems to be the sweet spot” based on consumer interest and the desire for a more accessible and profitable economic model.
“We took out a lot of the complexity or the variations—drive-thru, line service, things like that … and we simplified it to the core of what Famous Dave’s is,” he said. “We’re back to a super simple menu again, what the brand was founded on, and it’s just about executing it at the highest of levels and getting back to the roots of Famous Dave’s.”
The prototype grants Famous Dave’s the opportunity to test units in new markets and reenter once-exited ones.
Case in point is the company signing a new franchisee last summer to a three-unit deal in the Atlanta region, marking the company’s first venture there in over a decade. All three restaurants will follow the new prototype build, with the first opening as soon as later this year to early next year.
“It’s certainly attracting new potential franchise candidates and allows us to expand the concept into markets,” Hank said. “When you have a much more palatable investment, it allows us to branch out a little bit quicker and more effective.”
Hank said the company’s existing franchise base and franchisees under the MTY Food Group umbrella—which acquired parent company BBQ Holdings in 2022—are expressing interest in operating the smaller model and becoming multi-unit and multi-brand operators.
“I think the biggest goal of ours right now is to make sure that we do it the right way. We get it right. We perfect all of the operating modules and processes,” Hank said of the prototype’s debut. “I think it’s going to cross all the t’s and dot all the i’s for us … [so we’re] making sure that we execute it effectively and efficiently and set ourselves up for long-term sustainable growth.”
