What You Need to Know: California takes action after company deceives small business owners, the latest in DFPI’s ongoing work to protect consumers and support small businesses.
September 6, 2026 - SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) has announced it penalized 
Texas-based Dickey’s Barbecue Restaurants, Inc., also known as Dickey’s Barbecue Pit, Inc., for violating the California Franchise Investment Law (FIL). This enforcement action is part of an ongoing effort by DFPI to protect consumers and increase transparency for entrepreneurs and small businesses in California. The DFPI has ordered Dickey’s to cease its wrongful acts and pay $36,800 in penalties.
Dickey’s Barbecue Pit is a franchised restaurant chain with over 500 locations across the United States, with a substantial number operating in California. Individual entrepreneurs contract with Dickey’s to operate locations in exchange for licensing fees and other revenue.
Under California law, companies like Dickey’s must make accurate representations in disclosures to prospective franchisees. The DFPI found that Dickey’s concealed the true number of its franchise locations that had ceased operating. The company claimed 20 franchisees were no longer in operation; however, the DFPI found the actual number to be 36, almost double what was reported. This underreporting grossly misrepresented the success of the business model, misleading small business owners.
“California is making clear to companies: follow the law or face the consequences,” said DFPI Commissioner KC Mohseni. “Companies must be truthful and transparent — there is no room for deceptive practices that harm consumers and small business owners.”
Small business owners often spend thousands of dollars—sometimes their entire life savings—to invest in a franchise. The California Franchise Investment Law requires that franchisors provide accurate information about their track record and business stability to small business investors. Failure to provide these disclosures, which are also required under federal franchise rules, can lead to serious consequences.
In the case involving Dickey’s, the Department found violations, which occurred between November 2023 and March 2026, during an examination of Dickey’s franchisee termination notices, franchise agreements, and other compliance documents.
The DFPI ordered the company to pay $36,800 in penalties and refrain from any further violations of the FIL. The order ensures that Dickey’s filings comply with disclosure laws in place to protect California’s small business investors. If Dickey’s fails to follow the order, the DFPI can revoke its registration under California law.
The DFPI is working to strengthen its oversight of the franchise market to ensure entrepreneurs are not improperly deceived or coerced. DFPI expects to develop additional guidance and determine whether any existing rules need to be updated. In addition, DFPI expects that future enforcement actions will include remedies that directly help small business owners harmed by unlawful practices. This work is particularly important considering the slowdown in enforcement of franchise protections by federal regulators.
The DFPI accepts complaints from operators of franchised businesses about problems in franchise markets.
About DFPI
The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower Californians to access a fair and equitable financial marketplace through education and by preventing potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.
Source: Department of Financial Protection and Innovation