The squeal deal.

• Author: Cary, Michael
• Position: David Womick's Redneck Foods barbecue restaurant venture - Company Profile

To build a nationwide chain of barbecue restaurants, Redneck Foods will have to pull its fat out of the fire.

David Womick's voice, always hushed, is strained to almost a whisper. "I'm not having a good day," he says, though it's only 11 a.m. He has just gotten some bad news. The deal he engineered as a springboard for Redneck Foods Inc., the fledgling Asheville-based company he founded, has crumbled.

It's a heavy blow to Womick's dream of creating the nation's first coast-to-coast barbecue-restaurant chain. His plan: Buy restaurants in every nook and cranny of the country and convert them to eateries marketed around part-owner Jeff Foxworthy, the comedian with the you-might-be-a-redneck-if shtick. The purchase of Woody's Bar-B-Q Holdings Inc., a Jacksonville, Fla.-based chain with 33 stores and 1998 sales of $38 million, was to be the start. The deal's collapse in late February left publicly traded Redneck Foods with just one restaurant and a stock that is tanking.

Last August, when it announced plans to buy Woody's for $3 million in cash and stock, Redneck Foods boasted it was "soon to be the fifth-largest barbecue chain in the nation." Soon turned out to be a mighty long time. After almost a year of negotiations and several deadline extensions, Woody's killed the deal because Redneck couldn't come up with the funds. Womick, the president and CEO, had lined up a private placement, but the backers withdrew last fall when the stock market soured. That left him scrambling to raise the money. "It didn't come like it was supposed to," he concedes.

Before the bust-up, Womick had planned to keep some restaurants company-owned but franchise most for a one-time fee of $35,000, plus 4.5% of sales and 1.5% of Redneck Foods' advertising costs. He had a waiting list, he said, of more than 50 franchisees from as far away as Oregon and hoped to have them in business by year-end.

His business plan projected 284 restaurants by 2002 - toppling Maitland, Fla.-based Sonny's Real Pit Bar-B-Q, which has 105 outlets in eight Southeastern states and had sales of $150 million last year, as the nation's biggest chain. "Obviously, you have to have more than one restaurant to get that to work," says Timothy Miles, CEO of Hilton Head, S.C.-based Little Pond Enterprises, a consultant to Redneck Foods. In early March, to save on overhead, the company cut its CFO and COO posts, leaving its staff at three.

Still, Womick is not ready to roll over. The company has income...