Dairy Queen Franchise Costs $573K– $2.6M (+ 2024 Profits)

Dairy Queen, a globally recognized food and treat company, has been a staple in the quick-service restaurant industry for over eight decades. Founded in 1940 with its first restaurant in Joliet, Illinois, Dairy Queen quickly grew to become a beloved brand known for its iconic Blizzard® Treats, Dilly® Bars, and a wide array of other ice cream treats and fast food items. Dairy Queen started its franchise system in 1940, the same year the first store opened. 

Headquartered in Minneapolis, Minnesota, Dairy Queen operates under International Dairy Queen Inc., which is a subsidiary of the renowned Berkshire Hathaway Inc., led by investor Warren Buffett. This corporate backing not only signifies the brand’s financial stability but also its adherence to high standards of quality and innovation in the fast-food and treat sectors.

Dairy Queen differentiates itself from competitors through a strong commitment to creating positive memories for everyone involved with the brand—from customers to franchise owners and employees. The company’s mission to be the world’s favorite quick-service restaurant is driven by core values that emphasize collaboration, forward-thinking, inclusivity, and empowerment.

Type of Expenditure	Amount Range
Initial franchise fee	$25,000
DQ MT/ND Management Training Readiness Assessment fee	$600 – $1,200
Initial training fee	$10,800
SERVSAFE course	$600 – $1,200
Travel and living expenses during training	$7,800 – $14,100
Building construction, site work and leasehold improvements	$235,000 – $470,000
Prepaid rent and security deposit	$2,500 – $5,500
Building plans, design intent plans and architectural seal	$7,000 – $38,000
Equipment and fixtures including signs and EPOS system	$220,000 – $360,000
Credit card processing fees	$200 – $2,000
Training inventory	$2,000 – $6,000
Opening inventory	$5,000 – $12,000
Utility deposits, business licenses and government charges	$4,000 – $17,000
Insurance	$6,000 – $20,000
Professional fees	$4,000 – $10,000
Supplies and uniforms	$2,000 – $3,000
Additional funds 3-6 months	$40,000 – $155,000
Total	$572,500 – $1,635,200 for DQ Treat store $1,539,200 – $2,565,200 for DQ Grill & Chill

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

You must pay a $25,000 initial franchise fee to DQ MT/ND when you sign the operating agreement. This fee is non-refundable and uniform, except in certain described circumstances. The initial franchise fee may be refunded in full without interest only if DQ MT/ND does not approve your application or if you cancel your application before final approval. 

There are specific conditions under which DQ MT/ND may declare the operating agreement null and void and may refund the initial franchise fee, less a cancellation fee of $10,000 or equal to DQ MT/ND’s and ADQ’s expenses, whichever is greater.

Building Plans/Design Services

You have the option to purchase prototypical design intent building plans for a freestanding store or restaurant from ADQ for $3,000. This fee is non-refundable.

Construction Consultation Services

For a DQ Grill & Chill restaurant, DQ MT/ND may require you to use ADQ’s construction services for pre-opening construction and equipment installation. The fee for this service is $5,000 or $7,500, depending on the type of project, and is non-refundable, with certain conditions for partial refunds if the project is cancelled.

Training

At least 3 trainees must attend training, which includes a management training readiness assessment (MTRA), ADQ’s initial training, and a SERVSAFE course. The current fee for the MTRA is $200 per trainee, which may be paid to DQ MT/ND or directly to a 3rd party supplier.

Other Fees

• Continuing License Fee: 4% of Gross Sales for a DQ Grill & Chill restaurant and 5% of Gross Sales for a DQ Treat store, payable monthly or weekly.
• Sales Promotion Program Fee: 3% to 6% of Gross Sales, payable monthly or weekly.
• Transfer Fee: Ranges from $6,000 to $9,900, payable upon transfer application submission.
• Transfer Training Fee: $1,300 per person, payable before training.
• Renewal Fee: $4,000, payable upon renewal.

Franchise Pros and cons

Pros

Some of the benefits of operating a Dairy Queen franchise include the following:

• Brand popularity: Dairy Queen has established a strong brand following among its customers. Since its founding 80 years ago, the quick-service chain has now over 4,000 stores in the US alone, and more than 6,800 restaurants globally. Franchisees can market their businesses easily and reach a wide customer market.
• Industry leaders: Dairy Queen is best known for its famous and tasty food offerings. It has the expertise that has led to its success as one of the leading soft-serve treat restaurants. From the famous Blizzard treats—Orange Julius and sundaes—to their ice cream sandwiches, Dairy Queen has a huge following, and customers will identify with its unique delicacies.
• Wide menu: In addition to its frequently served treats, food, and beverage menu items, Dairy Queen has introduced other foods to its menu to keep up with the competition and changing market trends. This gives customers a great variety to choose from and a reason to come back.
• Comprehensive training and support: As a new Dairy Queen franchisee, you are assured of comprehensive training and support. Dairy Queen provides guidance in site selection and construction as well as store establishment, management training, and support. You’ll get on-the-job training on how to operate the franchise and become successful.
• Non-dairy products’ future: In a move to meet customers’ changing tastes and market trends, Dairy Queen has established non-dairy menu items. For instance, the Non-Dairy Dilly Bar includes plant-based, gluten-free, and vegan ice cream. This provides great choices for those looking for healthy eating options and appeals to a diversified customer base.
• Proven business strategy: Having been in business for more than 80 years, Dairy Queen has an established business model. New franchisees benefit from the best ice cream treat production recipe, operation, and marketing practices, as well as from management ideas that have worked before. This is good for the growth and profitability of newly launched franchises.

Cons

Despite being one of the best-known quick-service soft ice cream franchises, Dairy Queen has its flip side.

• Qualifications: The Dairy Queen franchise requires new franchisees to have prior experience in franchise management. This discourages interested entrepreneurs who lack multi-unit franchise experience.
• Unhealthy food items: Some of the menu items offered by Dairy Queen are said to contain a lot of calories. This is unappealing to customers who are looking for healthy eating options.
• Stiff competition: With many people opting for healthier eating habits and changing trends, Dairy Queen faces stiff competition from other market leaders. Therefore, opening a Dairy Queen franchise may not be as profitable as it used to be.
• No financial assistance: Generally, the Dairy Queen franchise or its affiliates do not offer in-house financial assistance. Therefore, would-be franchisees will need to get third-party financing or apply for an SBA loan to fund their investments or expansion.
• No territory preservation: A Dairy Queen franchise agreement does not guarantee exclusive territory protection to its franchisees. This leaves room for internal competition and cannibalism.

How to apply

Opening a Dairy Queen franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Dairy Queen franchise.

1. Assess Your Qualifications

• Financial Requirements: Verify that you meet Dairy Queen’s financial requirements for net worth and liquid assets.
• Experience: Consider your background in food service or retail management, which can be beneficial.

2. Research the Franchise

• Brand Understanding: Learn about Dairy Queen’s brand, history, and values to ensure alignment.
• Market Analysis: Research the market demand for Dairy Queen in your desired location, including competition and customer base.

3. Submit an Application

• Initial Application: Complete Dairy Queen’s initial franchise application, providing personal, financial, and business information.
• Documentation: Prepare and submit any required documents that Dairy Queen may request to verify your information.

4. Attend Discovery Day

• Introduction: Attend a Discovery Day at Dairy Queen’s headquarters or a specified location to meet the franchisor team.
• Franchise Details: Learn about the operational, financial, and logistical aspects of running a Dairy Queen franchise.

5. Review Franchise Disclosure Document (FDD)

• Legal and Financial Information: Carefully review the FDD, which contains crucial details about the franchise system, fees, legal obligations, and success rates.
• Consultation: Consider consulting with a franchise attorney or advisor to understand the implications of the FDD.

6. Secure Financing

• Funding Options: Explore financing options, including loans, investors, or personal funds, to meet the initial investment requirements.
• Financial Planning: Develop a comprehensive business plan to present to potential lenders or partners.

7. Find a Suitable Location

• Location Analysis: Identify potential locations considering factors like foot traffic, accessibility, and local competition.
• Approval: Submit your location choices to Dairy Queen for approval, ensuring they meet the brand’s site criteria.

8. Sign the Franchise Agreement

• Agreement Review: Review the franchise agreement with your attorney to understand your rights and obligations.
• Signing: Once comfortable, sign the franchise agreement and pay any required franchise fees to secure your Dairy Queen franchise.

9. Complete Training Program

• Operational Training: Participate in Dairy Queen’s comprehensive training program covering store operations, management, product preparation, and customer service.

Disclaimer

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