With a target of adding 20 to 25 new multi-unit franchise groups to the system in 2016, Dairy Queen is bringing its 75-year-old brand into the future.
Since the first Dairy Queen® location opened in Joliet, Ill. in 1940, the chain’s signature treats have been rooted in tradition and nostalgia for kids and adults alike. Many decades later, that same sentiment remains. The chain celebrated its 75th anniversary in 2015 on solid footing, thanks to a sharpened focus and steady growth of the DQ Grill & Chill® concept, the brand’s innovative quick service restaurant (QSR) model that launched in 2002. With the success seen by 84 new DQ Grill & Chill locations that opened in 2015, hundreds of the traditional locations also converted to the DQ Grill & Chill model this past year. The Dairy Queen system has seen strong financial performance from the restaurants that showcase a modern, warm design reminiscent of your family room, complete with a fireplace and flat screen TVs. The dining room offers the look of a high-scale restaurant with dark colors and stacked stone, and guests can see the kitchen from the counter, where hot and delicious food items are prepared. A dedicated frozen treat section features a freezer near the counter, positioned as a comforting backdrop to the restaurant and includes DQ Cakes and Dilly® Bars that all fans of the brand will recognize.
In the U.S., there are currently more than 1,560 DQ Grill & Chill restaurants in 46 states. The Dairy Queen corporate team is eyeing 85-plus new store openings in 2016, shifting a focus to the QSR model with nearly 95 percent of projected new locations being DQ Grill & Chill restaurants and almost 100 percent of domestic growth will be in the DQ Grill & Chill model.
“Almost everyone will tell you a story of how they rode their bike to the local Dairy Queen location when they were kids. People are driven by the emotional connection—it’s very strong and powerful, and that nostalgia extends beyond just the product and into the brand itself,” said Jim Kerr, vice president of franchise development at American Dairy Queen Corporate (ADQ). “We like that we’re a historic brand but over the decades, we realized that we have to stay relevant to keep up with changing consumer behavior. As the QSR landscape evolves, we realized the need to do the same. We’re excited to continue introducing our DQ Grill & Chill concept to more towns across the country—it’s our answer for people who want to treat their families to a nice meal at a reasonable price in a warm and inviting atmosphere.”
Dairy Queen restaurants are franchised by ADQ, which is a wholly owned subsidiary of International Dairy Queen, Inc. (IDQ). IDQ is owned by Berkshire Hathaway (NYSE: NRK.A and BRK.B) and there are currently more than 6,700 locations in 30 countries worldwide. The DQ Grill & Chill concept now makes up about 23 percent of the U.S. franchise system and boasts more variety on its menu, with dozens of core items, including a variety of burgers and chicken sandwiches, alongside the heritage treat side of the business. The brand also incorporated the DQ $5 Buck Lunch deal and DQ Bakes!® Artisan-style Sandwiches, Snack Melts, and Hot Desserts à la Mode to their offerings.
“The DQ Grill & Chill restaurants have improved our economic model because the menu addresses more day parts than most other brands in our space,” said Mike Mettler, director of national franchise sales at ADQ.
ADQ now has its sights set on continuing the expansion of its DQ Grill & Chill restaurant footprint in the years to come. Backed by a strong culture and a management team built on integrity, the brand is looking for franchisees who can emulate that same value.
“We have been bringing on multi-unit franchisees who have experience with other quick-service brands that are looking to expand their portfolios,” Mettler said. “We are continuing to evolve the menu to add revenue to our franchisees’ locations and keep our offerings competitive and different from the industry norm.”
With a target of adding 20 to 25 new multi-unit franchise groups to the system in 2016, ADQ is laying plans to develop DQ Grill & Chill locations in markets such as New England, the Carolinas, California, New Orleans, Houston and Kansas City.
“As we move forward, the most important thing is to lay the groundwork for future years, and this means increasing awareness of our concept as an investment vehicle for franchise growth. There are still large pockets throughout the U.S. where people really don’t know who we are and what a DQ Grill & Chill restaurant is,” Kerr said. “With the help of our sophisticated franchisees, our strong work culture and our commitment to legacy, we’re excited to see what this reinvention holds for the future of our brand. This is the DQ ice cream shop that you remember as a kid and so much more!”
The investment range to open a DQ Grill & Chill restaurant ranges from $1,077,225 to $1,833,125.