Franchise Deep Dive: Dairy Queen Franchise Costs, Fees, Profit and Data

The Dairy Queen franchise concept offers both hot foods and frozen treats, including its famous Blizzard, and has become an American favorite for quick-service snacking.

By Morgan Wood1851 Franchise Contributor

7:00 AM • 03/06/23

LAST UPDATED: February 20, 2023

FRANCHISE WEBSITE: https://www.dairyqueenfranchising.com/

NUMBER OF LOCATIONS: 7,000+

REPORTED COST TO GET IN: $1,461,200 – $2,426,990

REPORTED ROI (Item 19): $1,427,766

Dairy Queen is a franchise concept that has grown from a small-town soft serve shop to a network of nearly 2,000 locations that offer desserts, snacks and other classics. In 1927, the McCullough family established a homemade ice cream company in Green River, Illinois. Over a decade later, the family developed the soft serve concept and coined the Dairy Queen name. The first official Dairy Queen store opened in 1940, and franchising became available just three years later.

Now, the concept offers both drive-thru and in-store fast food options, including a range of ice cream products, burgers, fried chicken and the famous Blizzard.

How Many Dairy Queen Locations Are There?

The Dairy Queen website boasts “more than 7,000 locations in the United States, Canada and more than 20 other countries.” The concept has seen steady growth for nearly a decade, continuing to expand in countless markets.

Because it offers three primary build-out options, franchisees have flexibility in selecting and building a restaurant that fits their investment capabilities and market demand. However, the brand does emphasize that “Above all, the restaurant location must have an efficient drive-thru service lane.” Recently, the importance of drive-thru service has been recognized industry-wide, and Dairy Queen’s attention to that offering will likely continue to drive business.

What Is the Dairy Queen Business Model?

Dairy Queen advertises three primary build-out models: DQ Grill & Chill Core 46, DQ Grill & Chill Core 60 and DQ Grill & Chill End Cap. The “core” models allow for 46 and 60 seats, respectively, and the end cap model is designed to seat 72 guests indoors and an additional 20 on a patio.

However, the brand is incredibly clear that the capacity to run an efficient drive-thru, regardless of build-out model, is crucial to the success of the location. Though the brand will consider end caps, conversions and multi-use buildings, it is primarily focused on standalone locations.

Each restaurant is built to include comfortable seating, welcoming lighting and an environment that welcomes “fans” who are there to gather and celebrate.

How Much Can Dairy Queen Franchise Owners Make?

Dairy Queen’s Franchise Disclosure Document includes financial representations reflective of the brand’s performance in 2021.

Restaurants included in these calculations were:

Newly constructed freestanding locations developed under American Dairy Queen’s new or additional restaurant development programs
Developed and first opened for business between January 1, 2017 and December 31, 2020
Operated and reported sales data to American Dairy Queen for all 12 months of 2021
Franchisee owned and operated

The following circumstances excluded restaurants from the calculations:

New Dairy Queen restaurants developed in Texas. If these restaurants have the “Texas County Foods” menu, they are included in a different disclosure
Existing Dairy Queen restaurants that have converted to the DQ Grill & Chill model
New DQ Grill & Chill restaurants that were opened in a nontraditional location
New DQ Grill & Chill restaurants that were opened under a Franchise Development Agreement that was granted by a territory operator

In 2021, included restaurants reported average gross sales of $1,427,766 with a unit-level low of $592,454 and a unit-level high of $2,886,417.

How Much Does It Cost To Open a Dairy Queen?

Dairy Queen reports a total initial investment of $1,461,200–$2,426,990.

Its 2022 FDD outlines the following costs:

Franchise Fee: $45,000
ALTA Survey and/or Site Investigation Report: $0–$5,000
Initial Training Fees and Costs: $1,200–$11,990
Travel and Living Expenses for Training Programs: $23,000–$38,500
Building, Construction and Leasehold Improvements: $800,000–$1,400,000
Construction Consultation Services: $0–$7,500
Building Plans, Design Intent Plans and Architectural Seal: $15,000–$45,000
Equipment, Including Signs and POS Systems: $500,000–$600,000
Training Inventory: $6,000–$16,000
Opening Inventory: $15,000–$35,000
Utility Deposits, Business Licenses and Government Charges: $4,000–$17,000
Attorneys’ Fees: $1,000–$8,000
Additional Funds: $51,000–$198,000

What Is the Franchise Fee for Dairy Queen?

According to the brand’s website, all franchisees pay a $45,000 franchise fee.

Who Is the Leadership of Dairy Queen?

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