The Franchise Chatter Blog’s List of 28 Things Every Prospective Franchisee Needs to Know Before Investing in a Dairy Queen Franchise
Dairy Queen Franchise Concepts
1. Dairy Queen offers two primary concepts available for franchising: the DQ Grill & Chill restaurant, which serves burgers, sandwiches, salads and sides, as well as DQ frozen treats; and the DQ Orange Julius store, which specializes in DQ frozen treats and Orange Julius fruit drinks and smoothies.
Dairy Queen’s DQ Grill & Chill Franchise
2. The DQ Grill & Chill restaurant is the company’s flagship concept, offering a full menu of hot meals and frozen treats. The restaurants feature on-trend food favorites (burgers, chicken fingers, hot dogs) while preserving the legendary DQ treat heritage.
3. A typical DQ Grill & Chill restaurant is a freestanding facility between 1,886 and 2,612 square feet. Land may either be purchased or leased, and the average site requires between 20,952 and 29,670 square feet in lot size. A DQ Grill & Chill restaurant can also be developed in strip center end-caps, dual use buildings, travel centers, street front locations, and other venues.
4. The minimum net worth requirement to own a DQ Grill & Chill franchise is $750,000, with liquid assets of $400,000. The franchisee must be able to inject at least $300,000 in cash equity. The liquid asset requirement may be relaxed if the franchisee leases the premises.
5. The initial franchise fee for a DQ Grill & Chill franchise is $35,000. The monthly royalty is 4% of gross sales and the monthly sales promotion contribution is 5-6% of gross sales. The term of the franchise is 20 years, with a 10 year option to renew.
6. The estimated development costs for a DQ Grill & Chill franchise can run anywhere from $905,000 on the low end to $1,350,000 on the high end.
Dairy Queen’s DQ Orange Julius Franchise
7. A DQ Orange Julius franchise combines Dairy Queen’s legendary ice cream treats (such as the Blizzard, Dilly Bar, sundaes, parfaits and ice cream cakes) with Orange Julius beverage favorites (including fruit drinks, smoothies, shakes, and blended coffee drinks).
8. DQ Orange Julius stores may be located in shopping malls, strip centers, street fronts, and busy non-traditional sites that pull in large numbers of consumers, especially shoppers on-the-go or any guests just needing a quick, leisurely break.
9. There are five different prototypes for a DQ Orange Julius store, namely: (a) free-standing building with inside seating, (b) free standing walk-in building, (c) free-standing walk-up building, (d) enclosed mall and (e) strip center location.
10. The minimum net worth requirement to own a DQ Orange Julius franchise in a mall or strip location is $200,000, with liquid assets of $175,000. The franchisee must be able to inject at least $125,000 in cash equity.
11. The minimum net worth requirement to own a DQ Orange Julius franchise in a street location is $500,000, with liquid assets of $250,000. The franchisee must be able to inject at least $200,000 in cash equity.
12. The initial franchise fee for a DQ Orange Julis franchise is $25,000. The monthly royalty is 5% of gross sales and the monthly sales promotion contribution is 5-6% of gross sales. The term of the franchise is 15 years or the lease term, whichever is shorter.
13. The estimated development costs for a DQ Orange Julius franchise can run anywhere from $270,000 on the low end (for a leased mall location) to $900,000 on the high end (for a free-standing building with inside seating).
Basic Requirements for Prospective Franchisees of DQ Grill & Chill Restaurants and DQ Orange Julius Stores
14. Dairy Queen evaluates the background, work experience, and financial capabilities of prospective franchisees. In general, Dairy Queen is looking for someone with prior retail or food service ownership or management experience.
15. If the franchisee has prior restaurant management experience, he/she is encouraged to be active in the day-to-day operation of the business.
16. For a DQ Grill & Chill restaurant, if the franchisee does not have retail management experience, he/she must partner with a professional restaurant manager who has or can earn a vested interest in the business.
17. For a DQ Orange Julius store, a professional restaurant manager is not required, although it is highly recommended.
18. At least 3 full-time managers are required to run a DQ Grill & Chill restaurant, while up to 2 full-time managers are required to run a DQ Orange Julius store.
Dairy Queen Franchise Training
19. DQ Grill & Chill restaurant franchisees undergo 5 weeks of training that combines classroom and on-the-job instruction at a certified regional training location, while DQ Orange Julius franchisees undergo 3 weeks training in the field.
20. New franchisees undergo product training, systems and management training, and leadership training to gain proficiency in the DQ product line and equipment, daily operations, customer service, facilities management and sanitation, scheduling, among others.
Dairy Queen Franchise Support
21. All Dairy Queen franchisees receive support in the following areas: site selection, architecture and construction, purchasing and distribution, marketing (national and local), and retail technology. Franchisees also benefit from national accounts secured by Dairy Queen for payroll, insurance, credit card processing, and similar common expenses.
22. An Operations Consultant will be assigned to every new franchisee upon approval of the application and site. The Operations Consultant will provide pre-opening guidance in the areas of facility readiness, financial tools, staffing, competitive analysis, and establishing restaurant systems and routines.
23. The Operations Consultant will be on site to shadow the management staff in training staff members through the opening of the restaurant.
24. The Operations Consultant will provide ongoing consultation for at least four months while operations systems and routines are being learned. Ongoing support will then be transferred to an assigned Business Consultant.
25. The Business Consultant is responsible for continuing to provide coaching to help increase the franchisee’s sales and profits. The Business Consultant will also help reinforce Dairy Queen’s systems and routines for operational excellence.
26. Ongoing monthly conference calls are utilized to update operators with current news and coach for promotion readiness and training for system-wide rollouts.
Dairy Queen Franchise Investment Options
27. Franchisees can own and operate a single unit, multiple units, or become a passive investor.
28. Dairy Queen’s Investor Program allows a passive investor to partner with a general manager, with prior management experience, who will have a vested or vesting interest in the restaurant.