In this FDD Talk 2015 post, you’ll learn the following:
- Section I – Background information on the DQ Grill & Chill franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a DQ Grill & Chill franchise, based on Item 7 of the company’s 2015 FDD
- Section III – Presentation and analysis of DQ Grill & Chill’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
- 2014 average, high, and low total net sales, total product cost, total labor cost, total restaurant controllables, and total manageable profit for DQ Grill & Chill’s GC Core 72 and GC Core 47 restaurants, respectively, that were newly constructed freestanding restaurants developed under American Dairy Queen’s new restaurant development or ARD programs; were developed and first opened for business between January 1, 2012 and December 31, 2013; were operated for the full year 2014; are franchisee owned and operated; and submitted usable profit and loss statements to ADQ
- 2014 average, high, and low net sales for newly constructed DQ Grill & Chill freestanding restaurants developed under ADQ’s new restaurant development or ARD programs; were developed and first opened for business between January 1, 2012 and December 31, 2013; were operated for the full year 2014; are franchisee owned and operated; and submitted sales reports, but not usable P&L’s, to ADQ
Section I – Background Information
There are two primary formats of Dairy Queen stores, the Treat Center concept and the Grill and Chill concept. While the histories of the two overlap because they are variations within the same company, they’ll be treated separately for franchising purposes.
Dairy Queen’s history dates all the way back to the late 1930s when J. F. “Grandpa” McCullough and his son Alex were experimenting with a new way to serve a different kind of frozen dairy treat – a soft-serve fresh from the freezer rather than frozen completely solid.
Although Dairy Queen was one of the earliest proponents of franchising, there wasn’t a lot of standardization back in the early days. Many of the Dairy Queen stores started adding in hot food to the menu, mostly in the form of burgers, hot dogs, fries, and other sandwiches.
This started back in 1957 when a DQ franchisee by the name of Jim Cruikshank saw a New York restaurant using an open charcoal grill. As he watched the rising flames, he was sold on the idea and the Dairy Queen “Brazier” concept was born.
Starting in 1993 DQ began phasing out “Brazier” from signage and advertising, and in 2001 launched the DQ Grill and Chill concept for its full fast-food restaurants. The chain’s current official motto is Fan Food not Fast Food.
As of 2015, Dairy Queen has more than 6,500 locations (4,437 in the US, 620 in Canada, and 1,472 in 25 other countries around the world). Here’s how Dairy Queen gets its grill on for customers around the world:
A Great Menu
Grill and Chill locations offer a line of four different Grillburgers (Bacon Cheese, FlameThrower, Cheese, and Mushroom Swiss), several Artisan-Style sandwiches (Chicken Bacon Ranch, Chicken Mozzarella, and a Turkey BLT), two chicken sandwiches (Crispy Chicken and Grilled Chicken), several Favorites (Cheeseburger, Double Cheeseburger, and the Chili Cheese Dog), a Chicken Strip Basket, three Snack Melts (Buffalo Chicken, Chicken Bacon BBQ, and Chicken Quesadilla), three salads (Chicken Garden Greens, Chicken BLT, and a Side Salad), and several deep-fried sides (French Fries, Onion Rings, and Cheese Curds). And of course, the full range of DQ Treats as well.
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The latest dessert innovation at the chain is the new line called DQ Bakes! This includes three Hot Desserts a La Mode, the Triple Chocolate Brownie, the Apple Tart, and the Fudge Stuffed Chocolate Chip Cookie, all topped with vanilla soft-serve. Yum!
Although the number of DQ locations has declined slightly in the US over the past five years, the company continues to see healthy international growth, growing from just 1,447 international locations in 2011 (including Canada) to nearly 2,100 as of 2015. The latest countries to come on board include Jordan (2015), Poland (2015), and Kuwait (2014),
DQ does a great job with all kinds of innovative fan engagement gimmicks. This year, the chain is continuing its 75th “Fanniversary” celebration with Random Acts of Fandom. DQ patrons submit what they are a fan of to DQ’s Facebook and Twitter social media pages and the chain will randomly select one grand-prize winner, three first-prize winners, and three second-prize winners. One classic car fan was recently surprised with a fully restored 1978 Trans Am car!
Section II – Estimated Costs
- Please click here for detailed estimates of DQ Grill & Chill franchise costs, based on Item 7 of the company’s 2015 FDD.
Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis
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