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FDD Talk 2017: What You Need to Know About the DQ Grill & Chill Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on May 8, 2017

in Fast Casual Restaurant Franchise, FDD Talk 2017: Food Franchises, Franchise Earnings, Frozen Dessert Franchise, Hamburger Franchise



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DQ Grill & Chill Exterior Photo

In this FDD Talk 2017 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 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a DQ Grill & Chill franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of DQ Grill & Chill’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • 2016 average, high, and low net sales for the 65 DQ Grill & Chill restaurants that were newly constructed freestanding restaurants; were developed and first opened for business between January 1, 2014 and December 31, 2015; were operated for the full year 2016; and are franchisee owned and operated
  • 2016 average total net sales, total product cost, total labor cost, total restaurant controllables, and total manageable profit for DQ Grill & Chill’s GC Core 72 (36 units) and GC Core 47 (6 units) restaurants, respectively, that were newly constructed freestanding restaurants; were developed and first opened for business between January 1, 2014 and December 31, 2015; were operated for the full year 2016; are franchisee owned and operated; and submitted usable profit and loss statements to ADQ
  • 2016 average, high, and low net sales for the 23 DQ Grill & Chill restaurants that were newly constructed freestanding restaurants; were developed and first opened for business between January 1, 2014 and December 31, 2015; were operated for the full year 2016; are franchisee owned and operated; and submitted sales reports, but not usable P&L’s, to ADQ

Section I – Background Information

11 Things You Need to Know About the DQ Grill & Chill Franchise

Record Year for DQ Grill & Chill

1.  Despite being in business for nearly 80 years, Dairy Queen is still seeing a large amount of success and growth. In 2016, the company added over 300 new locations around the world, most of which were DQ Grill & Chill concepts. 2016 was also the year when Dairy Queen sold the greatest number of DQ Grill & Chill franchises in a single year.

2.  In the U.S., the company opened 82 locations in 29 states last year and almost all of them were DQ Grill & Chill models. Markets such as Little Rock, Arkansas; Staten Island, New York; Knoxville, Tennessee; and Charleston, South Carolina, got their first-ever Dairy Queen locations.



Plans to Open Locations in Upstate New York and South Korea

3.  Late last year, Dairy Queen announced that it had plans to open 100 new DQ Grill & Chill locations in Buffalo and Upstate New York over the next decade. The company also said that it would be opening at least 50 DQ Grill & Chill locations in South Korea within the next five years.

4.  Dairy Queen has already started looking for local franchise owners to run the Upstate New York locations. There are only a few DQ Grill & Chill restaurants in the area and according to Jim Kerr, International Dairy Queen Vice President of Franchise Development, Buffalo is a great area with great opportunity.

5.  Dairy Queen has partnered with privately-held M2G USA Investment Inc. to open DQ Grill & Chill locations in South Korea. According to John Park of M2G USA Investment, “DQ is one of the most respected, exceptional and popular brands in the world. We are thrilled to partner with the DQ system here in Korea.” The DQ Grill & Chill locations in South Korea will serve a full range of DQ food items.

Celebrating Free Cone Day

6.  To kick off the spring season, Dairy Queen offered customers one free small soft-serve vanilla ice cream cone. The free treat was available on March 20 at participating non-mall Dairy Queen locations and DQ Grill & Chill restaurants. Participating locations also accepted donations to the Children’s Miracle Network Hospitals throughout the day.

Affordable Food

7.  One of DQ Grill & Chill’s biggest promos is its complete meal deals. The restaurant chain offers the $5 Buck Lunch, which is now served all day, and the $6 Buck Lunch. Both deals include an entree, fries, a 21 oz. drink, and a sundae. Customers have two choices for the $5 Buck Lunch:  3-piece chicken strips or a deluxe cheeseburger. For the $6 Buck Lunch, customers can get a 1/3 lb. double burger with cheese or a crispy chicken sandwich. The $6 Buck Lunch is not available all day.

8.  DQ Grill & Chill also has a happy hour available Monday through Friday from 2 to 5 pm. During happy hour, $2 soft pretzel sticks with zesty queso and small ultimate frappes are available.

Company History



9.  The first Dairy Queen restaurant was opened in 1940 by John Fremont McCullough and Sherb Noble in Joliet, Illinois. McCullough had developed the first soft-serve formula a few years earlier in 1938 and convinced Noble to sell the new ice cream in his ice cream store. On the first day of sales, Noble served more than 1,600 servings within two hours. The new soft-serve concept quickly caught on and more locations were opened. Franchising officially began in 1944. During the 50s, some Dairy Queen locations began serving hot food.

10.  Eventually, in 2002, the company launched a spin-off concept called DQ Grill & Chill that serves both the traditional ice cream treats and hot foods. Today, there are more than 1,500 DQ Grill & Chill locations around the world. Two hundred older Dairy Queens were also converted into Grill & Chill models. Currently, about 35% of all Dairy Queen U.S. locations are DQ Grill & Chill restaurants. According to Jim Kerr, everything the company is building these days is a DQ Grill & Chill.

Entrepreneur’s Franchise 500

11.  Dairy Queen, which franchises DQ Grill & Chill restaurants and DQ Treat centers, has appeared on Entrepreneur’s annual Franchise 500 list almost every year in the last decade. The company’s highest rank is this year’s No. 6 spot, while its lowest rank was No. 58 in 2013.

Section II – Estimated Costs

  • Please click here for detailed estimates of DQ Grill & Chill franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on DQ Grill & Chill’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis



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