In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a DQ Grill & Chill franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a DQ Grill & Chill franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned DQ Grill & Chill outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the DQ Grill & Chill franchise opportunity

Section V – Presentation and analysis of DQ Grill & Chill’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2019, 2020, 2021, and 2022 average, median, high, and low gross sales for the DQ Grill & Chill restaurants that were newly constructed freestanding restaurants developed under American Dairy Queen’s (ADQ’s) new or additional restaurant development programs; were developed and first opened for business between January 1, 2012 and December 31, 2021; were operated and reported sales data to ADQ for all 12 months of the noted year; and are franchisee owned and operated

• 2019, 2020, 2021, and 2022 average gross sales, cost of goods, labor, restaurant controllables, and manageable profit for the DQ Grill & Chill restaurants that were newly constructed freestanding restaurants developed under ADQ’s new or additional restaurant development programs; were developed and first opened for business between January 1, 2012 and December 31, 2021; were operated and reported sales data to ADQ for all 12 months of the noted year; are franchisee owned and operated; and submitted usable profit and loss statements to ADQ

Section VI – Key ratios, comparables, computations, and analyses for the DQ Grill & Chill franchise opportunity (exclusive content for Platinum subscribers)

Section I – DQ Grill & Chill Franchise Costs

• DQ Grill & Chill franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $45,000
• ALTA Survey and/or Site Investigation Report (SIR):  $0 to $5,000
• Initial Training Fees and Costs:  $1,200 to $11,800
• Travel and Living Expenses for Training Programs:  $23,000 to $42,950
• Building, Construction, and Leasehold Improvements:  $800,000 to $1,400,000
• Construction Consultation Services:  $0 to $7,500
• Building Plans, Design Intent Plans, and Architectural Seal:  $15,000 to $45,000
• Equipment (includes signs and point-of-sale systems):  $550,000 to $700,000
• Training Inventory:  $6,000 to $16,000
• Opening Inventory:  $15,000 to $35,000
• Utility Deposits, Business Licenses, and Government Charges:  $4,000 to $17,000
• Attorneys’ Fees:  $1,000 to $8,000
• Additional Funds for 3 Months:  $51,000 to $198,000
• Total Estimated DQ Grill & Chill Franchise Costs:  $1,511,200 to $2,531,250

Section II – DQ Grill & Chill’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• DQ Grill & Chill’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $45,000
• Continuing License Fee:  4% of Gross Sales
• Sales Promotion Program Fee:  5% to 6% of Gross Sales

Section III – Number of Franchised and Company-Owned DQ Grill & Chill Outlets

Franchised

2020

• Outlets at the Start of the Year:  1,913
• Outlets at the End of the Year:  1,926
• Net Change:  +13

2021

• Outlets at the Start of the Year:  1,926
• Outlets at the End of the Year:  1,952
• Net Change:  +26

2022

• Outlets at the Start of the Year:  1,952
• Outlets at the End of the Year:  1,965
• Net Change:  +13

Company-Owned

2020

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2021

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2022

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section IV – News Updates on the DQ Grill & Chill Franchise

• Dairy Queen Launches Stackburger Line as Chain Sees Record Sales in 2021

• Construction on New DQ Set to Begin

• Dairy Queen Ranked No. 41 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the DQ Grill & Chill Franchise (Item 19, 2023 FDD)

• Schedules A and B disclose information about DQ Grill & Chill restaurants that:

• were newly constructed freestanding restaurants developed under American Dairy Queen’s (ADQ’s) new or additional restaurant development programs;
• were developed and first opened for business between January 1, 2012 and December 31, 2021;
• were operated and reported sales data to ADQ for all 12 months of the noted year; and
• are franchisee owned and operated.

• This financial performance representation does not include information about:

• (1) new DQ restaurants developed in Texas (which have the “Texas County Foods” cooked food menu and are offered under a separate disclosure document);
• (2) existing DQ restaurants that have converted to the DQ Grill & Chill restaurant’s facility design, menu, and trademark by remodeling an existing DQ restaurant or replacing an existing DQ restaurant with a new DQ Grill & Chill restaurant design facility either at the same site or at a new location;
• (3) new DQ Grill & Chill restaurants that were opened in a fuel center or other non-traditional location inside a host building such as a ferry terminal or mall; or
• (4) new DQ Grill & Chill restaurants that were opened under a developmental rights contract or a franchise agreement granted by a territory operator.

• Schedule A presents Gross Sales for all locations that meet the criteria above for inclusion in this financial performance representation.

• Schedule B includes information on certain categories of expenses and manageable profit for a subset of the locations listed in Schedule A, based on the usable profit and loss statements (“P&Ls”) these locations submitted to ADQ for the years 2019 through 2022.

• The data in schedule A is based on sales reports submitted to ADQ by franchisees of the restaurants included in the schedule and the data in schedule B is based on information submitted on P&Ls from franchisees of the restaurants included in the schedule.

• ADQ has not audited or independently verified the results in the P&Ls or sales reports.

Schedule A – Gross Sales for All Locations That Meet the Criteria for Inclusion in the Financial Performance Representation

2019

• Average Annual Gross Sales:  $1,163,274
• Number of Restaurants Meeting or Exceeding the Average:  108
• Percent of Restaurants Meeting or Exceeding the Average:  45%
• High Annual Gross Sales:  $2,753,016
• Median Annual Gross Sales:  $1,133,549
• Low Annual Gross Sales:  $383,060
• Number of Restaurants That Qualified for Inclusion:  239
• Number of Restaurants That Were Excluded Because They Were Not Open or Did Not Report Sales for All 12 Months of the Year:  31

2020

• Average Annual Gross Sales:  $1,268,919
• Number of Restaurants Meeting or Exceeding the Average:  113
• Percent of Restaurants Meeting or Exceeding the Average:  43%
• High Annual Gross Sales:  $2,682,054
• Median Annual Gross Sales:  $1,236,684
• Low Annual Gross Sales:  $512,290
• Number of Restaurants That Qualified for Inclusion:  265
• Number of Restaurants That Were Excluded Because They Were Not Open or Did Not Report Sales for All 12 Months of the Year:  29

2021

• Average Annual Gross Sales:  $1,401,471
• Number of Restaurants Meeting or Exceeding the Average:  124
• Percent of Restaurants Meeting or Exceeding the Average:  42%
• High Annual Gross Sales:  $3,002,244
• Median Annual Gross Sales:  $1,362,544
• Low Annual Gross Sales:  $518,468
• Number of Restaurants That Qualified for Inclusion:  293
• Number of Restaurants That Were Excluded Because They Were Not Open or Did Not Report Sales for All 12 Months of the Year:  31

2022

• Average Annual Gross Sales:  $1,372,115
• Number of Restaurants Meeting or Exceeding the Average:  140
• Percent of Restaurants Meeting or Exceeding the Average:  44%
• High Annual Gross Sales:  $3,135,208
• Median Annual Gross Sales:  $1,325,089
• Low Annual Gross Sales:  $484,663
• Number of Restaurants That Qualified for Inclusion:  317
• Number of Restaurants That Were Excluded Because They Were Not Open or Did Not Report Sales for All 12 Months of the Year:  7

Schedule B – Information on Certain Categories of Expenses and Manageable Profit for a Subset of the Locations Listed in Schedule A

2019

• Store Count:  177
• Average Gross Sales:  $1,196,269
• Average Cost of Goods:  31.12%
• Average Labor:  29.99%
• Average Restaurant Controllables:  10.58%
• Average Manageable Profit:  28.31%

2020

• Store Count:  177
• Average Gross Sales:  $1,273,969
• Average Cost of Goods:  29.84%
• Average Labor:  28.26%
• Average Restaurant Controllables:  10.60%
• Average Manageable Profit:  31.31%

2021

• Store Count:  164
• Average Gross Sales:  $1,476,845
• Average Cost of Goods:  29.90%
• Average Labor:  28.87%
• Average Restaurant Controllables:  10.02%
• Average Manageable Profit:  31.20%

2022

• Store Count:  106
• Average Gross Sales:  $1,498,227
• Average Cost of Goods:  31.98%
• Average Labor:  29.41%
• Average Restaurant Controllables:  10.47%
• Average Manageable Profit:  28.14%

• Schedule B is based upon P&L information for restaurants that submitted usable P&Ls for one or more of the years 2019 through 2022.

• There were restaurants included in Schedule A that were excluded from Schedule B for one or more of the following reasons: (a) ADQ did not receive any P&Ls with 12 full months of data during the applicable time period, (b) the P&Ls showed a variance of 3% or more from the sales reports submitted to ADQ, or (c) the P&Ls submitted to ADQ had an obvious error in the data.

• The number of restaurants included in Schedule A but excluded from Schedule B was as follows: 93 restaurants in 2019; 117 restaurants in 2020; 160 restaurants in 2021; and 218 restaurants in 2022.

• Gross Sales. Gross sales, as used in Item 19 and in the Operating Agreement, means the total revenues and receipts from the sale of all products sold by the Restaurant, whether paid for by cash, credit (not adjusted for credit card fees) or gift card, barter, or otherwise, including sales of all products under any of the Trademarks as well as sales of other products, services, and merchandise, whether or not identified by other brand names, and excluding sales taxes and revenues and receipts arising directly from Licensee’s sale of gift cards.

• Cost of Goods. The cost of the food products that are sold to consumers and the associated paper purchases (based on beginning inventory, plus purchases, less ending inventory). The food products include ingredients, beverages, and condiments. The associated paper purchases include bags, product wraps and containers, other paper products, cups and lids, straws, and eating utensils.

• Labor. The sum of crew labor wages, manager’s salary and other compensation, and related taxes and benefits. Labor does not include payments that may be made to a franchisee or its owners in the form of a manager’s salary or wages. Labor does not include payments that may be made to a franchisee or its owners in the form of an owner’s draw, a dividend, or similar distributions.

• Restaurant Controllables. The sum of utilities, telephone, local advertising, repairs and maintenance, service contractors, laundry and uniforms, operating supplies (other than inventory), trash and recycling, delivery service provider fees and commissions, and bank charges (other than debt service).

• Miscellaneous Expenses. All miscellaneous expenses are rolled up into the total Restaurant Controllables percentage.

• Manageable Profit. Profit remaining after deduction of sales taxes, discounts, Cost of Goods, Labor Cost, and Restaurant Controllables, but before the deduction of occupancy costs, insurance (non-employment), continuing license fees, sales promotion program fees, legal fees, accounting fees, and other administrative costs.

Section VI – DQ Grill & Chill Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️