Did you ever have a Blizzard, the ice cream, with candy in it? Or did you get a soft-serve cone with a curl on it? That is Dairy Queen, or DQ as it is shortened. Its ice cream and food are enjoyed by millions of people.
But have you ever thought about who owns the Dairy Queen store in your town? In the majority of cases it is not a big company. A franchisee is a normal individual who chose to start a DQ business.
Being a franchisee is to pay a right to use the name, recipes of a large company, and its appearance. You are the owner of your store, but you must comply with the regulations of the company.
Dairy Queen is also one of the well-known franchises in the world. It is extremely old, dating back to 1940. There are now over 7,700 stores of DQ in over 20 countries. It is a huge family!
In case you ever wondered, I want to have my own ice-cream shop this article is aimed at you. We are going to consider the big question: How much money does it cost to start a Dairy Queen franchise? We will divide all the costs, stepwise, in very simple terms.
About Dairy Queen
History and Background
The story of the Dairy Queen begins with ice cream. In 1938 an ice-cream shop was operated in Illinois by a man called Sheb Noble. His friends, J.F. “Grandpa” McCullough and his son Alex had a new idea. They produced a new type of soft-serve ice cream. It was smoother and warmer than regular hard-packed ice cream.
They needed to know whether people would like it. One day in August, when it was hot, Sheb consented to a tencent All-You-Can-Eat. The new soft-serve was an enormous success. People loved it! They sold more than 1, 600 sundaes within two hours.
They knew they had a winner. In 1940, two years later, the first Dairy Queen store was set up in Joliet, Illinois. Grandpa McCullough was the one who gave the name of the Dairy Queen, as he called his soft-serve the queen of dairy products.
The store grew fast. When World War II ended the franchise concept was launched. Individuals desired to establish their own business, and DQ turned into a success. Famous Blizzard where candy is added to the ice cream and served inverted did not come until 1985. It soon became their most renowned treatise.
Menu Offering and Brand Ethos
Dairy Queen is not a single type of shop. There are two main types:
1. DQ Treat:
This is the traditional ice-cream store. It focuses on the sweet items. This is where soft-serve cones, Dilly Bars, sundaes, ice-cream cakes and, of course, Blizzard Treats are found. They can also sell such beverages as milkshakes and slushies. Such stores tend to be smaller. You could have them in a shopping center or in a small walk-up window.
2. DQ Grill and Chill:
It is a full restaurant. It has the entire Treat menu and also a grill menu that has hot food. This comprises burgers, chicken strips, fries, onion rings and salads. These are generally larger constructions. There are a number that have a drive-through and seats to have lunch. This is the primary form of store that DQ constructs nowadays.
The overall concept of the brand, the ethos, is straightforward: Happy Tastes Good.
DQ should be a place that makes people happy. It is a place where families can take on a post soccer game. It is the meeting place of friends during the summer. It is a happy treat. Neither do they attempt to be a fancy restaurant. Their mission is to become a happy, relaxed, and enjoyable member of the neighborhood.
Global and UK Presence
Dairy Queen is a massive international brand. It has over 7,700 stores as we said. The majority of them are in the United States and Canada, where the brand is a classic.
However, other countries are also very fond of DQ. Dairy Queen stores are located in:
- China (it has over 1,600 stores)
- Mexico
- The Philippines
- Thailand
- Middle East (as in Saudi Arabia and Qatar)
However, what of the United Kingdom (UK)? This is a significant question. Currently, Dairy Queen in the UK is not franchised.
There is no DQ store in London, Manchester, Birmingham, or any other place in the UK. They have attempted to open a store a couple of times previously, but it was not a permanent thing. The company is expanding rapidly in Asia and elsewhere, yet it is yet to make the major leap to the UK market.
This is to say that all the expenses that we discuss in this article are in the US and Canada. In case DQ came to the UK, the prices would be varied. Of that we shall have more to say.
Dairy Queen Franchise Overview.
Franchise Business Model
I would like to discuss the so-called franchise model. Consider it in the following way: You would like to bake and to sell cookies. You could start from scratch. You would need to come up with a recipe, a name, a logo and hope that people will purchase your cookies. This is very hard.
Or you can purchase a franchise with well-known cookie company.
The company (the “franchisor”) gives you:
- The secret recipes.
- The well‑known name and logo.
- Designing the plans to make your store look right.
- Training on cookie baking.
- Advertising assistance, such as TV commercials.
You, the franchisee, in exchange give them:
- A huge sum in the initial phase (the franchise fee).
- Money to construct the store and purchase ovens.
- A minor percentage of your monthly sales (the royalty fee).
You run your store. You recruit employees and take care of day in day out. However, you have to obey the regulations of the company. You can’t start selling pizza. You have to sell their cookies in the manner they desire.
Number of locations and Expansion Trajectory
That’s how Dairy Queen works. You use the trademark name of DQ and the secret recipe of Blizzards.
Dairy Queen is still growing. It has over 7,700 stores thus being one of the biggest food franchises in the world. They target new DQ Grill and Chill restaurants. They would like to establish additional such full-service restaurants.
Their rapid growth is not within the U.S., but in China, the largest new market. They also desire large partners who are known as multi-unit developers to open numerous stores simultaneously in other countries.
They continue to open new stores and renovate the old ones in the U.S. and Canada. They desire that all the old Treat stores should be transformed into contemporary Grill & Chill restaurants.
Requirements for Prospective Franchisees
So, who can buy a Dairy Queen? DQ seeks out some types of individuals. You can not come with money and take a key.
The basic requirements are:
- Money: You need enough cash. We shall come to the specifics of it presently, but it is quite some. You must have savings in the bank and a good credit record.
- Experience: DQ also seeks individuals who have previously operated a business, preferably, fast-food or quick-service restaurant. You are expected to know how to be a team leader, food handler and customer server.
- Passion: They desire owners who are fond of the Dairy Queen brand. They desire individuals who will labor in the store, meet the consumers and ensure that all ice-cream cones are flawless. They do not desire owners who do not appear.
- A good plan: You must have an effective business plan. Demonstrate to DQ that you have pondered over the site, your customers and how you will excel.
Dairy Queen Franchise Cost
The cost is explained in this section.
Dairy Queen Franchise Cost is vary a lot. A small DQ Treat store is not as expensive as a large DQ Grill and Chill restaurant.
The costs of the Grill and Chill are the primary one, so we will cover its costs. The figures refer to the 2024 2025 franchise documents of Dairy Queen.
Initial Franchise Fee -Normal Range.
Initial Franchise Fee is the first money you make upfront payment.
It is a single expenditure that allows use of name and the system.
- DQ Grill & Chill: $45,000
- DQ Treat: $25,000
This fee is paid upon the signing of the contract. Once it has been made, it cannot be refunded even when you cancel.
Estimated Investment (setting up, equipment, signage, etc.)
The franchise fee is simply the ticket of entry. It does not include construction, ice-cream machine, and furniture. You pay all that yourself.
This is what we refer to as Total Estimated Investment.
- In the case of a new DQ Grill & Chill the business shall cost between 1,516,200 and 2,543,050.
- It is over $1.5 million to 2.5 million.
The scale is high since the prices depend on the location. It is more costly to purchase land in a metropolis than in a small town. Other buildings require renovation.
The following are the key cost items once you have paid the 45000 franchise fee. To construct and develop real estate.
This is the biggest cost. You have to purchase a piece of land and construct a new restaurant or rent a space in a shopping center. Prices range from $800,000 to $1,400,000.
Equipment
You should have all the DQ machines: soft serve machines, Blizzard mixers, grills, fryers, freezers, and refrigerators. This costs $550,000 to $700,000.
Building Plans and Design
You hire architects and engineers to sketch the plans so that the store would resemble a DQ. This costs $15,000 to $60,000.
Signs, Seats, and Decor
You must have the large red DQ sign, tables, chairs, cash registers and pictures on the walls. This is factored in the equipment cost.
Training
You and your managers are at DQ training. You spend on the travel, hotel and food. This Dairy Queen Franchise Costs $23,000 to $42,950. Opening Inventory (First Stock) is calculated by summing together the values of Opening inventory and Opening work in progress.
The first day you will require ice-cream mix, burger patties, cups, spoons and Blizzard candy. This costs $20,000 to $35,000.
Business Licenses and Utility Deposits:
You will have to pay the city to have a license to sell food. You are also required to deposit money to initiate electricity, water and gas. These costs are $4,000 to $17,000.
Additional Funds (Your “Safety Net”):
This is very important. You are not going to make any profit on your first day. It is additional funds that you must keep in the bank to cover the first three months of paying your employees and your bills as you get the business going. This is $51,000 to $198,000.
All this amounts to that huge amount of 1.5 million to 2.5 million. It is a huge and costly undertaking.
Regional Variations (e.g., close to London, Birmingham)
The largest expense, as we have mentioned, is the building and land. This varies much depending on the location. A DQ in one of the small towns in Ohio will be far cheaper than a DQ in a large city such as Los Angeles.
Now, let’s talk about the UK. Remember, DQ is not in the UK. But what if they were? How would a store in London or Birmingham cost?
We do not know how many, but we can very well guess: It would be very costly.
- Land and Rent: Land and Rent in London is among the most expensive in the globe. It would be much more expensive to rent a good restaurant location in a busy section of London or Birmingham than the average space in the US.
- Construction Costs: The cost of constructing items and employment of construction labor is also quite high in UK.
- Supply Chain: DQ would need to establish a complete new system to supply its special ice cream mix and food to all the stores in the UK. This would be quite an expensive setup.
Therefore, when the high-end price in the US is approximately $2.5 million (approximately 2.1 million pounds), a new store in such metropolis as London would probably be even more expensive than that.
Comparison of Costs in Canada, US and UK.
- United States: This is its primary market. A new Grill & Chill costs between one and half a million dollars.
- Canada: The prices in Canada are quite comparable to the US. The figures will be slightly different due to the exchange rate (US dollars versus Canadian dollars) although the aggregate investment would be in the same range.
- UK: (Hypothetical) As we have already observed, in case DQ were to launch in the UK, the price would definitely be more expensive than the US price, particularly in major cities.
Ongoing Fees and Royalties
The expenses do not conclude when you open the doors. You must pay the primary company (DQ) on a monthly basis as a franchisee.
These are the two large continuing fees:
1. Royalty Fee:
This is the primary cost that you pay to lease the Dairy Queen name. It comprises a percentage of the total sales of your store.
- In the case of a DQ Grill & Chill the royalty is 4% of your gross sales.
- (For a DQ Treat store, it’s 5%).
Suppose that your store sold 10,000 of food and ice cream in a week to Dairy Queen headquarters you would write a check to the headquarters of Dairy Queen in 400 (4% of 10,000). You do this regardless of whether you made a profit or not.
2. Marketing Fee (Advertising):
You must make contributions to the vast advertisement fund, also. This is the money that covers all the national television advertisements, web advertisements and social media.
This is normally 5 or 6 percent of your gross sales.
You are, then, sending back to the main company, all in all, approximately 9 percent to 10 percent of all the money you make (your sales) each and every month.
Dairy Queen Franchises Profitability.
So here is the question that everyone would really like to have the answer to: If you spend $2 million to open a DQ, how much profit do you make?
Profit is money you have after all.
Your Sales – Your Cost of Food – Your Pay to your Workers – Your Rent – Your electric bill – Your 9 percent DQ Fees = Your Profit.
It is a very difficult question to answer, since Dairy Queen does not disclose to the population the amount of money that its owners make. In most instances, it is not legal.
Besides, each store is unique.
- A store in a highway exit will earn more as compared to a store in a street with low traffic.
- A well-run store (which does not waste food, has pleasant workers, etc.) will bring more profit than a poorly run store.
Step-by-Step Application Process
Here is the basic journey:
- Do Your Homework: Read anything you can. Interview other DQ franchise owners. Ask them if they like it. Is it hard work? Are they happy?
- Complete the Form: You visit the franchising site of the Dairy Queen. You complete a brief query form. This is the same as lifting your hand and indicating that you are interested.
- First Talk: You will be called by a person of DQ. They will question you on your money, your experience and why you would want to own a DQ.
- Show Them the Money: You will be required to present them with your bank statements. This is so as to demonstrate that you hold money that we will discuss in the following section (the Net Worth and Liquid Cash).
- The Big Book (FDD): They will send you a huge, very serious legal textbook, in case they believe you are a good candidate. It is referred to as the Franchise Disclosure Document (FDD). In this book, there is all the rules, all the costs, and all the details. You will have to have a lawyer read this.
- Approval: You will be interviewing more. You may get to meet with the seniors at DQ. They must all consent that you would be a good owner. If they do, you are “approved.”
- Locate: Here the difficult part begins. You must collaborate with the team of DQ in order to locate an ideal location of your new store. They have to approve the spot.
- Sign the Contract and Pay: When you have a spot, you sign the final franchise contract and pay your 45000 franchise fee.
- Construct Store: This is a lengthy process, which takes months. You contract construction groups (approved by DQ) to construct your restaurant.
- Go to Training: You and your managers attend the special training provided by DQ as the store is being constructed. This is referred to as the Management Training Readiness Assessment (MTRA) and the other programs. You will spend more than 270 hours (some of them in the classroom, some of them in a real shop) to learn all about it:
Eligibility and Financial Requirement.
This is where the majority of people come to a halt. Just to begin this process DQ must perceive that you are money strong.
- You should possess Net Worth of at least $750,000.
- You should possess Liquid Capital (cash) of not less than $400,000.
We will define what exactly they are in the following section.
Tips for Approval
- Be a Fan: Make them know that you are a fan of Dairy Queen.
- Have a Team: DQ prefers having a partner or manager who has experience working in a restaurant.
- Be a Good Leader: Demonstrate to them that you have the knowledge of how to lead a team.
- Have a Great Business Plan: Do not merely say I want a store. Say, I would like to open a store along this busy road, and I know it will be successful since there are three schools and a large office park in the area.
- Be Honest: Be fully honest regarding your money and your experience.
Financial Requirements and Net Worth.
This is the final huge money issue. We require that you have 750,000 in Net Worth and 400,000 in Liquid Capital.
What do these words mean?
Minimum Amount of Net Worth to qualify (750,000)
Net Worth is a math problem. It is everything that you own, less all the money you owe.
- Stuff You Own (Assets): This includes the value of your house, the cars you own, the value of any stocks you own, and the value of the money in your savings account.
- Money You Owe (Liabilities): This is your mortgage loan, your car loan, any student loans, or credit card debt.
Conclusion
Being a Dairy Queen owner is a big dream. You become the boss, you can make jobs, and make happy treats to your local community. You are a member of one of the most popular brands in the world with more than 80 years of history. But it is a very big and serious business.
The Dairy Queen franchise cost is quite high. The franchise is costly, and it takes a lot of money to apply. In order to qualify you should possess $750,000 in net worth and $400,000 in cash. The cost of constructing a new DQ Grill & Chill restaurant is usually approximately 2 million dollars.
Running a DQ is hard work. You have to take care of a team, work long hours and adhere to everything that DQ has to say. You are required to remit 9-10 percent of your sales to the company every month.
A DQ store is not present in the UK at this moment. Dairy Queen is not establishing stores there. In the US or Canada, though, with the right money and experience, being a DQ owner can be a very sweet experience.
Explore More Franchise Options:
FAQs
1. What is the cost of a franchise with Dairy Queen?
A complete DQ Grill & Chill would cost between 1.5m to 2.5m. A smaller DQ Treat (ice cream only) store is between $549,100 and 1.6million.
2. What is the royalty fee of the Dairy Queen?
A Grill and Chill will pay royalty of 4% of gross sales. There is also a 5-6% marketing fee, which amounts to 9-10% sales-per-month.
3. Is it possible to start a Dairy Queen in UK?
No. Dairy Queen is not providing franchise opportunities in the United Kingdom of the year 2024 2025.
4. What is the amount of money required to apply to DQ?
To be considered, you need to have a total net worth of at least $750,000 and liquid capital of at least 400,000 (banked cash).
