If you say Dairy Queen, many will automatically think about the widely popular Blizzard. You know, that type of ice cream you can eat upside-down?
Of course, there’s more to the business than selling non-spill cold treats. Dairy Queen, or DQ, offers chicken dishes, burgers, sandwiches, snacks, and cakes. No wonder a lot of customers visit the company’s restaurants!
You can take advantage of DQ’s popularity by operating one your own. To guide you, here is a list of expenses included in the Dairy Queen Franchise cost.
Average Dairy Queen Franchise Cost
The initial investment for a Dairy Queen franchise, according to Franchise Direct, is $1,083,525 to $1,835,825. The cost includes the following:
- Franchise fee
- Location expenses
- Other opening costs
The exact cost will vary depending on the Dairy Queen concept you plan to establish.
Dairy Queen Franchise Startup Fee
One of the most important expenses for a Dairy Queen business is the franchise fee. You should settle this one upon signing of the agreement. Doing so would give you the right to operate under the company’s name.
The Dairy Queen franchise startup fee for a Grill and Chill concept is $35,000. This will allow you to operate the business for a term of 20 years.
A DQ Orange Julius unit, on the other hand, requires a franchise fee of $25,000. This cost is equivalent to a 15-year term.
Franchise Direct listed average costs of location expenses, including:
- Construction and leasehold improvements: $550,000 to $900,000
- Construction consultation services: $7,500
- Building plans, design intent plans, and architectural seal: $15,000 to $45,000
As said earlier, Dairy Queen has different franchise concepts you could choose from. Following are descriptions for each:
- DQ Grill and Chill
- This concept offers a full line of famous DQ treats and fresh food menu items. Typically, a Grill and Chill is a freestanding facility. You can also opt to develop this type in strip centers, dual-use buildings, travel centers, and street-front locations.
- DQ Orange Julius
- This unit offers refreshments like the Blizzard Treat, MooLatte frozen coffee, and DQ Cakes. Of course, the concept also sells a full line of Orange Julius fruit-blended beverages.
You can also opt to build an in-line store in shopping malls. The company requires your mall location the following:
- 600 to 800 square feet inline
- Impulse treat location, or
- Throat of a food court, or
- Wet kiosk locations with a nearby dry storage
You can also develop Grill and Chill and Orange Julius concepts in non-traditional locations. The said venues include airports, military bases, travel plazas, and universities.
You’ll need equipment to run your Dairy Queen business. Some of the things you should purchase includes:
- Orange Julius machines
- Soft-serve ice cream machines
- Commercial refrigerator and freezer
- Ice makers
- French fry stations
- Food holding bins
- Menu boards
- Restaurant furniture
- Point-of-Sale (POS) units
The cost of equipment, according to Franchise Direct, is $390,000 to $530,000. The price already includes the store’s signage.
Other Opening Costs
The Dairy Queen franchise cost also includes the following:
- Opening inventory: $8,300 to $30,000
- Utility deposits, business licenses, and government charges: $4,000 to $17,000
- Attorney’s fees: $1,000 to $8,000
- Additional fund: $51,000 to $198,000
The additional fund will serve as your working capital. The company estimates that the said amount will cover your expenses for the first 3 months of operations.
Aside from the Dairy Queen franchise startup fee, you should also pay the following:
- Royalty fee: 4% of gross sales for a Grill and Chill, 5% for Orange Julius and inline stores
- Marketing fee: 5% to 6% of gross sales
- Transfer fee: $5,000
- Renewal fee: $17,500
- Interest expenses: 18% per annum or at maximum rate permitted by law
- Late fees: $50 per delinquent report
- Insurance: $6,000 to $20,000 (annual premiums)
- Gift card program fees: 3% of total gift card redemptions
- Training materials: $150 to $500
- Training cancellation fee: $150 or $800
There are also fees of which costs vary depending on the circumstances. These include:
- Operational program fee
- Audit and record-keeping cost
- Termination fee
- Additional training fees
The company will require, unless otherwise stated, at least two people from your store to undergo training. That includes your designated manager and assistant manager. The initial training currently includes the following components:
- Product and equipment training
- Systems and management training
- People, PRIDE, and profit training
- Cake decorating and certification course
The training expenses are included in your initial investment. Expect to spend the following:
- Initial training fee: $1,125 to $11,825
- Travel and living expenses: $23,000 to $38,500
- Training inventory: $5,000 to $15,000
Dairy Queen will also conduct or sponsor several other forms of training (as needed). These include meetings, seminars, and conventions.
Training your crew is only one of the many types of assistance DQ will give you. The company also offers the following support:
- Evaluation of the market area, finding a location, and development of your store
- Store design and construction process
- Management of the supply chain for supply, quality, and consistency
- Consultants for sales and profits
- Overseeing of marketing plans and assistance on local store marketing
As for financing, you can seek assistance from third-party companies who have relationships with DQ. Usually, the sources will aid you in the startup costs as well as payroll.
According to Entrepreneur, Dairy Queen has the following financial requirements:
- Net worth: $750,000
- Liquid capital: $400,000
The company also seeks the following attributes and capabilities:
- Commitment to the brand and business operation
- Ability to lead, mentor, train, and develop a strong team of people
- Commitment and ties to the local community (for driving marketing efforts)
- Knowledge of the real estate market and development of locations
- Business experience
- Prior restaurant management experience
So, how do you apply for a franchise? The first thing to do is to request information online through the company website. If you are qualified, Dairy Queen will call you to discuss the process. After the construction, training, and signing of the agreement, you can open your DQ Grill and Chill or DQ Orange Julius store.
Note that the qualification process will be strict. Do your best to get your hands on that franchise!
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