Do you want to start a restaurant business by buying Dairy Queen franchise? If YES, here is how much it cost to open a Dairy Queen franchise.
Dairy Queen, now often known as DQ, is one of America’s most iconic quick-serve restaurant brands. The company makes and sells soft serve ice cream. Dairy Queen built its reputation on its famous soft-serve ice cream, but it has long expanded to a full menu of restaurant delights that include burgers, chicken strips, sandwiches and fries.
As of 2006, Dairy Queen has become an international brand with more than 5,600 stores in more than a dozen countries. Today, there are more than 6,800 restaurants in the United States, Canada, and 27 other countries.
Dairy Queen has reported revenue in excess of $2.5 billion. Dairy Queen has ascribed the secret of their success to their recipe, combined with hardworking individuals and great-tasting food that’s served in a welcoming environment.
The DQ Grill & Chill restaurants are the flagship concept of Dairy Queen, which also owns the Orange Julius brand. Franchise agreements are available for both concepts. A DQ Grill & Chill franchise is an opportunity to own and operate an internationally loved brand.
Franchise development is available in Alabama, Arkansas, California, Colorado, Florida, Louisiana, Maryland, Massachusetts, Mississippi, New York, North Carolina, Oklahoma, South Carolina, Tennessee, and Wyoming.
How Much It Cost to Open a Dairy Queen Franchise
The franchise fee for a Dairy Queen restaurant is between $25,000 and $35,000. The total estimated investment ranges from $382,000 to $1.8 million, with liquid cash available of $400,000. A 4-5% royalty fee on gross monthly receipts is paid to the company. The fees are broken down as follows;
- Initial franchise Fee – $35,000
- ALTA Survey – $5,000
- Initial Training Fees and Costs – $1,125 to $11,625
- Travel And Living Expenses for Training Programs – $23,000 to $38,500
- Building 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
- Equipment (Including Signs and Point-of-Sale Systems) – $390,000 to $530,000
- Training Inventory – $5,500 to $16,000
- Opening Inventory – $15,400 to $38,000
- Utility Deposits, Business Licenses and Government Charges – $4,000 to $17,000
- Attorney’s Fees – $1,000 to $8,000
- Additional Funds (3 Months) – $51,000 to $198,000
- ESTIMATED TOTAL – $1,091,025 to $1,849,625
- Continuing License Fee – 4% of Gross Sales
- Sales Promotion Program Fee – 5% to 6% of Gross Sales
- Operational Program Fees – Will vary under circumstances.
- Transfer Fee – $5,000
- Renewal Fee – $17,500
- Audit and Recordkeeping Costs – The franchisee’s contractual percentage continuing license fees and percentage sales promotion program fees times the amount of understated Gross Sales, plus any other amounts owed to the franchisor.
- Termination fee – One of the following: (1) Two times the continuing license fee due for the last 12 months of active operations; (2) If the location did not operate for a full 12 months, 24 times the average monthly continuing license fee when location was open; or (3) If less than 24 months remain on the franchise agreement, the number of months remaining times the average monthly continuing license fees due for the last 12 months of active operations
- Interest Expenses – 18% per annum or at maximum rate permitted by governing law
- Late Fees – $50 per delinquent report or payment
- Additional Training Fees – Will vary based on circumstances
- Gift Card Program Fees – Currently, 3% of total gift card redemptions.
- Costs and attorneys’ fees – Will vary under circumstances.
- Training Materials – $150 to $500
- Training Cancellation Fee – $150 or $900
As a Dairy Queen Franchisee, you will be expected to undergo these four trainings which include;
- The Management Training Readiness Assessment
- The Dairy Queen Corporation’s training scheme. These are in 3 phases;
- Product & Equipment Training
- Management and Systems Training
- People, Pride and Profit training
- Cake certification and decoration course
You will be expected to deploy the Franchisee’s Manager, which could be you or any other person, 2 assistant managers for the first 3 training components. After that, only one person is expected to attend the cake certification course.
Steps on How to Open a Dairy Queen Franchise
If you want to purchase a Dairy Queen franchise, you have to first identify the concept in which you are interested. The choices are DQ Grill & Chill, or the DQ Orange Julius Treat Center. Choose your location area and then submit a request.
To acquire a DQ franchise, the first thing you have to do is to fill out an online Request for Consideration, providing your contact information and preliminary financial information to them. You have to specify the cash assets you have available and the locations you are interested in. A Dairy Queen franchise director will follow up with you to discuss the opportunity. A breakdown of the process goes thus;
- Ensure you have the finance
Going through the fees listed above, you will have a clear view of what it would cost you to get a DQ franchise. So, before you proceed, you have to make sure you have this capital, or that you are able to access it. Aside from the franchise fees and other capital requirements, you need to consider real estate costs, the cost of equipment and signs, the costs of licenses and permits, the cost of uniforms, the cost of insurance, etc. All these costs add up to a lot, so ensure you have no issues covering them.
3. Check area availability
For you to be successful with your franchise application, you have to ensure that there is an available area for your business. You need to see if there are available markets in your location of interest before proceeding with your application.
4. Fill out and Submit your application
The next step will now be to fill out your application and submit it to the company. Your application will be reviewed by the DQ franchise team. You will be emailed a confirmation receipt upon reception of your online application. From the confirmation receipt, you will be provided with additional information on the franchise owner.
5. Receive approval & opening your Dairy Queen franchise
After going through all the steps required by DQ and if the franchisor finds that you are capable of opening and running a restaurant, you will receive an approval from the company. Note that approval will only be given to candidates who meet all the requirements stated out by Dairy Queen.