Cost of a Dairy Queen Franchise
By Brian Ernst
Dairy Queen: Frozen Treats For All
Can you imagine the time when no soft-serve ice cream was available? That's exactly how it was in the world of desserts before World War II. Back then, a known ice cream maker, J.F. McCullough envisioned an ice cream treat that would not have to reach consumers in a frozen solid block form. This resulted in the birth of Dairy Queen. Its first ever location was established in 1940 in Joliet, Illinois. At first, the store only offered vanilla ice cream that flowed like a white ribbon into sundae cups and cones. Then came the quarts and pints for takeout. More items that played the same theme were introduced to consumers over the years. These include ice cream cakes, Dilly Bars, banana splits, and the very popular Peanut Buster Parfait.
Four years after the establishment of its first store, Mr. McCullough realized that the business has the potential to become a popular commodity, even amidst military conflicts, so 10 years after it was founded, almost all existing Dairy Queen branches included hot food items in their menu like hotdogs and hamburgers. Today, numerous aspiring entrepreneurs are looking forward to investing in a Dairy Queen franchise.
Dairy Queen Franchise Review
You can find Dairy Queen franchise locations in almost every major city in the US, as well as in several other countries. As of 2008, there are about 4,500 Dairy Queen franchises in the country; about 600 branches in Canada; and more than 450 locations overseas, particularly in Asia. A franchisee is provided with three weeks training at the company's main office in Minneapolis and a two-week assistance program from the parent company before and after the store opens. All franchise owners are given the privilege to access a buying co-op that allows them to buy supplies and equipment at lower prices.
The company also calls for regular regional meetings among its franchisees. On top of that, the company provides continuous evaluations to the areas' field management offices, and regular upgrades of trainings to all new assistants or managers. The company's national media campaign frequently receives awards for its remarkable promotional methods. In addition, franchisees also have the advantage of signing up for the parent company's co-op advertising that covers direct-mail coupons and other strategies. It generally takes 20 to 40 employees to run and operate one franchise branch, as suggested by the parent company.
More Dairy Queen Franchise Information
The upfront franchise fee when you buy a Dairy Queen franchise is $25,000. The franchise cost also includes an ongoing royalty fee. This is paid either on a monthly or on a quarterly basis and runs from four to six percent of a franchisee's gross sales. Additional fees include 3-6% of a franchisee's net sales as payment for promotion programs. These benefit all franchise owners respectively. For you to buy a franchise, you need to shell out $700,000 to $1.3 million total investment. As such, you need to have a net worth of not less than $750,000, with cash liquidity of $400,000.
The startup costs in the overall estimate already covers pre-opening inventory (minimum of $6,000), various equipment like cash register, signage, and ice cream makers (minimum of $280,000), and remodeling and construction of the building location, which can cost as much as $425,000. Furthermore, you also need to consider the costs to operate the business, which include the business license, insurance, taxes, attorney's fees, and utilities. A Dairy Queen franchise agreement is generally set for 20 years. You have the option to renew the contract for another 10 years. This renewal fee can go as high as $2,500, but in 10 years, you would have earned millions of dollars from selling DQ Treats that $2,500 is merely a drop in the bucket.
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