Dairy Queen Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Dairy Queen is a quick-service franchise known for its soft-serve, Blizzards, and, at Grill & Chill locations, burgers and food. Franchisees run restaurants and treat stores managing food and treat production, service, and staffing.
FranchiseVerdict summary · 2026
A Dairy Queen franchise requires a total initial investment of $1.5M – $2.6M, including a $45K franchise fee and an ongoing 4.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.5M[2]. SBA 7(a) loans show a 10.6% charge-off rate across 1,242 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $1.5M – $2.6M
- 98th pct Service Resta…
- Avg gross sales
- $1.5M
- Outlet subset28th pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 1,985
- 94th pct Service Resta…
- SBA charge-off
- 10.6%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $1.5M – $2.6M including a $45K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.5M/year (median $1.4M) (reported for a subset of outlets rather than the whole system).
- RISKVerdict B (Above average), verdict score 69/100 (higher is better). SBA loan charge-off rate of 10.6% across 1242 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- TERMSNo protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Dairy Queen Montana / North Dakota LLC
- Parent company
- American Dairy Queen Corporation (ADQ)
- Ultimate parent
- International Dairy Queen (IDQ), subsidiary of Berkshire Hathaway Inc.
- Predecessor
- Willis and Muriel Brown partnership; Diane M. L. Brown and Muriel Brown partnership; Diane M. L. Brown and children partnership
- Prior franchisor entity
- CEO title
- President
- James Willis Brown
- Incorporated in
- MT
- HQ
- 11300 Chumrau Loop, Missoula, MT 59802
- Auditor
- Lee & Company, P.C.
- Audited financials
- Franchisor revenue
- $266.1M
- vs $257.6M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
- CEO
- James Willis Brown
- Headquarters
- MT
- Founded
- 1947
- FDD year
- 2026
- States available
- 2
Can you afford it, and what does the money buy?
Entry cost runs 206% above the typical quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $45K | $45K | |
| ALTA Survey and/or Site Investigation Report (SIR) | $0 | $10K | |
| Initial Training Fees and Costs | $2K | $11K | |
| Travel and Living Expenses for Training Programs | $0 | $32K | |
| Building, Construction and Leasehold Improvements | $800K | $1.4M | |
| Construction Consultation Services | $0 | $8K | |
| Building Plans, Design Intent Plans and Architectural Seal | $15K | $60K | |
| Equipment (includes signs and point-of-sale systems) | $550K | $700K | |
| Training Inventory | $8K | $15K | |
| Opening Inventory | $25K | $40K | |
| Utility Deposits, Business Licenses and Government Charges | $4K | $17K | |
| Attorneys' Fees | $10K | $15K | |
| Additional Funds - 3 Months | $51K | $198K | |
| Total initial investment | $1.5M | $2.6M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.5M – $2.6M
- Bottom third — review vs category
- Liquid capital req'd
- $51K – $198K
- Bottom third — review vs category
- Franchise fee
- $45K – $45K
- Bottom third — review vs category
- Royalty
- 4.0%
- typical 6–8%
- Ad fund
- 5.0%
- typical 3–5%
- Total fee load
- 0.1%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 5.0% of gross sales |
| Technology fee | $2K |
| Training fee | $11K |
| Transfer fee | $6K |
| Renewal fee | $4K |
| Inventory (initial) | $25K – $40K |
| Total fee load | 0.1% of rev |
A 0.1% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 29% above the quick-service restaurants norm.
Reported for a subset of outlets rather than the whole system
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Dairy Queen until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$2.2M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Dairy Queen unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Reported for a subset of outlets rather than the whole system
- Avg gross sales
- $1.5M
- Per unit, per year
- Median gross sales
- $1.4M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Schedule A: franchised DQ Grill & Chill restaurants newly constructed as free-standing restaurants, open the full calendar year 2025 - average, median, high and low annual Gross Sales (n = 286)
- Sample size
- 286 outlets
- vs category median 18 · large
- Range (low → high)
- $602K→$3.1M
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 782 Quick-Service Restaurants brands
Revenue is only 0.7x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.5M/year in gross sales. Revenue-to-investment ratio: 0.7x. Reported for a subset of outlets rather than the whole system.
Fee burden
Total ongoing fee load of 0.1% — below the Quick-Service Restaurants average of 7.9%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System roughly stable (+4.2% 3-year CAGR) with 1,985 units.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants averages
How Dairy Queen Compares
Is the system healthy?
Source: FDD 2026 · Item 20
ADQ's 2026 DQ Grill & Chill FDD Table No. 1 counts the outlets ADQ licenses directly: 1,983 franchised + 2 company-owned = 1,985 at the end of 2025 (1,969 / 1,967 franchised in 2024 / 2023). The same Item 20 separately prints 543 subfranchised outlets operating under territory operators (master franchisees) and 524 Texas DQ restaurants, which are offered under a separate disclosure document; neither is in the count here (owner rulings R13 and R28). DQ Treat stores (743) have their own FDD. Item 1 puts the DQ system at over 7,880 restaurants and stores worldwide.
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,985
- Opened
- 1
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.4%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +4.2%
- Net unit change over 3 years
- 3-yr CAGR
- +4.2%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 2
- Closed (3yr)
- 1
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 3
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 38 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 1,242
- Loan volume
- $380.5M
- Median loan
- $218K
- 50th percentile
- Charge-off rate
- 10.6%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 89.3%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 272
- Defaults
- 110
- Typical loan rate
- 6.0%
- avg rate to borrowers
- Franchised industry avg
- 21.5%
- brand beats franchise avg ↓
- Jobs supported
- 10,478
- 3.3 per loan
- Lender concentration
- 13%
- top lender's share
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 21.5% vs 25.0% for independents — franchising is associated with 14% lower SBA default risk in this category.
Vintage analysis
Dairy Queen charge-off rate by loan vintage
Shaded area: recent vintages with few resolved loans; rates may change as loans mature.
Top lenders financing Dairy Queen franchisees
Showing 3 of 272 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Dairy Queen's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 22-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
What could kill this investment?
SBA loans charge off at 10.6% — 34% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Dairy Queen presents caution-level risk due to negligible unit growth, undisclosed profitability metrics, significant franchisor litigation, and unprotected territories that expose franchisees to encroachment and margin compression.
Litigation (Item 3)
4 pending: Oshlo-Wilkinson DQ vs ADQ (contract/Iowa Franchise Act - transfer rights); ADQ vs Estate of Ridl (termination/trademark infringement); Rhode Island General Treasurer vs Domino's et al (securities class action naming ADQ officer D'Elia); Project Lonestar vs ADQ (breach of contract/transfer process). 4 concluded settlements. ADQ is plaintiff in Ridl and Project Lonestar counterclaims; defendant in others.
Largest disclosed settlement: $425,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Lee & Company, P.C.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Item 21 attaches the audited consolidated financial statements of International Dairy Queen, Inc. (IDQ), ADQ's parent and a wholly owned subsidiary of Berkshire Hathaway Inc., for the years ended December 31, 2025, 2024 and 2023, in thousands of dollars; ADQ's own statements are not included and IDQ guarantees ADQ's obligations. 2025 total revenues $266,139,000; net income $100,623,000; total assets $365,085,000; total liabilities $268,860,000; stockholder's equity $96,225,000.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 69 / 100 verdict
- 01MINORStagnant unit growth of only 1.4% YoY indicates system contraction and poor franchisee recruitment/retention
- 02MINORNo Item 19 (Average Net Income) disclosure prevents validation of $1.62M average revenue translating to actual profitability
- 03HIGHMultiple litigation categories (contract disputes, trademark infringement, encroachment claims) suggest franchisor credibility and operational governance issues
- 04MINORUnprotected territory creates direct competition risk and commoditizes franchisee investments within the same market
- 05HIGHOfficer litigation history from previous franchise employment raises governance and compliance risk concerns
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 0.1% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Termination groundsℹ | 11 |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | Yes |
| Arbitration location | Missoula, Montana |
| Jury trial waiver | No |
| Governing law | State where restaurant is located |
| Litigation count | 8 |
View Item 3 litigation summary
4 pending: Oshlo-Wilkinson DQ vs ADQ (contract/Iowa Franchise Act - transfer rights); ADQ vs Estate of Ridl (termination/trademark infringement); Rhode Island General Treasurer vs Domino's et al (securities class action naming ADQ officer D'Elia); Project Lonestar vs ADQ (breach of contract/transfer process). 4 concluded settlements. ADQ is plaintiff in Ridl and Project Lonestar counterclaims; defendant in others.
Items 10, 11
Training & Operations
- Classroom training
- 32 hrs
- On-the-job training
- 245 hrs
- Training location
- Approved DQ locations (optimally Billings, MT) for Phases 1 and 2; Minneapolis, MN or other ADQ-designated location for Phase 3
- Ongoing training
- Required
- Time to open
- 9 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- ParTech ParBrink EPOS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: ParTech ParBrink EPOS
Item 20 · call current owners
Franchisee Contacts
276 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Dairy Queen · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Dairy Queen franchise?
The total investment to open a Dairy Queen franchise ranges from $1.5M – $2.6M, with an initial franchise fee of $45K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Dairy Queen franchise owners earn?
According to Item 19 of the Dairy Queen FDD, the average gross sales per unit is $1.5M. The median is $1.4M. Important context: Reported for a subset of outlets rather than the whole system. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Dairy Queen FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Dairy Queen FDD and qualifies whose outlets they describe.
What is Dairy Queen's franchise failure rate?
Based on SBA 7(a) loan data, Dairy Queen has a charge-off rate of 10.6% across 1,242 loans, meaning 10.6% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Dairy Queen franchise locations are there?
As of their most recent FDD filing, Dairy Queen has 1,985 total units in the United States, including 1,983 franchised units and 2 company-owned units. 1 new units were opened in the latest reporting year. ADQ's 2026 DQ Grill & Chill FDD Table No. 1 counts the outlets ADQ licenses directly: 1,983 franchised + 2 company-owned = 1,985 at the end of 2025 (1,969 / 1,967 franchised in 2024 / 2023). The same Item 20 separately prints 543 subfranchised outlets operating under territory operators (master franchisees) and 524 Texas DQ restaurants, which are offered under a separate disclosure document; neither is in the count here (owner rulings R13 and R28). DQ Treat stores (743) have their own FDD. Item 1 puts the DQ system at over 7,880 restaurants and stores worldwide.
Is Dairy Queen a good franchise to buy?
FranchiseVerdict rates Dairy Queen as a B-grade franchise with a verdict score of 69 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.