DQ Grill & Chill Franchise Cost, Revenue & Review 2026
- Investment
- $1.5M – $2.4M
- Disclosed sales
- $1.4M
- gross sales, not profit
- SBA charge-off
- 10.7%
- on 1,190 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
DQ Grill & Chill is the full-menu Dairy Queen format, pairing burgers, hot dogs, and sandwiches with its signature Blizzards and soft-serve treats. Franchisees run sit-down and drive-thru restaurants managing food, staffing, and equipment.
FranchiseVerdict summary · 2026
A DQ Grill & Chill franchise requires a total initial investment of $1.5M – $2.4M, including a $45K franchise fee and an ongoing 4.0% royalty[2]. Per the 2022 FDD, average unit revenue was $1.4M[2]. SBA 7(a) loans show a 10.7% charge-off rate across 1,190 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: high - issued more than two years ago
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $1.5M – $2.4M
- 97th pct Service Resta…
- Avg gross sales
- $1.4M
- Outlet subset27th pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 1,954
- 94th pct Service Resta…
- SBA charge-off
- 10.7%
- % 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 median · 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 – $2.4M including a $45K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.4M/year (median $1.4M) (reported for a subset of outlets rather than the whole system).
- RISKVerdict B (Above average), verdict score 64/100 (higher is better). SBA loan charge-off rate of 10.7% across 1190 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHPositive: net +26 franchised outlets in the latest year (47 opened, 23 closed); 54 signed but not yet open (Item 20).
- LEGAL14 litigation matters disclosed in Item 3, higher than typical. Of these, 13 name the franchisor itself, 1 its parent, affiliates or predecessor. Pending claims are allegations, not findings.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- American Dairy Queen Corporation
- Parent company
- International Dairy Queen, Inc.
- FDD Item 1, page 9 of the 2022 FDD
- Ultimate parent
- Berkshire Hathaway, Inc.
- FDD Item 1, page 9 of the 2022 FDD
- CEO title
- Director, Chief Executive Officer and President
- Troy A. Bader
- CEO experience
- 22 yrs
- Years in role or industry
- Incorporated in
- DE
- HQ
- 8000 Tower, Suite 700, 8331 Norman Center Drive, Bloomington, MN 55437
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $224.7M
- vs $190.4M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Same owner · FDD Item 1, page 9
2 other brands on this site name Berkshire Hathaway, Inc. as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2022 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Troy A. Bader
- Headquarters
- MN
- Founded
- 1962
- FDD year
- 2022
- States available
- 48
Can you afford it, and what does the money buy?
Entry cost runs 300% above the typical quick-service restaurants franchise.
Source: FDD 2022 · Items 5–7
FDD Item 7 · 2022 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $45K | $45K |
| Working capital (3–6 mo) | $51K | $198K |
| Equipment, build-out, other | $1.4M | $2.2M |
| Total initial investment | $1.5M | $2.4M |
Source: DQ Grill & Chill 2022 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.5M – $2.4M
- 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
- 9.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 5.0% |
| Technology fee | $408 |
| Training fee | $3K |
| Transfer fee | $6K |
| Renewal fee | $23K |
| Inventory (initial) | $15K – $35K |
| Total fee load | 9.0% of rev |
What do units actually make?
Average unit sales run 46% above the quick-service restaurants norm.
Reported for a subset of outlets rather than the whole system
Source: FDD 2022 · 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 DQ Grill & Chill 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
$2.1M
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 DQ Grill & Chill 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: 2022 FDD
Financial Performance
Reported for a subset of outlets rather than the whole system
- Avg gross sales
- $1.4M
- 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
- gross sales and profitability
- Sample size
- 129 outlets
- vs category median 19 · large
- Range (low → high)
- $592K→$2.9MCited, not corroborated — printed on page 64 of the 2022 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2021
- Fiscal year the figures cover
- Source filing
- FDD 2022
- Disclosed in the 2022 filing, covering 2021
- Transparency
- 6 / 10
- vs category median 4 / 10 · above
Compared against 781 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 $1.4M/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 9.0% — above the Quick-Service Restaurants median of 7.5%.
Disclosure
Transparency score 6/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System roughly stable (+2.0% 3-year CAGR) with 1,954 units.
Multi-unit rate
50% of franchisees own multiple units, a moderate multi-unit rate.
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 medians
How DQ Grill & Chill Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2022 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,954
- Opened
- 47
- Last reporting year
- Closed
- 23
- Terminated
- 23
- Franchisor ended the franchise (per Item 20)
- Turnover rate
- 1.2%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Multi-unit owners
- 50.0%
- Net growth (3-yr)
- +2.0%
- Net unit change over 3 years
- 3-yr CAGR
- +2.0%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 23
- Signed, not yet open
- 54
- 0.03 per open outlet · Item 20 Table 5
- Projected new
- 89
- Franchisor's next-year forecast
- Transfer rate
- 5.3%
- Owners selling to other franchisees
- Continuity rate
- 98.8%
- Units that stayed open
- Termination rate
- 1.2%
- Franchisor-initiated terminations
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 20 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.
Where the owners are · Item 20 owner list
37 current owners across 20 states.
- FL 5
- GA 5
- OH 3
- CA 2
- ID 2
- MD 2
- MO 2
- NY 2
- SC 2
- TN 2
- AR 1
- AZ 1
- +8 more states
Counts only, from the list the franchisor prints in Item 20; 3,255 entries carry no state. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 1,190
- Loan volume
- $359.8M
- Median loan
- $302K
- average
- Charge-off rate
- 10.7%
- on 1,190 loans · 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)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 42
- Defaults
- 109
Vintage analysis
DQ Grill & Chill charge-off rate by loan vintage
Shaded area: recent vintages with few resolved loans; rates may change as loans mature.
Top lenders financing DQ Grill & Chill franchisees
Showing 3 of 42 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.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for DQ Grill & Chill from SBA 7(a) FOIA data.
Top SBA lenders
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Wells Fargo Bank National Association | 146 | $53.7M | 13.4% |
| 2 | U.S. Bank, National Association | 49 | $15.8M | 7.1% |
| 3 | Stearns Bank National Association | 46 | $17.1M | 4.9% |
| 4 | PNC Bank, National Association | 43 | $7.6M | 12.5% |
| 5 | Readycap Lending, LLC | 43 | $15.3M | 32.4% |
| 6 | The Huntington National Bank | 32 | $7.1M | 4.0% |
| 7 | Bank of America, National Association | 31 | $5.8M | 17.9% |
| 8 | JPMorgan Chase Bank, National Association | 30 | $6.9M | 22.2% |
| 9 | BMO Bank National Association | 21 | $5.8M | 0.0% |
| 10 | Wachovia SBA Lending, Inc. | 18 | $8.2M | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| MNMinnesota | 88 | 1 | 1.2% |
| OHOhio | 88 | 7 | 9.6% |
| TXTexas | 70 | 12 | 20.7% |
| CACalifornia | 67 | 9 | 15.8% |
| INIndiana | 65 | 2 | 3.4% |
| WAWashington | 60 | 4 | 7.5% |
| FLFlorida | 59 | 1 | 2.0% |
| ILIllinois | 50 | 6 | 16.7% |
| AZArizona | 49 | 4 | 9.5% |
| MOMissouri | 46 | 5 | 13.2% |
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 10.7% — 33% 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
DQ Grill & Chill presents elevated risk due to undisclosed profitability data, stagnant unit growth, unprotected territories, active encroachment litigation, and potential franchisor financial concerns despite $1.4M average revenue.
Why this reads harsher than the B grade: the grade weighs financial health, unit economics, unit growth, scale, legal, and transparency across the whole filing, while this summary lists individual flags without that weighting. The flags are worth checking with current owners; neither is investment advice.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
4 pending cases: (1) subcontractor HVAC payment claim against ADQ; (2) subcontractor roofing payment claim against ADQ; (3) ADQ vs. Wineinger declaratory judgment re: transfer conditions; (4) franchisees vs. ADQ re: territory division and transfer rights. Multiple concluded cases including settlement of sales promotion fee disputes and trademark enforcement actions.
Largest disclosed settlement: $425,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Financial statements are the consolidated statements of International Dairy Queen, Inc. (IDQ), parent of franchisor American Dairy Queen Corporation (ADQ); ADQ's separate statements are not included. Figures for FY ended Dec 31, 2021 (prior year 2020). Amounts reported in thousands. IDQ is a wholly owned subsidiary of Berkshire Hathaway Inc.
ⓘ 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: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 64 / 100 verdict
- 01MEDNet income not disclosed in FDD Item 19 — cannot assess actual profitability against $1.46M-$2.43M investment
- 02MINORMinimal unit growth (1.3% YoY) suggests market saturation or franchisee dissatisfaction in 1,954-unit system
- 03MINORNo protected territory exposes franchisees to direct brand competition and encroachment risk
- 04HIGHMultiple active litigation cases involving encroachment claims, territorial disputes, and termination enforcement indicate systemic franchisor-franchisee conflicts
- 05HIGHSubcontractor payment disputes in litigation suggest operational/financial stress among existing franchisees
Severity inferred from the FDD text · not a regulatory classification
Litigation case detail14 matters · Item 3
Litigation cases
The franchisor
Pending (4)
American Dairy Queen Corporation vs. David Wineinger
pendingBrought against a franchisee · filed 2021-06-07 · United States District Court, Western District of Wisconsin · 3:21 CV-00378
“American Dairy Queen Corporation vs. David Wineinger (United States District Court, Western District of Wisconsin, 3:21 CV-00378, filed June 7, 2021). ADQ initiated this litigation seeking a declaratory judgment that ADQ has the contractual right to condition transfer of Defendant’s franchise on the buyer signing ADQ's current form operating agreement”Page 17 of the 2022 FDD, Item 3
Oakland Family Restaurants, Inc. and Lake Area Restaurants, Inc. v. American Dairy Queen Corporation
pendingBrought by a franchisee · filed 2021-10-28 · United States District Court, Eastern District of Michigan, Southern Division · 2:21-cv-12539-TGB-EAS
“Oakland Family Restaurants, Inc. and Lake Area Restaurants, Inc. v. American Dairy Queen Corporation (United States District Court, Eastern District of Michigan, Southern Division, #2:21- cv-12539-TGB-EAS, filed October 28, 2021). Plaintiffs, Dairy Queen® franchisees, have initiated this litigation”Page 17 of the 2022 FDD, Item 3
Beristain Roofing & Construction, LLC v. Justin Caleb Story, JCS Properties, LLC, Caspian/Columbia Construction Group, Inc., Tom Huff, Mark Provenzano, a.k.a. M. Prevensagallo, and American Dairy Queen Corporation
pendingThird-party plaintiff · filed 2019-08-29 · Chancery Court for Dickson County, Tennessee at Charlotte · 2019-CV-320
“Beristain Roofing & Construction, LLC v. Justin Caleb Story, JCS Properties, LLC, Caspian/Columbia Construction Group, Inc., Tom Huff, Mark Provenzano, a.k.a. M. Prevensagallo, and American Dairy Queen Corporation (Chancery Court for Dickson County, Tennessee at Charlotte, #2019-CV-320, filed August 29, 2019).”Page 17 of the 2022 FDD, Item 3
Outcome:“ADQ disputes Plaintiff’s allegations, denies that it made any misrepresentations and intends to vigorously defend against the claims.”
Denney Mechanical, LLC v. Justin Caleb Story, JCS Properties, LLC, Caspian/Columbia Construction Group, Inc., Tom Huff, Mark Provenzana, a.k.a. M. Prevensagallo, and American Dairy Queen Corporation
pendingThird-party plaintiff · filed 2019-06-28 · Chancery Court for Dickson County, Tennessee at Charlotte · 2019-CV-239
“Denney Mechanical, LLC v. Justin Caleb Story, JCS Properties, LLC, Caspian/Columbia Construction Group, Inc., Tom Huff, Mark Provenzana, a.k.a. M. Prevensagallo, and American Dairy Queen Corporation (Chancery Court for Dickson County, Tennessee at Charlotte, #2019- CV-239, filed June 28, 2019).”Page 17 of the 2022 FDD, Item 3
Outcome:“ADQ disputes Plaintiff’s allegations, denies that it made any misrepresentations and intends to vigorously defend against the claims.”
Concluded (6)
White Enterprise, Inc. vs. American Dairy Queen Corporation
settledBrought by a franchisee · filed 2020-01-30 · American Arbitration Association · 01-20-0000-3584
“White Enterprise, Inc. vs. American Dairy Queen Corporation (American Arbitration Association, Case No. 01-20-0000-3584, filed January 30, 2020). Claimant commenced this action January 30, 2020 alleging a breach of contract and implied covenant of good faith and fair dealing.”Page 20 of the 2022 FDD, Item 3
Outcome:“The parties reached a settlement on May 15, 2020 under which they agreed that, effective January 1, 2021, Claimant shall pay to ADQ a sales promotion fee of 2.5% of gross sales and ADQ shall provide Claimant with the full benefits available under the National Marketing Fund”
M & M Petroleum Too, Inc. vs. American Dairy Queen Corporation
settledBrought by a franchisee · filed 2019-10-18 · American Arbitration Association · 01-19-0003-3181
“M & M Petroleum Too, Inc. vs. American Dairy Queen Corporation (American Arbitration Association, #01-19-0003-3181, filed October 18, 2019).”Page 19 of the 2022 FDD, Item 3
Outcome:“ADQ denied Petitioner’s claims and counterclaimed for breaches of the operating agreement. The parties reached a settlement on March 12, 2020 under which they agreed to terminate the operating agreement effective April 15,”
American Dairy Queen Corporation. vs. Universal Investment Corporation f/k/a Neos Corporation
settledBrought against a franchisee · filed 2016-05-16 · United States District Court, Western District of Wisconsin · 16-cv-323
“American Dairy Queen Corporation. vs. Universal Investment Corporation f/k/a Neos Corporation (United States District Court, Western District of Wisconsin, No: 16-cv-323, filed May 16, 2016). ADQ commenced this action against the defendant franchisee seeking a declaratory judgment that ADQ properly terminated defendant’s franchise agreement”Page 19 of the 2022 FDD, Item 3
Outcome:“The parties settled the remaining claims on December 11, 2017 with defendant agreeing to relinquish any remaining rights he may have to use ADQ’s trademarks and systems under, and to the termination of, his franchise agreement and the territory agreements for four territories in Iowa in exchange for a mutual release of claims and a payment of $425,000 from ADQ.”
Rodney Johnson and Food Ventures, Inc. vs. American Dairy Queen Corporation
settledBrought by a franchisee · filed 2016-12-09 · American Arbitration Association · 01-16-0005-3571
“Rodney Johnson and Food Ventures, Inc. vs. American Dairy Queen Corporation (American Arbitration Association, No. 01-16-0005-3571, filed December 9, 2016). Claimants, a DQ Grill & Chill franchisee and its owner, initiated this arbitration claiming that ADQ unlawfully encroached upon their franchise”Page 19 of the 2022 FDD, Item 3
Outcome:“On August 5, 2017, the parties entered into a settlement agreement under which claimants are allowed to pay ADQ a reduced royalty fee and advertising fee for set periods and avoid the modernization requirement for the next transfer of the franchise since the restaurant recently had been remodeled to current image. ADQ also paid claimants $25,000.”
Richard J and Kazuko Kunz, Bruce D. and Patricia J. Lahm vs. American Dairy Queen Corporation and International Dairy Queen, Inc.
settledBrought by a franchisee · filed 2013-01-15 · State of Minnesota District Court, Hennepin County, Fourth Judicial District · 27-CV-13-922
“Richard J and Kazuko Kunz, Bruce D. and Patricia J. Lahm vs. American Dairy Queen Corporation and International Dairy Queen, Inc. (State of Minnesota District Court, Hennepin County, Fourth Judicial District, #27-CV-13-922, filed January 15, 2013). The plaintiffs initiated this action claiming that ADQ improperly increased or “flexed” franchisees sales promotion fees”Page 18 of the 2022 FDD, Item 3
Outcome:“In or about November 2013, the parties reached a settlement agreement under which ADQ agreed to reimburse plaintiffs the amount of their “flexed” sales promotion fees for the period January 1, 2006 through December 31, 2010. As part of the settlement, ADQ is entitled to recover the amounts it reimbursed the plaintiffs from future sales promotion fees paid by them.”
Timothy A. and Amy Lefevre, Dairy Queen of Bainbridge, Jerry Chabrian, Lavern Engelman, Ken Fugett, Thomas and Karyl Cleary, Thomas E. Klein and MAR-KA, Inc. vs. American Dairy Queen Corporation and International Dairy Queen, Inc.
settledBrought by a franchisee · filed 2013-01-15 · American Arbitration Association · 002-8DF-9JF
“Timothy A. and Amy Lefevre, Dairy Queen of Bainbridge, Jerry Chabrian, Lavern Engelman, Ken Fugett, Thomas and Karyl Cleary, Thomas E. Klein and MAR-KA, Inc. vs. American Dairy Queen Corporation and International Dairy Queen, Inc. (American Arbitration Association, No. 002- 8DF-9JF, filed January 15, 2013).”Page 18 of the 2022 FDD, Item 3
Outcome:“On or about September 10, 2014, the parties reached a settlement agreement under which ADQ agreed to reimburse any franchisees that were incorrectly flexed the amount of their “flexed” sales promotion fees for an agreed upon number of years.” (page 19)
Status not stated in the filing (3)
American Dairy Queen Corporation vs. McMath 2 Corporation, Byron G. McMath, Beverly McMath, Bliss McMath, Breana McMath, Bryon McMath, II
Brought against a franchisee · American Arbitration Association, Minneapolis, Minnesota · 01-21-0000-1903
“American Dairy Queen Corporation vs. McMath 2 Corporation, Byron G. McMath, Beverly McMath, Bliss McMath, Breana McMath, Bryon McMath, II, American Arbitration Association, Minneapolis, Minnesota, Arbitration No. 01-21-0000-1903.”Page 20 of the 2022 FDD, Item 3
American Dairy Queen Corporation vs. The McMath Company Group, Inc., Byron G. McMath, Beverly McMath, Bliss McMath, Breana McMath, Bryon McMath, II
Brought against a franchisee · American Arbitration Association, Minneapolis, Minnesota · 01-21-0000-1895
“American Dairy Queen Corporation vs. The McMath Company Group, Inc., Byron G. McMath, Beverly McMath, Bliss McMath, Breana McMath, Bryon McMath, II, American Arbitration Association, Minneapolis, Minnesota, Arbitration No. 01-21-0000-1895.”Page 20 of the 2022 FDD, Item 3
American Dairy Queen Corporation vs. Yogikrupa, Inc., Nareshkumar Patel, and Jaiminkumar Patel
Brought against a franchisee · Circuit Court of Madison County, Alabama · 47-CV-2021-900813.00
“American Dairy Queen Corporation vs. Yogikrupa, Inc., Nareshkumar Patel, and Jaiminkumar Patel, Circuit Court of Madison County, Alabama, Case No. 47-CV-2021-900813.00.”Page 20 of the 2022 FDD, Item 3
Parent, affiliates and predecessor
Concluded (1)
Sinil Restaurants, Ltd. v. Dairy Queen Canada, Inc.
settledBrought by a franchisee · Dairy Queen Canada, Inc. (DQC) · filed 2011-09-09 · Court of Queen’s Bench of Alberta, Judicial Centre Calgary · 1101-12453
“Sinil Restaurants, Ltd. v. Dairy Queen Canada, Inc. (Court of Queen’s Bench of Alberta, Judicial Centre Calgary, No. 1101-12453, filed September 9, 2011). Action filed by franchisee against DQC for breach of contract, misrepresentation, breach of fiduciary duty and breach of the Franchises Act, Alberta, RSA 2000, c.F-23 (the “Act”)”Page 18 of the 2022 FDD, Item 3
Outcome:“The parties reached a settlement, effective February 5, 2013, with mutual releases that eliminated the lease administrative fee and the net sales waiver and assignment language from plaintiff’s incentive package, and provided assurances related to renewals of the operating agreement and sublease. The Discontinuance of Claim was filed and the matter was dismissed on March 1, 2013.”
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
What are you signing up for?
Ongoing fees run about 9.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2022 · 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 | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Territory radius | 0.3 mi |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 1 year |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Minneapolis, Minnesota |
| Jury trial waiver | No |
| Governing law | State where authorized location is located |
| Litigation count | 14 |
View Item 3 litigation summary
4 pending cases: (1) subcontractor HVAC payment claim against ADQ; (2) subcontractor roofing payment claim against ADQ; (3) ADQ vs. Wineinger declaratory judgment re: transfer conditions; (4) franchisees vs. ADQ re: territory division and transfer rights. Multiple concluded cases including settlement of sales promotion fee disputes and trademark enforcement actions.
Items 10, 11
Training & Operations
- Classroom training
- 32 hrs
- On-the-job training
- 245 hrs
- Training location
- Approved certified DQ locations (Phases 1 & 2); ADQ franchisee support center in Minneapolis, MN (Phase 3)
- Ongoing training
- Required
- Time to open
- 6 mo
- From signing to launch
- Site selection
- Franchisee with ADQ approval required
- Franchisor financing
- Not offered
- Item 10
- POS system
- ParTech/ParBrink with Restaurant Magic back office
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: ParTech/ParBrink with Restaurant Magic back office
Item 20 · call current owners
Franchisee Contacts
3,292 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a DQ Grill & Chill franchise?
The total investment to open a DQ Grill & Chill franchise ranges from $1.5M – $2.4M, 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 DQ Grill & Chill franchise owners earn?
According to Item 19 of the DQ Grill & Chill FDD, the average gross sales per unit is $1.4M. 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.
Who owns DQ Grill & Chill?
DQ Grill & Chill is franchised by American Dairy Queen Corporation. Its parent company is International Dairy Queen, Inc.. The ultimate parent named in the FDD is Berkshire Hathaway, Inc.. Source: FDD Item 1, 2022 filing.
What is Item 19 in the DQ Grill & Chill 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 DQ Grill & Chill FDD and qualifies whose outlets they describe.
What is DQ Grill & Chill's franchise failure rate?
Based on SBA 7(a) loan data, DQ Grill & Chill has a charge-off rate of 10.7% across 1,190 loans, meaning 10.7% 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 DQ Grill & Chill franchise locations are there?
As of their most recent FDD filing, DQ Grill & Chill has 1,954 total units in the United States, including 1,952 franchised units and 2 company-owned units. 47 new units were opened in the latest reporting year.
Is DQ Grill & Chill a good franchise to buy?
FranchiseVerdict rates DQ Grill & Chill as a B-grade franchise with a verdict score of 64 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.
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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.