DQ Grill & Chill
Formerly known as Dairy Queen
Bottom line
- Total investment $1.5M – $2.4M including a $45K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $1.4M/year (median $1.4M).
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 1750 loans (below the industry average).
- 14 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one DQ Grill & Chill unit return on the cash you put in?
Unlevered ROIC · per unit
9%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 DQ Grill & Chill units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.7M
on $8.6M purchase
Total debt
$6.9M
SBA $4.3M + senior + seller note
Overview
About
Franchisees operate a hybrid quick-service restaurant combining Dairy Queen's food menu (burgers, hot dogs, sandwiches) with grill-focused offerings and Blizzard/frozen treats. Day-to-day operations include food preparation, staff management, inventory control, equipment maintenance, customer service, and local marketing to drive the $1.4M average annual revenue.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 31 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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.
Score breakdown · what drove the 52 / 100 rating
- 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
- 06HIGHGoing Concern status is FALSE — requires clarification on franchisor's financial stability and support infrastructure
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
83 numbers
One-time purchase · CSV download · Validation questions included
FDD download
DQ Grill & Chill · FDD (2022) PDF