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As Dairy Queen celebrates its 80th anniversary, we speak with Jim Kerr, vice president of franchise development for U.S. and Canada, about how the consistently cool restaurant brand is continuing to deliver trailblazing results.
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Interview by Kieran McLoone, deputy editor for Global Franchise
Very few brands can claim almost a century of experience backing-up their operations, and even fewer are able to remain consistently popular; especially in the face of changing consumer tastes and trends. After all, when Dairy Queen was founded, a gallon of gas cost 11 cents, and you could buy a house for just under $4,000.
Today, the international ice-cream restaurant brand has grown to more than 7,000 locations in 23 countries, with its first-ever store in Joliet, Illinois being preserved by the city as a designated landmark. The secret to its staying power? An unwavering commitment to the customer.
“Dairy Queen celebrated its 80th birthday this year, and it is a brand that evokes happiness for people worldwide,” says Jim Kerr, executive vice president of franchise development, U.S. and Canada. “Our staying power and strong hot food and cold treat sales are what resonate with the franchise ownership groups we attract.”
Hitting the ground running
Launching in 1940, Dairy Queen unveiled its franchise system three years later, with the goal of becoming a national brand. As we now know, it didn’t take long for this modest goal to be surpassed, and after just 10 years in operation, the brand had a sizable portfolio of 3,000 stores; with international expansion arriving in 1953, and the inaugural opening in Winnipeg, Western Canada.
“The DQ brand easily translates in Canada: feelings of comfort and happiness through food, similar menu flavor profiles, and a passion for giving back to communities where we do business make serving Canadian consumers an easy choice,” says Kerr. “We also have strong fan loyalty with the brand in the U.S. and Canada, and consumer brand recognition is at 95 per cent.”
This exponential growth maintained throughout the 20th century, and in 1970, Dairy Queen was the third-largest fast-food chain in the U.S., with gross sales of approximately $450m. 10 years later, in 1980, the brand had expanded its international presence to nine countries including Barbados, Guatemala, and Japan.
“Establishing a legacy brand takes time, dedication, and the force of a powerhouse team behind you”
Part of this growth was due to Dairy Queen’s honed franchising savvy, but it was also thanks to the introduction of hot menu items that joined the previous cool treats which the brand had become renowned for. In 1961, the introduction of the Brazier program brought savory food items to customers alongside their iced favorites; by the start of the 80s, when Dairy Queen’s footprint numbered several thousand, 40 per cent of stores were selling goods from the Brazier line. It honed in on what got it started in the first place and yet wasn’t afraid to try new ventures and pursue them when they bore fruit – the sign of a truly enduring franchise brand.
The customer is always right
The introduction of Dairy Queen’s Brazier model arguably laid the groundwork for what would become its most successful, primary franchise offering today: DQ Grill & Chill.
Before Grill & Chill, Dairy Queen was seen as a centralized location in a community that consumers gathered around for an evening iced treat. However, with the dawn of a new century, Dairy Queen recognized that this idealistic, picturesque image of friends and family heading to their local ice cream parlor in the evening wasn’t representative of the modern consumer. Customers wanted fast, convenient service at a time and place that suited them.
“Since we announced our DQ Grill & Chill concept in 2002, we have opened more than 2,000 DQ Grill & Chill restaurants,” says Kerr. “What makes our DQ Grill & Chill concepts special is the ability to maintain a consistent revenue stream year-round by selling hot foods and cold treats. Additionally, the modern open-air grill design, separate ‘Grill’ and ‘Chill’ kitchens, comfortable booths, large gathering tables, fun music, and modern outdoor patios all help us create a one-of-a-kind experience for our fans.
“After we perfected the DQ Grill & Chill prototype, we launched incentive programs to entice multi-unit operators who are eager to grow.”
The backing of Dairy Queen’s consistent growth with attractive investment incentives is something that the legacy brand has maintained to this day. Just last year, for example, it launched four simultaneous franchise incentives to bring new multi-unit investors on board. These included financial bonuses up to $30,000 for operators who opened a new DQ Grill & Chill location within 32 weeks of signing up, as well as multi-unit bonuses of $10,000 per opening in the same year.
All of this growth requires seamless back-office support, of course, and that’s something that the brand has worked tirelessly on since the beginning: “We have a dedicated franchise development team that develops systems and processes – analyzing market areas, determining the best locations, and the development of stores – to ensure the success of every restaurant,” says Kerr. “Each franchisee also has a dedicated regional marketing manager and operations business consultant to consult on local store marketing and operational support.”
Blazing a trail with frozen favorites
Despite Dairy Queen just celebrating its 80th anniversary, the international brand is far from finished. Last year, it launched its ‘Happy Tastes Good’ tagline to exemplify its commitment to positive customer experiences, and this year, Dairy Queen has announced plans to add eight new locations to Nevada, and a doubling-down on development efforts in states like California, Tennessee, and New Orleans.
“Establishing a legacy brand takes time, dedication, and the force of a powerhouse team behind you,” says Kerr. “Our success also lies in our franchisees, who create millions of smiles and are committed to their local communities. The collaboration between Dairy Queen, franchisees, and fans, in addition to 80 years of experience, is a winning combination.”
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