Restaurant chain – Dairy Queen eyes Westchester for New York expansion

Dairy Queen, the international soft-serve ice cream and fast- food restaurant chain, is looking to add up to 100 locations in New York over the next 10 years in an expansion expected to mark DQ’s debut in Westchester County.

The Minneapolis company, owned by Warren Buffet’s Berkshire Hathaway Inc., is looking for franchisees to bring its Blizzard sundaes and cheeseburgers into the Westchester market.

While Dairy Queen is not now a presence in the county, it has established itself in the surrounding area. The chain has locations in Manhattan, the Bronx and New Jersey and in Orange and Dutchess counties in the Hudson Valley. Dairy Queen also operates in Connecticut’s Fairfield County, with locations in Stamford, Monroe, Bridgeport and Stratford.

It may be best known for its ice cream, but the company is looking to grow its Grill & Chill model in Westchester. Dairy Queen launched the concept in 2002. Beyond the soft-serve ice cream that Dairy Queen originally offered, the locations carry a variety of burgers and chicken sandwiches.

Jim Kerr, vice president of franchise development for Dairy Queen, said the company generally looks for experienced operators to franchise its locations. Franchise owners are required to have $400,000 in equity for a single store and approximately $2 million in equity to open multiple stores. The investment for a franchise buyer ranges from $1.07 million to $1.83 million before the cost of leasing or purchasing land, according to Dairy Queen.
“Ideally, we love to see multiunit-capable franchisees,” Kerr said. “A group that already operates a brand that wants to diversify in an area, or just individuals with strong business skills with access to capital.”

Kerr said the Grill & Chill concept is an attractive model for franchisees, as it can attract customers for lunch, dinner or snacks. Dairy Queen last year launched 84 new Grill & Chill locations and converted more than 200 regular DQ locations and expects to open another 85 this year, he said. A total of 1,560 Grill & Chill locations have opened in 42 states.

Kerr said the company uses analytics to find locations that would work best to draw customers to Dairy Queen. The formula showed multiples areas in Westchester that could work, Kerr said, including White Plains, Yonkers, Greenburgh and Port Chester.

Dairy Queen wants to give customers a drive-through option, so standalone buildings are preferred to locations in shopping plazas or malls, Kerr said. Exceptions can be made for denser areas, he added, citing a Manhattan location that consists of only a storefront. The average DQ Grill & Chill restaurant has about 2,600 square feet of space with capacity for 72 seats, according to the company.

The first Dairy Queen opened in 1940 in Joliet, Illinois, and the company still operates most heavily in the Midwest. But Kerr said Dairy Queen has pushed into the southeast, Texas and California, along with its growth in New York in Rochester, Syracuse, Albany and Long Island.

August is a good month to be talking New York expansion, Kerr said. The DQ Blizzard of the Month right now is a Royal New York Cheesecake.

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