DQ's Long Journey to Put Food First Pays Off
Few franchise systems have tackled a change as big as Dairy Queen’s, when they realized starting in 2001 their long-term prospects were waning and they needed to overhaul the brand, described Troy Bader, vice president of operations, at a Franchise Business Network event in Minneapolis this week.
That started a journey that became DQ Grill & Chill, which de-emphasizes the “treat” aspect in favor of food. “The business was stagnating because people went out for treats once every five to six weeks,” Bader recalled. “We screamed treats. I love treats—don’t get me wrong. But the opportunity for us was food and moving into the center of the QSR segment.”
Getting franchisees to buy in was crucial but difficult, since so many operators were wedded to the old ways, including staffing to accommodate treat time, not lunch or dinner. Their point of view, Bader explained, was understandable: “Are you now abandoning the heritage that made me incredibly successful and going in a new direction?” was the type of question they asked.
Dairy Queen started by taking the first risk itself, building the first two new prototype stores and operating them for two years. They then put up cash themselves to franchisees, not for an ownership stake but to contribute to the cost of the project.
They also strategically invited franchisees to serve on a special committee around the new concept—with the pioneers, those chomping on the bit to try something new, but also some true critics. “We also needed a couple of resisters,” people who were open to change but asked very tough questions. “If you win them over and they’re known to be critical,” others become convinced quickly.
DQ Grill & Chill is now 50 percent of the system’s locations, Bader said, and they’ve just rolled out an incentive program for remodels. They wanted to get 700 to do it and have had 1,700 sign-ups in the U.S. and Canada. “We’ve set record after record after record with our opening numbers,” he said, thanks to the focus on food.