Dairy Queen is sweet on Los Angeles.
The 76-year-old Minneapolis ice cream maker is planning on opening 50 to 60 stores in Los Angeles, San Bernardino, Riverside, and Orange counties in the next decade. It would be a significant step up from the brand’s 98 locations in California.
“Those four counties represent one of the most populated areas and probably one of the biggest restaurant markets in the country,” Mike Mettler, director of national franchise sales at American Dairy Queen Corporation, a subsidiary of Berkshire Hathaway, said yesterday. “They really represent one of the biggest growth opportunities for Dairy Queen as a brand.”
The L.A. move is part of Dairy Queen’s nationwide push of its quick-service restaurant concept DQ Grill and Chill, which includes new locations and conversions of existing stores. Started in 2002, the restaurant has a menu with burgers and chicken sandwiches that the company hopes can compete with Jack in the Box and Burger King.
“The cost of real estate has risen and competition in our segment has increased, so it’s important to be in the right location,” said Mettler, adding it must be a stand-alone building able to accommodate a drive-thru. “To get the right location, we need a broad menu so people come more frequently.”
Fifty to 60 percent of a Dairy Queen’s store revenue comes from the drive-thru, said Mettler, although he declined to provide average revenue figures. The company says that those looking to open a franchise need at least $400,000 in equity and almost an acre of land. It is taking its time finding the properties and partners in the area.
“We want to open stores that will be around another 76 years,” he said.
Retail and hospitality reporter Caroline Anderson can be reached at firstname.lastname@example.org. Follow her on Twitter @Caroline_Mander.
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