Franchisees Sue Dairy Queen Over Upgrades

A group of some 1,900 franchisees, Dairy Queen Operators' Association , is suing International Dairy Queen (5,677 franchises worldwide) saying that the ice-cream giant is trying to force its owners out of business with future upgrade requirements.

"In 2001, the company [IDQ] shook up many of its smaller franchisees by unveiling the fast-food focused DQ Grill & Chill. Although company execs touted the opportunity to tap into a larger market -- full fast-food meals vs. just treats -- franchisees balked at Grill & Chill's $1.2 million price tag for an initial investment. Converting an existing store would cost $300,000 to $500,000. In response, IDQ said it would launch a treat-centered concept, called DQ TreatWorks, for franchisees who want to stay with the times, but can't or don't want to make a commitment for a Grill & Chill. A new TreatWorks will cost about $700,000 to build, or $450,000 to convert an existing store."

[via Minneapolis-St. Paul Business Journal ]