Yenra : Food : Dairy Queen Franchises : Free Ice Cream Cones at Dairy Queen

Ice Cream Cone

Dairy Queen celebrates the ice cream cone's 100th anniversary, September 22, 2003 by giving out free ice cream cones.

July 9, 2002 - Dairy Queen rolls out franchises for new style restaurant

On her 63rd birthday, the queen is getting a facelift. She'll be spending more of her time uptown, too.

International Dairy Queen, which introduced Americans to "the cone with the curl on top" in 1940, is cautiously rolling out a new restaurant format with more food choices and warm, earth-toned dining rooms where customers can enjoy lingering.

The new restaurants, called DQ Grill and Chill, are a departure from Dairy Queen's image as an ice cream place, and aim at expanding the chain's presence in metropolitan areas. The ultimate goal is a bigger piece of the $115 billion fast-food industry.

"We are moving into larger areas," spokesman Dean Peters said. "Smaller towns (are) where Dairy Queen has and continues to have our roots. But we have opportunities in these other markets and see an opportunity for growth there."

The company, owned by Warren Buffet's Berkshire Hathaway Inc. since 1998, has opened its first two DQ Grill and Chills in Chattanooga, Tenn., and plans to open another in the Rockford, Ill., area in August. Others are planned for the Rio Grande Valley in Texas; Atlanta; Baltimore; Seattle; Kansas City, Missouri; Tampa, Florida; and Minneapolis-St. Paul by the end of next year.

But with its Grill & Chills, Dairy Queen is out to steal market share from McDonald's and Burger King and more upscale sit-down restaurants like Chili's, Applebee's and TGI Friday's, Peters said. It's a bit like a minnow nibbling on a shark.

Dairy Queen has 5,737 stores, including 4,914 in the United States. McDonald's, the world's biggest restaurant company, will have more than 30,000 outlets worldwide by the end of this year.

Dairy Queen had total revenues of $420 million when Berkshire Hathaway bought it. That figure has grown about 2 percent annually since then - on par or slightly ahead of the industry average -to about $450 million last year.

Allan Hickok, an industry analyst for U.S. Bancorp Piper Jaffray, said the Grill & Chill concept probably won't have a big effect on sales for awhile because the company is starting slowly.

"You'd have to develop quite a few of these before it would have a significant impact on the business," Hickok said. "But is there any reason why they can't be successful? I don't know what that would be."

Offerings at the new concept stores include made-to-order flame-grilled hamburgers with a choice of toppings, grilled turkey and Philly steak sandwiches, vegetable quesadillas and breakfast items such as hash browns, eggs, sausage, pancakes and cinnamon rolls baked on site.

At one of the new Grill & Chills in Chattanooga, ice cream was still the bait for Jeffrey Smith, 14, and Jeffrey Mattheiss, 17. But they said they noticed the décor: wooden partitions separating sections of booths and tables that seat a total of about 80 customers, textured tile floors and soft background music. Dairy Queen remodeled one of its restaurants to fit the Grill & Chill concept.

"It's a lot better this way," Smith said, leaning back under an umbrella on the restaurant's patio, after polishing off a Brownie Earthquake. "The facility looks a whole lot nicer."

The Miller family - Janice and Dale and 4 year old twins Brad and Brianna - began eating at the Grill & Chill more when the new format was introduced. The kids like the children's menu and the parents like the expanded main menu, Janice Miller said.

"It's not your typical fast food," Miller said after finishing a grilled sandwich, "but it's still fast."

Miller said her children "love McDonald's because they get toys. They demanded to eat here tonight because they get ice cream."

Howard Waxman, editor and publisher of New York-based Ice Cream Reporter magazine, said the new restaurants might attract customers who want both an upscale sandwich and a good ice cream desert.