Dairy Queen, one of the world’s largest quick-service restaurant chains and an iconic franchise brand owned by International Dairy Queen (IDQ), is facing a wave of franchisee-led restaurant closures across the United States. However, the shutdowns remain isolated to individual operators and come as the company continues to accelerate franchise development and international expansion.
Founded in 1940 and acquired by Berkshire Hathaway in 1998, Dairy Queen today operates more than 7,700 restaurants in over 20 countries, with nearly all locations owned and operated by independent franchisees. While around 46 US franchised restaurants have closed during 2025, the closures represent well under 1% of the brand’s global footprint, underscoring that they are franchisee-specific rather than part of a broader corporate downsizing. The company is simultaneously pursuing an ambitious target of US$10 billion in global system sales by 2030, up from approximately US$6.4 billion in 2024.
The latest closures occurred in Alaska, where Dairy Queen restaurants in Anchorage, Wasilla and Palmer permanently ceased operations at the end of June, leaving the Soldotna outlet as the state’s only remaining Dairy Queen restaurant.
Alaska Franchise Exits Surprise Customers
The three Alaska restaurants reportedly closed without prior public notice, disappointing loyal customers and local communities.
According to local reports, Pete Ischi, owner of the Soldotna Dairy Queen, declined an opportunity to acquire the closed restaurants, citing the operational complexity of managing multiple locations across Alaska’s vast geography.
Meanwhile, Greg Todd, who opened the Anchorage Dairy Queen in 2017, reflected on the restaurant’s success during its early years, noting that it had received overwhelming community support following its launch.
The closures have been attributed to local franchise operating decisions rather than directives from Dairy Queen’s corporate headquarters.
Texas Accounted for the Largest Closures
Before the Alaska shutdowns, the biggest wave of Dairy Queen closures occurred in Texas, where franchise operator Project Lonestar permanently closed 37 restaurants earlier this year.
The closures followed financial and franchise agreement disputes involving the operator. Reports indicate the franchisee later sought a buyer for the affected restaurants, but the proposed sale did not move forward.
Industry experts note that such situations are not uncommon in franchising, where individual operators are responsible for restaurant performance, lease obligations, staffing and local financial management. Consequently, franchisee failures do not necessarily reflect the health of the franchisor or the wider brand.
Dairy Queen Continues Investing in Franchise Growth
Despite the recent closures, Dairy Queen has continued expanding its franchise network and investing in restaurant innovation.
Earlier this year, in May, International Dairy Queen introduced a new franchise incentive program offering up to US$150,000 for qualifying DQ Grill & Chill developments in the US and Canada, with higher incentives for multi-unit operators, reinforcing the brand’s commitment to franchise expansion.
Announcing the initiative, Gregg Benvenuto, Vice President of Franchise Development for the US and Canada at International Dairy Queen, said: “This initiative is designed to support franchisees who are ready to grow with the brand and have a solid development strategy in place.”
Internationally, Dairy Queen has also expanded its development strategy, signing agreements for 187 new restaurants across Hong Kong, Macau, Taiwan and Qatar, alongside a recent 20-unit development agreement in Puerto Rico, reflecting continued confidence in the brand’s long-term growth.
Investing in Technology Alongside Expansion
Alongside restaurant development, Dairy Queen is accelerating its digital transformation strategy.
The company has expanded its partnership with Presto to deploy AI-powered drive-thru voice ordering technology to franchisees following successful pilot programmes. It also recently appointed former Shake Shack executive Phil Crawford as Chief Technology Officer to lead digital innovation and technology across the franchise system.
These investments form part of Dairy Queen’s broader strategy to improve operational efficiency, enhance customer experience and support franchise profitability.
Customers Encouraged to Verify Local Restaurant Status
The recent franchise closures have generated confusion among customers in affected communities. However, Dairy Queen has not announced any nationwide store reduction programme, and customers are encouraged to check the brand’s official restaurant locator before visiting locations where ownership changes may have occurred.
For franchise industry observers, the recent closures illustrate the distinction between franchisee performance and brand performance. While individual operators may exit due to local financial pressures, lease challenges or operational issues, Dairy Queen continues to grow its global franchise network, recruit new operators and invest in technology, restaurant development and international expansion.
With more than 7,700 restaurants worldwide, an expanding international pipeline and a long-term US$10 billion system sales ambition, Dairy Queen’s global growth story remains firmly intact despite isolated franchisee closures in parts of the United States.
