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Dairy Queen Observation

jaykla

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So I was driving around yesterday and my wife saw a dairy queen and naturally she wanted a blizzard. We pulled into the parking lot, went inside and glanced at the menu. Lots of ice cream and dessert choices. We both ordered our treats, sat down and enjoyed. The place was moderately busy and I was looking at the menu and saw that they also served burgers, fries and hot dogs. I look around and NO ONE is eating anything but ice cream. I walked up to the guy working behind the counter and ask him if anyone ever orders anything but ice cream. He tells me very rarely someone orders one of the "other items."
That got me thinking about doing one thing and executing it very well. Why would you go to a place that has the word "dairy" in it and order fast food? That's like going to the finest steakhouse and ordering tofu. It doesn't make sense.
Are they negatively affected by offering the food items? Probably not. Would they benefit from removing those items and offering more dessert options. Possibly.
I know this isn't a mind-blowing observation but I'm excited that I'm beginning to see things differently and hopefully make the right decisions when it comes time to execute my own ideas.
 
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FDJustin

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Fair warning, everything I'm about to post is just stream of consciousness and isn't intended to answer the question. It may not even properly evaluate the situation :p

That brings us to more questions of why. Why are they putting that much effort into having the food items and spending millions on advertising them (There seems to be a run of advertisement for actual food one or two seasons in the year), and even make combo deals if it isn't getting many orders?

Well, let's see. Out of ice cream selections, there's probably really only two or three that are all that popular. The blizzard, cone, and sundae, right? Well, everywhere else has their own version of ice cream cups (blizzards), probably cones and maybe sundaes. Is that relevant? Maybe.

If it's relevant, why? Well... Is the idea of dessert dead among fast-food eaters? If not, then there might be a mentality of "I could go from place to place to get my food then ice cream, or I could just go to McDonalds and get a flurry with/after my burger."
But is this a likely thought? Hrm... Maybe, if you have four kids and you're hauling around four kids you don't want to cook for, and feel spoiling them with ice cream and fast food is the way to go.

Are you familiar with the paradox of choice? There's something around that talks about the problem with choice; when you have too many, you often decide on none. With three choices (Cup, Sundae, Cone) you would either naturally gravitate towards the middle priced one, or just get your preference. With 30 choices you'll stand in line for a minute, go 'Gee, I need to think about this.' get out of line, go for a drive to 'think about this' then not bother coming back. Turns out, you're happy with a cone from your 7-11's freezer.

So what happens if you break up the types of choices? I don't honestly know, but I would guess you have a better chance of getting someone to make two choices. To get a sundae and a blizzard would be nigh unto blasphemy. People would look at you like you were the worlds most hopeless glutton. You would think about all those preachy critics that cry at you for enjoying your 2200kcal's a day and think, "Gee... Maybe I really am evil for having too much while people go without."
But you could get one of those and and a burger without any such pressure, internal or external. (Well, there might be internal pressure of another kind if you're lactose intolerant or something.)

And I think my final idea on 'why' is, maybe that's their way of attracting new customers. It might just be that they aren't really looking to make profit with food directly, but instead to use it as a lure to attract people who might not bother coming into the store anyway. So they think "Well, since I'm in a DQ anyway, I really should try some of their ice cream... I don't want to look like a putz."

Yes, that must be it. I'm onto you, DQ! I know your food is a gateway drug for your sugary soft serve!
 

CommonCents

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Their burgers suck IMHO. Years (decade or two) ago they were awesome, fresh patties on an open flame grill.
 

MJ DeMarco

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Well I can guarantee you that there is a financial reasoning behind this ... maybe the burger and fries are a "loss leader" or some other reasoning backed by data. Dairy Queen is a big franchise and I'm pretty sure nothing is done without research and statistical data to back-up the menu offering.

Maybe AJGlobal can ask his buddy the reasoning behind this as he used to own a DQ franchise ...
 
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Russ H

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Had a friend who owned a DQ . . .

In some parts of the US, DQs have been in locations 10-20 *years* before Mikkie Ds.

Turns out they're in some pretty good spots, for a fast food restaurant.

Adding the burgers/things to the menu, back then, was a way of capitalizing on their great locations (and helping owners in the 70s, 80s, 90s deal w/decreasing revenues as more and more people went to places like Taco Bell and McDs.

Nowadays, you can get a Subway franchise for a $15K franchise fee. You can open a frozen yogurt franchise (cost of *everything*) for as little as $10-15K.

So DQ has some real competition these days.

Not so back in the 60s, when they were pretty much the only ice cream place around besides mom and pop owned ice-cream parlors (at least in the midwest).

I'd love to hear Global's answer, too. The above info is just from talks w/my friend-- and that was ages ago!

-Russ H.

PS I just looked it up. Turns out DQ started selling burgers in the 50s: Dairy Queen Franchise Information.
 

gotbalz

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We had a DQ in Upstate NY for a while. It only lasted about 4 years and It was turned in to a bank. Too cold up here for ice cream all year long! Actually that was why I thought they had burgers and dogs there was to bring in customers in the cold months. All the mom and pop ice cream shops close down in the winter.
 

Icy

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We had a DQ in Upstate NY for a while. It only lasted about 4 years and It was turned in to a bank. Too cold up here for ice cream all year long! Actually that was why I thought they had burgers and dogs there was to bring in customers in the cold months. All the mom and pop ice cream shops close down in the winter.

Dude, where do you live in Upstate? PM me if you want. I live in a small town, and we had a DQ, and now a bank is there...
 
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jaykla

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Thanks for all the great responses! When I look at successful business models (at least food establishments) it seems like the most successful tend to be the ones with the simplest menu choices. Take for example, In-N-Out. The menu is as simple as it gets: burgers, fries, drink, shake. That's it. And you can bet there will be a line there anytime you go. There is a big rage here in LA for gourmet food trucks using twitter to relay their location. I've been to most of them and the main truck "Kogi" has a simple menu as well (taco, burrito or quesadilla). I think the paradox of choice is a HUGE factor whether it's fast food, consumables or services. In essence it comes down to the "specialist" mentality. Do one thing and do it well. People seem to gravitate towards those businesses that do one thing great rather than the "jack-of-all trades" establishments. Now I know this is not absolute but I do see it quite frequently.
Now time to go get me a double-double!
 

AJGlobal

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Well I can guarantee you that there is a financial reasoning behind this ... maybe the burger and fries are a "loss leader" or some other reasoning backed by data. Dairy Queen is a big franchise and I'm pretty sure nothing is done without research and statistical data to back-up the menu offering.

Maybe AJGlobal can ask his buddy the reasoning behind this as he used to own a DQ franchise ...

I never got into the details of the menu with him but I was engaged in day to day conversation with him when he owned it and I can tell you that it made money. So much that before he moved to L.A. he was about to buy another one in the north valley. Unfortunately there was a fire and the entire business was lost. Luckily no one was hurt and the building was leased and insurance covered everything. At the same time that this all happened, him and his wife had an opportunity in L.A. so they picked up and left to start this.......d pet hotels. Dpethotels.com
I'm not trying to plug his biz as he doesn't need it by any means, but if you want to see a fastlane biz in action take a peak.

Back on point. I will ask him and see what he says. We stay in contact and speak a couple times a week.
 

FDJustin

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I keep forgetting to mention an observation.

My local DQ got a new paintjob, and the sign says Dairy Queen Resteraunt. Is that resteraunt new? I would have never noticed the extra word if it weren't for this post, but I couldn't miss the white turning beige and the cheery sign darkening, with a dark brown background.
 
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AJGlobal

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So I spoke to my buddy today that owned the DQ here and he in fact said almost all of his revenue was from ice cream sales and that the other items on the menu were to get people in the door and it is part of their marketing plan. How they came up with it, I don't know. If I had to speculate I would say that kids always want ice cream but parents don't. If there is other items besides ice cream to order and eat then everyone wins and DQ grabs both the ice cream revenue and a little bit of food revenue as well. I know he was required to go to a 3 week deal somewhere for training before his purchase would go through so I'm guessing they shared some of that info with him but how much I don't know.
 

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