International Dairy Queen Inc. has completed plans to sell 58 of its 60 remaining corporate restaurants in a deal with franchisee Fourteen Foods.
Terms of the deal were not disclosed.
IDQ chief development and legal officer Troy Bader said Tuesday in an interview with Nation’s Restaurant News that prior to the Fourteen Foods transaction the company had sold 12 Grill & Chill restaurants to 12 individual joint-venture partners in Kentucky.
The combined divestitures leave Edina, Minn.-based Dairy Queen with just two corporate restaurants, one in Minnesota and one in Kentucky.
Referring to IDQ’s newly streamlined portfolio of company restaurants, Bader said, “Our current strategy is to focus our resources on what we believe we do best, which is developing and implementing programs that enhance the growth and profitability of our franchised locations.”
He said the system’s franchisees “overall have been quite supportive” of the move.
Prior to the transaction, Minneapolis-based Fourteen Foods operated about 55 Dairy Queen restaurants in Iowa, Minnesota, Nebraska, South Dakota and Wisconsin.
Officials of Fourteen Foods were unavailable to comment about the deal, which involved 52 Kentucky restaurants and six Indiana units.
The move by IDQ is in keeping with those by a number of foodservice franchisors looking to cut expenses by significantly reducing their corporate restaurant bases through refranchising, including Applebee's parent company DineEquity Inc., Jamba Inc. and Jack in the Box Inc.
IDQ officials acknowledged last November that the company’s efforts to close a deal with an unnamed buyer had been slowed by the tight credit markets in a post-recession environment.
For the fiscal year ended in late December, Dairy Queen reported U.S. systemwide sales of $2.66 billion, up 0.8 percent from the prior year. The chain’s average unit volume rose 1.5-percent in 2010, to $587,600, according to Nation’s Restaurant News research.
IDQ said it ended the fiscal year with 4,514 Dairy Queen restaurants, including 4,453 franchised and 62 company restaurants in the United States.
Contact Alan J. Liddle at [email protected]