What is in this article?:
- Frozen-treat chains prepare to serve pent-up demand
- Rita's springs into action
Executives from Dairy Queen and Rita’s Italian Ice discuss growth plans as winter begins to thaw.
Dairy Queen will open its first Manhtattan location this spring
Much has been made of the negative effect severe winter weather has had on sales and traffic at quick-service restaurants this year, but chains like Dairy Queen and Rita’s Italian Ice are focusing on the other side of that equation as they prepare ambitious plans for growth and menu development for the spring and summer.
“It will be nice to kick off the season serving a lot of pent-up demand,” said Troy Bader, chief operating officer of Minneapolis-based Dairy Queen. “Consumers get very anxious to get their lives back to a greater sense of normalcy, and that’s important to the whole category, not just our brand.”
Jeff Moody, chief executive of Rita’s Italian Ice, agreed that most quick-service brands, especially treat-focused chains like his, should be ready to serve guests anxious to return to their dining-out habits once the long winter finally ends.
“Bad weather is our enemy, but cabin fever is our friend,” he said. “When we get a clear day, even if the temperature is 10 degrees below average, people are sick of winter and are coming to us.”
The executives spoke with Nation’s Restaurant News about their plans to fire up new development as winter thaws and gives way to their peak-demand seasons.
Dairy Queen takes Manhattan
Bader conceded that a winter as tough as this one affected Dairy Queen, known for its Blizzard and other frozen treats. But he said the brand of about 4,500 locations in the United States and Canada outperformed its industry peers in January and February, “and the reason was food.”
Further diversifying the chain’s menu last year with Orange Julius fruit smoothies and Dairy Queen’s $5 Buck Lunch combo helped Dairy Queen have “a strong year” at its “Grill and Chill” locations, which make up two-thirds of the domestic system, he said. Dairy Queen opened 87 new locations in the United States and Canada last year.
The next domestic opening set for this spring will be a major milestone for Dairy Queen: the brand’s first restaurant in Manhattan, to open on 14th Street, a few blocks west of Union Square.
“This is very different for Dairy Queen than how we’ve developed for 74 years, which is one of the reasons we wanted to be cautious,” Bader said. “You have to have the right franchisee, and we’ve had opportunities in New York City in the past, but those operators weren’t aligned with our prospects for development.”
The operator for the Manhattan location, LSQ Foods, has signed a multiunit agreement for DQ Grill and Chill locations — not treat-only stores, which interested franchisees had pitched the company before — throughout the island.
The new site in Manhattan will have some new challenges Dairy Queen has not yet encountered in its typical store design, Bader said. For one, the in-line restaurant has no drive-thru, and it is the first Dairy Queen unit to have two stories. The chain had to change the design of its queue line before the cash register to maximize through-put in a more limited space.
The franchisees will test limited table service, where food is run to the upstairs dining area after guests order at the counter and find a seat.
“We’ll see how well it works over time,” Bader said, “but there are some unique opportunities for service that the franchisees are excited about.”
The brand opened locations last year on Long Island and in the Staten Island Ferry Terminal. New markets around New York planned for this year include Queens, as well as Rochester and Syracuse upstate.
“I like the heritage we have with 74 years, and the national ads we have make a big difference,” Bader said. “It wouldn’t be possible to advertise that way and develop quickly in New York City with only a handful of locations in the area. It’s been an incredibly important advantage in that market.”