Famous ice cream chain Dairy Queen, with 86 years of history, closes 46 units in the country

Franchisees of one of the most traditional ice cream chains in the country, Dairy Queen, have closed several stores since the beginning of 2025. The recent closures add up to dozens of units that have stopped operating in different regions.

The unfavorable economic scenario significantly impacted the restaurant sector over the last year, and ice cream shops were not immune to these difficulties. Rising input prices and consumer sensitivity to menu adjustments have put pressure on business.

To mitigate losses, several ice cream chains were forced to close units that performed below expectations. This measure is a direct reflection of the need for restructuring in the face of persistent financial challenges in the market.

Dairy Queen, a popular brand with 86 years on the market, has already recorded the closure of at least 46 of its stores nationwide since the beginning of 2025. The latest instances of closures were recorded at the end of June 2026. The chain, known for its legacy and classic products, felt the impact of increased operating costs and reduced consumer purchasing power, elements that have forced restaurant owners to adjust prices and rethink strategies in an environment of increasing public sensitivity to values charged.

Dairy Queen franchisees close operations in three Alaska cities

The Dairy Queen franchise in Alaska suddenly closed its doors in Anchorage, Wasilla and Palmer on June 30, 2026. The reasons for the abrupt closures were not publicly detailed, leaving only one operating chain in the state, located in Soldotna.

Dairy Queen representatives confirmed the closures in an email. The official communication only indicated that “the franchise owner” of the aforementioned units decided to close operations, without disclosing the name of the person responsible.

Closing of unit in Montana after almost four decades of operation

Just days before the Alaska closures, a Dairy Queen franchise in Great Falls, Montana, had already closed its doors. The unit, located at 1651 Farm Fox Road, closed its operations on June 13, 2026, after 39 years of service at the location.

Former Great Falls Dairy Queen owner Steve Galloway has revealed plans to open a new dining venture. The new restaurant, called Zesty Eatz, will focus on Mediterranean cuisine, offering dishes such as gyros, rice bowls, pita bread, hummus, grilled meats and salads, and is scheduled to open in June.

“Our goal is to bring something new and exciting to Great Falls,” Galloway said, noting the intention to create an inviting environment. “We want Zesty Eatz to be a place where families, students and professionals can enjoy great food, unique drinks and exceptional customer service in a welcoming environment.”

Dispute with headquarters leads to the closure of dozens of stores in Texas

In February 2025, a Dairy Queen franchisee in Texas closed 30 stores. The closures were the result of a disagreement with the parent company, which extended, leading to the closure of another 12 units in March of the same year, totaling 42 affected stores.

American Dairy Queen has revoked franchises from the Project Lonestar group due to failure to comply with store renovation requirements. This measure prevented units from being able to purchase supplies directly from headquarters, forcing them to stop working.

A Dairy Queen spokesperson commented on the closures, stating, “These closures are related to closures that occurred last month by the same franchisee.” The representative added that “The closings are an isolated event and we refrain from publicly disclosing the terms of the contract.”

The resolution of the dispute also prevented Lonestar from selling its franchises, which resulted in it being forced to close Dairy Queen locations under its operation. Minneapolis-based International Dairy Queen Inc., which serves as the parent company of American Dairy Queen Corporation and Dairy Queen Canada Inc., is responsible for developing, licensing and supporting a global network of 7,800 restaurants in 20 countries. The company is part of the Berkshire Hathaway Inc. conglomerate.

Dairy Queen franchisees that closed their stores did not file for bankruptcy protection, an indication that the closures were the result of strategic decisions or contractual disputes rather than widespread insolvency.

Dairy Queen opened its first store in 1940, in Joliet, Illinois, and expanded its portfolio with malts and milkshakes in 1949. The famous Blizzard, one of the brand’s most popular products, was launched in 1985. The company, which has 86 years of history, expanded its operations even further by acquiring the Orange Julius brand in 1988.

Ice cream sector faces financial difficulties and bankruptcy cases

While Dairy Queen’s closures did not lead to bankruptcy filings, other ice cream chains and their franchisees have faced this situation. M&M Custard LLC, for example, which operated franchises of Freddy’s Frozen Custard & Steakburgers, filed for Chapter 11 bankruptcy protection on November 14, 2025. The move, which included 31 affiliated companies, was aimed at reorganizing the business and restructuring debt.

Based in Overland Park, Kansas, M&M Custard LLC has filed for bankruptcy in the U.S. Bankruptcy Court for the District of Kansas. The documents indicated liabilities of $27.7 million against assets of $5.2 million.

Despite the challenges and bankruptcy filings observed in the sector, there was growth of 5.8%, totaling US$7.4 billion, in the five years leading up to 2025. In 2025 alone, the ice cream parlor sector recorded growth of 0.9%, according to data from IBISWorld.

However, the US Bureau of Labor Statistics pointed out that prices for meals away from home increased by 3.5% in the 12 months ending in May 2026. This increase has forced many restaurant owners to raise menu prices, in a context where consumers are increasingly sensitive to values.

James O’Reilly, an experienced food industry executive with more than 15 years of experience in restaurant marketing, told FSR magazine that low- and middle-income families are under financial pressure. He highlighted that this is true despite the broader economic improvements that have been observed.

“In favorable economic environments, price increases have historically been tolerated by restaurant customers. In recent years, this has become much more difficult,” explained O’Reilly, highlighting the shift in consumer behavior and the business landscape.

Dairy Queen Closing Locations

• Anchorage, Alaska, June 30, 2026.
• Wasilla, Alaska, June 30, 2026.
• Palmer, Alaska, June 30, 2026.
• Great Falls, Montana, June 13, 2026.
• 42 units in Texas, between February and March 2026.