One Of America's Most Popular Ice Cream Chains Is Closing More Stores And The Reason Is Surprising

There's no question that it's been tough few years for those in the restaurant business. As if shutdowns during the COVID-19 pandemic weren't challenging enough, restaurant operators then faced inflation and increasing costs for both labor and food. Plus, depending on the source, anywhere from 30% to 60% of all newly opened restaurants don't survive past their first birthday. 

However, well-established national chain restaurants aren't exempt from the carnage, either. A wave of recent store closings and bankruptcies has hit the likes of Red Lobster, Denny's, and TGI Fridays, to name a few. What's more, fast-food staple Wendy's announced the closure of 140 of its U.S. locations. With that in mind, it's hardly shocking that the frozen treat purveyor Dairy Queen is also losing locations, primarily in the state of Texas. That said, Blizzard fans will be glad to know that Dairy Queen's troubles in the lone star state are specific to a single franchise owner and not indicative of larger trouble within the brand itself — which is owned by billionaire investor Warren Buffett and his Berkshire Hathaway conglomerate.

In an early April announcement, Dairy Queen confirmed that 12 locations in Texas had closed. This was on top of an additional 25 Texas stores which closed in February 2025, for a total of 37 closures in less than two months. The single owner of these franchise locations is known as Project Lonestar or Lone Star DQ. After being pressed for offer a reason for this most recent round of closures, a Dairy Queen spokesperson told The Mirror, "You asked for a business reason for the closures and we do not publicly comment on contract terms." Similarly, the reason for the 25 locations closing in February was also not publicly disclosed.

However, court documents, obtained by local news outlet KETK, seem to indicate that the Dairy Queen parent company demanded that the franchise locations undergo remodeling or the operator, Project Lonestar, would lose its franchising rights. Rather than undertaking presumably expensive construction and redecorating costs, Project Lonestar opted to sell its more than three dozen stores instead. Although a buyer was found in late-2024, Dairy Queen would not approve the transfer of ownership. While fast food fast food franchise owners can make a surprising amount of money, this particular seller was reportedly behind on royalty payments for its franchising rights. Ultimately, the buyer appeared to lose interest and dropped out of contention.

When the February closures happened, the contents of the doomed locations were sold to highest bidders at LocalAuctions.com. Some of the equipment being sold included tables, grills, freezers, and even the machines that make the brand's signature Blizzard ice cream dessert. The auctioneer's website indicated that buyers themselves were fully responsible for removing and transporting their prizes away from the shuttered buildings. Dairy Queen superfans will be disappointed, though, because all brand signage must be removed from any sold fixtures. It remains to be seen if a similar auction will occur for the contents of the 12 recently closed locations.

Even after these affected stores are closed, Texas will still have more Dairy Queen locations than any other state of the country. While some neighborhoods lament losing their most convenient source for ice cream and char-grilled hamburgers — some of which have been operating for more than 50 years — there are still more than 500 Dairy Queen locations in Texas. That represents about 13% of the total number of Dairy Queen locations in the entire United States.