Dairy Queen has closed at least 46 locations across the United States since early 2025, marking a significant contraction for the 86-year-old ice cream chain, with the most recent closings occurring in late June 2026 in Alaska.
A Dairy Queen franchisee abruptly closed three restaurant locations in Anchorage, Wasilla, and Palmer, Alaska, on June 30, 2026, according to the Anchorage Daily News. The closures leave just one Dairy Queen remaining in the state, located in Soldotna, Alaska.
The Alaska closings came days after a Great Falls, Montana, franchisee closed its restaurant on June 13, 2026, after operating for 39 years at the location, according to KRTV3. The former owner plans to open a Mediterranean cuisine restaurant in its place.
Texas Dispute Drives Majority of Closures
The bulk of the 46 closures stem from a legal dispute between Dairy Queen corporate and Project Lonestar, a Texas-based franchisee. In February 2025, Project Lonestar abruptly shut down 30 locations across Texas over disagreements with the parent company regarding remodeling requirements and royalty payments. The franchisee then closed 12 additional locations in March 2025, according to the Austin American-Statesman.
American Dairy Queen Corporation pulled the franchises from Project Lonestar after the company failed to remodel its locations to corporate standards. Once the franchises were terminated, those locations could no longer order supplies from the parent corporation and were forced to shut down, according to reporting from the Chron. The dispute prevented Lonestar from selling its franchise locations, which left the franchisee with no option but to close the restaurants.
Project Lonestar sued Dairy Queen in February 2025, alleging the corporation caused $4 million in damages related to the dispute. A Dairy Queen spokesperson said the closures were “an isolated event” and refrained from publicly sharing contract terms.
Minneapolis-based International Dairy Queen Inc., the parent company of American Dairy Queen Corporation and Dairy Queen Canada Inc., operates a system of 7,800 restaurants across 20 countries. The company is a wholly owned subsidiary of Berkshire Hathaway Inc., acquired in 1998 for $585 million.
The closures reflect broader challenges facing the restaurant industry in 2025 and 2026. Rising costs, labor pressures, and shifting consumer spending patterns have forced many chains to reassess their footprint. The ice cream shop sector has not been immune; despite the Dairy Queen closures, the industry grew by 5.8% to $7.4 billion in the five years through 2025, according to IBISWorld. However, prices for food away from home rose 3.5% in the 12 months ending May 2026, according to the U.S. Bureau of Labor Statistics, making consumers increasingly price-sensitive.
James O’Reilly, a food industry executive with more than 15 years of restaurant marketing experience, told FSR Magazine that middle- and lower-income households are facing financial pressure despite broader economic improvements. “In strong economic environments, price increases have historically been tolerated by restaurant guests. Over the past few years, that’s become far more difficult,” O’Reilly said.
Sources
- TheStreet — Confirmed 46 total closures since early 2025, including Alaska closures on June 30, 2026, and Montana closure on June 13, 2026; reported Dairy Queen ownership by Berkshire Hathaway and industry context on pricing and consumer sensitivity.
- Anchorage Daily News — Reported three Alaska locations closed June 30, 2026, leaving one DQ in Soldotna; quoted Dairy Queen official on the closures.
- KRTV3 — Reported Great Falls, Montana, location closed June 13, 2026, after 39 years; quoted former owner on new restaurant plans.
- Austin American-Statesman — Reported 12 additional Texas closures in March 2025 following 30 closures in February; provided context on the dispute and franchise termination.
- Chron — Explained how supply cutoff forced closures after franchise termination; reported 37 total Texas closures in 10 weeks.
- Yahoo Finance — Confirmed Project Lonestar sued for $4 million in damages; reported February 2025 closures and March 2025 follow-up closures.
- IBISWorld — Reported ice cream industry grew 5.8% to $7.4 billion in five years through 2025; noted 0.9% growth in 2025 alone.
- U.S. Bureau of Labor Statistics — Reported food away from home prices rose 3.5% in 12 months ending May 2026.
- FSR Magazine — Quoted James O’Reilly on price sensitivity among middle- and lower-income households.
