Further complicating these matters is the notion that a very large number of Dairy Queen franchises are governed by old, antiquated, and insufficient contracts. Thus, INDQ will see a lot more litigation over their alleged control of the brand, QSR location improvements, and general store operations. Many of these Franchisees operate under agreements originating (and then assigned) as early as the 1940's. These agreements call for "cents per gallon of milk mix" as when the primary business was making and selling an awesome ice cream cone. Modern day agreements are wrapped around transfer fees, signage specifications, brand usage, modernization plans, and even the color of the paint on the restroom walls. Get over yourselves!
It should also be duly noted that the ownership structure of Dairy Queen, including a majority stake by Berkshire Hathaway, is a single point of failure as it relates to reputation risk. What might it be worth in terms of lost good will for a disenfranchised owner to show up at the Berkshire Hathaway Annual Meeting of Shareholders in a clown suit, huge signs displaying discontent, and flyers with cartoons of Warren Buffet counting his huge piles of DQ profits? National networks and the Money Show Pundents will eat that stuff up. Can you see W.B. trying to explain himself away on "In the Money?" Me thinks not!
Lastly, what about another law suit from one of the "little Guys" who was trying hard to do the right thing, feed his family, and leave a legacy for his growing family? Who looks like the schmuck then? Moreover, who wants to eat in a restaurant whose reputation is one of being owned by "da Man" who rules with an iron fist and a massive legal checkbook?
Haven't we seen enough of this bulling in our society, let alone hammering the small business person?
Knock it off, Dairy Queen and get back to the business of making kids happy from the notion of a soft serve ice cream cone with their parents, siblings, and grand parents!
So here's an interesting question to ponder.
At what point is it legal for a large corporation like Dairy Queen to interfere with the vendor relationships of its franchisees? If, for the sake of a simple misunderstanding or even a greater contract dispute, is a Dairy Queen within its legal rights to demand a vendor put a store operator on payment terms? Is there some mysterious clause in one of their antiquated contracts from the 1940's that allows them to demand a supplier to revise credit terms to a store operator?
Where is this all leading to? Does anyone think Warren Buffet would approve of such actions and business practices? Doesn't he visit a Dairy Queen nearly every day to enjoy his Blizzard treat? What if IDQ interfered with that Omaha store owner's credit and he wasn't open one day when W.B. walked down the street for his treat? Do you think someone at corporate would give a thought to that? How about when the old man gives them a ring and grabs a piece of their butts through the phone?
What's it all coming to when the power brokers start to interfere with the store operator? Isn't that a conflict of interest? Isn't that the likes of Dairy Queen wielding the power of becoming or acting like an operator? If so, then they might as well just buy all the stores and operate them as a chain. Maybe that's what they plan to do anyway.
I guess only time will tell....
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.