Executive Insights | February 2012 | By Pamela Parseghian

The Dairy King

COO Jean Champagne is responsible for hitting Dairy Queen’s international expansion goals two years early. 

International Dairy Queen Inc.’s chief operating officer, Jean Champagne, understands his franchisees’ point of view.

He comes from a large extended family of franchisees.

The COO’s Canadian parents ran a store in Niagara Falls, Ontario, for 18 years. His brother owned one in Welland, Ontario, for 13. His aunt and uncle were Dairy Queen franchisees for more than 30 years, and one of his cousins still operates units in Montreal.

If that wasn’t enough, Champagne, who is now 52 years old, spent much of his formative years during the 1970s working for his parents and at his brother’s store.

So it’s not surprising that his father’s words of wisdom that he received after his first big promotion with International Dairy Queen—“Remember where you came from”—are still important to the way he does business today. In fact, as he climbed the corporate ladder, many of his family gatherings began with conversations that involved Dairy Queen issues.

“There was discussion for about two minutes, and then my mother would shut it down,” he says. His mom insisted on keeping family time and DQ matters separate. He used her sage advice, along with much of what his dad taught him, to get where he is today.

Champagne holds one of the top executive positions at International Dairy Queen (IDQ), which includes Dairy Queen and Orange Julius concepts outside of the U.S., including Canada, Asia, and the Middle East. He reports directly to the company’s president and CEO, John Gainor.

Under Champagne’s watch, the global division is expanding ahead of schedule. He and his team plan to open their 500th location in China within the first two months of this year. That’s more than two years ahead of the previously publicized plan. Moreover, IDQ is targeted to expand to 1,000 locations outside of North America in 2012 (currently there are 935 stores), and management has set ambitious long-range goals for the concept after that target is reached.

“Our plan is to double that number” to 2,000 outlets by 2015, Champagne says. And he has a clear vision on how to get there: keeping his operators happy.

“What’s good for the franchisee is good for the franchisor,” he says in a way that makes it clear it’s not his first time proclaiming the strategy. And to ensure operators follow the parameters set by IDQ corporate, Champagne says he works hard to show them positive returns on investment. Demonstrating the numbers in black and white clearly and simply points out how intended goals work for both parties.

Being owned by Berkshire Hathaway Inc. doesn’t hurt either. The internationally known company and its CEO, Warren E. Buffett, who is reportedly the second wealthiest man on the planet, also helped IDQ reach targeted expansion plans ahead of schedule.

“It was a great boost of confidence in our brand,” Champagne says of Berkshire Hathaway’s 1998 acquisition of the quick serve. “And our franchisees were very pleased.”

Champagne works hard to keep his franchisees that way. As a rule, he makes sure to explain how spending money will benefit both the company and franchisees when he approaches operators with new promotional ideas, menu items, or remodeling requests.

“It’s not about telling, it’s about selling,” the COO says. “And it’s about listening.” Nevertheless, convincing people to do something that they don’t want to do is one of the hardest aspects of his job, he admits. But it’s easier to do so when he understands his franchisees’ concerns.

Just like his two-minute discussions at family get-togethers, it’s all about relationships for Champagne.

He points out that effective communication and developing trusted partners is especially important since IDQ competes for investment funds from franchisees around the globe. Those operators often run multiple concepts and only pick the most successful franchisors to work with.

The goal is to “make them love us more than other brands,” Champagne says. “The only way you can do that is by showing them their return on investments.”

His method, and a little of Buffett’s Midwestern charm, seem to be working in China, where the company has experienced strong growth and increasing popularity among consumers.

“We are the No. 1 ice cream brand in China,” Champagne says proudly.

A Chinese press event last year helped solidify that position and tie the Buffett name to the company. While there, Buffett allowed a child to sit on his lap as media captured the sweet image that Champagne says was completely unscripted. Buffett is also known to devour DQ sweet treats in public to encourage consumer confidence.

But the real proof is in the pudding, or in this case the soft-serve ice cream Dairy Queen is best known for.

In fact, Dairy Queen’s frozen sweet is so beloved it was copied by Chinese imitators. Champagne says that at one point he knew of five fake Dairy Queen stores that were operating in China.

“They were stealing our trademarks and recipes and they had done a pretty darn good job,” he says. The Chinese government acted swiftly to shut down the illegal copycats once Champagne’s staff discovered and reported the fake shops. But they had to navigate proper channels to get them shut down, and the process was costly and time consuming.

There’s little companies can do to prevent imitators, Champagne says, but the Chinese government is under a great deal of pressure to protect intellectual property in the country.