Sherman may not be getting its third Dairy Queen after all. Owners of a property located near the intersection of FM 691 and U.S. Highway 75 announced that a Dairy Queen franchisee has terminated an agreement for the development of the new location.

The announcement was made Monday during a meeting of the City Council as representatives were requesting a zoning change related to the project for the property located at 5900 N. U.S. Highway 75.

“We had a contract with a restaurant — Dairy Queen actually — that was signed in August,” co-owner Stanley Blythe said Monday. “We were getting ready for them to start construction, and I got a call on Friday that they decided they wanted to cancel our agreement.”

The request to rezone the property, which is located just south of the Sherman QuikTrip, was approved unanimously by the Planning and Zoning Commission in mid February. Commissioners also approved initial plans for a new Panda Express location near FM 1417 and U.S. Hwy. 75 during the same meeting.

“It was a shock to me about the termination, especially since we went to P&Z and the city council,” Blythe said.

During the meeting Blythe said the proposed location was expected to be a prototype for future development within the company. Blythe said the company did not give a reason as to why they were cancelling plans, but said it might have something to do with the ongoing Coronavirus scare.

“They didn’t give any reasons why they pulled out like they did,” he said. “It could have been something to with the economy, the virus and so forth.”

Despite the setback, Blythe decided to move forward with the zoning change and replat for the site. While Dairy Queen may no longer be interested, he said he has had other interest in the property.

“We’ve had several inquiries about it while we were in contract with Dairy Queen,” he said.

Blythe said he is not committed to the location being developed as a restaurant. Given the location’s proximity to Texoma Medical Center, he said he has received interest from individuals in the medical field. Others were interested in general retail.

If completed, this would have been the third Dairy Queen location open in Sherman following two locations on Sunset Boulevard and E. Lamar Street.