Freddy’s Frozen Custard & Steakburgers Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Freddy's is a fast-casual franchise serving cooked-to-order steakburgers, shoestring fries, and hand-churned frozen custard. Franchisees run restaurants with counter and drive-thru service, managing food prep, custard, and staffing.
FranchiseVerdict summary · 2026
A Freddy’s Frozen Custard & Steakburgers franchise requires a total initial investment of $786K – $2.8M, including a $35K franchise fee. Per the 2025 FDD, average unit revenue was $1.9M[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $786K – $2.8M
- 91st pct Service Resta…
- Avg gross sales
- $1.9M
- 41st pct Service Resta…
- Royalty
- N/A
- Units
- 550
- 84th pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- Total investment $786K – $2.8M including a $35K franchise fee.
- Average unit revenue of $1.9M/year (median $1.8M).
- Verdict A (Strongest tier), verdict score 80/100 (higher is better).
- System growing at 20.4% CAGR over 3 years with 550 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Freddy's, L.L.C.
- Parent company
- Freddy's Acquisition Intermediate, Inc.
- Ultimate parent
- Freddy's Acquisition Holdings, Inc.
- CEO title
- Chief Executive Officer and President
- M. Chris Dull
- Incorporated in
- KS
- HQ
- 3020 N. Cypress Street, Suite 200, Wichita, Kansas 67226
- Auditor
- KPMG LLP
- Audited financials
- Franchisor revenue
- $138.4M
- vs $128.6M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
- CEO
- M. Chris Dull
- Headquarters
- KS
- Founded
- 2003
- FDD year
- 2025
- States available
- 36
Can you afford it, and what does the money buy?
Entry cost runs 179% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| License Fee | $35K | $35K | |
| Training Costs and Expenses (Travel, Meals, Lodging, and Employee Wages) | $10K | $60K | |
| Construction, Remodeling, and Leasehold Improvements | $270K | $1.8M | |
| Real Property Rent (one month) | $6K | $16K | |
| Security Deposit | $6K | $16K | |
| Computer, Point of Sale Equipment, Outdoor Ordering System and Software, Security Cameras, Drive Thru Headsets | $30K | $99K | |
| Equipment, Furniture, Fixtures and Decor | $350K | $500K | |
| Building Signage / Interior Neon / LED Border | $12K | $115K | |
| Miscellaneous Opening Costs | $8K | $15K | |
| Opening Inventory and Supplies | $10K | $25K | |
| Insurance | $2K | $8K | |
| Grand Opening Advertising | $3K | $5K | |
| Additional Funds - 3 months | $20K | $60K | |
| Total initial investment | $761K | $2.8M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $786K – $2.8M
- Bottom third — review vs category
- Liquid capital req'd
- $20K – $60K
- Middle of category vs category
- Franchise fee
- $35K – $35K
- Middle of category vs category
- Royalty
- 4.5% of all Gross Receipts for License Agreements signed …
- Ad fund
- 1.5%
- typical 3–5%
- Total fee load
- 6.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Marketing / ad fund | 1.5% of gross sales |
| Technology fee | $100 |
| Transfer fee | $5K |
| Inventory (initial) | $10K – $25K |
| Total fee load | 6.0% of rev |
A 6.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 69% above the quick-service restaurants norm.
Source: FDD 2025 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$270K
14.5% margin
Unlevered ROIC
15%
EBITDA / total invested capital
Payback
6.7 yrs
cash-on-cash, unlevered
Financial Performance
- Avg gross sales
- $1.9M
- Per unit, per year
- Median gross sales
- $1.8M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross_sales
- Sample size
- 496 units
- vs category median 28 · large
- Range (low → high)
- $766K→$4.3M
- Cohort dispersion (min → max)
- Quartile band
- $1.2M→$2.6M
- Bottom 25% → top 25%
- Transparency tier
- limited
- Categorical assessment of disclosure depth
- Transparency
- 7 / 10
- vs category median 3 / 10 · above
Compared against 485 Quick-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.9M/year in gross sales. Revenue-to-investment ratio: 1.1x.
Fee burden
Total ongoing fee load of 6.0% — below the Quick-Service Restaurants average of 8.1%.
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 20.4% CAGR over 3 years across 550 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants averages
How Freddy’s Frozen Custard & Steakburgers Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 550
- Opened
- 37
- Last reporting year
- Closed
- 0
- Terminated
- 7
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.4%
- Company-owned
- 36
- Corporate units in the system
- % franchised
- 94%
- vs corporate-owned
- Net growth (3-yr)
- +20.4%
- Net unit change over 3 years
- 3-yr CAGR
- +20.4%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 37
- Closed (3yr)
- 0
- Terminated (3yr)
- 7
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 43
- Reacquired (3yr)
- 0
- Franchisor bought back
- Ceased ops
- 12.5%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 18 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Freddy's presents moderate-to-caution risk: lack of earnings disclosure, corporate going concern issues, and declining growth rates offset by established brand presence and no litigation history.
Litigation (Item 3)
Item 3 states no litigation is required to be disclosed.
Largest disclosed settlement: $60,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · KPMG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: Yes
Score breakdown · what drove the 80 / 100 verdict
- 01MEDNo Item 19 (Average Unit Volume) disclosed despite $1.89M average revenue being provided — suggests inconsistent profitability across units or franchisor unwilling to guarantee earnings potential
- 02HIGHGoing Concern status is FALSE — indicates potential financial distress at corporate level that could impact franchisee support, marketing funds, and supply chain stability
- 03MINORRoyalty rate increase from 4.5% to 5% effective July 1, 2025 — represents 11% fee increase for new franchisees, reducing unit economics and creating a two-tier system that may fragment the system
- 04MINORModest unit growth of 6.2% YoY — below QSR industry averages (8-12%), suggesting slower expansion and potential market saturation or franchisee dissatisfaction
- 05MEDHigh initial investment range ($785K–$2.75M) with high ongoing royalties leaves thin margins, especially without disclosed net income transparency
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 15 years |
|---|---|
| Renewal term | 15 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 2 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | Yes |
| Arbitration location | Wichita, Kansas |
| Jury trial waiver | Yes |
| Governing law | KS |
| Litigation count | 0 |
View Item 3 litigation summary
Item 3 states no litigation is required to be disclosed.
Items 10, 11
Training & Operations
- Classroom training
- 51 hrs
- On-the-job training
- 255 hrs
- Training location
- Wichita, Kansas
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- franchisor
- POS system
- PAR Brink
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: PAR Brink
Item 20 · call current owners
Franchisee Contacts
85 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Freddy’s Frozen Custard & Steakburgers · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Freddy’s Frozen Custard & Steakburgers franchise?
The total investment to open a Freddy’s Frozen Custard & Steakburgers franchise ranges from $786K – $2.8M, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Freddy’s Frozen Custard & Steakburgers franchise owners earn?
According to Item 19 of the Freddy’s Frozen Custard & Steakburgers FDD, the average gross sales per unit is $1.9M. The median is $1.8M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Freddy’s Frozen Custard & Steakburgers's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Freddy’s Frozen Custard & Steakburgers (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Freddy’s Frozen Custard & Steakburgers franchise locations are there?
As of their most recent FDD filing, Freddy’s Frozen Custard & Steakburgers has 550 total units in the United States, including 514 franchised units and 36 company-owned units. 37 new units were opened in the latest reporting year.
Is Freddy’s Frozen Custard & Steakburgers a good franchise to buy?
FranchiseVerdict rates Freddy’s Frozen Custard & Steakburgers as a A-grade franchise with a verdict score of 80 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.