Freddy’s Frozen Custard & Steakburgers Franchise Cost, Revenue & Review 2026
- Investment
- $1.5M – $2.8M
- Disclosed sales
- $1.9M
- gross sales, not profit
- SBA charge-off
- Not SBA-matched
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 $1.5M – $2.8M, including a $35K franchise fee and an ongoing 4.5% royalty[2]. 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 →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored7 of 8 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $1.5M – $2.8M
- 97th pct Service Resta…
- Avg gross sales
- $1.9M
- 31st pct Service Resta…
- Royalty
- 4.5%
- 11th pct Service Resta…
- Units
- 550
- 89th 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 median · 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
- COSTTotal investment $1.5M – $2.8M including a $35K franchise fee, 4.5% ongoing royalty.
- RETURNSAverage unit revenue of $1.9M/year (median $1.8M).
- RISKVerdict A (Strongest tier), verdict score 80/100 (higher is better).
- GROWTHPositive: net +30 franchised outlets in the latest year (37 opened, 7 closed) (Item 20).
- GROWTHSystem 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.
- FDD Item 1, page 6 of the 2025 FDD
- Ultimate parent
- Freddy's Acquisition Holdings, Inc.
- FDD Item 1, page 6 of the 2025 FDD
- 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 337% 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 Fee1 | $35K | $35K | |
| Training Costs and Expenses (Travel, Meals, Lodging, and Employee Wages) | $20K | $60K | |
| Construction, Remodeling, and Leasehold Improvements2 | $950K | $1.8M | |
| Real Property Rent (one month)2 | $6K | $16K | |
| Security Deposit2 | $6K | $16K | |
| Computer, Point of Sale Equipment, Outdoor Ordering System and Software, Security Cameras, Drive Thru Headsets | $54K | $99K | |
| Equipment, Furniture, Fixtures and Décor3 | $350K | $500K | |
| Building Signage / Interior Neon / LED Border | $25K | $115K | |
| Miscellaneous Opening Costs4 | $8K | $15K | |
| Opening Inventory and Supplies5 | $10K | $25K | |
| Insurance | $2K | $8K | |
| Grand Opening Advertising6 | $3K | $5K | |
| Additional Funds – 3 months7 | $20K | $60K | |
| Total initial investment | $1.5M | $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
- $1.5M – $2.8M
- Bottom third — review vs category
- Liquid capital req'd
- $20K – $60K
- Top 40% of category vs category
- Franchise fee
- $35K – $35K
- Middle of category vs category
- Royalty
- 4.5%
- Tiered by sales volume · typical 6–8%
- Ad fund
- 1.5%
- typical 3–5%
- Total fee load
- 6.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.5% of gross sales |
| Marketing / ad fund | 1.5% |
| 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 91% above the quick-service restaurants norm.
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Freddy’s Frozen Custard & Steakburgers until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$2.2M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Freddy’s Frozen Custard & Steakburgers unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
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
- 463 outlets
- vs category median 19 · large
- Range (low → high)
- $766K→$4.3MCited, not corroborated — printed on page 47 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $1.2M→$2.6M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 7 / 10
- vs category median 4 / 10 · above
Compared against 781 Quick-Service Restaurants brands
Revenue is only 0.9x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
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: 0.9x.
Fee burden
Total ongoing fee load of 6.0% — below the Quick-Service Restaurants median of 7.5%.
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 medians
How Freddy’s Frozen Custard & Steakburgers Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
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
- 7
- Terminated
- 7
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.3%
- 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
Last fiscal year · Item 20 exits and transfers
- Terminated
- 7
- Not renewed
- 0
- Transferred
- 43
- Reacquired
- 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 12 · 36 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
36
states with franchisees (per FDD Item 12)
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
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
Item 3 states no litigation is required to be disclosed.
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
- 01MINORRoyalty 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
- 02MINORModest unit growth of 6.2% YoY — below QSR industry averages (8-12%), suggesting slower expansion and potential market saturation or franchisee dissatisfaction
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 territory |
| 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
513 owners to call
Name · phone · city · state. Extracted from FDD Item 20
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 $1.5M – $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.
Who owns Freddy’s Frozen Custard & Steakburgers?
Freddy’s Frozen Custard & Steakburgers is franchised by Freddy's, L.L.C.. Its parent company is Freddy's Acquisition Intermediate, Inc.. The ultimate parent named in the FDD is Freddy's Acquisition Holdings, Inc.. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Freddy’s Frozen Custard & Steakburgers FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Freddy’s Frozen Custard & Steakburgers FDD and qualifies whose outlets they describe.
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). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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.