Freddy’s Frozen Custard & SteakburgersFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $786K – $2.8M
- 93rd pct Service Resta…
- Avg gross sales
- $1.9M
- 51st pct Service Resta…
- Royalty
- N/A
- Units
- 550
- 89th pct Service Resta…
- SBA default
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · 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 $1.9M).
- Verdict A (Top Quintile) with a risk score of 47/100.
- 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
- Legal entity
- Freddy’s, L.L.C.
- Parent company
- Freddy’s Acquisition Holdings, 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
- $115K
- vs $129K 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
Franchisees operate fast-casual restaurants serving premium beef steakburgers, hand-scooped frozen custard, and sides. Day-to-day operations include food preparation, customer service, staff management, inventory control, and local marketing to drive foot traffic in a protected territory.
- CEO
- M. Chris Dull
- Headquarters
- KS
- Founded
- 2003
- FDD year
- 2025
- States available
- 36
FDD Item 7 · 2025 filing · 13 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.
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
$274K
14.5% margin
Unlevered ROIC
15%
EBITDA / total invested capital
Payback
6.6 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $786K – $2.8M
- Below avg, review vs category
- Liquid capital req'd
- $20K – $60K
- Near category avg vs category
- Franchise fee
- $35K – $35K
- Near category avg vs category
- Royalty
- For License Agreements signed before July 1, 2025: 4.5% o…
- 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.
Financial Performance
- Avg gross sales
- $1.9M
- Per unit, per year
- Median gross sales
- $1.9M
- Item 19 type
- Gross Receipts and Costs
- Sample size
- 496 units
- vs category median 28 · large
- Range (low → high)
- $766K→$4.3M
- Cohort dispersion (min → max)
- Transparency tier
- limited
- Categorical assessment of disclosure depth
- Transparency
- 7 / 5
- vs category median 4 / 5 · above
Compared against 453 Quick-Service Restaurants brands
vs Quick-Service Restaurants averages
How Freddy’s Frozen Custard & Steakburgers Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 550
- Opened
- 37
- Last reporting year
- Closed
- 7
- Turnover rate
- 1.3%
- Company-owned
- 36
- Corporate units in the system
- % franchised
- 94%
- vs corporate-owned
- Net growth (yr3)
- +6.2%
- Net unit change last year
- 3-yr CAGR
- +20.4%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 30
- Closed (3yr)
- 1
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 43
- Reacquired (3yr)
- 3
- 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.
- Total loans
- 13
- Loan volume
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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)
0 case reference(s): 0 pending, 0 settled.
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: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: Yes
Score breakdown · what drove the 47 / 100 rating
- 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
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 15 years |
|---|---|
| Renewal term | 15 years |
| Allowed renewalsℹ | 1 |
| Territory type | radius |
| Protected territory | Yes |
| 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 |
| Termination notice | 30 days |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Kansas |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 51 hrs
- On-the-job training
- 255 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- 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 $1.9M. 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 30 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 risk score of 47 out of 100, 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.
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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.