Freddy's Frozen Custard & Steakburgers^®

Food & Beverage • Year: 2025

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What Is Freddy's Frozen Custard & Steakburgers?

Freddy's Frozen Custard & Steakburgers is a quick-service restaurant franchise that features steakburgers, hot dogs, and frozen custard. Franchisees operate restaurants under a mandated System of distinctive design, operational and training manuals, and develop single or multiple restaurants under License and Development Agreements with protected territories and company site-approval requirements.

Freddy's Frozen Custard & Steakburgers Franchise: Pros and Cons

The franchisor offers extremely thorough training and support (score 100 and 306 total training hours) and operates a sizable 550-outlet system (514 franchised units), while the major risk is the high upfront capital requirement (Item 7 minimum total $785,936 with assets minimum $415,102), which significantly raises financing needs.

Pros

Training/support score of 100 and 306 total training hours (well above industry peers) - the franchisor delivers very thorough initial and ongoing training, which prepares new operators to run the business from day one.

Zero disclosed lawsuits, zero government penalties, and zero franchisor-initiated enforcement (bottom 5% for Food & Beverage) - a very clean legal and regulatory record that reduces legal friction and suggests stable franchisor–franchisee relations.

550 total outlets with 514 franchised units and 36 company-owned locations (top 10% for Food & Beverage) - a sizable system that provides brand recognition, a broad peer network, and direct operational experience from the franchisor.

Cons

Item 7 total minimum of $785,936 and Item 7 assets minimum of $415,102 (well above typical) - the upfront capital required is materially higher than industry standard and will increase your financing needs.

Item 7 assets maximum of $483,665 and Item 7 training maximum of $40,000 (both well above typical) - these higher caps mean your actual cash outlay could climb significantly during build-out and pre-opening.

Seven outlet terminations (well above typical for Food & Beverage) - the elevated number of terminations suggests a higher-than-normal rate of operators exiting the system and is worth probing.

Lawsuits & Legal Risk

100

Excellent

Freddy's Frozen Custard & Steakburgers reported no material legal proceedings,

Territory Protection

43/100

NORMAL

Freddy's Frozen Custard & Steakburgers grants a protected Assigned Area/Assigned Territory (commonly DMA-based or a site-specific radius) providing exclusivity while the Development/License Agreement remains in effect; territorial rights are contingent on meeting performance quotas and the franchisor retains rights to develop nearby units and sell via e-commerce and alternative channels.

Training & Support

100

Excellent

Freddy's Frozen Custard & Steakburgers provides a comprehensive 306-hour training curriculum designed to prepare five individuals for launch through classroom instruction and hands-on operational training. The program includes on-site launch assistance as an operational readiness measure, with on-site support available for an additional fee and travel and living expenses borne by the franchisee.

Franchisee Stability

Excellent

Freddy's Frozen Custard & Steakburgers earns an Excellent Stability Score. Three-year turnover of 0.92% is well below the typical Food & Beverage franchise (around 5%) and far under the high end of the industry range (around 14%). Out of 12 total exits across the three reported years, terminations dominated with 7, alongside no non-renewals, 3 franchisor buybacks, and 2 ceased operations.

The dominance of terminations suggests franchisor-initiated exits, which can mean operators struggled with the model or that the franchisor enforces standards aggressively. Prospective buyers should ask why those terminations occurred, what support is offered to struggling owners, and whether the franchisor provides examples of recovery. With about 484 franchised outlets in the most recent year, the system size gives more context to these retention patterns. For prospective franchisees, this is among the strongest retention profiles in franchising.

Unit Growth Analysis

This franchise expanded from 456 units in 2023 to 517 in 2024 (+13.4%) and to 550 in 2025 (+6.4%), indicating continued positive but decelerating unit growth. Total growth of 20.6% over two years signals healthy expansion and scale, but the drop from ~13.4% to 6.4% (roughly halved growth rate) is a notable slowdown investors should probe (e.g., franchisee pipeline, market saturation, or execution constraints).

How Much Does It Cost to Open a Freddy's Frozen Custard & Steakburgers Franchise?

Opening a Freddy's Frozen Custard & Steakburgers franchise requires a total initial investment of $785,936 to $1,198,665, according to the 2025 Franchise Disclosure Document. This range covers the franchise fee, real estate, equipment, training, and initial working capital needed to launch and operate through the early months.

Minimum Investment

$785,936

Franchise Fee

Real Estate

Equipment & Assets

Reserves

Training

Other

Maximum Investment

$1,198,665

Minimum Investment Breakdown

Franchise Fee$35,000

Real Estate$293,334

Equipment & Assets$415,102

Reserves$20,000

Training$10,000

Other$12,500

Maximum Investment Breakdown

Franchise Fee$35,000

Real Estate$555,000

Equipment & Assets$483,665

Reserves$60,000

Training$40,000

Other$25,000

Investment Analysis

This investment analysis is coming soon. Have ideas for other analyses you'd like us to add? Get in touch.

The initial investment amounts shown are estimates only. Actual costs may vary based on location size, business model, and multi-unit ownership arrangements. We recommend reviewing the full Franchise Disclosure Document for complete details.

How Much Do Freddy's Frozen Custard & Steakburgers Franchise Owners Make?

Freddy's Frozen Custard & Steakburgers franchise locations reported average gross sales of $1,860,140 and median gross sales of $1,834,089 in 2025, based on financial performance data disclosed in Item 19 of the Franchise Disclosure Document.

Average Gross Sales:

$1,860,140

Median Gross Sales:

$1,834,089

High Gross Sales:

$4,292,651

Low Gross Sales:

$765,761

Sample Size:

463

Percent Attaining Average:

47.0%

Audit Status:

Unaudited

Franchise vs Corporate Performance: Franchised restaurants reported an average annual gross receipt of 1,860,140 versus company-owned average of 2,325,836, indicating company-owned outlets in the sample produced higher average sales in 2024.

Performance Variability Analysis: Franchised unit performance shows wide variability with annual receipts ranging from 765,761 to 4,292,651 and only 47% of franchised units meeting or exceeding the mean, reflecting a broad spread across locations and quartiles.

Data Scope and Limitations: The franchised data are unaudited and derived from royalty reports and exclude units not open the full year and certain non-traditional locations, while expense percentages are reported only for company-owned, Midwest-located restaurants.

Frequently Asked Questions

Is Freddy's Frozen Custard & Steakburgers a good franchise to own?

Whether Freddy's Frozen Custard & Steakburgers is a good franchise depends on your goals, experience, and local market. Key factors from the 2025 FDD: Freddy's Frozen Custard & Steakburgers operates 550 locations, received a legal risk score of 100/100, a training and support score of 100/100. Financial performance data is disclosed in Item 19. Prospective franchisees should review the full Franchise Disclosure Document and consult with a franchise attorney before making any investment decision.

Is a Freddy's Frozen Custard & Steakburgers franchise worth the investment?

The value of a Freddy's Frozen Custard & Steakburgers franchise investment depends on factors such as location, operator experience, and market demand. The initial investment ranges from $785,936 to $1,198,665. Freddy's Frozen Custard & Steakburgers disclosed average gross sales of $1,860,140 in 2025. The system reported 7 terminated units in 2025. Franchise investments carry inherent risk, and prospective buyers should conduct thorough due diligence before committing capital.

What is the failure rate of Freddy's Frozen Custard & Steakburgers franchises?

In the 2025 FDD, Freddy's Frozen Custard & Steakburgers reported 7 terminated franchises and 0 non-renewals out of 550 total locations. Franchise closures can result from many factors including market conditions, operator decisions, lease expirations, and franchisor enforcement actions. The FDD's Item 20 provides the most detailed unit turnover data.

How long does it take to break even with a Freddy's Frozen Custard & Steakburgers franchise?

Break-even timelines for Freddy's Frozen Custard & Steakburgers franchises are not disclosed in the 2025 Franchise Disclosure Document. Break-even periods vary significantly based on initial investment level, local market conditions, operating costs, and revenue ramp-up speed. Prospective franchisees should build a pro forma financial model using Item 7 cost estimates and, where available, Item 19 financial performance data from the FDD.

Is Freddy's Frozen Custard & Steakburgers a franchise or a corporate-owned business?

As of the 2025 FDD, Freddy's Frozen Custard & Steakburgers operates 514 franchised locations and 36 company-owned locations. Franchise opportunities are available through the franchisor's disclosure process.

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