About Freddy's Franchise
Freddy's Frozen Custard & Steakburgers is a fast casual restaurant franchise known for its cooked to order steakburgers, Vienna beef hot dogs, and signature frozen custard desserts.
Franchising since 2004, the brand has grown into one of the most recognized names in the fast casual burger segment, combining quality ingredients with a nostalgic, family friendly dining atmosphere.
The initial franchise fee is $30,000.
Freddy's Franchise Cost & Fees
Minimum Investment
$761K
Average Investment
$1.4M
Maximum Investment
$2.1M
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $30,000 | One-time payment upon signing |
| Royalty Fee | 4.5% of Gross Receipts of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 0.375% of Gross Receipts (will increase to 1.5% as of December 30, 2021) | National brand fund |
| Total Investment Range | $760,752 – $2,077,046 | Includes build-out, inventory, working capital |
The investment range of $761K–$2.1M reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (4.5% of Gross Receipts) and marketing fee (0.375% of Gross Receipts (will increase to 1.5% as of December 30, 2021)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| License Fee | $30,000 | $30,000 |
| Training Expenses (Travel, Meals, Lodging, and Employee Wages) | $20,000 | $30,000 |
| Construction, Remodeling, and Leasehold Improvements | $372,000 | $1,314,577 |
| Real Property Rent (one month) | $5,667 | $15,750 |
| Security Deposit | $5,667 | $15,750 |
| Computer, Point of Sale Equipment, Outdoor Ordering System and Software, Security Cameras, Drive Thru Headsets | $30,102 | $69,218 |
| Equipment, Furniture, Fixtures and Décor | $259,816 | $410,921 |
| Building Signage / Interior Neon / LED Border | $6,000 | $100,830 |
| Miscellaneous Opening Costs | $8,000 | $15,000 |
| Opening Inventory and Supplies | $9,000 | $15,000 |
| Insurance | $2,000 | $5,000 |
| Grand Opening Advertising | $2,500 | $5,000 |
| Additional Funds – 3 months | $10,000 | $50,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $5,000 |
| Renewal Fee | One-third of our then-current initial license fee |
| Technology Fee | Not currently charged; will not exceed $100 per 28-day operating period when implemented |
| Audit Fee | $500 - $5,000 per location |
| Site Selection | $0 - $2,000 per trip |
| Cooperative Advertising | 0% - 2% of Gross Receipts |
| Additional Training | $100 - $18,000 |
| New Product/Service Testing | $0 - $1,000 per product or service |
| Loan Approvals | $1,000 - $10,000 not including the cost of outside services not performed by us |
| Private Offering Fee | $1,000 - $20,000 not including the cost of outside services not performed by us |
| Interest | 1.5% per month or as allowed by law |
| Costs and Attorneys’ Fees | Will vary under the circumstances |
| Indemnification | Will vary under the circumstances |
| Reimbursement of Insurance Costs | Our costs of obtaining coverage on your behalf |
| Taxes | Any fees or assessments imposed on us (other than income taxes) for acting as a franchisor or licensing the Marks |
| Early Termination Fee | Will vary under the circumstances |
| EcoSure/Restaurant Inspection Fees | $250 |
| OAR Restaurant Inspection Fees | Will vary under the circumstances |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | Minimum of 24 actual training days for one general manager and one assistant manager; minimum of 16 actual training days for 3 additional personnel. |
| Classroom Training | 67 |
| On-the-Job Training | 348 |
| Training Location | Wichita, Kansas or other locations specified and approved by franchisor. |
| Additional Training | Franchisor may provide additional optional or required training programs or seminars. Franchisee is responsible for travel, lodging, meals, and employee wages for training. Franchisor may charge reasonable fees for instruction and course materials for training programs other than initial training. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Protected |
| Exclusive Territory | Yes |
| Territory Size | Typically 2 miles radius |
| Description | The Assigned Territory will be determined by franchisor's then-current standards and generally identified by a radius from a specific location (typically 2 miles), a particular standard metropolitan statistical area, or a city, county, or other political subdivision. The radius or other description may vary depending on population densities, business districts, demographic trends, and other factors affecting a specific franchise location. Franchisor reserves the right to award national or regional licenses to third parties, merchandise and distribute products, and operate/license other restaurants outside the Assigned Territory or in specific captive market locations. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 15 years |
| Renewal Term | 15-year renewal |
| Renewal Fee | One-third of our then-current initial license fee |
| Renewal Conditions | Give notice, remodel, not be in default, pay all amounts owed to franchisor and landlord, sign new License Agreement (terms may differ), pay fee, sign release, and comply with training requirements. |
| Transfer Fee | $5,000 |
| Transfer Conditions | All monetary obligations satisfied, no default, transferor executes general release, transferee assumes obligations, transferee meets franchisor's standards (educational, managerial, business, financial, credit), transferee executes current development/license agreement, transferor remains liable for prior obligations, transferee completes training, and payment of transfer fee. |
| Termination for Cause | Franchisor can terminate if franchisee defaults on development schedule, other agreement terms, or attempts an unauthorized transfer. Non-curable defaults include bankruptcy, insolvency, receivership, general assignment for creditors, failure to timely open, cessation of operations, felony conviction, improper transfers, misuse of confidential information, false reporting, under-reporting Gross Receipts, or repeated defaults. |
| Non-Compete Period | During the term of the agreement and for 2 years after expiration, assignment or termination. |
| Non-Compete Details | During the term, no competition in any Competitive Business in the United States. After termination/expiration, no competition in any Competitive Business within the Assigned Territory, the then-current Designated Market Area (DMA) where the Assigned Territory is located, or the DMA of any other System Restaurant then existing. A 'Competitive Business' is a retail food establishment offering custard-style products or where ice cream, yogurt, ground-beef, or hot dog sandwiches constitute more than 10% of food revenues. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | No |
| Participation Details | Franchisee (or its chief operating officer, managing partner, or principal manager) is not required to take any specific role in day-to-day operations or to participate personally in direct operations on the premises, if a general manager is designated who devotes full time to management and operation of the Restaurant. |
| Required Suppliers | Franchisee must purchase or lease most food, beverage, paper goods, inventory, computer hardware, and computer software meeting franchisor's established standards. |
| Supply Restrictions | Franchisor may take advantage of price discounts for volume purchases and may act as a supplier. Franchisor will not be the sole approved supplier, and purchases from franchisor will not be mandatory. Franchisee may request approval of specific items or sources not previously approved. |
| Franchisor Revenue from Suppliers | $257,400 from third party suppliers in 2020 fiscal year |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | Freddy’s does not offer direct or indirect financing. Freddy’s does not guarantee your note, lease, or obligation. |
Freddy's Franchise Earnings — Item 19
Average Revenue
$1.6M
Median Revenue
$1.6M
Revenue Range
$685K – $3.8M
Sample Size
330 units
Past financial performance does not guarantee future results. Individual results will vary.
Freddy's Litigation & Risk Flags
Clean Litigation RecordFreddy's has no pending litigation actions listed in their FDD. There is also no bankruptcy history disclosed.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Freddy's System Growth
Total Units
389
Franchised
357
Company-Owned
32
Freddy's currently operates 357 franchised locations and 32 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2018 | 53 | 5 | 330 |
| 2019 | 38 | 4 | 364 |
| 2020 | 30 | 5 | 389 |
Transfers: 81 | Closures: 14
State Registrations
Registered in 14 states: CA, HI, IL, IN, MD, MI, MN, NY, ND, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$27.5M
Net Income
$15.7M
Total Assets
$23.6M
Audited by Allen, Gibbs & Houlik, L.C for year ending December 30, 2020.
Freddy's Franchise — FAQ
The total investment to open a Freddy's franchise ranges from $760,752 to $2,077,046, per their Franchise Disclosure Document. This includes the initial franchise fee of $30,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Freddy's charges a royalty fee of 4.5% of Gross Receipts of gross sales, plus a 0.375% of Gross Receipts (will increase to 1.5% as of December 30, 2021) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Freddy's Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Freddy's to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Freddy's franchise owners report average revenue of $1.6M and median revenue of $1.6M. This is based on a sample of 330 units. Past performance does not guarantee future results.
Freddy's has been franchising since 2004. The FDD shows an investment range of $760,752-$2,077,046, a 4.5% of Gross Receipts royalty, and includes an Item 19 earnings disclosure. There is no pending litigation. Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $30,000 and the total investment ranges from $760,752 to $2,077,046 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Freddy's and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Freddy's or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com