Franchisor Stories
Franchise Opportunity Deep Dive: Freddy's offers a disciplined system for classic steakburgers and fresh-churned frozen custard, built on quality, cleanliness and genuine hospitality.
Freddy’s Frozen Custard & Steakburgers pairs cooked-to-order steakburgers, Vienna beef hot dogs, crispy shoestring fries and freshly churned frozen custard in a throwback, hospitality-first environment. The concept blends craveable, simple operations with daypart flexibility and a robust culture of franchisee support.
Freddy’s first restaurant opened in 2002 in Wichita, Kansas and began franchising in 2004. The current brand reflects a mature system with both company-owned and franchised locations across multiple formats (in-line, end cap with drive-thru, and standalone with drive-thru).
Mission: Deliver quality food with genuine hospitality while maintaining consistently clean, well-run restaurants.
Vision: Sustain long-term growth by protecting the system’s standards, simplifying execution, and investing in franchisee training and innovation.
Freddy’s continues to expand domestically and is recruiting for select international markets (10-unit minimum internationally; brand-provided).
For current openings, see the brand’s franchising site.
Initial Costs: The estimated initial investment required to open a Freddy’s ranges from $785,936 to $1,198,665 for an in-line (without drive-thru), $1,277,598 to $2,497,566 for an end cap (with drive-thru) and $1,487,598 to $2,753,566 for a standalone (with drive-thru). The 2025 Franchise Disclosure Agreement (FDD) breaks these costs down as follows:
| Type of Expenditure | In-Line (Min-Max) | End Cap (Min-Max) | Standalone (Min-Max) |
| License Fee | $35,000 | $35,000 | $35,000 |
| Training Travel/Lodging/Wages | $10,000 - $40,000 | $20,000 - $60,000 | $20,000 - $60,000 |
| Construction/Improvements | $270,000 - $500,000 | $750,000 - $1,600,000 | $950,000 - $1,800,000 |
| POS/Tech/Security/Drive-thru | $30,102 - $58,665 | $53,764 - $99,066 | $53,764 - $99,066 |
| Equipment/FF&E/Décor | $375,000 - $400,000 | $350,000 - $500,000 | $350,000 - $500,000 |
| Opening Inventory & Supplies | $10,000 - $25,000 | $10,000 - $25,000 | $10,000 - $25,000 |
| Grand Opening Advertising | $2,500 - $5,000 | $2,500 - $5,000 | $2,500 - $5,000 |
| Additional Funds (3 Months) | $20,000 - $60,000 | $20,000 - $60,000 | $20,000 - $60,000 |
Initial Franchise Fee: The initial franchise fee required to begin operation of a Freddy’s location is $35,000, due in a lump sum at the license agreement signing (non-refundable). Development agreements require a $15,000 per restaurant development fee plus a $20,000 license-fee deposit applied to your first restaurant’s license fee.
Ongoing Fees (Item 6):
Type of Fee | Amount | Due |
| Royalty | 5% of Gross Receipts | 3rd day after each week in the 28-day period |
| National Marketing Fund | 0%–3% of Gross Receipts (currently 2%) | Same cadence as royalty |
| Technology Support Fee | $100 per 28-day operating period (subject to change with notice) | Same cadence |
| Co-op Advertising (if applicable) | 0%–2% of Gross Receipts | 15th day after each 28-day period |
| Site Selection (if charged) | $0–$2,000 per trip (reimbursement) | On demand |
ROI Potential: According to the 2025 FDD, the 496 Freddy’s restaurants (33 company-owned and 463 franchises) operating for the entirety of FY 2024 reported the following gross receipts:
| Quartile | Average | Median | High | Low |
| Top (8/116) | $2,606,743 | $2,522,835 | $4,292,651 | $2,235,555 |
| 2nd (8/116) | $2,036,267 | $2,021,193 | $2,233,838 | $1,854,078 |
| 3rd (8/116) | $1,681,701 | $1,684,015 | $1,851,004 | $1,495,246 |
| Bottom (9/115) | $1,239,789 | $1,278,037 | $1,494,488 | $765,761 |
| Total (33/463) | $1,891,124 | $1,852,541 | $4,292,651 | $765,761 |
Initial training involves a multi-week curriculum that covers operations, hospitality standards and management routines. For your first grand opening, Freddy's deploys up to eight staff members on site, with the franchisee covering their travel and payroll, estimated at $20,000 to $60,000.
Freddy's provides comprehensive operational support, including real estate and site approval with format guidance and site selection assistance (travel reimbursement may apply). Marketing efforts are supported by a national marketing fund (currently 2% of gross receipts) with optional local co-op advertising (0% to 2%). Additionally, Freddy's offers a "Freddy Simon Salute to Veterans" program, providing an addendum for qualified veterans, though a repayment of any waived license-fee portion is required if the franchise is transferred or terminated within the first year.
Freddy's integrates point-of-sale (POS) systems, drive-thru systems, headsets and cameras. A technology support fee of $100 per 28-day operating period is also assessed to help defray the costs of system technology.
Strong background in operations/franchising/restaurant leadership preferred; community-minded, people-first operators.
Owner-led or experienced operating partner model expected; hands-on emphasis during ramp. Multi-unit developers typically commit to development schedules per the Development Agreement.
Freddy’s may introduce lenders familiar with the system; terms are lender-dependent.
“The top reason I was attracted to Freddy’s was because of what the co-founders said when we met them. They believed in the franchisees, they understood the value of what the franchisee brings to the table.”
- Brian Pyle, Multi-Unit Owner — Colorado, Alabama and New Mexico
The U.S. burger market is a robust $172 billion industry, demonstrating a compound annual growth rate (CAGR) of approximately 4.1% since 2019. Freddy's strategically positions itself within this market by offering quality steakburgers complemented by dessert leadership through its fresh-churned custard. This combination provides multi-daypart utility, contributing to a compelling average check and increased customer frequency.
Freddy’s primary competitors include Culver’s, Shake Shack, Five Guys, Smashburger and regional burger players; Freddy’s differentiates via fresh-churned custard at scale, nostalgic hospitality and simple, repeatable execution.
Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our Power Rankings to read more on brands making moves.
Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit www.1851growthclub.com and start your journey.
Disclaimer: This content is for information only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on this site constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.
All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial advice, nor does any information in the email constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.
Sign up for the 1851 Franchise newsletter to get our biggest stories before everyone else
By signing up, you agree to our user agreement (including class action waiver and arbitration provisions), and acknowledge our privacy policy.
