Dive Brief:
- Freddy’s Frozen Custard & Steakburgers expects to open 60 units this year as it closes in on a total restaurant count of 600 s, the company said in a Tuesday press release.
- The chain is expanding beyond its traditional standalone model to refocus on endcap and in-line restaurants, which offer more flexibility and lower initial investment costs for franchisees.
- Freddy’s is prioritizing growth in the Northeast, Rust Belt, Midwest, Pacific Northwest, Northern California and Florida as part of its multi-year development strategy.
Dive Insight:
Existing franchisees are helping fuel Freddy’s growth, and about one-third are expanding into new territories, the press release said.
“A strong franchise system is built on operators who see long-term opportunity within the brand,” Andrew Thengvall, chief development officer of Freddy's, said in a statement. “As Freddy's continues to grow, we remain focused on supporting our franchisees, through new restaurant prototypes, greater real estate flexibility, and development strategies that help position the brand for sustainable growth.”
Expanding its real estate focus allows franchisees to develop an in-line restaurant for about $854,834 compared to over $1.5 million for a standalone restaurant, creating “new pathways for growth in priority markets,” the chain said.
Freddy’s has steadily grown its unit count in the last few years, beginning 2023 with 456 units and growing to 580 by the end of 2025, according to its franchise disclosure document. Its average unit volume is nearly $1.9 million for standalone drive-thru franchised restaurants. End-cap units with drive-thrus have AUVs of about $1.8 million for franchisees while in-line units have AUVs of about $1.4 million.
To support its ongoing expansion, Freddy’s also hired Rafik Farouk as vice president of business development and Jackie Lobdell as vice president of franchise sales in April. Freddy’s was also acquired by Rhône, a global private equity firm, in September after being owned by Thompson Street Capital Partners since 2021.
