Freddy's Frozen Custard & Steakburgers franchise startup costs run $805K–$2.0M for a fast-casual concept that combines smash-style steakburgers with fresh-frozen custard. The dual revenue stream from food and dessert in a single visit drives above-average check sizes and strong repeat visit frequency.
Freddy's Frozen Custard & Steakburgers is a fast-casual franchise founded in 2002 in Wichita, Kansas. The brand operates 400+ locations across the United States and is one of the fastest-growing fast-casual concepts in the country. Freddy's signature model combines smash-style steakburgers — thin patties cooked on a flat-top with American cheese — with fresh-frozen custard desserts in a single concept, creating a dual revenue stream where the dessert visit often follows or accompanies the meal. The combination concept drives higher per-visit check averages than standalone burger or standalone frozen custard concepts. Drive-through capability is standard in most Freddy's builds. Prospective franchisees should review the current Franchise Disclosure Document (FDD) under the FTC Franchise Rule (16 CFR Part 436).
Per the current FDD filed under the FTC Franchise Rule (16 CFR Part 436), total estimated initial investment for a Freddy's franchise runs $805,000–$2,000,000. The combo concept requires both burger kitchen and custard equipment infrastructure:
Freddy's charges a 4.5% royalty on gross sales plus advertising fund contributions. The 4.5% rate is favorable relative to many fast-casual peers — the lower royalty reflects Freddy's franchise-growth-first strategy. National advertising fund investment is growing as the footprint expands past 400 locations, providing increasing media leverage for franchisees.
Freddy's is listed on the SBA Franchise Directory, qualifying franchisees for expedited SBA loan processing. Financing paths:
Fast-casual combo concepts at the $805K–$2M investment level typically target break-even within 24–42 months. Freddy's dual revenue stream from food and dessert in a single visit is a structural advantage: dessert customers who visit specifically for custard also frequently add a meal, and meal customers frequently add a custard, driving higher check averages than single-category fast-casual concepts. The 4.5% royalty and strong AUV performance among existing franchisees are frequently cited as strengths of the Freddy's system.
Freddy's suits operators with QSR or fast-casual management experience who want a high-growth dual-concept brand before it reaches saturation in their market. The $805K+ investment requires solid liquidity but is more accessible than pure freestanding drive-through QSR builds. Financial benchmarks typically include net worth of $600K+ and liquid capital of $250K+. Midwest, South, and Sun Belt operators benefit from Freddy's strong existing regional brand equity.
SBA-approved lenders evaluate Freddy's applications against five underwriting criteria sourced from SBA SOP 50 10 7:
SBA 7(a) covers franchise fee, FF&E, and working capital; SBA 504 is preferred for freestanding QSR real estate. Finance frozen custard equipment (continuous-batch machines) on a separate equipment note to preserve SBA capacity for the build-out. Stress-test DSCR against the full 9% combined fee load and account for seasonal custard volume dip in colder months for northern-climate locations.
ClearValue Lending works with fast-casual franchise operators on SBA 7(a), SBA 504, equipment, and working capital financing. Apply for franchise financing at Find my match. Your file routes to one matched lender.
Per the current FDD, total estimated initial investment runs $805,000–$2,000,000. Real estate or build-out, kitchen equipment, frozen custard machines, and franchise fee are the primary cost drivers.
Freddy's Frozen Custard & Steakburgers was founded in 2002 in Wichita, Kansas, by Scott Redler and Bill Simon. The brand has grown to 400+ locations across the United States and is consistently ranked among the fastest-growing fast-casual chains.
Freddy's charges a 4.5% royalty on gross sales plus advertising fund contributions. The 4.5% rate is favorable relative to many fast-casual peers and reflects Freddy's franchise-growth-first strategy.
Yes. Freddy's is on the SBA Franchise Directory. SBA 7(a) can cover the build-out, kitchen and custard equipment, drive-through systems, franchise fee, and working capital. SBA 504 is available for ground-up freestanding builds.
The dual revenue stream from steakburgers and frozen custard in a single visit drives higher per-visit check averages than standalone burger or standalone frozen dessert concepts. Custard-focused customers frequently add a meal; meal customers frequently add custard — the two menu categories are naturally cross-promotional.
SBA lenders require a minimum DSCR of 1.25× after all operating costs, royalties, and debt service. At $805K–$2.0M total investment, lenders stress-test DSCR using Freddy's FDD Item 19 systemwide AUV data and apply the full ~9% combined royalty + advertising fee load against projected gross sales before approving.
SBA lenders typically require 20–25% equity injection for QSR franchise startups. At $805K–$2.0M, that translates to $161K–$500K in equity. ROBS (Rollover for Business Startups) allows eligible borrowers to use 401(k) or IRA funds as the equity injection without triggering taxes or penalties — a common path for Freddy's operators at the lower investment tier.