In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Freddy’s Frozen Custard & Steakburgers franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Freddy’s Frozen Custard & Steakburgers franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Freddy’s Frozen Custard & Steakburgers outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Freddy’s Frozen Custard & Steakburgers franchise opportunity

Section V – Presentation and analysis of Freddy’s Frozen Custard & Steakburgers financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, high, and low weekly gross receipts and annual gross receipts for the 26 stand alone with drive-thru, 2 end cap with drive-thru, 4 in-line with no drive-thru, and all 32 company-owned Freddy’s Frozen Custard & Steakburgers restaurants that were open for the entire fiscal year that ended December 27, 2023

• 2023 average, median, high, and low weekly gross receipts and annual gross receipts for the 376 stand alone with drive-thru, 36 end cap with drive-thru, 3 in-line with no drive-thru, and all 415 franchised Freddy’s Frozen Custard & Steakburgers restaurants that were open for the entire fiscal year that ended December 27, 2023

• 2023 average, median, high, and low annual gross receipts for the 415 franchised Freddy’s Frozen Custard & Steakburgers restaurants, 32 company-owned Freddy’s Frozen Custard & Steakburgers restaurants, and 447 franchised and company-owned Freddy’s Frozen Custard & Steakburgers restaurants that were open for the entire fiscal year that ended December 27, 2023

• 2023 average cost of sales, labor costs, and controllable expenses (as percentages of total gross receipts) for the 32 company-owned Freddy’s Frozen Custard & Steakburgers restaurants that were open for the entire fiscal year that ended December 27, 2023

Section VI – Key ratios, comparables, computations, and analyses for the Freddy’s Frozen Custard & Steakburgers franchise opportunity (exclusive content for Platinum subscribers)

Section I – Freddy’s Frozen Custard & Steakburgers Franchise Costs

• License Fee:  $35,000
• Training Costs and Expenses (Travel, Meals, Lodging, and Employee Wages):  $20,000 to $60,000
• Construction, Remodeling, and Leasehold Improvements:  $950,000 to $1,800,000
• Real Property Rent (one month):  $5,667 to $15,750
• Security Deposit:  $5,667 to $15,750
• Computer, Point of Sale Equipment, Outdoor Ordering System and Software, Security Cameras, Drive Thru Headsets:  $53,764 to $99,066
• Equipment, Furniture, Fixtures, and Decor:  $350,000 to $500,000
• Building Signage, Interior Neon, LED Border:  $25,000 to $115,000
• Miscellaneous Opening Costs:  $8,000 to $15,000
• Opening Inventory and Supplies:  $10,000 to $25,000
• Insurance:  $2,000 to $8,000
• Grand Opening Advertising:  $2,500 to $5,000
• Additional Funds – 3 Months:  $20,000 to $60,000
• Total Estimated Freddy’s Frozen Custard & Steakburgers Franchise Costs:  $1,487,598 to $2,753,566

Section II – Freddy’s Frozen Custard & Steakburgers’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• License Fee:  $30,000
• Royalty:  4.5% of Gross Receipts
• National Marketing and Advertising Fund:  1.5% of Gross Receipts

Section III – Number of Franchised and Company-Owned Freddy’s Frozen Custard & Steakburgers Outlets

Franchised

2021

• Outlets at the Start of the Year:  357
• Outlets at the End of the Year:  391
• Net Change:  +34

2022

• Outlets at the Start of the Year:  391
• Outlets at the End of the Year:  427
• Net Change:  +36

2023

• Outlets at the Start of the Year:  427
• Outlets at the End of the Year:  484
• Net Change:  +57

Company-Owned

2021

• Outlets at the Start of the Year:  33
• Outlets at the End of the Year:  30
• Net Change:  -3

2022

• Outlets at the Start of the Year:  30
• Outlets at the End of the Year:  29
• Net Change:  -1

2023

• Outlets at the Start of the Year:  29
• Outlets at the End of the Year:  33
• Net Change:  +4

Section IV – News Updates on the Freddy’s Frozen Custard & Steakburgers Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Freddy’s Frozen Custard & Steakburgers Franchise (Item 19, 2024 FDD)

• As of December 27, 2023, there were 33 company-owned Restaurants and 484 franchised Restaurants.

• Parts 1 through 5 below display the Gross Receipts of 32 company-owned Restaurants that were open for the entire fiscal year that ended December 27, 2023 (“2023 Fiscal Year”) and 415 franchised Restaurants that were open for the entire 2023 Fiscal Year.

• These tables exclude the results of one company-owned Restaurant and 55 franchised Restaurants that were not open for the entire 2023 Fiscal Year and the 14 non-traditional franchised Restaurants that are not open seven days per week and operate during limited hours (these include five units located at college campuses, two in casinos, one at an airport, and six in a sports arena).

Part 1 – Weekly Gross Receipts of Company-Owned Restaurants for 2023 Fiscal Year by Facility Type

Stand Alone with Drive-Thru

• Number of Restaurants:  26
• Average Weekly Gross Receipts:  $44,363
• Number and Percentage of Restaurants That Met or Exceeded the Average:  11 (42%)
• Median Weekly Gross Receipts:  $42,484
• Range of Average Weekly Gross Receipts:  $27,199 to $71,347

End Cap with Drive-Thru

• Number of Restaurants:  2
• Average Weekly Gross Receipts:  $63,209
• Number and Percentage of Restaurants That Met or Exceeded the Average:  1 (50%)
• Median Weekly Gross Receipts:  $63,209
• Range of Average Weekly Gross Receipts:  $61,676 to $64,742

In-Line with No Drive-Thru

• Number of Restaurants:  4
• Average Weekly Gross Receipts:  $43,907
• Number and Percentage of Restaurants That Met or Exceeded the Average:  1 (25%)
• Median Weekly Gross Receipts:  $41,377
• Range of Average Weekly Gross Receipts:  $29,027 to $63,846

All Restaurants

• Number of Restaurants:  32
• Average Weekly Gross Receipts:  $45,484
• Number and Percentage of Restaurants That Met or Exceeded the Average:  14 (44%)
• Median Weekly Gross Receipts:  $42,484
• Range of Average Weekly Gross Receipts:  $27,199 to $71,347

Part 2 – Annual Gross Receipts of Company-Owned Restaurants for 2023 Fiscal Year by Facility Type

Stand Alone with Drive-Thru

• Number of Restaurants:  26
• Average Annual Gross Receipts:  $2,306,901
• Number and Percentage of Restaurants That Met or Exceeded the Average:  11 (42%)
• Median Annual Gross Receipts:  $2,209,171
• Range of Annual Gross Receipts:  $1,414,341 to $3,710,306

End Cap with Drive-Thru

• Number of Restaurants:  2
• Average Annual Gross Receipts:  $3,286,863
• Number and Percentage of Restaurants That Met or Exceeded the Average:  1 (50%)
• Median Annual Gross Receipts:  $3,286,863
• Range of Annual Gross Receipts:  $3,207,131 to $3,366,595

In-Line with No Drive-Thru

• Number of Restaurants:  4
• Average Annual Gross Receipts:  $2,283,161
• Number and Percentage of Restaurants That Met or Exceeded the Average:  1 (25%)
• Median Annual Gross Receipts:  $2,151,603
• Range of Annual Gross Receipts:  $1,509,426 to $3,320,011

All Restaurants

• Number of Restaurants:  32
• Average Annual Gross Receipts:  $2,365,181
• Number and Percentage of Restaurants That Met or Exceeded the Average:  14 (44%)
• Median Annual Gross Receipts:  $2,209,171
• Range of Annual Gross Receipts:  $1,414,341 to $3,710,036

Part 3 – Weekly Gross Receipts of Franchised Restaurants for 2023 Fiscal Year by Facility Type

Stand Alone with Drive-Thru

• Number of Restaurants:  376
• Average Weekly Gross Receipts:  $36,233
• Number and Percentage of Restaurants That Met or Exceeded the Average:  180 (48%)
• Median Weekly Gross Receipts:  $35,821
• Range of Average Weekly Gross Receipts:  $14,847 to $83,071

End Cap with Drive-Thru

• Number of Restaurants:  36
• Average Weekly Gross Receipts:  $34,375
• Number and Percentage of Restaurants That Met or Exceeded the Average:  18 (50%)
• Median Weekly Gross Receipts:  $34,121
• Range of Average Weekly Gross Receipts:  $18,973 to $53,918

In-Line with No Drive-Thru

• Number of Restaurants:  3
• Average Weekly Gross Receipts:  $28,258
• Number and Percentage of Restaurants That Met or Exceeded the Average:  2 (67%)
• Median Weekly Gross Receipts:  $28,684
• Range of Average Weekly Gross Receipts:  $25,311 to $30,779

All Restaurants

• Number of Restaurants:  415
• Average Weekly Gross Receipts:  $36,014
• Number and Percentage of Restaurants That Met or Exceeded the Average:  200 (48%)
• Median Weekly Gross Receipts:  $35,549
• Range of Average Weekly Gross Receipts:  $14,847 to $83,071

Part 4 – Annual Gross Receipts of Franchised Restaurants for 2023 Fiscal Year by Facility Type

Stand Alone with Drive-Thru

• Number of Restaurants:  376
• Average Annual Gross Receipts:  $1,884,105
• Number and Percentage of Restaurants That Met or Exceeded the Average:  180 (48%)
• Median Annual Gross Receipts:  $1,862,673
• Range of Annual Gross Receipts:  $772,039 to $4,319,693

End Cap with Drive-Thru

• Number of Restaurants:  36
• Average Annual Gross Receipts:  $1,787,524
• Number and Percentage of Restaurants That Met or Exceeded the Average:  18 (50%)
• Median Annual Gross Receipts:  $1,774,288
• Range of Annual Gross Receipts:  $986,609 to $2,803,710

In-Line with No Drive-Thru

• Number of Restaurants:  3
• Average Annual Gross Receipts:  $1,469,413
• Number and Percentage of Restaurants That Met or Exceeded the Average:  2 (67%)
• Median Annual Gross Receipts:  $1,491,588
• Range of Annual Gross Receipts:  $316,155 to $1,600,496

All Restaurants

• Number of Restaurants:  415
• Average Annual Gross Receipts:  $1,872,729
• Number and Percentage of Restaurants That Met or Exceeded the Average:  200 (48%)
• Median Annual Gross Receipts:  $1,848,546
• Range of Annual Gross Receipts:  $772,039 to $4,319,693

Part 5 – Systemwide Annual Gross Receipts of Company-Owned and Franchised Restaurants for 2023 Fiscal Year

Company-Owned and Franchised

• Number of Restaurants:  447
• Average Annual Gross Receipts:  $1,907,983
• Number and Percentage of Restaurants That Met or Exceeded the Average:  212 (47%)
• Median Annual Gross Receipts:  $1,880,489
• Range of Annual Gross Receipts:  $772,039 to $4,319,693

Franchised

• Number of Restaurants:  415
• Average Annual Gross Receipts:  $1,872,729
• Number and Percentage of Restaurants That Met or Exceeded the Average:  200 (48%)
• Median Annual Gross Receipts:  $1,848,546
• Range of Annual Gross Receipts:  $772,039 to $4,319,963

Company-Owned

• Number of Restaurants:  32
• Average Annual Gross Receipts:  $2,365,181
• Number and Percentage of Restaurants That Met or Exceeded the Average:  14 (44%)
• Median Annual Gross Receipts:  $2,209,171
• Range of Annual Gross Receipts:  $1,414,341 to $3,710,036

• “Weekly Gross Receipts” means all gross revenue during each week of each 28-day operating period of every kind or nature related to the Restaurant, including all Restaurant revenue posted whether it is collected or remains uncollected, all charges for other products, services, and facilities and vending machine receipts, and any amounts payable from insurance policies to compensate you for loss of the same, but excluding sales taxes or other taxes collected by you from customers for transmittal to appropriate taxing authorities. Weekly Gross Receipts do not include loyalty points earned or redeemed at Restaurant locations.

• “Annual Gross Receipts” is calculated in the same manner for the fiscal year.

• Freddy’s compiled the Gross Receipts of the company-owned Restaurants on the basis of generally accepted accounting principles. The information presented is unaudited. All company-owned Restaurants use the same accounting methods and system.

• The information presented for franchised Restaurants are the result of information included in royalty reports and other financial reports provided by the franchisees. Freddy’s has not audited this information nor has Freddy’s verified its accuracy.

Part 6 – Cost of Sales, Labor, and Controllable Expenses of Company-Owned Restaurants for 2023 Fiscal Year

• As of December 27, 2023, there were 33 company-owned Restaurants.

• Part 6 below depicts the Cost of Sales, Labor, and Controllable Expenses for 32 company-owned Restaurants that were open during the entire Fiscal Year 2023 as percentages of total Gross Receipts for Fiscal Year 2023.

• Part 6 excludes the results of one company-owned Restaurant that was not open for the entire 2023 Fiscal Year.

• Cost of Sales:  31.3%
• Labor with Benefits:  30.8%
• Controllable Expenses:  9.4%

• “Cost of Sales” includes all costs associated with food, beverage, and disposable paper and plastic, but does not include any other costs, including costs related to real estate or leasehold improvements, rental payments, marketing costs, or costs related to equipment, fixtures, or décor.

• “Labor with Benefits” includes all salaries and wages paid to employees, payroll taxes, and short-term management performance incentive pay, and includes 100% employer paid health insurance, 401K with employer match, employer paid health savings account contribution, and any other employee benefits.

• Labor expenses do not include phantom stock bonuses, owners’ draws, or management expenses not directly attributable to a Restaurant, such as an area manager’s salary.

• Freddy’s believes its robust benefits package and management short-term and performance incentive pay plans reduce turnover and are integral to the operations of its Restaurants.

• “Controllable Expenses” includes maintenance, supplies, utilities, uniforms, bank and credit card fees, equipment rental, and other miscellaneous expenses. It does not include items such as fixed costs, advertising, professional and accounting fees, licenses, insurance, or taxes, nor does it include rent, other real estate costs, depreciation, or amortization.

• Because the company-owned Restaurants in Part 6 are not franchised Restaurants, they are not subject to royalty fees.

• Based on the franchisor’s experience, the company-owned Restaurants experience seasonal fluctuations, with greater sales occurring during the months of April through October and lesser sales occurring during the months of November through March.

• The information provided is based on a number of conditions and assumptions that may not be applicable to you. For example, each of the company-owned Restaurants for which information is provided is located in the Midwest. The costs of labor, including the pay scale, bonus plans, and other benefits you choose to provide your employees or that may be mandated by local law for the market in which your Restaurant would be located may or may not be comparable to these Restaurants. Costs of inventory and supplies may or may not be comparable to those obtainable in the Midwest.

• The information provided does not include certain non-recurring, opening, and pre-opening costs such as grand opening advertising; initial employee training; real estate acquisition costs/rent; real estate or leasehold improvements; computer and points-of-sale equipment and software; equipment, furniture, fixtures, décor, signage, and neon; opening inventory and supplies; insurance; utility deposits; licenses and business permits; other prepaid expenses; legal and other professional fees; and recruitment.

• The financial performance representation figures do not reflect all of the costs or expenses that must be deducted from the Gross Receipts to obtain your net income or profit.

• Some Restaurants have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.

Section VI – Freddy’s Frozen Custard & Steakburgers Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️