Editor’s note: This article is part of an ongoing franchise series, highlighting brands that are new or aggressively expanding through franchising. Is your restaurant starting to be franchised? Email us at [email protected]
More than a year later Thompson Street Capital Partners bought Freddy’s Frozen Custard & Steakburgers, the chain is on track to reach 1,000 units. The 450-unit restaurant plans to open 800 locations by 2027 and has 600 units in its current pipeline.
Freddy’s Director of Development Andrew Thengvall thanked existing franchisees for helping the chain reach this milestone. Each year, about half of its development engagements are with existing franchisees, he said. Freddy’s first franchise restaurant opened in 2004, and the company signed a multi-unit development agreement with a second operator that brought the chain to Oklahoma. Since then, Freddy’s has focused primarily on multi-unit developers and still works with those two original franchises today.
The company has 135 sites in development and has sold more than 140 engagements for 2022, Thengvall said. In October, Freddy signed several franchise development agreements with existing operators to add 12 locations in Montana, Nebraska, Iowa, South Dakota, Illinois, Nevada, Missouri and Texas. Additional development agreements will lead to 57 units in Texas, six units in northeastern Illinois and four units in Caroline from the south.
Thengvall attributed the franchise’s continued interest to Freddy’s consistency. The chain has never offered discounts or incentives to customers and franchisees, respectively. The food is also cooked to order, which he says helps differentiate the burger brand from competitors.
“The fast casual sector can sometimes be very attractive to people in the [economic] downturn,” Thengvall said. “And we certainly saw that in the 2008-2009 period. And we think we’re going to see it again if we do, in fact, have a recession or an economic downturn in the next few years. »
Freddy’s offers paid training to franchisees and provides on-the-ground support when a franchise group opens a Freddy’s restaurant for the first time. The chain is constantly evaluating how to support its franchisees and ensure its training department is properly staffed and on-the-ground business coaches are ready for upcoming openings, Thengvall said.
Development projects: While the company has a presence in 34 states coast-to-coast, Thengvall said the chain, which has a strong presence in the Midwest, is interested in pushing further into the Northeast where it has territories. open. Freddy’s has franchisees in New Jersey and Pennsylvania, and is considering a bigger presence in the Northwest. The company has a minimum development requirement of four units, and the opening schedule depends on the total number of units under the development agreement.
Ideal franchisees: Freddy’s prefers to work with franchisees with existing restaurant operations and an interest in expanding into a territory who is available, Thengvall said. The company prefers to work with people who have a passion and love for the brand rather than someone who is simply looking for return on investment, Thengvall said.
Quick facts about franchises
- Liquidity requirement: $400,000
- Net value : $1 million
- Franchisee fees: $30,000
- Royalty fee: 4.5%
- Advertising fee: 1.5%