Complete investment analysis based on official FDD data
Total Investment
$785,936 – $2,753,566
Franchise Fee
$35,000
Royalty Rate
5.0%
The total initial investment to open a Freddy's Frozen Custard & Steakburgers franchise ranges from $785,936 to $2,753,566, as disclosed in their Franchise Disclosure Document. This includes the one-time franchise fee of $35,000.
Midpoint estimate: $1,769,751
$35,000
One-time initial fee
The Freddy's Frozen Custard & Steakburgers franchise fee is a one-time upfront payment made to the franchisor when you sign the franchise agreement. This fee grants you the right to operate under the Freddy's Frozen Custard & Steakburgers brand and is included in the total initial investment range above.
Royalty Fee
5.0%
of gross revenue
Ad/Marketing Fund
2.0%
of gross revenue
Total Ongoing Fee Burden: 7.0% of gross revenue
Combined royalty and advertising fund contributions before any other fees.
| Fee Type | Rate | Type | Notes |
|---|---|---|---|
| Royalty | 5.0 | PCT | Payable the 3rd day after the end of each consecutive week during each 28-day operating period. Gross Receipts includes all gross revenue related to the Restaurant, excluding sales taxes and including gift card redemptions. |
| National Marketing and Advertising Fund | 2.0 | PCT | Currently 2% of Gross Receipts. Range is 0%-3%. May be increased above 3% with 66% vote of all restaurants or 51% vote of franchised restaurants. Payable the 3rd day after the end of each consecutive week during each 28-day operating period. Non-traditional restaurant franchisees pay reduced contributions. |
| Technology Support Fee | 100.0 | FIXED | Used to defray costs of technology products and services associated with the System. May be modified upon 30 days' prior written notice. Payable the 3rd day after the end of each consecutive week during each 28-day operating period. |
| Site Selection | N/A | VARIABLE | Currently not charged. If charged, requires reimbursement for travel, food, and other reasonable expenses incurred. Payable upon demand. |
| Cooperative Advertising | N/A | PCT | Range is 0%-2% of Gross Receipts. Obligation commences 30 days after notice of implementation. Payable on the 15th day after the end of each 28-day operating period. Contributions count toward required local advertising expenditures. No cooperatives established as of FDD date. |
| Additional Training | N/A | VARIABLE | Initial training provided at no cost. Franchisee responsible for travel, lodging, and food expenses for all employees. Must reimburse for training replacement personnel and other required or optional training. Payable upon demand. |
| New Product/Service Testing | N/A | VARIABLE | For inspection and testing of items from non-approved sources. Franchisee or proposed source must pay reasonable expenses of testing or inspection. Payable upon demand. |
| Audit Expenses | N/A | VARIABLE | Payable if audit shows understatement of reported Gross Receipts of 2% or more, or if franchisee fails to file required financial reports. Payable upon demand. |
| Loan Approvals | N/A | VARIABLE | Range excludes cost of outside services not performed by franchisor. Must reimburse for reasonable costs and expenses including legal and accounting fees. Payable as incurred. |
| Transfer | 5000.0 | FIXED | Payable before consummation of transfer of interest in License Agreement or Development Agreement. Not payable if transfer is to franchisor, to entity formed for convenience of ownership without change of beneficial ownership, or to employees (if less than 25% ownership and other conditions met). |
| Private Offering Fee | N/A | VARIABLE | Range excludes cost of outside services not performed by franchisor. Must reimburse for reasonable costs and expenses including legal and accounting fees. Payable as incurred. |
| Interest | 1.5 | PCT | 1.5% per month or as allowed by law on overdue amounts owed to franchisor. Interest begins from date of underpayment. Payable upon demand. |
| Development Schedule Extension Fee | 10000.0 | FIXED | Payable if franchisee requests and franchisor grants extension of up to 6 months of a deadline for an option in the Development Schedule. Must be submitted at least 30 days prior to deadline date. Refundable if extension request is rejected. |
| Renewal Fee | N/A | VARIABLE | Payable upon signing of new License Agreement before expiration of initial term of License Agreement. |
| Costs and Attorneys' Fees | N/A | VARIABLE | Payable if incurred by franchisor in obtaining injunctive or other relief for enforcement of any term in Development Agreement or License Agreement and for collecting monies owed. Payable as incurred. |
| Indemnification | N/A | VARIABLE | Must reimburse franchisor for claims arising from Restaurant operations, any occurrence at Restaurant, and any joint employer claims. Payable as incurred. |
| Reimbursement of Insurance Costs | N/A | VARIABLE | If franchisee fails to obtain or maintain required minimum insurance, franchisor may obtain insurance and charge its cost along with reasonable expenses. Payable upon demand. |
| Taxes | N/A | VARIABLE | Any fees or assessments imposed on franchisor (other than income taxes) for acting as a franchisor or licensing the Marks. Payable upon demand. |
| Early Termination Fee | N/A | VARIABLE | Payable if franchisor terminates License Agreement after franchisee default. Amount equals sum of all License Fees, royalty fees, marketing and advertising fees, and other fees for the 36 28-day operating periods preceding default. If Restaurant operated less than 36 periods, fee is projected on 36-period basis. If remaining term is less than 36 periods, fee based on remaining periods. Payable upon demand. |
| EcoSure/Restaurant Inspection Fees | N/A | VARIABLE | Up to $3,000. Payable upon revisit following a failed inspection. Payable as incurred. |
| Operational Assessment Report (OAR) Restaurant Inspection Fees | N/A | VARIABLE | Up to $3,000. Payable upon revisit following a failed inspection. Payable as incurred. |
Category
QSR
Franchise Score
out of 100
Freddy's Frozen Custard & Steakburgers combines a quick-service restaurant concept offering premium frozen custard, gourmet steakburgers, and fresh-cut fries. The franchise emphasizes high-quality ingredients and a casual dining atmosphere with a focus on customer service.
Median Revenue
$2,224,066
per year, per location
Estimated Owner Profit
$131,220
per year
Profit Margin
5.9%
of revenue
Estimation method: disclosed+benchmark
Estimated ROI (Simple Payback): 13.5 years
Based on midpoint investment of $1,769,751 and estimated annual owner profit of $131,220.
Avg. Annual Closure Rate
0.5%
Low risk — below industry average
Net Unit Growth
-391 units
From 2022 to 2025
| Year | Start | Opened | Closed | Transfers | End |
|---|---|---|---|---|---|
| 2022 | 391 | +37 | — | — | 427 |
| 2023 | 427 | +61 | — | — | 484 |
| 2024 | 484 | +37 | -7 | — | 514 |
| 2025 | — | +70 | — | — | — |
Based on the FDD data, here is a data-driven snapshot of the Freddy's Frozen Custard & Steakburgers franchise opportunity:
Overall Score
89/100
Strong opportunity
Est. Payback Period
13.5 yrs
Longer payback
Risk Level
Low
0.5% annual closure rate
Freddy's Frozen Custard & Steakburgers scores well across our evaluation criteria, indicating a strong franchise system. With median unit revenue of $2,224,066 and a combined fee burden of 7.0% of gross revenue, prospective franchisees should model their own financial projections carefully. For a complete analysis including risk factors, deal-breaker flags, and detailed financial modeling, see the full report.
Get the full Freddy's Frozen Custard & Steakburgers franchise intelligence report with risk analysis, deal-breaker alerts, and detailed financial projections.
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