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Local Freddy’s Franchisee Files for Bankruptcy, Aims to Keep Doors Open
M&M Custard, LLC, a significant franchisee operating nearly 40 Freddy’s Frozen Custard & Steakburgers locations across six states, has filed for Chapter 11 bankruptcy. The filing, made on November 14, allows the company to reorganize its finances while aiming to keep its restaurants open for business.
Founded in 2010 by CEO Eric Cole with a single Freddy’s in Jefferson City, Missouri, M&M Custard expanded rapidly to include locations in Missouri, Indiana, Illinois, Kansas, Kentucky, and Tennessee. The company even had ambitious plans to open over a dozen new Freddy’s restaurants in the Chicago area in 2022.
Despite its growth, M&M Custard is facing substantial financial challenges. Court documents indicate the company holds approximately $5.2 million in assets against nearly $27.7 million in liabilities. This situation mirrors a broader trend within the fast-casual and quick-service restaurant industry, which has been grappling with rising food and labor costs.
Freddy’s Frozen Custard & Steakburgers, a chain that originated in Kansas in 2002, has since grown to over 550 locations across the United States and Canada, with projected sales exceeding $1 billion in 2024. The vast majority of these locations are operated by franchisees like M&M Custard. The chain is currently owned by the global private equity firm Rhône.
While M&M Custard’s current plan is to maintain operations at all its restaurants during the bankruptcy proceedings, this strategy may evolve. The Chapter 11 filing provides a pathway for the company to restructure its debts and continue serving customers, rather than immediately closing its doors.