Freddy’s Frozen Custard & Steakburgers Chief Development Officer Andrew Thengvall
Freddy’s Frozen Custard & Steakburgers presents pins and picture frames signed by the late co-founder Freddy Simon every year to employees in recognition of their tenure with the brand.
It does the same for franchisees, and while Chief Development Officer Andrew Thengvall has no idea of the number distributed, he knows it’s a lot.
“We have so many multi-unit franchisees that have been with us for many years, and they keep opening new restaurants. Their longevity and their success really are the big story for us because, without them, we wouldn’t have been able to achieve the steady, consistent growth we’ve had,” Thengvall said.
Freddy’s, which has 520 locations open in 37 states, aims to have 800 restaurants by 2026. The company opened 62 restaurants last year, including its 500th location in Burleson, Texas, in October. This week, Freddy’s opened its newest restaurant in Valley Park, Missouri.
If the fast-casual restaurant chain, which is known for its steakburgers, shoestring fries and freshly churned frozen custard, is able to reach its lofty unit goals, it will be because of the success of its multi-unit franchisees, said Thengvall. Those owners, he continued, account for more than 90 percent of the company’s franchise system, and their success is driving the steady growth of the company. Freddy’s moved up 23 spots on the Franchise Times Top 400, to No. 97, with $807.8 million in systemwide sales from 456 units in 2022.
“Our growth has been steady and consistent and it’s all because of our longtime partners who have been with us for a number of years now and keep adding more restaurants,” Thengvall said.
Recent development deals signed with existing franchisees will add more than 30 Freddy’s to target markets within New Mexico, Texas, Idaho, Arkansas, Oklahoma, Missouri and Arizona. Those deals include Denver-based ERC Hospitality, which operates 34 Freddy’s locations and is set to build 13 new stores across New Mexico and in El Paso, Texas. Another is Glendale, Arizona-based EMS Management, which has committed to the development of nine new Freddy’s locations in Idaho, Oregon and Utah.
Additionally, Ram-Z Restaurant Group, which owns nine Freddy’s in Oklahoma and Texas and has 13 units in development there, signed to open five more restaurants in Oklahoma and northwest Arkansas. Atlanta-based TR Hospitality committed to building three new Freddy’s locations between Longview, Tyler and Lindale, Texas.
Jaytoo, which owns 13 Freddy’s and has been a franchisee since 2011, committed to opening three additional locations in Arizona, said Thengvall. He noted the company also plans to open its first restaurants in Canada later this year with master franchisee North 49 Frozen Custard, targeting the provinces of Saskatchewan and Alberta.
Freddy’s average unit volume was $1.8 million in 2022, while the top 25 percent of restaurants did $2.5 million, according to the company’s franchise disclosure document. The investment range for a Freddy’s is $769,752 to $2,077,046.
For ERC Hospitality CEO Brian Pyle, who’s been a Freddy’s franchisee since 2009 and operates the company’s top revenue-producing restaurant in Colorado, the opportunity to expand his portfolio of restaurants was simply too good to pass up.
Brian Pyle is the CEO of ERC Hospitality, which operates 34 Freddy’s locations and recently signed a deal to build 13 new stores across New Mexico and in El Paso, Texas.
“We’ve done extremely well with Freddy’s in Colorado and I don’t see why we can’t duplicate that success in the Albuquerque, New Mexico and El Paso, Texas area,” said Pyle, who has opened two or three Freddy’s nearly every year since opening his first location in Littleton, Colorado, in 2009.
Pyle’s family has a long history with Freddy’s. His uncle, Ron Oberg, the president and owner of Epoch Development and TR Hospitality Group and the first franchisee for the brand in 2004, who convinced Pyle to become a Freddy’s operator. Today, Epoch Development owns more than a dozen Freddy’s in Kansas, Oklahoma and Texas, while TR Hospitality has seven in Nebraska and is developing two units in Sioux Falls, South Dakota.
Pyle said he’s seen no change in the quality of Freddy’s food and overall operations since the company was acquired by Thompson Street Capital Partners in 2021. If anything, he said things have improved with new investments being made in the brand, including the launch of a slightly smaller but more efficient prototype restaurant this year.
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The new 2,800- and 2,400-square-foot restaurants being built will still accommodate indoor seating for 75-85 guests, but will devote additional space to pickup and drive-thru and speed up food preparation times, said Thengvall. They will also require fewer front-line employees to cook the steakburgers and prepare the custom-made custards, he said.