Wichita, Kansas-based Freddy’s Frozen Cusard & Steakburgers has 537 locations in 36 states, with an additional 540 development commitments.
With four franchise agreements signed for 21 locations in five states and another dozen or so restaurants in the final stages of construction, Freddy’s Frozen Custard & Steakburgers is closing in on another big growth year.
Chief Development Officer Andrew Thengvall is not ready to celebrate just yet. He and his team at Freddy’s are focused on signing more franchise agreements and opening more restaurants to hit 800 units in the next few years. The Wichita, Kansas-based company has 537 locations in 36 states.
“I always want us to get a new record for openings every year and we’re still way short of the 62 new restaurants we opened last year. So far this year we’ve opened 24 restaurants and we’re looking at adding 45 to 50 new restaurants this year. That’s great, but still below what I’m hoping for,” Thengvall said.
Andrew Thengvall is the chief development officer for Freddy’s Frozen Custard & Steakburgers.
Thengvall said the latest agreements signed are with three new franchisees and one existing operator.
Imrit Chattrath and Jasdeep Singh of Puget Sound Bites Inc. signed a 10-unit development agreement in the Seattle area and are debuting the fast casual brand in Washington.
In New Jersey, Peter Labib inked a deal to open four restaurants in Monmouth County. In another four-unit deal, Frank Fayyaz of ARF Restaurants will develop Freddy’s locations in the Austin, Texas market.
Meanwhile, the father-son team behind Cedar Rapids, Iowa-based MLY Investments signed a three-unit agreement for Rock Island and Knox County, Illinois, as well as Des Moines, Iowa. The deal adds to their portfolio of 10 Freddy’s in Iowa and Illinois. MLY has another 15 locations in various stages of development across the Midwest.
“It’s an exciting time for Freddy’s with a lot of new development agreements being signed and growth continuing with both existing groups and with new folks,” Thengvall said. “We’ve got nine developments signed this year and it’s been just about a 50-50 split with four existing groups and five new groups. That’s really been the pattern for us and the ratio that we really like.”
Related: Existing Franchisees Drive Nationwide Expansion for Freddy’s
“A key for us in our growth has been the success of our restaurants,” he said.
Thengvall said the average unit volume for Freddy’s increased from about $1.5 million in 2019 to just under $1.9 million. The AUV for the top quartile of franchise restaurants is $2.6 million, according to the company’s franchise disclosure document.
“The vast majority of our restaurants are freestanding,” said Thengvall, “and then endcaps with the drive-thru would be the next most prominent with less than 5 percent inline right now.”
The total investment range for a Freddy’s is $897,936 to $1.63 million for an inline restaurant, $1.78 million to $2.5 million for an endcap restaurant and $1.49 million to $2.75 million for a standalone restaurant.
“The thing we’ve done, like a lot of other brands have done, is shrink the model down a bit for the restaurants we’re building now,” Thengvall said. “We still have the 3,500- to 3,800-square-foot locations, but the inlines, endcaps and drive-thrus being built are now more in the 2,000 to 2,200 range.
“We like to attack a market with all those available types of restaurants because we feel like that gives us the best chance at profitable restaurants that can really penetrate the market and be where we want to be,” he said.