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Freddy's Frozen Custard & Steakburgers Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What is the Initial Investment for a Freddy's Frozen Custard & Steakburgers Franchise?
To open a Freddy's Frozen Custard & Steakburgers franchise, you should anticipate an initial investment ranging from $794,254 to $2,523,239. This investment includes a franchise fee of $30,000, which is required upfront. Additionally, you will need to have between $794,254 and $1,439,105 in cash readily available, along with a net worth of at least $1,000,000 to qualify for ownership. Understanding these financial requirements is crucial as you prepare for franchise ownership.
What Are the Ongoing Fees Associated with a Freddy's Franchise?
As a Freddy's franchisee, you will be responsible for ongoing fees that include a royalty fee of 4.5% of your gross sales and a marketing fee of 1.5%. These fees are essential for supporting the brand's marketing efforts and ensuring you benefit from the collective strength of the franchise network. It's important to factor these costs into your financial planning to maintain profitability in your operations.
What is the Average Revenue Potential for a Freddy's Franchise?
Freddy's Frozen Custard & Steakburgers franchises have shown promising revenue potential, with an average annual revenue of approximately $1,839,856 per unit. The median revenue is slightly lower at $1,758,128, while the revenue can vary significantly, with the lowest recorded at $555,243 and the highest at $4,290,719. This variance highlights the importance of location and operational efficiency in maximizing your franchise's financial performance.
What is the Breakeven Time for a Freddy's Franchise?
The breakeven time for a Freddy's Frozen Custard & Steakburgers franchise is estimated at 15 months, which is relatively favorable in the franchise industry. Additionally, the investment payback period is around 12 months, indicating that franchisees can expect to recover their initial investment quickly if their operations are well-managed. This timeframe can be a significant factor for potential franchisees considering the financial viability of the opportunity.
Freddy's Frozen Custard & Steakburgers Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Freddy's Frozen Custard & Steakburgers Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 368 | 387 | 420 |
| Net Change YoY | 19 | 33 | |
| Franchised Units | 335 | 357 | 391 |
| Net Change YoY | 22 | 34 | |
| Corporate Units | 33 | 30 | 29 |
| Net Change YoY | -3 | -1 |
Franchise Overview
Freddy's Frozen Custard & Steakburgers is a fast-casual restaurant chain founded in 2002, known for its delicious steakburgers, fresh frozen custard, and a welcoming atmosphere. With a commitment to quality, Freddy's offers a unique dining experience that emphasizes fresh ingredients and friendly service. The brand has seen significant growth, expanding its footprint across the United States and gaining a loyal customer base.
Investment Requirements
To become a Freddy's franchisee, the initial investment ranges from $794,254 to $2,523,239. This includes a franchise fee of $30,000. Potential franchisees should have a cash requirement of $794,254 to $1,439,105 and a net worth of at least $1,000,000. These financial prerequisites ensure that franchisees are well-prepared to operate a successful unit.
Financial Performance
Freddy's units demonstrate strong financial potential, with an average annual revenue of $1,839,856 per location. The median annual revenue is slightly lower at $1,758,128, while revenues can vary significantly, with the lowest unit earning $555,243 and the highest reaching $4,290,719. This range highlights the brand's ability to perform well across diverse markets.
Royalty and Marketing Fees
Freddy's franchisees are required to pay a royalty fee of 4.5% of gross sales, along with a marketing fee of 1.50%. These fees contribute to the brand's overall marketing efforts and support franchisees in driving sales and customer engagement. The structured fee system helps maintain brand consistency and effectiveness in local marketing initiatives.
Operational Insights
The average breakeven time for a Freddy's franchise is approximately 15 months, with an investment payback period of around 12 months. This indicates a relatively quick return on investment, making Freddy's an attractive option for aspiring franchisees. Understanding these operational metrics is crucial for potential investors looking to evaluate the financial viability of the franchise.
Growth and Expansion
Freddy's has been on a steady growth trajectory, with franchised units increasing from 335 in 2020 to 391 in 2022. The total number of units rose from 368 to 420 during the same period, reflecting the brand's successful expansion strategy. This growth not only signifies a strong market presence but also presents opportunities for new franchisees to join a thriving network.
Frequently Asked Questions
The initial investment for a Freddy's franchise ranges from $794,254 to $2,523,239, which includes the franchise fee, equipment, and other startup costs.