Freddy’s Frozen Custard Bankruptcy: One Franchisee Faces Financial Struggles
Freddy’s Frozen Custard & Steakburgers is beloved for its made-to-order 100% beef patties, craveworthy shoestring fries, and creamy frozen custard. From fan favorites like the Dr Pepper Frost to the limited-time Smoky Bacon Cheddar Stack, Freddy’s always makes headlines. Now, attention shifts to finances, as one franchisee has filed for Chapter 11 bankruptcy.
Table of Contents
Freddy’s Frozen Custard Bankruptcy
Chapter 11 Filing by M&M Custard
On November 14, 2025, M&M Custard, LLC, a Freddy’s franchisee, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Kansas. This type of bankruptcy allows companies to restructure debts while staying operational. Court filings indicate that M&M Custard holds assets of just over $5 million but owes nearly $28 million—prompting the need for reorganization.
From Local Success to Ambitious Expansion
M&M Custard opened its first Freddy’s location in Jefferson City, Missouri, in 2012, followed by a second in Sedalia. The franchise quickly expanded to 42 locations across six states, including Missouri, Illinois, Indiana, Kentucky, Tennessee, and Kansas.
In 2021, Freddy’s offered M&M Custard the chance to expand into the Chicago market, which promised substantial growth. The franchisee invested in land, marketing, and staffing to attract a new customer base.
The Chicago Challenge
The Chicago locations, however, did not perform as hoped and became a financial burden. To protect its profitable stores, M&M Custard separated its operations into:
- M&M Custard Legacy – 31 profitable, well-established locations
- M&M Custard Chicago – underperforming stores that eventually closed, with the last closing in October 2025
The company believes this move will allow its legacy stores to stabilize and reorganize successfully. There’s currently no indication that these remaining locations will close.
What Fans Should Know
For Freddy’s enthusiasts, the Chapter 11 filing concerns one franchisee, not the chain as a whole. While Chicago fans lost their local stores, the brand’s legacy locations are expected to continue serving loyal customers. This situation highlights the risks even popular chains face when entering new markets.
For readers interested in similar cases, check out our article on other hamburger chain restaurant closures.
Conclusion
The Freddy’s Frozen Custard bankruptcy filing by M&M Custard highlights the risks of rapid expansion. While Chicago locations closed, Freddy’s legacy stores continue delighting loyal customers.
FAQ – Freddy’s Frozen Custard Bankruptcy & Related News
Did Freddy’s file bankruptcies?
No, Freddy’s as a brand has not filed for bankruptcy. Only one of its franchisees, M&M Custard, LLC, filed for Chapter 11, affecting some locations.
Who bought out Freddy’s Frozen Custard?
Freddy’s Frozen Custard & Steakburgers is privately held, and there’s no recent public buyout. Individual franchisees operate their locations.
What ice cream company just filed bankruptcy?
In recent news, M&M Custard, a Freddy’s franchisee, filed for Chapter 11 bankruptcy. This is not the Freddy’s brand as a whole.
What donut chain has filed for bankruptcy?
Several smaller donut chains have faced financial struggles recently, but this depends on the region. Popular chains like Dunkin’ have not filed.
Is Freddy’s owned by Pepsi?
No, Freddy’s is an independent chain and not owned by Pepsi. Some locations may serve Pepsi products as part of their beverage offerings.
Why is Wendy’s closing down?
Wendy’s may close underperforming locations to focus on profitability, market strategy, and remodeling older stores, not due to company-wide bankruptcy.
Leave a Reply