2026 FDD Issued Apr 30, 2026 Minnesota Commerce (CARDS)
Freddy's Franchise Cost (2026)
A Freddy's franchise costs an estimated $1,586,334 – $2,802,000 to open, according to Item 7 of the 2026 Franchise Disclosure Document (FDD). That total includes the $35,000 initial franchise fee (Item 5) and covers this format: Standalone Restaurant with drive-thru. Item 6 lists royalty: 5% of Gross Receipts, subject to the conditions below. This record has unresolved source-review issues and was published provisionally before independent verification was complete.
Read the source-review hold before using these figures.
- Total investment
- $1.59M – $2.8MItem 7 source and qualifications
- Franchise fee
- $35KItem 5 source and terms
- Royalty
- 5% of Gross ReceiptsItem 6 conditions and fee bases apply
- Brand fund
- 3% of Gross ReceiptsItem 6 conditions and fee bases apply
What stands out about Freddy's
Construction is the line that moves this budget. Item 7 prints separate columns for a standalone drive-thru building, an end-cap unit with a drive-thru and an in-line unit without one, and the standalone column used here runs from $1,586,334 to $2,802,000. Its construction and leasehold line accounts for most of that spread, and it already includes the construction advisory service that Item 5 makes mandatory for a first restaurant. Buying land is outside the estimate entirely, so a purchased site adds a cost the FDD does not price.
Item 19 reports profit-type figures, but only for part of the system. Sales appear for every format, and franchised restaurants open all of 2025 averaged $1,859,481. Expense lines and four-wall EBITDA (earnings before interest, taxes, depreciation and amortization at the restaurant level) cover only end-cap and in-line restaurants whose owners sent in profit and loss statements. Stand-alone restaurants, the large majority of the franchised count, have no expense data. The EBITDA definition also leaves out above-restaurant management costs, and the labor line excludes owners' draws, so neither figure shows what an owner takes home.
Exits rose in 2025. Item 20 records 19 franchised restaurants leaving the system that year, all of them terminations, after a smaller count the year before, while openings reached 47. The transfer table shows a separate spike: owner-to-owner sales jumped in 2024 and fell back to almost none in 2025. A buyer can ask the franchisor which markets the terminated restaurants were in and whether the 2024 transfers came from a single portfolio sale.
Both percentage fees are collected weekly within each operating period rather than once a month. Item 6 shows the marketing fund contribution reaching 3% of Gross Receipts of Gross Receipts in October 2026, the ceiling the franchisor can set on notice; going higher requires a vote of the restaurants. The 15-year term runs from opening day rather than from signing, and a renewal adds another term of the same length.
What are the initial franchise fees and financial requirements for Freddy's?
Item 5 lists an initial franchise fee of $35,000 for Freddy's. Check the cited Item 5 for payment timing, discounts and format-specific terms.
Item 5 (PDF pages 11-13) charges a $35,000 License Fee in a lump sum when the License Agreement is signed, less any License Fee Deposit or Development Fee credit; it is nonrefundable. A Development Agreement requires a nonrefundable Development Fee of $15,000 per restaurant plus a $20,000 License Fee Deposit toward the first restaurant's License Fee, both credited against License Fees. A first restaurant must use the franchisor's construction advisory services for a nonrefundable $35,000 Advisory Fee plus reimbursed out-of-pocket expenses. Qualifying veterans receive a 25% reduction in the License Fee for a first restaurant. Grand opening training staff costs (travel, expenses and payroll) are estimated at $20,000 to $60,000.
Source: Freddy's 2026 FDD, Item 5, PDF p. 11.
This record lists no minimum net worth or liquid-capital requirement for Freddy's, because no sourced figure has been recorded. Ask the franchisor for its current financial qualifications in writing.
How much does it cost to open a Freddy's franchise? (Item 7)
Source: Freddy's 2026 FDD, Item 7, PDF p. 18.
Item 7 of Freddy's 2026 Franchise Disclosure Document estimates the total cost to open one standalone restaurant with drive-thru at $1,586,334 – $2,802,000. This total includes the initial franchise fee.
| Expense Category | Low ($) | High ($) |
|---|---|---|
| License Fee | $35,000 | $35,000 |
| Training Costs and Expenses (Travel, Meals, Lodging, and Employee Wages) | $20,000 | $60,000 |
| Construction, Remodeling, and Leasehold Improvements | $950,000 | $1,800,000 |
| Real Property Rent (one month) | $5,667 | $15,750 |
| Security Deposit | $5,667 | $15,750 |
| Computer, Point of Sale Equipment, Outdoor Ordering System and Software, Security Cameras, Drive Thru Headsets | $42,500 | $59,500 |
| Equipment, Furniture, Fixtures and Décor | $450,000 | $600,000 |
| Building Signage / Interior Neon / LED Border | $35,000 | $100,000 |
| Miscellaneous Opening Costs | $8,000 | $15,000 |
| Opening Inventory and Supplies | $10,000 | $25,000 |
| Insurance | $2,000 | $8,000 |
| Grand Opening Advertising | $2,500 | $8,000 |
| Additional Funds – 3 months | $20,000 | $60,000 |
| Total | $1,586,334 | $2,802,000 |
Other formats
| Format | Total investment |
|---|---|
| End Cap Restaurant with drive-thru | $1,026,334 – $2,361,000 |
| In-Line Restaurant without drive-thru | $854,834 – $1,302,000 |
For comparison, the median high-end investment among 25 restaurants & food records without a source-review hold is $1,297,100.
Item 7 (PDF pages 18-19) prints separate columns for Standalone (with drive-thru), End Cap (with drive-thru) and In-Line (no drive-thru) restaurants. This record uses the Standalone column; its 13 lines add to the printed $1,586,334-$2,802,000. Construction, remodeling and leasehold improvements is the widest line and includes the cost of the required construction advisory services (note 2); the FDD does not estimate the cost of buying land. Additional funds cover three months and exclude any owner draw or salary (note 7). The cover page prints the In-Line high total as $1,301,000; the Item 7 table prints $1,302,000, which its In-Line lines add to.
What ongoing royalties and fees does Freddy's charge? (Item 6)
Source: Freddy's 2026 FDD, Item 6, PDF p. 13.
Item 6 of Freddy's 2026 FDD lists the charges below. Recurring charges and charges triggered by a transfer, renewal or other event have different conditions. Read each fee’s basis and notes before comparing rates.
How to read an Item 6 fee table.
| Fee Type | Amount / Rate | Payment Frequency | Notes & Source |
|---|---|---|---|
| Royalty | 5% of Gross Receipts | Every period | 5% of all Gross Receipts, payable the third day after the end of each week of each 28-day operating period. (Item 6, PDF p. 13) |
| National Marketing and Advertising Fund | 3% of Gross Receipts | Every period | 0%-3% of Gross Receipts: Item 6 lists 2.5% currently and 3% as of October 8, 2026. Payable weekly with the royalty. Raising it above 3.0% requires a vote of the restaurants (note 3), and non-traditional restaurants pay a reduced contribution (note 1). Separately, the franchisor may require local advertising spending of up to 2.0% of Gross Receipts (note 3). (Item 6, PDF p. 13) |
| Technology Support Fee | $100 per 28-day period | Every period | $100 per 28-day operating period, payable on the weekly schedule. The franchisor may modify it on 30 days' written notice. (Item 6, PDF p. 13) |
| Site Selection | $0 – $2,000 | When it applies | $0-$2,000 per trip, upon demand. Not currently charged; if charged, the franchisor requires reimbursement of travel, food and other reasonable expenses. (Item 6, PDF p. 14) |
| Cooperative Advertising | 0% – 2% of Gross Receipts | When it applies | 0%-2% of Gross Receipts, payable on the 15th day after each 28-day operating period, starting 30 days after notice. No cooperatives had been established as of the FDD date; contributions count toward required local advertising (note 4). (Item 6, PDF p. 14) |
| Additional Training | $100 – $18,000 | When it applies | Upon demand. Initial training is free, but you pay your employees' and the franchisor's employees' travel, lodging and food, and reimburse training for replacement personnel and other required or optional training. (Item 6, PDF p. 14) |
| New Product/Service Testing | $0 – $1,000 | When it applies | $0-$1,000 per product or service, upon demand, for testing an item or source the franchisor has not approved. (Item 6, PDF p. 14) |
| Audit Expenses | $500 – $5,000 | When it applies | $500-$5,000 per location. Payable if an audit shows Gross Receipts understated by 2% or more, or if you fail to file required financial reports. (Item 6, PDF p. 14) |
| Loan Approvals | $1,000 – $10,000 | When it applies | $1,000-$10,000, not including outside services. Reimburses the franchisor's costs of reviewing a proposed loan, including legal and accounting fees. (Item 6, PDF p. 14) |
| Transfer | $5,000 | When it applies | Due before the transfer closes. Not payable for a transfer to the franchisor, to an entity formed for convenience without a change of beneficial ownership, or to employees (under 25% of ownership interests) that meets the other conditions. (Item 6, PDF p. 15) |
| Private Offering Fee | $1,000 – $20,000 | When it applies | $1,000-$20,000, not including outside services. Reimburses the franchisor's costs of reviewing a proposed private offering. (Item 6, PDF p. 15) |
| Interest | 1.5% of overdue amounts | When it applies | 1.5% per month or as allowed by law on overdue amounts, from the date of the underpayment. (Item 6, PDF p. 15) |
| Development Schedule Extension Fee | $10,000 | When it applies | Payable with a request, at least 30 days before the deadline, to extend a Development Schedule deadline by up to 6 months; refunded if the request is rejected. (Item 6, PDF p. 15) |
| Renewal Fee | Varies | When it applies | One-third of the then-current initial License Fee, payable when the new License Agreement is signed before the initial term expires. (Item 6, PDF p. 15) |
| Costs and Attorneys' Fees | Varies | When it applies | As incurred, if the franchisor seeks injunctive or other relief to enforce the agreements or collects money you owe. (Item 6, PDF p. 16) |
| Indemnification | Varies | When it applies | Reimbursement for claims arising from the restaurants' operations, any occurrence at the restaurant and any joint-employer claims. (Item 6, PDF p. 16) |
| Reimbursement of Insurance Costs | Varies | When it applies | If you fail to obtain or maintain the required insurance, the franchisor may obtain it and charge its cost plus reasonable expenses. (Item 6, PDF p. 16) |
| Taxes | Varies | When it applies | Any fees or assessments (other than income taxes) imposed on the franchisor for acting as a franchisor or licensing the Marks, upon demand. (Item 6, PDF p. 16) |
| Early Termination Fee | Varies | When it applies | If the franchisor terminates after your default: the sum of all License Fees, royalty, marketing and advertising fees and other fees for the 36 28-day operating periods before the default. It is projected when the restaurant has operated fewer periods, and limited to the periods remaining in the term when fewer than 36 remain (note 5). (Item 6, PDF p. 16) |
| EcoSure/Restaurant Inspection Fees | Varies | When it applies | Up to $3,000, as incurred, payable upon a revisit following a failed inspection. (Item 6, PDF p. 16) |
| Operational Assessment Report ("OAR") Restaurant Inspection Fees | Varies | When it applies | Up to $3,000, as incurred, payable upon a revisit following a failed inspection. (Item 6, PDF p. 17) |
Explore annual fees and payback assumptions
This fee schedule cannot be reduced to the calculator’s simple sales-based formula. Enter your own assumptions and check them against the Item 6 terms.
Freddy's startup investment and modeled fees over 10 years
A source check placed this record on review hold. Automatic fee estimates are withheld until the outstanding issues are resolved. See the fee amounts and definitions in Item 6 above. Open the calculator with your own assumptions.
Item 20: Freddy's franchised outlet history
Source: Freddy's 2026 FDD, Item 20, PDF p. 63.
Item 20 Table 3 reports 542 franchised outlets at the end of 2025. The company-owned table reports a further 38 outlets.
| Year | Franchised at Start | Opened | Reported Exits | At End | Franchise Exit Rate (%) |
|---|---|---|---|---|---|
| 2023 | 427 | 61 | 4 | 484 | — |
| 2024 | 484 | 37 | 7 | 514 | — |
| 2025 | 514 | 47 | 19 | 542 | — |
Calculated outlet totals, net growth and exit rates are withheld because this record has not cleared the current Item 20 source checks. The table retains the outlet counts printed in Item 20. Read the unresolved source issues.
Reported exits include terminations, non-renewals, franchisor reacquisitions and other cessations. A reacquired outlet may continue operating. How we calculate the exit rate. How to read the Item 20 outlet tables.
1 units changed owners in 2025.
Item 20 Table 3 (PDF pages 59-63) prints national totals on PDF page 63. Table 4 (PDF page 63) reports the company-owned restaurants, which the affiliate FFC operates; transfers come from Table 2 (PDF pages 58-59).
How much do Freddy's franchise owners make? (Item 19)
Source: Freddy's 2026 FDD, Item 19, PDF p. 47.
Item 19 of the 2026 FDD reports average Annual Gross Receipts, all franchised restaurants of $1,859,481 (2025 fiscal year, 477 franchised restaurants open the entire 2025 fiscal year). Besides sales, Freddy's Item 19 reports “Average EBITDA - 4 Wall, franchised End Cap and Inline restaurants” and “Average EBITDA - 4 Wall, company-owned End Cap and Inline restaurants”. Some of them cover company-owned units rather than franchised ones; the “Based on” column shows which. Each figure follows the franchisor’s own definition in Item 19, which decides which costs are deducted and whether an owner’s salary is one of them. None of them is necessarily an owner’s take-home pay.
Read the source-review hold before using this figure.
See every Freddy's Item 19 figure, with its period and sample.
Payback calculator (enter your own assumptions) Check any inputs against this record’s Item 7 startup costs and Item 6 fee rules.
How to interpret Freddy's Item 19 figures and sample limits.
How long is the Freddy's franchise agreement term?
Source: Freddy's 2026 FDD, Item 17, PDF p. 41.
The standard Freddy's franchise agreement runs 15 years, with renewal terms of 15 years.
Item 17 (PDF page 41): the term is 15 years from the date the restaurant opens for business, with a 15-year renewal if you give notice, remodel, are not in default, sign the then-current License Agreement (which may differ materially), pay the fee, sign a release and complete training.
How long does it take to open a Freddy's franchise? (Item 11)
Source: Freddy's 2026 FDD, Item 11, PDF p. 32.
Item 11 of the 2026 FDD states the time from signing a License Agreement to opening: generally 6 to 12 months.
Franchises with a similar investment range
These published records are selected by proximity to Freddy's $1,586,334 low-end Item 7 investment, starting with Restaurants & Food. Formats, fees and source qualifications differ; the figures are not interchangeable budgets:
- Sonic Drive-In $1.49M – $2.52M Source review pending Provisional publication Restaurants & Food
- Panera Bread $1.34M – $4.57M Restaurants & Food
- Taco Bell $1.86M – $4.31M Source review pending Provisional publication Restaurants & Food
- Jack in the Box $1.91M – $4.04M Restaurants & Food
- Popeyes $1.22M – $3.92M Source review pending Provisional publication Restaurants & Food
- Planet Fitness $1.28M – $5.39M Fitness
Compare other restaurants & food franchises
Sources
Freddy's, L.L.C. Franchise Disclosure Document, issued April 30, 2026, as filed with the Minnesota Commerce (CARDS). Read the source FDD PDF. How to get this FDD yourself.
- Item 5: cited PDF p. 11
- Item 6: cited PDF p. 13
- Item 7: cited PDF p. 18
- Item 19: cited PDF p. 46
- Item 20: cited PDF p. 63
- Agreement term (Item 17): cited PDF p. 41
Page references for Freddy's use the PDF viewer's digital page count, not printed page headers. Some viewers download the document instead of opening the referenced page.
If the state document viewer does not open, use Minnesota Commerce's public filing instructions to look up the filing by franchisor name and document date.
Document & verification changelog
- November 3, 2026: Provisional publication approved per owner directive: Owner authorized provisional publication on November 3, 2026. The FDD's investment totals and Item 19 sample counts conflict; the sourceReview hold remains and this record is not independently verified.
- November 3, 2026: Initial cost profile published from the 2026 Franchise Disclosure Document (issued April 30, 2026).
- October 29, 2026: Source review hold recorded. Unresolved corrections are listed in this source section.
- October 29, 2026: Drafted from the April 30, 2026 Clean FDD filed in Minnesota: cover, Item 1, Item 5, all 21 Item 6 rows, every Item 7 row and total for the three formats, Item 11 opening time, Item 17 term, Item 19 Tables 1-11 and Item 20 Tables 1-4.