Popular Fast Food Chain's Franchisee Files For Bankruptcy

M&M Custard, the franchisee of Freddy's Frozen Custard & Steakburgers, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Kansas last Friday (November 14), according to the Franchise Times.

The company, which operates 32 Freddy's locations in Illinois, Indiana, Kansas, Kentucky, Missouri and Tennessee, reported assets of $5.2 million and liabilities of $27.7 million owed to more than 100 creditors, confirming plans to close some of the restaurants in the court documents. M&M Custard was founded by Eric Cole in 2010, opened its first Freddy's location in Jefferson City, Missouri, in 2012, and operated up to 42 locations as of February 2024, according to a post shared on Cole's LinkedIn account at the time.

The company was an active developer within the fast food chain's system, having reached an agreement to expand Freddy's footprint in the Chicago area with 13 locations in 2022. Freddy's described M&M Custard as a "veteran franchise group" that had "consistently fueled Freddy's franchise development, spearheading the fast-casual restaurant concept's growth in new markets for over a decade" in a press release announcing the Chicago area expansion deal at the time.

Freddy's ranked No. 79 overall in the Franchise Times' Top 400 list of the largest franchise brands for 2025, with an estimated $987.6 million generated in sales for the 2024 fiscal year, having increased by 6.8% from the previous year, and operating 560 locations in the U.S. and Canada, according to its official website.