In addition to standalone, Freddy’s offers inline, endcap drive-thru, and a growing nontraditional business. The brand opened its first airport location in Oklahoma City this year, and another is in the queue. The company is also exploring college campuses, casinos, and stadiums.
In 2022, expansion is split evenly among new and existing operators, and agreements have been sold from coast to coast. In April, Freddy’s announced multi-unit agreements that will bring 64 locations to North Carolina, South Carolina, Texas, Louisiana, Illinois, and California. In May, the chain announced its debut in Fargo, North Dakota, and Sioux Falls, South Dakota. The Fargo restaurant has been one of the strongest performers in the country, and the Sioux Falls store set new records for opening week sales.
Typically, Freddy’s sells multi-unit deals that include a minimum of four stores. The brand will sell more than that depending on experience of the franchisee.
“Our 20th anniversary is coming up here. And I think as we look back historically at Freddy's, we obviously started in Wichita, Kansas, and we grew from there, but very quickly,” Thengvall says. “We found success, first in California, we opened there in the early 2010s, and then shortly thereafter in Philadelphia. And as we started to branch out, what we found is that the Freddy's products and the Freddy's way of doing business has success all over the country, the same way it does in the Midwest.”
Although restaurants still face inflationary commodity and labor expenses, Thengvall and Dull both say the franchise community remains excited and engaged. Freddy’s reported a 17.8 percent increase in systemwide sales in 2021, and franchisees experienced a 13.7 percent lift in AUV.
Dull points out that Freddy’s first franchisee opened their restaurant in 2004, and they are still developing today. The chain’s second-ever operator signed in the same year and debuted a location in 2006—they are still growing, as well. Those two franchisees will open a combined three outlets in 2022. The 11th, 12th, and 13th, operators signed in 2008, during the Great Recession.
“Our system and our growth is based on a very consistent product that we deliver and very consistent and longstanding relationships with our franchise community,” Dull says. “And these groups have been through ’08, ’09, ’10 recession. They've been through COVID now, and so as we see the macros go up and down, I believe Freddy’s is a system that is consistent and will continue to stand the test of time because of the way we do business on our three pillars—quality hospitality, and cleanliness—and also the consistency in our relationships with our franchise community. And so they're very confident in our brand, and we’re in turn very confident in their ability to execute the brand.”
From a development perspective, Freddy’s has the necessary commitments in its pipeline to reach the 800-unit goal. Now, it’s all about providing the right amount of support in three key areas—operations, marketing, and training. The company will continue adding human capital to ensure it’s giving franchisees enough tools to drive profitable revenues.
“A great brand with a great legacy and history of success and a lot of exciting new things coming to keep Freddy’s relevant and really disrupting the burger space,” Dull says. “With a product that's truly high quality and made to order and served in an environment of absolute hospitality and then a super clean environment. So we're excited about the next 20 [years].