Freddy’s Frozen Custard & Steakburgers has been purchased by private equity firm Thompson Street Capital Partners in an undisclosed deal.
The nearly 20-year-old chain is coming off a momentous year in which it opened 30 stores in the U.S., including its 400th. After experiencing a week in March where sales were down 38 percent, the chain finished the year by growing AUV by 6.5 percent, and increasing systemwide sales by 21.2 percent. In July, the brand experienced a 47 percent increase in drive-thru traffic and reduced wait times by 28 percent.
The brand also signed six new development groups that committed to more than 60 development options and signed development agreements with existing franchisees who committed to more territories and more than 70 new restaurant options.
Amid the growing age of convenience, the chain accelerated the rollout of a mobile ordering platform and saw notable growth in the use of its app and loyalty program. Curbside delivery has been implemented in certain markets and is continuing to expand, as well.
Randy Simon, co-founder and CEO, said that when Freddy’s began in 2002, the chain’s goal was to serve craveable food with “quick-service speed and full-service hospitality at a price that was fair and competitive.” The Freddy’s leader believes Thompson Street Capital will help the brand maintain growth and fill whitespace across the country.
“Obviously, the credit goes to our Team Members who have contributed immensely to our success to date and to our close-knit family of franchisees who have devoted their time and capital to develop the Freddy’s brand,” Simon said in a statement. “We are confident that TSCP shares our values and philosophies as we continue to be guided by The Freddy’s Way in all we do.”
Thompson Street Capital, based in St. Louis, focuses on middle-market business in the healthcare and life science services, software and technology services, and business services and engineered products sectors. Since it was founded in 2000, it has acquired more than 100 companies and managed more than $2.6 billion in equity.
Joe St. Geme, a Thompson Street Capital director, said the private equity firm will partner with Freddy’s leadership to accelerate franchise development, increase focus on marketing and technology deployment, and enable operational best practices across the footprint.
Bon Dunn, managing partner of the firm, voiced the same objectives.
“Freddy’s is a highly unique, scaled franchisor platform that has built a premium brand over the past two decades with leading franchisee retention, remarkable growth, and a passionate guest following of ‘FredHeads,’” Dunn said in a statement. “We look forward to working with the outstanding team at Freddy’s to accelerate the Company’s already exceptional growth.”
A dozen restaurants are expected to open in Q1 in markets such as Tennessee, Georgia, and Texas. The plan is to open more than 50 stores by the end of 2021.
Scott Redler, Freddy’s COO, said the brand has developed close relationships with operators, and has always prioritized their growth and success. The executive is confident that Thompson Capital Partners will allow Freddy’s to continue that “unparalleled corporate support system.”
“When we were introduced to the exceptional team at TSCP, it was apparent that our core values and company culture aligned, making them the perfect fit for our Freddy’s family of Team Members, franchisees and vendor partners,” Redler said in a statement.