Connecting Data to Wealth Creation
Connecting Data to Wealth Creation
M&M Custard LLC, one of the largest franchisees of Freddy’s Frozen Custard & Steakburgers (a chain often touted as a Dairy Queen rival), has filed for Chapter 11 bankruptcy. The filing, made on November 14, 2025, in Kansas, reveals a stark imbalance: $5.2 million in assets weighed against a staggering $27.7 million in liabilities. That's a debt load more than five times their asset value.
The immediate impact? Thirty-two Freddy's locations across six states—Missouri, Kansas, Illinois, Indiana, Kentucky, and Tennessee—are now operating under the shadow of bankruptcy proceedings. M&M Custard intends to shutter some of these locations. The court has been asked to allow the company to keep using its current banking system. (A fairly standard request in these situations.)
While the filing itself is a matter of public record, the underlying reasons for M&M Custard's financial woes remain opaque. Was it over-expansion, poor location choices, increased competition, or simply mismanaged finances? Details on the specific factors are scarce. The filing doesn't offer a granular breakdown of the debt structure.
It's tempting to speculate. Freddy's, while popular, operates in a crowded fast-food landscape. The "Dairy Queen rival" label is a bit of an overstatement. Dairy Queen boasts thousands of locations, while Freddy's, though growing, still has a significantly smaller footprint. Did M&M Custard overextend itself, betting on a level of market penetration that never materialized?
Let's look at location density. M&M Custard operates multiple locations in some cities (e.g., two in Evansville, Indiana, and two in Lexington, Kentucky). Was this a strategic clustering to dominate local markets, or a case of cannibalizing their own sales? I've looked at countless franchise filings, and aggressive clustering can be a double-edged sword.
And this is where the data gets interesting. The bankruptcy filing impacts a “beloved fast-food chain,” according to some reports. But how beloved are we talking? Online sentiment, while generally positive towards Freddy's custard and steakburgers, doesn't always translate to consistent foot traffic and revenue. How many customers are truly "beloved" enough to visit regularly, especially with so many other options available? Beloved restaurant chain and Dairy Queen rival faces closure of dozens of locations after bankruptcy filing - The US Sun
The immediate future for these 32 Freddy's locations is uncertain. While they continue to operate for now, the bankruptcy process will likely involve a careful assessment of each store's profitability. Some will undoubtedly be closed, while others might be restructured or sold off to other franchisees. The locations are clustered in the Midwest and South. This makes me wonder if this region has different consumer spending habits than other parts of the country.
The long-term implications for Freddy's as a whole are less clear. While M&M Custard's bankruptcy is a significant setback, it doesn't necessarily spell doom for the entire chain. Freddy's has other franchisees, and the brand itself still holds value. However, this situation should serve as a cautionary tale. Rapid expansion, without careful financial planning and a deep understanding of local market dynamics, can quickly turn a sweet custard dream into a sour financial reality.
This isn't just about ice cream and steakburgers. It's a stark reminder that even "beloved" brands can face serious financial challenges. The numbers don't lie: $27.7 million in liabilities is a mountain to climb.