Freddy's Franchise Cost 2026: Single-Unit Tier, Fees by Format

Freddy’s FDD issued April 30, 2026 lists a $35,000 initial license fee, an in-line Item 7 investment of $854,834 to $1,302,000 and a 5% royalty on gross sales, defined as Gross Receipts; its What It Takes page, checked October 13, 2026, lists single-unit minimums of $1M+ net worth and $400K+ liquid assets. A published single-unit tier gives buyers a starting point, but the brand’s FAQ states different qualifications and lower ongoing fees.

Use the FDD figures below for the cost comparison and confirm the qualification requirement with Freddy’s before applying. The website figures remain alongside them so the differences are explicit.

Investment, by format

For a separate look at Five Guys franchise availability in the US, see its current market-status page.

Item 7 of the FDD issued April 30, 2026 gives the following estimates. The brand’s What It Takes page, checked October 13, 2026, still displays different ranges:

Format	2026 FDD Item 7 total investment	What It Takes, October 13, 2026
In-line, no drive-thru	$854,834 to $1,302,000	$785,936 to $1,198,665
End cap with drive-thru	$1,026,334 to $2,361,000	$1,277,598 to $2,497,566
Standalone with drive-thru	$1,586,334 to $2,802,000	$1,487,598 to $2,753,566

The FDD itself has a small discrepancy: its cover gives the in-line ceiling as $1,301,000, while Item 7’s total is $1,302,000. This page uses the Item 7 table. The FAQ checked October 13, 2026 gives a combined website range of $785,936 to $2,753,566; it does not replace the format-specific FDD estimates.

The $35,000 license fee is included in each Item 7 range. Item 5 also requires construction advisory services for the first restaurant, with a $35,000 advisory fee plus reimbursable expenses; Item 7’s construction note says its estimate includes advisory services. Land purchase costs are excluded. Additional funds cover an estimated three months, not a promise that the restaurant will fund itself after that period.

Price the format your site supports. An end cap and a standalone restaurant both have drive-thrus, but their construction requirements and investment ranges differ. The Item 7 guide explains how to replace estimates with site-specific quotes; the food-franchise investment tiers put those formats in context.

Price the Freddy's format for your site

Our free startup-cost worksheet follows Item 7's rows for in-line, end-cap or standalone builds, so you can swap estimates for quotes. Plus the due-diligence kit.

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Royalty and marketing: the FDD differs from the FAQ

Charge	FDD issued April 30, 2026, Item 6	FAQ checked October 13, 2026
Initial franchise/license fee (Item 5)	$35,000	$35,000
Royalty	5% of Gross Receipts	4.5% of gross sales
National marketing and advertising fund	2.5% of Gross Receipts at issuance; 3% effective October 8, 2026	1.5% marketing fee; basis not stated in the supplied FAQ wording

For the FDD terms effective October 8, 2026, royalty plus the national fund equals 8% of Gross Receipts. Item 6 defines Gross Receipts broadly as restaurant-related gross revenue, including posted but uncollected revenue and specified other receipts, excluding taxes collected for taxing authorities. Gift cards count when redeemed, and loyalty points are excluded.

That 8% is not the entire ongoing cost. Item 6 allows required local advertising of up to 2% of Gross Receipts. Cooperative contributions count toward local advertising requirements. The national fund can exceed 3% with the specified restaurant-owner vote. Nontraditional restaurants pay a reduced fund contribution. Other Item 6 charges also apply.

The royalty and ad-fund comparison shows the combined percentage in dollars using the same assumed sales across brands. The Item 6 guide explains why the fee basis and additional obligations matter alongside the headline rate.

Territory availability and the rights Item 12 grants

As of October 13, 2026, Freddy’s territory list shows Kansas, New Mexico and North Dakota as not available. Check the brand’s available-territories list and confirm the proposed site directly with Freddy’s.

Availability does not define the protection in your contract. Item 12 says the License Agreement grants an Assigned Territory, typically a two-mile radius or another specified geographic area, with boundaries that vary by location. Freddy’s agrees not to establish another franchised or company-owned restaurant under the system there, subject to the agreement and reserved rights.

Item 12 also explicitly says you will not receive an exclusive territory. Reserved rights include other distribution channels, national or regional foodservice licenses and restaurants in captive-market locations such as airports and stadiums. Other operators can solicit customers and accept orders in your territory. The Item 12 guide explains how to read those limits together.

For multi-unit development, an Assigned Area is protected during the development schedule while the developer complies with the agreement. Default can lead to a smaller area, fewer restaurant options or termination of territorial rights. A state listed as available is not a guarantee of an unrestricted market.

One conflict: the financial qualification minimums

SBA Franchise Directory: Freddy’s Frozen Custard & Steakburgers appears in the SBA’s Franchise Directory file effective October 9, 2026 (SBA Franchise Identifier Code S0669; franchisor certification marked received). A listing is what a lender checks for brand eligibility; it is not an endorsement, and your own eligibility as a borrower is assessed separately. See how to check the SBA Franchise Directory.

The two brand pages give different financial qualifications as of October 13, 2026:

Brand page	Published qualification wording
FAQ	Owners must have $250,000 in liquid assets and a minimum net worth of $750,000
What It Takes, single-unit	Net worth of $1M+; liquid assets of $400K+
What It Takes, multi-unit	Net worth of $1.5M+; liquid assets of $400K+

The FDD does not specify numerical liquid-asset or net-worth qualification minimums. Confirm the current single-unit or multi-unit requirement with Freddy’s. Neither website figure establishes approval for a particular applicant, and the qualification minimum is separate from the full opening budget.

Item 20: openings and exits during 2025

Item 20 of the FDD issued April 30, 2026 reports these outlet changes:

Outlet type	Start of 2025	Opened	Terminations	Other closures	End of 2025
Franchised	514	47	19	0 ceased operations for other reasons	542
Company-owned	36	2	Not applicable	0 closed	38

The franchised table also reports zero nonrenewals and zero reacquisitions by the franchisor in 2025. The company-owned table reports zero reacquisitions and zero sales to franchisees. Systemwide outlets increased from 550 to 580. Keep the 47 franchised openings and 19 terminations visible alongside that net growth; the table does not explain each termination’s cause or establish profitability.

Use the Item 20 guide to plan questions for current and former franchisees about openings, exits and operating experience.

Compare the ownership model before choosing a site

For other burger concepts, compare Culver’s franchise costs, Habit Burger’s multi-unit franchise terms and BurgerFi’s franchise costs. The Jimmy John’s versus Wayback Burgers comparison offers another ownership comparison. Check each brand’s own format, qualification and agreement terms rather than treating the opening budget as the whole decision.

For a separate quick-service comparison, see Del Taco’s franchise cost breakdown alongside these burger concepts. Whataburger’s franchise cost page provides another dated burger-brand comparison.

Questions to ask Freddy’s before you sign

• Which financial qualification minimums apply to this application, given the differing brand pages?
• Which Item 7 format applies to the proposed site, and which costs need local quotes?
• How do the FDD’s royalty and marketing terms apply to the agreement offered, including local advertising and other Item 6 charges?
• What exact Assigned Territory will the agreement describe, and which reserved channels or captive-market locations can compete inside it?
• What explains the 2025 terminations, and what can current and former franchisees say about their experience?
• Will a franchise attorney and an accountant review the full FDD and proposed agreement before you commit?