WICHITA, KS — Freddy’s Frozen Custard & Steakburgers, the fast-casual concept synonymous with mid-century hospitality and cooked-to-order steakburgers, has announced a robust development strategy for 2026. The company expects to open 60 new units over the next calendar year, a move that will see the brand officially surpass the 600-unit milestone.

Central to this growth phase is a fundamental shift in the company’s real estate philosophy. While Freddy’s has traditionally been associated with iconic standalone buildings, the brand is now aggressively pivoting toward "in-line" and "endcap" locations. This strategic diversification is designed to provide franchisees with greater flexibility, lower entry costs, and faster routes to market in an increasingly competitive commercial real estate landscape.

I. Main Facts: A New Blueprint for Scalability

The 2026 expansion plan is not merely a numbers game; it represents a tactical evolution of the Freddy’s business model. By the end of 2025, the brand had already grown its footprint to 580 units, up from 456 at the start of 2023. The projected 60-unit surge in 2026 underscores a steady, double-digit growth trajectory that has persisted despite broader economic headwinds in the restaurant sector.

The Shift to In-Line and Endcap Units

The most significant revelation in Freddy’s latest development brief is the emphasis on varied real estate formats. Historically, the "standard" Freddy’s experience involved a standalone building with a dedicated drive-thru. However, the company is now incentivizing franchisees to look at:

• In-line Units: Restaurants situated within a larger strip or shopping center.
• Endcap Units: Restaurants located at the end of a shopping strip, often allowing for a modified drive-thru lane.

The financial logic behind this shift is compelling. A traditional standalone Freddy’s restaurant currently requires an investment of upwards of $1.5 million. In contrast, an in-line unit can be developed for approximately $854,834. This nearly 45% reduction in initial capital expenditure significantly lowers the barrier to entry for new franchisees and allows existing operators to scale their portfolios more rapidly.

Franchisee Retention and Territory Expansion

The growth is being fueled largely from within. According to corporate data, approximately one-third of Freddy’s existing franchise base is currently in the process of expanding into new territories. This high rate of internal reinvestment is a hallmark of "system health," suggesting that current operators are satisfied with their returns and confident in the brand’s long-term viability.

II. Chronology: The Road to 600 Units

To understand the magnitude of Freddy’s 2026 goals, one must look at the brand’s accelerated timeline over the last five years.

• 2002–2020: Foundation and Regional Dominance. Founded in Wichita, Kansas, Freddy’s spent its first two decades perfecting a retro-themed menu of thin-pressed steakburgers, shoestring fries, and freshly churned frozen custard. It grew from a single shop to a respected regional powerhouse.
• 2021: The Institutional Shift. The brand was acquired by Thompson Street Capital Partners. This move provided the capital and corporate infrastructure necessary to transition from a regional favorite to a national contender.
• 2023: Breaking the 450-Unit Barrier. Freddy’s began 2023 with 456 units. Throughout the year, the brand focused on operational efficiencies and digital integration, including enhanced mobile ordering and loyalty programs.
• 2024–2025: Strategic Scaling. During this period, the brand added over 120 units, reaching a total of 580. This growth was supported by the introduction of new restaurant prototypes designed for high-density urban areas and non-traditional sites like airports and universities.
• April 2026: Executive Leadership Reinforcement. Recognizing the need for specialized expertise to manage a 600+ unit system, Freddy’s hired Rafik Farouk as Vice President of Business Development and Jackie Lobdell as Vice President of Franchise Sales. Their mission was clear: identify high-potential markets and streamline the onboarding of multi-unit operators.
• September 2026: Acquisition by Rhône. In a landmark deal, the global private equity firm Rhône acquired Freddy’s from Thompson Street Capital Partners. This acquisition signaled that Freddy’s was now viewed as a "blue chip" asset in the fast-casual space, ready for global or IPO-level considerations.
• Late 2026 & Beyond: With the backing of Rhône and a fresh executive team, the brand enters its current phase: the push toward 600 units and the implementation of the flexible real estate model.

III. Supporting Data: The Economics of the "Better Burger"

The decision to diversify real estate formats is backed by rigorous Average Unit Volume (AUV) data. While standalone units remain the top earners, the "smaller" formats offer a highly attractive Return on Investment (ROI) due to their lower overhead.

Comparative AUV Performance (Franchised Units):

1. Standalone Drive-Thru: ~$1.9 Million
2. End-Cap with Drive-Thru: ~$1.8 Million
3. In-Line Units: ~$1.4 Million

While the in-line units generate roughly $500,000 less in annual revenue than standalone buildings, the $650,000+ savings in construction costs makes them an efficient choice for high-rent urban corridors where standalone land is either unavailable or prohibitively expensive.

Unit Count Trajectory:

• Start of 2023: 456 units
• End of 2025: 580 units
• End of 2026 (Projected): 640 units

This growth represents an approximate 40% increase in total unit count in just three years, a pace that places Freddy’s among the fastest-growing chains in the "Better Burger" segment, alongside competitors like Five Guys and Culver’s.

IV. Official Responses: Leadership’s Vision

The leadership at Freddy’s emphasizes that while the "look" of the buildings may be changing, the core mission remains anchored in franchisee profitability and guest experience.

Andrew Thengvall, Chief Development Officer of Freddy’s, highlighted the symbiotic relationship between the brand and its operators:

“A strong franchise system is built on operators who see long-term opportunity within the brand. As Freddy’s continues to grow, we remain focused on supporting our franchisees through new restaurant prototypes, greater real estate flexibility, and development strategies that help position the brand for sustainable growth.”

The appointment of Rafik Farouk and Jackie Lobdell also speaks to the brand’s professionalization. Farouk, tasked with business development, is reportedly focusing on "non-traditional" growth—looking at how Freddy’s can fit into smaller footprints without sacrificing the speed of service that drive-thru customers expect. Lobdell’s role in franchise sales is focused on attracting "sophisticated multi-unit operators" who can take down entire metropolitan territories, rather than single-unit "mom and pop" investors.

V. Implications: What This Means for the Industry

The "Freddy’s Strategy" offers a window into the future of the fast-casual industry at large. Several key implications emerge from this 2026 expansion plan:

1. The End of the "Standalone-or-Bust" Era

For decades, fast-food success was measured by the number of standalone "boxes" a brand could build. However, as land prices soar and prime corners become scarce, Freddy’s is proving that a brand’s identity can survive—and thrive—inside a shopping center. By maintaining an $1.8 million AUV in endcap locations, Freddy’s is demonstrating that the "drive-thru" experience can be successfully adapted to existing structures.

2. The Private Equity "Efficiency" Mandate

The acquisition by Rhône suggests a move toward "capital-light" growth. Private equity firms typically favor models that can scale quickly with minimal corporate debt. By encouraging franchisees to build $850,000 in-line units rather than $1.5 million standalones, Freddy’s is accelerating its footprint and royalty stream without requiring the massive capital outlays associated with land acquisition.

3. Market Saturation and Priority Markets

With 600 units, Freddy’s is moving out of its "emerging brand" phase and into "established player" territory. This necessitates a shift in marketing and supply chain logistics. The 60-unit push in 2026 will likely focus on "filling in" markets where the brand already has a presence (like the Midwest and Southeast) while establishing beachheads in the Northeast and West Coast where the "steakburger" concept is still relatively novel.

4. Consumer Accessibility

From a consumer standpoint, the move to in-line and endcap units means Freddy’s will soon appear in places it previously couldn’t fit. Expect to see the brand in high-traffic lifestyle centers, near grocery anchors, and in dense suburban strips. This increased physical proximity to the consumer’s daily routine is essential for competing with giants like McDonald’s or Wendy’s.

Conclusion

As Freddy’s Frozen Custard & Steakburgers marches toward its 600th location, the company is effectively rewriting its own playbook. By balancing the high-earning potential of standalone drive-thrus with the cost-effective scalability of in-line units, the brand has created a "multi-tier" investment strategy that appeals to a wide range of franchisees. Under the new stewardship of Rhône and a reinvigorated executive suite, 2026 stands to be a transformative year that could cement Freddy’s as a permanent fixture in the American culinary landscape. For the "Better Burger" segment, the message is clear: the red-and-white stripes of Freddy’s are coming to a corner—or a shopping center—near you.