Freddy’s Frozen Custard & Steakburgers is facing an uncertain future after one of its major franchise owners filed for bankruptcy. This situation has raised concerns that several of its restaurants may close.
M&M Custard LLC, which operates many Freddy’s locations, filed for Chapter 11 bankruptcy on November 14. The filing was made in the US Bankruptcy Court for the District of Kansas. According to the documents, the company has $5.2 million in assets and $27.7 million in liabilities.
M&M Custard is based in Overland Park, Kansas. It runs dozens of Freddy’s restaurants across Missouri, Kansas, Illinois, Indiana, Kentucky, and Tennessee. Court records list 32 Freddy’s locations connected to the bankruptcy case. If closures happen, they are likely to affect restaurants in these states.
Being named in the filing does not mean the locations will close immediately. However, the filing does show that the company plans to close some stores. For now, all restaurants will remain open while the company reviews its operations during the Chapter 11 process.
M&M Custard is one of the largest franchise owners of Freddy’s. Its financial problems affect the chain, but because it does not own the company itself, the overall damage will be limited. The company believes that restructuring will help it recover and become financially stronger.
As part of the process, M&M Custard has asked the court for permission to manage its debts and continue using its current banking system. In related news, three coffee companies are also facing bankruptcy as prices for shoppers rise by 19%.
