Freddy’s Tenant Overview


  • NNN Leases
  • Long-term deals
  • Rental escalations
  • Customer loyalty and brand recognition


  • Competitive sector
  • Market saturation
  • Location dependency

Tenant Description

Freddy's is a fast casual chain serving up custard and steakburgers and was founded in 2002, Freddy’s Frozen Custard & Steakburgers has grown into a nationwide brand, serving up classic American meals to its customers. Brothers Bill and Randy Simon, along with business partner Scott Redler, decided to name the chain after their father, Freddy, and to model the menu after meals he would make. Selling steakburgers and frozen custard desserts allows Freddy’s to step into a unique role in the sector, setting itself apart with unique, quality offerings.

Traditionally, Freddy’s leases are structured as NNN leases, taking the responsibility of structure upkeep out of the owner’s hands and putting it into the tenant’s. The term lengths on typical leases will also be on the longer side, usually 20 years, and have rental escalations built in, showing that the tenant is committed to the location and helping protect the owner against inflation.

Typical Freddy's locations are freestanding buildings approximately 3,200 square feet in size. These locations are strategically positioned in areas with high traffic, often near retail centers, family entertainment spots, and residential neighborhoods, maximizing visibility and accessibility.

As of early 2024, Freddy's operates over 550 locations and has over 140 more under development, including ongoing constructions and signed leases. The chain has an aggressive growth plan aiming to reach 800 locations by 2026. Freddy’s growth strategy involves a robust expansion through franchising, targeting both new and existing markets.

The growth trajectory of Freddy's Frozen Custard & Steakburgers offers several attractive aspects for investors, particularly in the context of net lease investments. Freddy's demonstrates robust expansion momentum through its consistent year-over-year opening of new locations, highlighting a scalable and strong business model that is appealing to investors. These locations are typically involved in long-term triple net leases, where tenants handle all property-related costs, including taxes, insurance, and maintenance, thereby reducing the financial and managerial burden on landlords. This lease structure ensures stable and predictable cash flows with minimal vacancy risks. Moreover, Freddy's has built a strong brand presence and a loyal customer base, driving high foot traffic and sustained revenue, which enhances the value of the property. The fast-casual sector, known for its resilience during economic downturns, sees Freddy's offering affordable comfort food that continues to perform well under various economic conditions. Therefore, investing in a property leased to Freddy's presents a mix of stability, predictable revenue through fixed leases, and potential for capital appreciation, making it an enticing option for those seeking investment opportunities in the quick-service restaurant sector.

Average Cap Rate
Trailing 12-month average
Average Property & Lease
Average Sale Price $2,597,634
NOI $148,210
$/Square Foot $649 - $866
Building SF 3,000 - 4,000
Lot Size .75 - 1 Acre
Lease Term 20 Years
Escalations Varies
Stock Symbol N/A
Credit Rating
Moody's N/A
Average Cap Rate Trend
Rates reflect year-over-year comparison
Recent Sales Comps
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St. Louis, MO 6.00%