Huge Dairy Queen rival franchisee files for Chapter 11 bankruptcy | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Consumers love their frozen dessert fast-food chains and are disappointed anytime a local shop closes down.

Among the sector’s favorite chains are Dairy Queen, Culver’s, Freddy’s Frozen Custard & Steakburgers, and Rita’s Italian Ice.

30 Dairy Queen franchises closed in Texas

Fans of about 30 Dairy Queens in Texas may have been upset in the first half of 2025 when the parent company, American Dairy Queen, pulled the franchises from franchisee Project Lonestar after it failed to remodel its locations. That meant that those locations could not order supplies from the parent corporation and would have to shut down.

Devoted Rita’s Italian Ice customers will have to substitute their favorite frozen treat for another company’s offerings as some Rita’s across the country close their doors in October each year for about four months.

Rita’s Italian Ice & Frozen Custard in Horseheads, N.Y., posted a message on its Facebook page in September, alerting customers that its “2025 season” was ending on Oct. 13.

Rita’s Italian Ice franchise closes for the season

“Our 2025 season will be coming to an end in just 4 short weeks. Make sure to stop in and stock up on all your favorite treats & flavors before we close our doors!” the post read. An image embedded in the post stated: “Closing For The Season On 10/13.”

Another frozen treat chain might be closing some locations after filing for Chapter 11 bankruptcy protection.

Freddy’s Frozen Custard & Steakburgers franchisee M&M Custard LLC filed for Chapter 11 protection.

Freddy’s Frozen Custard franchisee files for bankruptcy

Freddy’s Frozen Custard & Steakburgers franchisee M&M Custard LLC and 31 affiliates filed for Chapter 11 bankruptcy protection to reorganize their businesses and restructure debts, according to KCTV-5.

The Overland Park, Kan.-based debtor filed its petition in the U.S. Bankruptcy Court for the District of Kansas on Nov. 14, listing $5.2 million in assets and $27.7 million in liabilities, according to Bondoro.

Freddy’s Wichita, Kan.-based parent company and franchisor did not file for bankruptcy.

The debtor’s largest unsecured creditors include Equity Bank, owed $8.5 million; Budderfly LLC, owed over $869,000; insider Eric H. Cole, owed $700,000; insider Steven Nordstrom, owed $550,000; U.S. Food, owed over $524,000; West Side Investment LLC, owed $400,000; and Flowers Food, owed over $91,000.

Cole and Nordstrom each hold 17% equity interest in the franchisee.

Freddy’s Frozen Custard’s largest unsecured creditors

Equity Bank, owed $8.5 million
Budderfly LLC, owed over $869,000
Eric H. Cole, owed $700,000
Steven Nordstrom, owed $550,000
U.S. Food, owed over $524,000
West Side Investment LLC, owed $400,000
Flowers Food, owed over $91,000

Funds will be available to pay unsecured creditors, according to the filing.

M&M Custard indicated in the filing that it plans to close several franchise locations, KCTV-5 reported.

The debtor currently operates 31 locations in Illinois, Indiana, Kansas, Kentucky, Missouri, and Tennessee.

M&M Custard’s Freddy’s locations:

Carbondale, Ill.
Marion, Ill.
Bloomington, Ind.
Franklin, Ind.
Columbus, Ind.
Evansville, Ind. (2)
Seymour, Ind.
Gardner, Kan.
Lexington, Ky. (2)
Owensboro, Ky.
Richmond, Ky.
Hopkinsville, Ky.
Paducah, Ky.
St. Peters, Mo. (2)
Ellisville, Mo.
Cottleville, Mo.
Florissant, Mo.
O’Fallon, Mo.
Wentzville, Mo.
Lake St. Louis, Mo.
Valley Park, Mo.
Columbia, Mo. (2)
Jefferson City, Mo.
St. Robert, Mo.
Sedalia, Mo.
Martin City, Mo.
Jackson, Tenn.

Freddy’s Frozen Custard owner sells to PE firm

Freddy’s, which has 550 locations in the U.S. and Canada, revealed on Sept. 4 that its owner, St. Louis-based private equity firm Thompson Street Capital Partners, had sold the company to investment funds affiliated with global private equity firm Rhône.

More bankruptcy:

“This acquisition marks a pivotal moment for Freddy’s,” said Chris Dull, president and CEO of Freddy’s. “Over the last few years, we’ve seen steady growth and surpassed many milestones for our brand, while simultaneously strengthening our franchise system and building a loyal guest following.

“We’re excited to take our success to the next level with this new partnership with Rhône. Together, we look forward to unlocking even greater opportunities for the Freddy’s franchise family,” Dull said.