A new entrant to the Second 100 report, Freddy’s Frozen Custard & Steakburgers managed to grow its U.S. unit count more than 25 percent, while still accelerating its estimated sales per unit, or ESPU, from 3.5 percent the Preceding Year to 10.5 percent in its latest Fiscal Year. Leaders of the “better burger” noted that franchisees have been driving unit growth and ramping up their opening schedules as they build more scale in their territories. In franchised or company-owned stores, Freddy’s managers focus on customer service and hospitality, rather than aggressive discounting, to build long-term guest loyalty, brand officials said.
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Keys to growth:
Infrastructure investments. Freddy’s has increased its franchise support staff from three business coaches out in the field a few years ago to 11 people today, president Bill Simon said. The chain continues to invest in mystery shopping services and is developing proprietary software for real estate site selection.
Perceived value through menu quality. The brand has tried to steer clear of aggressive discounting, both during the last recession and before, Simon said. Freddy’s does not have a value menu and tries to price competitively with the fast-casual burger segment, but it relies on ingredient quality and operational consistency to bolster perceptions of value for the money guests pay.
Double drive-thrus in future units. Freddy’s has retrofitted a handful of stores to have a double-drive thru, which produced significant sales increases in the few test locations in the Kansas City, Mo., market. Nearly all future restaurants that can fit a two-lane drive-thru will have one, Simon said.
