Dairy Queen Rival Recordsdata for Chapter

[ad_1] On Friday, M&M Custard, one of many largest franchisees of Freddy's Frozen Custard & Steakburgers, filed for Chapter 11 safety with the Chapter Court docket for the District of Kansas.

Newsweek has contacted the corporate’s authorized representatives by way of e mail for remark.

Why It Issues This 12 months has already seen quite a lot of chains within the fast-food and fast-casual restaurant area file for chapter safety, shut areas or report notable slides in gross sales and site visitors. This comes amid a interval of financial problem for lower- and middle-income shoppers throughout the nation that has hit the retail and restaurant sectors particularly onerous.

What To Know In accordance with Friday’s court docket submitting, M&M Custard reported $5.2 million in belongings and $27.7 million in liabilities, with a complete of between 100 and 199 collectors. The submitting acknowledged that there will likely be funds accessible for the franchisee to pay out to its unsecured collectors.

M&M Custard filed for chapter alongside 31 different affiliate areas, although all are anticipated to renew regular operations as the corporate reorganizes and restructures its money owed. The chapter case completely entails franchisees and never the father or mother agency.

<img id="11055146" alt="" caption="06 April 2024, Saxony, Geierswalde: In early summer temperatures, soft ice cream begins to melt in an ice cream cone. Photo by: Frank Hammerschmidt/picture-alliance/dpa/AP Images" src="Stock image of a frozen custard cone. (Photo by: Frank Hammerschmidt/picture-alliance/dpa/AP Images)" credit="" sourcealt="" sources="[]" fetchpriority="auto" loading="lazy" width="5513" height="3675" decoding="async" data-nimg="1" style="color:transparent;aspect-ratio:inherit;object-fit:cover" sizes="(min-width: 1200px) 1536px, (min-width: 768px) 768px, 100vw" srcset="https://assets.newsweek.com/wp-content/uploads/2025/11/AP24097684624634.jpg?w=640&quality=75&webp=1 640w, https://assets.newsweek.com/wp-content/uploads/2025/11/AP24097684624634.jpg?w=750&quality=75&webp=1 750w, https://assets.newsweek.com/wp-content/uploads/2025/11/AP24097684624634.jpg?w=1000&quality=75&webp=1 1000w, https://assets.newsweek.com/wp-content/uploads/2025/11/AP24097684624634.jpg?w=1200&quality=75&webp=1 1200w, https://assets.newsweek.com/wp-content/uploads/2025/11/AP24097684624634.jpg?w=1360&quality=75&webp=1 1360w, https://assets.newsweek.com/wp-content/uploads/2025/11/AP24097684624634.jpg?w=1600&quality=75&webp=1 1600w" bad-src="https://assets.newsweek.com/wp-content/uploads/2025/11/AP24097684624634.jpg?w=1600&quality=75&webp=1"/> CBS affiliate KCTV 5 reported that M&M Custard holds the franchise rights to dozens of Freddy’s Frozen Custard & Steakburger areas which it operates throughout Missouri, Kansas, Illinois, Indiana, Kentucky, and Tennessee.

As The Avenue notes, different common chains much like M&M Custard have closed shops this 12 months, together with different Freddy’s franchisee areas and Dairy Queens. The latter has shuttered dozens of areas in 2025, together with a number of in Texas amid a authorized dispute between franchisees and the company headquarters over royalty funds and remodels.

What Individuals Are Saying McDonald’s CEO Chris Kempczinski, in a name with analysts final week, mentioned: “Within the U.S., we proceed to see a bifurcated client base, with [quick-service restaurant] site visitors from lower-income shoppers declining practically double digits within the third quarter, a development that is persevered for practically two years. In distinction, site visitors progress amongst higher-income shoppers remained robust, rising practically double digits within the quarter. We proceed to stay cautious in regards to the well being of the buyer within the U.S. and our high worldwide markets and consider the pressures will proceed effectively into 2026.”

Chipotle CEO Scott Boatwright, throughout an earnings name in October, mentioned: "Earlier this 12 months, as client sentiment declined sharply, we noticed a broad-based pullback in frequency throughout all earnings cohorts. Since then, the hole has widened, with low- to middle-income visitors additional lowering frequency.”

"This development just isn't distinctive to Chipotle and is happening throughout all eating places, in addition to many discretionary classes," he added. "This group is dealing with a number of headwinds, together with unemployment, elevated pupil mortgage compensation, and slower actual wage progress."

Hooters CEO Neil Kiefer, in a latest interview with Newsweek, mentioned: “It is a powerful time for almost all people within the restaurant business and the hospitality enterprise.”

What Occurs Subsequent In accordance with KVTV 5, M&M Custard plans to shut a number of shops because it makes an attempt to emerge from the chapter course of.