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<\/a><\/p>\nIn another sign of turbulence in America\u2019s fast-food industry, M&M Custard, one of the largest operators of Freddy\u2019s Frozen Custard & Steakburgers, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Kansas. The filing, made public on Friday, lists $5.2 million in assets and $27.7 million in liabilities, with up to 199 creditors awaiting settlement.<\/p>\n
The Kansas-based franchise group manages dozens of Freddy\u2019s locations across Missouri, Kansas, Illinois, Indiana, Kentucky, and Tennessee. Court documents state that M&M Custard\u2019s stores will remain open during restructuring as the company reorganises debt to \u201cstabilise operations.\u201d<\/p>\n
The move marks a significant setback for Freddy\u2019s, a brand often described as a Dairy Queen rival due to its focus on custard-based desserts and fast-casual burgers. M&M Custard\u2019s bankruptcy filing underscores how economic pressures, inflation, and declining middle-class spending power are battering once-stable restaurant chains.<\/p>\n
Economic Pressure Mounts on Fast-Food Operators<\/p>\n
The Chapter 11 protection for M&M Custard comes during what analysts have called a historic contraction in the fast-food and casual dining sectors. Companies dependent on low- and middle-income consumers are facing reduced foot traffic and sales, while costs for food, labour, and rent continue to climb.<\/p>\n
According to filings cited by Newsweek, M&M Custard\u2019s liabilities far exceed its assets, leaving the company with little choice but to restructure. Its court documents also confirmed that 31 affiliate locations are tied to the bankruptcy case. Despite assurances that operations will continue, local media reports indicate that some Freddy\u2019s outlets may close as part of the reorganisation.<\/p>\n
The trend isn\u2019t isolated. Dairy Queen, another major player in the frozen dessert and grill segment, has closed dozens of stores across the US in 2025, including several in Texas. The closures stemmed from a legal dispute between franchisees and Dairy Queen\u2019s corporate office involving royalty payments and mandatory store remodels.<\/p>\n
In a statement cited by Newsweek, restaurant consultant Neil Kiefer, CEO of Hooters, said: \u201cIt\u2019s a tough time for just about everybody in the restaurant industry and the hospitality business. Margins are getting crushed, and operators are having to make painful decisions.\u201d<\/p>\n
Industry-Wide Headwinds: Consumers Pull Back<\/p>\n
Economic conditions continue to test even the biggest brands. McDonald\u2019s CEO Chris Kempczinski recently told analysts that traffic from low-income consumers had fallen nearly double digits for a second consecutive year, while upper-income diners remain more resilient. \u201cWe continue to remain cautious about the health of the consumer in the US,\u201d he said on a November earnings call.<\/p>\n
Similarly, Chipotle CEO Scott Boatwright noted that declining consumer sentiment and high debt levels have hit lower- and middle-income diners hardest. \u201cThis trend is not unique to Chipotle and is occurring across all restaurants,\u201d he said in October. \u201cUnemployment, student loan repayments, and slower wage growth are forcing customers to eat out less frequently.\u201d’<\/p>\n
The combined impact of those trends has created a domino effect in the fast-food ecosystem. Smaller franchisees such as M&M Custard, which operate on thinner margins and depend on regional markets, have found it increasingly difficult to absorb cost spikes or withstand dips in foot traffic.<\/p>\n","protected":false},"excerpt":{"rendered":"Despite the Chapter 11 filing affecting its franchisees, Freddy\u2019s corporate parent has not filed for bankruptcy and continues…\n","protected":false},"author":2,"featured_media":41641,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[10344,23973,23795,23969,4843,23958,23960,23963,23972,23964,23965,23959,23975,23962,23968,5350,9424,2149,17877,23974,23976,23794,16823,23961,23967,9,24,23971,63,122,124,123,23966,287,1777,11338,23970,21398],"class_list":["post-41640","post","type-post","status-publish","format-standard","has-post-thumbnail","category-queens","tag-americas","tag-backeconomic","tag-chipotle","tag-chris-kempczinski","tag-dairy-queen","tag-dairy-queen-rival","tag-dairy-queen-rival-closures","tag-dairy-queen-texas-closures","tag-dairy-queens","tag-fast-food-bankruptcy-2025","tag-freddys","tag-freddys-bankruptcy","tag-freddys-frozen-custard-steakburgers","tag-freddys-frozen-custard-shutdown","tag-hooters","tag-illinois","tag-indiana","tag-kansas","tag-kentucky","tag-mm-custard","tag-mm-custards","tag-mcdonalds","tag-missouri","tag-mm-custard-chapter-11","tag-neil-kiefer","tag-new-york","tag-new-york-city","tag-newsweek","tag-nyc","tag-queens","tag-queens-headlines","tag-queens-news","tag-scott-boatwright","tag-tennessee","tag-texas","tag-times-now","tag-us-bankruptcy-court","tag-us-buzz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/41640","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=41640"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/41640\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/41641"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=41640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=41640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=41640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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