Thompson Street Capital Partners, the private equity owner of US fast-casual restaurant chain Freddy’s Frozen Custard & Steakburgers, is exploring a potential sale of the business at a valuation of over $1bn, including debt, according to a report by Reuters.
The report cites unnamed sources familiar with the matter as revealing that Thompson Street Capital, which acquired Freddy’s in 2021, has engaged investment bank William Blair to oversee the sale process, with the move expected to attract significant interest from other private equity firms.
Freddy’s could command a valuation exceeding 20 times its annual core earnings, a benchmark aligned with recent transactions in the restaurant industry, according to one Reuters source.
Thompson Street has declined to comment, while Freddy’s and William Blair did not immediately respond to requests for statements.
Franchise-driven restaurant chains like Freddy’s have garnered growing attention from private equity investors, with these businesses often delivering steady royalty income and being typically less expensive to operate than company-owned locations.
This trend has been underscored by recent high-profile deals, including Blackstone’s $8bn acquisition of Jersey Mike’s sandwich chain and Sycamore Partners’ purchase of Playa Bowls in September.
Founded in Wichita, Kansas, in 2002 by Bill and Randy Simon, alongside Scott Redler, Freddy’s was named in honour of the Simon brothers’ father. The chain has since grown to over 500 locations across North America, primarily operated by franchise partners. Freddy’s competes mainly with other fast-casual burger chains, carving out a niche with its signature steakburgers, custard offerings, and retro-inspired ambiance.
