US Restaurant Chain Bankruptcy: Lessons for Malta’s Food Scene
A major restaurant chain in the United States, M&M Custard LLC, has filed for bankruptcy, citing surging food prices and labor costs as the key factors behind its financial struggles. The company, which operates over 30 Freddy’s Frozen Custard & Steakburger locations across six states, faced significant losses from its Chicago operations, leading to the closure of six stores deemed “toxic assets.” Despite these setbacks, M&M Custard plans to continue operating its remaining locations, emphasizing that it’s “business as usual” outside the Chicago market. This development highlights the challenges faced by the global food industry, including rising costs, labor shortages, and regulatory pressures. For Malta’s dining industry, the case underscores the importance of sustainable practices, market adaptability, and customer satisfaction. Malta’s focus on fresh, locally sourced ingredients and its growing farm-to-table movement position the island’s restaurants to thrive despite economic pressures. The story serves as a reminder for diners to support establishments that prioritize quality, health-conscious dining,
Restaurant Chain Faces Bankruptcy Amid Rising Food and Labor Costs: A Lesson for Malta’s Dining Industry
As the global food and restaurant industry continues to grapple with challenges, a major restaurant chain in the United States has filed for bankruptcy, citing surging food prices and labor costs as the primary reasons for its financial difficulties. M&M Custard LLC, one of the largest franchise operators for Freddy’s Frozen Custard & Steakburger, has over 30 locations spanning six states, including Missouri, Illinois, Kentucky, Tennessee, Indiana, and Kansas. The company, which had ambitious expansion plans for Chicago three years ago, now faces $27.7 million in liabilities against assets valued at just $5.52 million.
For Malta’s food and restaurant enthusiasts, this story highlights the importance of sustainable business practices and adaptability in a fast-changing market. Rising costs of ingredients, labor shortages, and burdensome regulations are challenges not only faced by large chains abroad but also by many local establishments striving to offer high-quality dining experiences while maintaining profitability.
M&M Custard’s bankruptcy filing, under Chapter 11, reveals the financial strain caused by its Chicago operations, which the company referred to as a “toxic asset.” Purchased in 2021 for $1 million, the six Chicago stores failed to deliver sustainable returns, forcing M&M Custard to shut them down and focus on stabilizing its remaining locations. According to court documents, negative EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), limited market interest in underperforming assets, and Illinois' regulatory environment made the Chicago market unviable.
Despite these setbacks, M&M Custard has stated it has no plans to close additional stores and will continue operating its 31 franchise locations across the US. Co-CEO Eric Cole assured diners that “it’s business as usual” for Freddy’s Frozen Custard & Steakburger outside the Chicago market.
The restaurant chain’s struggles underscore a growing global trend: the need for businesses to adapt to fluctuating economic conditions. For Malta’s budding restaurateurs, there are valuable lessons to be learned from this case. Investing in market research, prioritizing high-quality yet cost-effective ingredients, and maintaining a focus on customer satisfaction can help local establishments avoid pitfalls. Malta’s dining industry, known for its Mediterranean flavors and commitment to fresh, healthy cuisine, is uniquely positioned to thrive despite global challenges.
Freddy’s Frozen Custard & Steakburger, known for its whipped desserts and savory burgers, competes directly with Dairy Queen in the US market. Some food enthusiasts have even compared Freddy’s offerings favorably to its rival. A Reddit user described Freddy’s desserts as “richer and creamier” with a better presentation, while another placed its burgers above McDonald’s but below Five Guys. Such comparisons highlight the role of quality, taste, and presentation in building customer loyalty—something Malta’s restaurants excel at, given the island’s strong focus on fresh, locally sourced ingredients.
For diners in Malta who value health-conscious eating, this story is a reminder to support local restaurants that prioritize sustainable practices. As global food prices continue to rise, many Maltese establishments have found innovative ways to serve nutritious meals without compromising on quality. The island’s farm-to-table movement, which emphasizes fresh produce and seasonal ingredients, is a beacon of hope for maintaining affordability and health-conscious dining amidst economic uncertainty.
Ultimately, M&M Custard’s struggles serve as a cautionary tale for businesses everywhere, including Malta’s restaurant scene. The ability to adapt, innovate, and cater to evolving customer needs remains key to long-term success in the food industry. For diners, it’s an opportunity to appreciate and support restaurants that bring health, flavor, and sustainability to the table—values that are central to Malta’s thriving culinary culture.