Dairy Queen Rival Files for Bankruptcy: No Meme Coin Celebration in Sight

The frozen dessert and fast-food industry faces a wave of uncertainty as M&M Custard filed for Chapter 11 bankruptcy protection on 14 November in the U.S. Bankruptcy Court for the District of Kansas. 

This development comes amid a challenging economic climate that has affected restaurants nationwide, particularly lower- and middle-income consumers who continue to tighten spending. 

With $5.2 million in assets and $27.7 million in liabilities, M&M Custard’s financial struggles highlight the difficulties faced by regional franchises. 

While this bankruptcy exclusively involves franchisees and not Freddy’s parent company, it signals broader disruptions in the frozen treat market, leaving fans of Dairy Queen Rival locations concerned about closures and operations.

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What Happened to Dairy Queen Rival?

M&M Custard, along with 31 affiliated franchise locations across Missouri, Kansas, Illinois, Indiana, Kentucky, and Tennessee, filed for Chapter 11 bankruptcy. The filing is designed to allow the company to reorganize and restructure its debts while continuing operations. 

Despite the bankruptcy, M&M Custard plans to keep most of its locations open, ensuring customers can still access their favorite frozen custards and steakburgers.

The filing lists a number of unsecured creditors, including Equity Bank ($8.5 million), Budderfly LLC ($869,000), insiders Eric H. Cole ($700,000) and Steven Nordstrom ($550,000), and U.S. Food ($524,000). Funds will be available to pay these creditors as part of the restructuring process.

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Impact on the Frozen Dessert Industry

This bankruptcy is part of a larger trend affecting frozen dessert chains and fast-food franchises across the United States. 

Dairy Queen, another popular chain, has closed around 30 locations in Texas during 2025 amid disputes between franchisees and corporate headquarters over remodels and royalty payments. Similarly, Rita’s Italian Ice locations close seasonally, leaving fans temporarily without access to their favorite treats.

Economic pressures such as slower wage growth, rising unemployment, and increasing consumer debt continue to challenge the industry. CEOs from major chains including McDonald’s, Chipotle, and Hooters have all noted declining traffic among lower- and middle-income customers, making operations and expansion difficult for franchisees.

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M&M Custard’s Operations and Locations

M&M Custard operates a significant number of Freddy’s Frozen Custard & Steakburgers franchises, including locations in:

• Illinois: Carbondale, Marion

• Indiana: Bloomington, Franklin, Evansville, Seymour

• Kansas: Gardner

• Kentucky: Lexington, Owensboro, Richmond, Hopkinsville, Paducah

• Missouri: St. Peters, Ellisville, Cottleville, Florissant, O’Fallon, Wentzville, Lake St. Louis, Valley Park, Columbia, Jefferson City, St. Robert, Sedalia, Martin City

• Tennessee: Jackson

While some locations may close as part of the bankruptcy reorganization, most are expected to resume operations once financial restructuring is complete.

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Why It Matters

The bankruptcy of a major Dairy Queen Rival franchisee like M&M Custard underscores the vulnerabilities in the fast-food and frozen dessert sectors. Consumers may see disruptions in service, while investors and franchise owners must navigate the complexities of Chapter 11 proceedings. 

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No Memecoin Emerge

There is no DAIRY QUEEN-themed memecoins appeared on the market. This is in stark contrast to past events, such as the U.S. presidential election, the near-bankruptcy of GameStop, and the papal election.

This shows that not all major events will be followed by the emergence of memecoins.   

FAQ

What is the Dairy Queen Rival bankruptcy about?

M&M Custard, a major franchisee of Freddy’s Frozen Custard & Steakburgers, filed for Chapter 11 bankruptcy to restructure its debts and continue operations.

Will Freddy’s parent company file for bankruptcy?

No, the bankruptcy filing only involves the franchisee and not Freddy’s Frozen Custard’s parent company.

How many locations are affected?

M&M Custard operates 31 franchise locations across Illinois, Indiana, Kansas, Kentucky, Missouri, and Tennessee.

Will locations close permanently?

Some closures may occur as part of the restructuring, but most locations are expected to resume normal operations.

Does this affect Dairy Queen?

Not directly, but Dairy Queen and other frozen dessert chains face similar economic pressures, including closures and reduced traffic.

What caused the bankruptcy?

High liabilities, economic pressures on consumers, and operational challenges in the fast-food and frozen dessert sectors contributed to the bankruptcy filing.