A number of popular ice cream brands in the United States are facing significant operational challenges, with several filing for Chapter 11 bankruptcy or announcing store closures, according to a report by The Street. This development affects well-known names such as Dairy Queen, Freddy's Frozen Custard & Steakhouse, and Rita's Italian Ice.

Dairy Queen is set to close as many as 30 franchises in Texas. This decision follows an announcement earlier this year by parent company American Dairy Queen that franchisee Project Lonestar had been decommissioned due to its failure to remodel locations as required.

In New York, Rita’s Italian Ice & Frozen Custard in Horseheads has announced a temporary shutdown for the remainder of 2025, effective from October 13.

Meanwhile, Freddy's Frozen Custard & Steakburgers franchisees, M&M Custard LLC and 31 affiliates, have filed for Chapter 11 bankruptcy protection. This move may lead to store closures, business reorganization, and debt restructuring. The Freddy's debtor, Overland Park, filed its petition on November 14 in the US Bankruptcy Court for the District of Kansas, reporting $5.2 million in assets against $27.7 million in liabilities.

Importantly, the parent company and franchisor of Freddy's did not file for bankruptcy. The largest unsecured creditors of the debtor include Equity Bank, owed $8.5 million; Budderfly LLC, owed over $869,000; insider Eric H. Cole, owed $700,000; insider Steven Nordstrom, owed $550,000; US Food, owed over $524,000; West Side Investment LLC, owed $400,000; and Flowers Food, owed over $91,000.

A total of 31 Freddy's stores across Illinois, Indiana, Kansas, Kentucky, Missouri, and Tennessee are likely to face closures. Specific affected locations include Carbondale and Marion in Illinois; Bloomington, Franklin, Columbus, two stores in Evansville, and Seymour in Indiana; Gardner in Kansas; two stores in Lexington, and one each in Owensboro, Richmond, Hopkinsville, and Paducah in Kentucky; two stores in St. Peters, and one each in Ellisville, Cottleville, Florissant, O’Fallon, Wentzville, Lake St. Louis, Valley Park, two stores in Columbia, Jefferson City, St. Robert, Sedalia, and Martin City in Missouri; and Jackson in Tennessee. The chain currently operates 550 locations across Canada and the US.

Additionally, it was reported in September that Thompson Street Capital Partners, the private equity firm previously owning Freddy's, had sold the company to investment funds affiliated with the global private equity firm Rhône.