How to Finance The Meadows Frozen Custard Franchise: Custard Shop
By Marc Cornella
The Meadows Frozen Custard franchise loan usually funds a compact, in-line dessert stand rather than a full restaurant: custard machines, freezers, a front counter and a modest strip-center build-out. Because the franchisor’s disclosure document lists no royalty and recommends leasing rather than buying real estate, the financing conversation centers on build-out quotes, equipment and enough cash to carry a seasonal treat business through its first year.
US Professional Funding is not affiliated with, sponsored by or endorsed by The Meadows Original Frozen Custard; the name is used only to describe the business. Figures from the franchisor’s disclosure document can change, loan programs vary by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice; review the current FDD and franchise agreement with a qualified franchise attorney and accountant.
The Meadows Frozen Custard Franchise Loan at a Glance
- Franchisor: The Meadows Franchise Systems, Inc., a Pennsylvania corporation based in Hollidaysburg, Pennsylvania, offering franchises since April 1987.
- Initial franchise fee: $25,000, paid as a $5,000 option deposit and a $20,000 balance at signing; $15,000 for an additional stand by an existing franchisee who does not need training.
- Royalty: no royalty is listed in Item 6 of the 2025 FDD; the franchisor instead earns income tied to the custard mix and other required purchases.
- Advertising: local advertising of 2% of gross sales (1% if you contribute to a regional cooperative), plus a national program of 1% and a regional cooperative of up to 3% only if those are established.
- Estimated initial investment: $134,000 to $512,000, excluding real estate or lease costs.
- Typical stand: about 1,500 square feet, usually an in-line unit in a strip center.
- System size: 29 franchised outlets at the end of the franchisor’s 2024 fiscal year.
- Franchisor financing: none offered (Item 10).
- SBA Franchise Directory: listed as “The Meadows Original Frozen Custard” under code S3015, with no special notes.
What Is The Meadows Original Frozen Custard?
The Meadows is a frozen custard brand with deep roots in central Pennsylvania. According to the 2025 FDD, the franchisor’s predecessor, J. V. Meadows and Sons, opened its first stand in 1950. The current franchisor was incorporated in December 1986 and began offering franchises in April 1987.
Stands sell fresh frozen custard and frozen yogurt made daily from the brand’s proprietary mix. The franchising page says franchisees buy that mix at a cost lower than an independent operator would pay for a generic formula.
The system is regional. Item 20 shows 24 franchised outlets at the end of fiscal 2022, 26 at the end of 2023 and 29 at the end of 2024, concentrated on the East Coast. The franchising page says new franchises are currently offered in Pennsylvania, Maryland, West Virginia, Virginia and New York, with requests elsewhere evaluated case by case.
How lenders view the concept. A lender sees a long operating history, a simple menu and a small footprint, which keeps the loan size moderate. The flip sides are seasonality, a small system that is not widely known outside its home region, and heavy reliance on the owner, since the FDD requires a full-time designated operator.
The Meadows Frozen Custard Franchise Costs
Initial franchise fee. Item 5 sets a uniform $25,000 fee: a $5,000 option deposit followed by a $20,000 balance when you sign the franchise agreement. An existing franchisee adding a stand that does not require training pays $15,000.
Real estate and build-out. The FDD describes a typical stand of about 1,500 square feet, usually in-line in a strip center, and recommends leasing rather than buying real estate. Rent is listed as variable and is not included in the total. Leasehold improvements, furnishings, equipment and signs are combined into one line of $79,000 to $390,000, the largest and widest item in the budget.
Equipment. You must buy frozen custard machines, formula mixes, cones, disposables, add-ins and syrups from designated or approved sources. The equipment package sits inside the leasehold improvements line, so ask the franchisor for a separate equipment list and price it before you set a loan amount.
Opening costs and working capital. Item 7 adds opening inventory, grand opening advertising, training travel, miscellaneous opening costs such as legal, accounting, insurance, deposits and permits, and 3 months of additional funds.
Total investment. According to The Meadows’ 2025 Franchise Disclosure Document, the estimated initial investment is:
- Initial franchise fee: $25,000
- Real estate: variable, paid to the landlord
- Leasehold improvements, furnishings, equipment and signs: $79,000 to $390,000
- Initial inventory: $10,000 to $15,000
- Opening advertising and promotions: $1,000 to $5,000
- Training expenses: $1,000 to $5,000
- Miscellaneous opening costs, including working capital, professional fees, insurance, deposits and permits: $14,000 to $62,000
- Additional funds for 3 months: $4,000 to $10,000
- Total, excluding real estate: $134,000 to $512,000
A former food space usually costs far less to fit out than a raw shell, so contractor bids decide where you land.
Ongoing Fees and How They Affect Your Loan
Item 6 of the 2025 FDD does not list a royalty. Instead, Item 8 explains that the designated mix suppliers pay the franchisor a per-gallon fee on the mix franchisees buy, $1.50 per gallon for franchises granted after December 1, 2016. That cost is built into your product price rather than billed as a percentage of sales, so model it inside cost of goods.
Advertising obligations include local spending of 2% of gross sales (1% if you join a regional cooperative), a national program of 1% of gross sales only if one is established, and a regional cooperative of up to 3% only if one is established. Other fees include a $5,000 transfer fee, a $5,000 renewal fee, $50 per day for additional training and $500 for a replacement operations manual.
When underwriting The Meadows Frozen Custard franchise loan, a lender subtracts advertising, mix costs, rent and payroll from projected sales and tests whether the remaining cash flow covers the loan payment with room to spare.
Franchisor Requirements for New Owners
The FDD does not publish a minimum net worth or liquid capital figure, so expect the franchisor and your lender to review your finances directly. What the FDD does require is commitment: Item 15 calls for a designated individual who works the business full time and avoids outside work that would prevent 40 hours per week. If you are an individual franchisee, that person is you; a corporate franchisee’s designee must own at least 5% and act as principal operating officer.
Item 15 also requires the franchisee’s owners and their spouses to sign a guarantee.
Training lasts 26 days, 5 before opening and 21 after, mostly at an affiliate stand in Ebensburg, Pennsylvania.
Ways to Own a Meadows Stand
Open a new stand. Most buyers start here: a leased strip-center space, a full build-out and new equipment. This is the loan structure that relies most on projections.
Buy an existing stand. Resales are financed on the stand’s actual sales history, which many lenders prefer. Expect the $5,000 transfer fee, franchisor approval and possibly upgrades as conditions of the transfer. Our article on buying a franchise resale covers what to request from a seller.
Add another stand. Item 12 says franchisees do not receive the right to acquire additional franchises in their area, and the franchisor is not obligated to permit more stands. Existing owners who do receive approval pay the reduced $15,000 fee if no new training is needed.
Financing Options for The Meadows Frozen Custard Franchise
SBA 7(a) loans. The most flexible fit for a start-up stand. A SBA 7(a) loan can combine the franchise fee, build-out, equipment, inventory and working capital into one structure with longer terms than many conventional loans.
SBA 504 loans. Because the FDD recommends leasing, 504 financing applies mainly if you buy a building or need long-lived fixed assets. Owners who prefer to own their location can review SBA 504 real estate loans.
Conventional term loans. Borrowers with strong collateral, liquidity and restaurant experience may qualify for conventional business loans, which can move with fewer program requirements.
Equipment financing. Custard machines, dipping cabinets, walk-in or reach-in freezers, refrigeration and point-of-sale hardware can be financed separately through restaurant equipment financing and leasing, which can preserve cash for opening.
Working capital and lines of credit. A frozen dessert stand faces slower months, and the FDD’s 3-month additional funds estimate is modest. A restaurant working capital line can help cover rent, payroll and mix purchases until the busy season returns.
Seller financing on resales. A seller may carry part of the price on a resale. Lenders typically require a seller note to be subordinate, and loan programs may limit how it is structured.
SBA Loans for Meadows Frozen Custard Franchisees
The SBA uses its Franchise Directory to confirm that a brand’s agreements meet eligibility rules. The Meadows Original Frozen Custard is listed under code S3015 with no special notes, so no brand-specific addendum or condition is attached to the listing.
The SBA 7(a) program maximum is currently $5 million, far above what a typical stand needs, though program rules can change. Before you apply, run your numbers through our SBA loan calculator, gather the current FDD and your personal financial statement, and be ready to show your equity injection.
How Lenders Evaluate The Meadows Frozen Custard Deal
Personal credit and financial history. Expect a full review of credit reports, tax returns and existing debts for each guarantor.
Net worth and liquidity. Lenders confirm you can cover the equity injection, closing costs and a reserve beyond the 3 months in Item 7.
Industry and management experience. Food service or retail management helps. Because the FDD requires a full-time operator, a lender will focus on your own ability to run the stand.
Business plan and projections. Base your plan on the stand’s location, traffic, nearby competition and the seasonal sales pattern. Item 19 is not included in the FDD, so talk with existing franchisees about their experience and keep assumptions conservative.
The FDD and franchise agreement. A lender reviews Items 5, 6, 7, 10, 12 and 17. Our article on how the FDD affects financing walks through what reviewers look for. Review Items 3 and 4 with your attorney as well.
Site and lease. The lease term should cover the loan term or come close.
Historical financials for resales. Lenders compare tax returns, sales reports and mix purchase records.
Custard Equipment and Seasonality
Custard equipment is the heart of a Meadows stand. Continuous-batch custard machines, dipping cabinets, blast or storage freezers and refrigeration must be reliable through the summer rush. Ask for warranties and service availability, and keep a repair reserve.
Seasonality affects both the loan structure and the cash plan. Many owners keep a working capital line in place before winter arrives.
Multi-Unit Growth
The Meadows does not offer development agreements or guaranteed expansion rights in the FDD, so growth happens one approved stand at a time. When a second stand is approved, lenders look at the first stand’s performance, your global cash flow and whether a manager can run one location while you oversee both. For more on that progression, see franchise acquisition financing.
Real-World Scenarios
A first-time owner in Pennsylvania. A former retail manager signs for a strip-center stand and uses SBA 7(a) financing for the build-out, equipment and opening costs, putting in personal equity and keeping a separate reserve for winter.
A family buying a resale. A couple purchases an established stand from a retiring owner. The lender underwrites the stand’s tax returns, the seller carries a small subordinate note, and the couple completes the franchisor’s transfer approval.
An existing franchisee adding a stand. An approved owner adds a second stand at the reduced $15,000 fee and uses a conventional term loan supported by the first stand’s history.
Common Mistakes to Avoid
- Treating “no royalty” as no ongoing cost and ignoring the mix fee built into product prices.
- Budgeting from the low end of the $79,000 to $390,000 build-out line without contractor bids.
- Underestimating the off-season and borrowing too little working capital.
- Signing a lease shorter than the loan term.
- Assuming you can add stands freely; the FDD grants no expansion rights.
For more pitfalls, read our post on restaurant loan mistakes.
Next Steps to Finance Your Meadows Frozen Custard Franchise
Step 1: Request the current FDD. Review it with a franchise attorney and accountant.
Step 2: Confirm your territory. Check whether your area is open and how the exclusive territory will be drawn.
Step 3: Find a site. Shortlist strip-center spaces of about 1,500 square feet and get the franchisor’s input.
Step 4: Price the build-out and equipment. Get contractor bids and an equipment list tied to Item 7.
Step 5: Build projections. Prepare a seasonal, month-by-month forecast with conservative assumptions.
Step 6: Apply for financing. Submit your package and compare The Meadows Frozen Custard franchise loan offers on total cost and structure.
The Meadows Frozen Custard Franchise Loan FAQs
How much does a Meadows franchise cost?
The 2025 FDD estimates $134,000 to $512,000, excluding real estate or lease costs.
What is the franchise fee?
$25,000, paid as a $5,000 option deposit and a $20,000 balance at signing.
Is there a royalty?
Item 6 lists no royalty. The franchisor earns a per-gallon fee from designated suppliers on custard mix purchases, and advertising contributions apply.
How much liquid capital do I need?
The FDD does not state a minimum. Plan for your equity injection, closing costs and reserves beyond the 3 months in Item 7.
Is The Meadows eligible for SBA loans?
Yes. It is listed on the SBA Franchise Directory under code S3015 with no special notes.
Does the franchisor offer financing?
No. Item 10 states that it offers no direct or indirect financing, though the franchising page says it helps franchisees explore financing options.
Can I finance the custard machines separately?
Yes. Equipment loans or leases can fund custard machines, freezers and refrigeration.
Can I own more than one stand?
Possibly, with franchisor approval; additional stands are not guaranteed.
How long is the franchise term?
Ten years from opening, with one additional 10-year renewal if conditions are met.
Does the FDD include financial performance figures?
No. Item 19 does not include financial performance representations.
Final Thoughts
The Meadows Frozen Custard franchise loan is moderate in size, but the wide build-out range and seasonal sales demand careful planning. Get firm quotes and keep real working capital for the slow months.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions, or explore restaurant start-up loans.
