The Frosty Palace is a malt shop, and a regular, central hangout for teenagers who attend Rydell High.
The Frosty Palace is a round building, with a wider roof than body (possibly an awning) with icicles hanging from it, and icicles painted on the body. On top of the building is it's name, Frosty Palace, with a snowman (a possible reference to Frosty the Snowman) holding an ice cream sundae, three ice cream cones and two banana splits - or dogsled delights (as Sonny called them) - behind the snowman.
Despite being a malt shop, a walk-in restaurant, they still bring your food out to your car, and you can walk up to a window and place an order.
The parking lot, however, only has enough space for about 10 cars, but most customers walk. Those who drive there mostly place their order, and leave once they've received their food, and walk up customers just place their order, receive their food, and leave. But the inside, is almost never empty. There's a TV set and a jukebox inside the Frosty Palace, so don't expect to be sitting around the whole time.
ROLE IN FILM:
The Frosty Palace first appears in the cartoon introduction, with the credit, "Dances and Musical Sequences Staged and Choreographed by Patricia Birch." The T-Birds were driving slowly passed it, but the Pink Ladies pass them by, and they speed off passed the Downtown Tavern.
After Greased Lightnin', the T-Birds meet at the Frosty Palace to discuss plans for a drag race with the Scorpions, but Danny becomes distracted when he sees Sandy sharing a sundae with Tom Chisum. When she gets up to change the song on the jukebox, Danny leaves the meeting to apologize to Sandy for his behavior at the bonfire. Danny tries insulting Tom, but Sandy retaliates by reminding him he's never done anything athletic before.
After joining the Rydell track team, and winning Sandy back, Danny takes her to the Frosty Palace, but their friends crash their date. Kenickie and Rizzo split up and Frenchy, now working at the Frosty Palace and has pink hair, reveals to Vi, who probably owns the Frosty Palace, that she dropped out of Beauty School and doesn't know what to do with her life, now. She stays behind after the place closes and is visited by a Guardian Angel who adivses her to go back to Rydell (Beauty School Dropout).
The waitresses of the Frosty Palace watch the dance off on the restaurant's TV, and they even point out the T-Birds and Pink Ladies; however, they didn't recognize Doody, Sonny, and Putzie when they mooned in the camera because their jackets were over their heads and faces, and Vi says, "I wonder who that is on the right (Putzie).