Interested in owning a burger business? How about investing in a Zagat-rated, retro-style burger joint? If so, the Five Guys Burgers & Fries franchise could be right for you. This All-American concept prides themselves on simple menu consisting of 100% fresh ground beef and fresh-cut fries. Not only does the restaurant offer delicious burgers, but it serves classic American staples such as cheese dogs, bacon dogs, grilled cheese sandwiches, and even kosher dogs.
How much will it cost to open a Five Guys franchise? Five Guys requires between $256,200 – $591,250 to open a store on average. Compared to other burger restaurant franchises, Five Guys is less expensive to open than alternatives like Burger King that require a net worth of $1 million to even be considered. Take our franchise quiz to find out if Five Guys is the right choice for you.
If this classic menu / concept is appealing to you, opening a Five Guys is your path to business success and financial independence. Read all about the financial requirements, advantages, and challenges of operating a Five Guys below.
Financial Requirements and Fees
Here is a base overview of what the essential finance requirements are for a Five Guys outlet:
|Franchising Start-up Fee
Here is a more detailed breakdown of the costs and fees required to open the franchise. While advertising and royalty fees are ongoing, training and operational fund fees are paid only at the beginning of the business.
||$1,500 per person
||$1,500 per person
|Advertising and Promotional Materials
|Local Advertising Fee
||Not less than 2%
|| Not less than 2%
It’s important to note that these are only the initial costs required to open the business. There could also be additional fees that are not accounted for in these numbers depending on the location or type of store you want to open.
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Fortunately, opening a Five Guys franchise is less expensive than opening other popular burger concepts. This leaves you with more financial capital to invest in important aspects of your business that will help you flourish like furniture, advertising, and high-speed WiFi service, to name a few. This also allows newer entrepreneurs the opportunity to get involved with a growing concept.
Here’s a breakdown of more fees and costs required of owning a Five Guys outlet:
|Type of Fee
|Initial franchise fee
|Travel, lodging, and meals for training
||$100 to $5,000
||$6,500 – $20,000
||$55,000 – $105,000
||$100,000 – $300,000
|Insurance and Premiums
||$750 – $1,250
||$4,000 – $8,500
|Lease Payments and Rental Expenses
||$7,500 – $20,000
|Electronic Cash Register System
||$15,000 – $25,000
|Business Licenses, Permits, Utility Deposits
||$5,000 – $15,000
|Delivery and Catering Costs
||$0 – $1,000
|Funds for First Three Months
||$20,000 – $25,000
Average Sales / Revenue per Year
Five Guys has made $2.204 billion in revenue for 2022. Although that statistic sounds impressive, this doesn’t take into account the sales costs required of each outlet. Operators have to consider all the overhead costs like taxes, wages, and cost-of-goods sold take a bite out of gross revenue.
||Five Guys Burgers & Fries
Five Guys prides itself on its family-owned business style. Hailing from Arlington, Virginia, the restaurant started serving burgers in 1986 and began franchising in 2002. In only a year and a half, the restaurant sold over 300 franchise locations. During the years of 2010 and 2011, Five Guys was the fastest-growing fast-food chain in the entire United States and even increased sales by over 32%.
In 2016, the franchise expanded to 1,500 locations and began developing 1,500 more. In 2013, Five Guys finally went global – the first international location opened in London and rapidly developed 113 more locations in the United Kingdom.
The company even expanded to the Middle East and Germany, making international customers happy with the increased amount of locations readily available to them. These facts alone attest to the all-around popularity and rapid growth of this beloved burger joint.
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In addition, all food is cooked in pure peanut oil – an ingredient that doesn’t contain cholesterol. Five Guys doesn’t own freezers, unlike many burger restaurants. Rather, they own coolers, which is a testament to the freshness of the product.
The franchise boasts an impressive number of awards and honors, including Best Burger in Philadelphia, Charlottesville, Richmond, and Annapolis, as well as awards from the Washingtonian and Washington Press.
How Much Profit Does the Five Guys Franchise Make Per Year?
On average, all food franchise owners make about $126,866 in income per year. Unfortunately, the company does not publish franchisee profit publicly.
Taking this statistic into consideration, it’s probably that Five Guys franchise owners make around the average for comparable burger chains. Your run rate will vary depending on location and how well you run the business.
Things You Need To Consider
Type of Franchise
Fortunately, there’s only one type of franchise with Five Guys. This makes the decision simpler for an entrepreneur. All of the Five Guys franchises range between 2,000 and 3,000 square feet and are walk-in, sit-down restaurants. Although the choice is simple, some may find a lack of options a weak point in this franchise. Other franchises offer option like mall locations.
Five Guys restaurants are granted a single location to operate their business. This location is approved by the franchisors at Five Guys and is determined by market demographics, growth trends in the market and available construction sites.
During the time of the Franchise Agreement, other Five Guys outlets will not be permitted to open within a certain radius of your outlet. This allows each franchise to occupy a territory exclusive to their contractual agreement. The franchise agreement is in effect for ten years, which means that your restaurant can occupy the assigned territory without being affected new Five Guys restaurants.
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In addition to being established in very specific areas, Five Guys restaurants are almost always located near shopping centers, sports arenas, airports, college campuses, and train stations. This allows easy access to customers as well as an increased likelihood of foot-traffic. Each restaurant size ranges between 2,000 – 3,000 square feet.
Although there are more locations in the United States than international, Five Guys remains a popular food restaurant across the globe. Many international customers are searching for a healthy substitute for the usually processed meals they receive at other American-inspired restaurants, and Five Guys is the perfect answer for them. Popularity amongst Europeans is not to be underestimated, and if you live in the United Kingdom a Five Guys restaurant may be an enticing way to attract customers looking for that All-American meal.
Compared to other franchises, Five Guys is a more affordable option for business owners. Opening a franchise requires roughly around $256,200 – $591,250, depending on how expensive building costs are in your territory.
Competitors such as Burger King require four times as much financial investment to launch a franchise, a considerably large amount compared to Five Guys. Unfortunately, financial aid is not guaranteed by Five Guys Burgers & Fries. If you fall into economic hardship, the likelihood of receiving assistance from headquarters is small.
Advantages of Five Guys Franchise
The use of peanut oil, fresh ground beef, and coolers makes Five Guys a healthier option compared to other fast-food restaurants. This commitment to healthier meal options attracts customers looking for a fresh meal rather than a frozen one and gives the sense that Five Guys is a higher-end restaurant compared to its competitors. This advantage helps business owners immensely, especially considering the current market trend is in favor of healthier, more natural meals compared to frozen ones.
As stated above, a Five Guys restaurant is generally more affordable to open than many other fast-food restaurants. While a Wendy’s costs over one million to open, a Five Guys is around $256,200 – $591,250.
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This fact alone gives business owners more of a chance to invest in other aspects of their business, such as quality advertising or business supplies. Rather than spending a small amount on advertising, you can invest in higher-tech signage that stands out and draws more attention to your business. Since Five Guys is a slightly smaller burger chain, there is also less competition when it comes to competing with other Five Guys locations.
The initial training program gives business owners more support in their business ventures. It increases the likelihood of success by equipping them with the tools they need to thrive in their franchise. For instance, initial training requires two to six weeks of classes at the corporate headquarters in Lorton, Virginia. One general manager, one assistant manager, and the operating principle owner must attend the training. The franchisor designates instructors and training materials to each franchise owner.
Although it may cost $1,500 per person for the training program, the fee does not come without its perks. For the opening of the franchisee’s first outlet, the franchisee will receive a trained representative. The representative will be on-site before opening, train for the opening itself, supervise and be assistant manager for ten days.
Five Guys is also quick to expand not just in the United States but globally as well. Their plans for expansion include growing their restaurants to 300 units. They’re planning to add 140 more restaurants in the UK and they also opened in Seoul, South Korea this year.
- Only fresh ingredients are used, which attracts customers looking for healthy food options.
- More affordable option compared to other franchise competitors.
- Extensive training increases the likelihood of business success.
- Fast expansion plans
Challenges of Five Guys Franchise
If you decide to open a Five Guys restaurant, there are challenges. For example, the franchisor does not offer any financial assistance, loans, notes, leases, or obligations to the franchisee. This means that if you are in need of financial help, you are left to your own network and creativity.
This shouldn’t be a problem, however, considering the more affordable financial requirements it takes to operate the business. Another challenge is that burgers and fries are a quintessential fast food option. Since Five Guys is slightly less well-known compared to McDonald’s and Burger King, there may be more of a marketing push needed in your area to drive awareness for the concept.
Some Five Guys restaurants also faced closure in the past years for several reasons cited. This only shows that if you want to run a food business, you’ll have to constantly keep a close eye on things such as keeping the store running successfully in order to avoid possible closures.
- No financial aid from the franchisor.
- Heavy competition from other fast food joints.
- Close supervision
Is the Five Guys Franchise Right for You?
In order to decide if owning a Five Guys outlet is right for you, ask yourself the following questions.
Do you have the financial capital to open and operate such a business? Remember, Five Guys is generally less expensive compared to other fast-food restaurants, and yet the medium income of a Five Guys owner is just as high as other restaurant owners. If you have the capital and net worth to do so, your investment in a Five Guys franchise may be a wise choice.
Are you in favor of more healthy meal options? It’s important to ask yourself if you believe in a restaurant’s value system. In this case, Five Guys values more quality meals rather than frozen food that takes less time to make. Take a look at your own nutrition and see if it aligns with the health options served at Five Guys.
Are you willing to accept that there’s no financial aid promised by the franchisor? Once again, the likelihood of falling into financial debt is probably lower due to the already low costs of opening a Five Guys. If you are worried about your finances, now may not be the right time to invest in any franchise.
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Do you have experience in the restaurant industry? The key to a successful restaurant is found prior knowledge and knowledge of the field. This business venture is viable for folks who worked as a restaurant manager or similar experience. Having previous experience will help relieve any anxiety about opening a business.
All of this information may look daunting, yet investing in a franchise can be fruitful. You can to buy into a proven system that works. Be sure to ask yourself the previous questions and look at what you can bring to the table as a franchisee.
Being a business owner and franchisee takes a lot of courage, gumption, and commitment – going into this opportunity armed with preparation is the best way you can succeed. With your new knowledge of Five Guys Burgers & Fries business ownership, you may find that the delicious, classic, All-American restaurant fits aligns with your goals. Click here to complete a franchisee interest form with Five Guys to start the application process.