About FIVE GUYS Franchise
Five Guys is one of the most recognized fast casual burger franchises in the United States, known for its fresh made burgers and hand cut fries prepared to order.
Owned by Five Guys Holdings, Inc., the brand has been franchising since 2017 under this filing and carries a franchise fee of $25,000.
The Five Guys experience is built around a simple but powerful promise: fresh, high quality burgers and fries made with premium ingredients in front of the customer.
FIVE GUYS Franchise Cost & Fees
Minimum Investment
$256K
Average Investment
$424K
Maximum Investment
$591K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $25,000 | One-time payment upon signing |
| Royalty Fee | 6% of Gross Sales of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | Up to 2% of Gross Sales (Currently 2%) for Creative Fund; Not less than 2% of Gross Sales annually for Local Advertising; Maximum 1½% of Gross Sales for Cooperative Advertising. | National brand fund |
| Total Investment Range | $256,200 – $591,250 | Includes build-out, inventory, working capital |
The investment range of $256K–$591K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (6% of Gross Sales) and marketing fee (Up to 2% of Gross Sales (Currently 2%) for Creative Fund; Not less than 2% of Gross Sales annually for Local Advertising; Maximum 1½% of Gross Sales for Cooperative Advertising.) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee (1) | $25,000 | $25,000 |
| Leasehold Improvements (2) | $100,000 | $300,000 |
| Lease Payments and other rental expenses (3) | $7,500 | $20,000 |
| Equipment (4) | $55,000 | $105,000 |
| Signage (5) | $6,500 | $20,000 |
| Initial Inventory (6) | $10,000 | $15,000 |
| Architectural/ Engineering (7) | $7,000 | $25,000 |
| Electronic Cash Register System with Modem (8) | $15,000 | $25,000 |
| Facsimile Machine (9) | $350 | $500 |
| Travel, lodging and meals for initial training (10) | $100 | $5,000 |
| Business Supplies (stationery, business cards, menus, gift cards, paper and other materials) (11) | $4,000 | $8,500 |
| Business licenses, permits, utility deposits, etc. (for first year) (12) | $5,000 | $15,000 |
| Delivery and catering expenses (13) | $0 | $1,000 |
| Insurance deposits and premiums (14) | $750 | $1,250 |
| Additional Funds for first 3 months (15) | $20,000 | $25,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $5,000 |
| Technology Fee | Approximately $5,000 (Cash Register Upgrades) |
| Audit Fee | Cost of audit (Currently estimated at $5,000) |
| Interest | The lesser of (i) 10% per annum or (ii) the maximum rate allowed by applicable law |
| Advertising & Promotional Materials | Varies, depending on your advertising needs |
| Prohibited Product or Service Fine | $250 per day of use of unauthorized products or services |
| Initial Training of additional or replacement and successor personnel | $1,500 per person |
| Additional Assistance | Current per diem is $500 |
| Additional or Remedial Training | Cost in providing the training (Currently $1,500) |
| Inspection and Testing | Cost of inspection or testing (Currently estimated at $5,000) |
| Vendor/Equipment Approval Fee | $5,000 |
| Late Payment or Reporting Fee | $50 per day you are late |
| Site Evaluation Fee | A reasonable amount to be determined (Currently $500) |
| Relocation Fee | $7,500 |
| Time Extension Fee | $10,000 per Time Extension |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | generally last about 2 weeks. However, we may require up to 6 weeks of training. |
| Classroom Training | 80 |
| On-the-Job Training | 136 |
| Training Location | Lorton, Virginia (for classroom), Your Restaurant (for on-the-job) |
| Additional Training | Operating Principal, general manager and other personnel must attend additional training programs and seminars we may consider necessary. For all of these programs and seminars, we will provide the instructors and training materials. If the training is mandatory, we will not charge you a fee for attending the training. We reserve the right to charge a reasonable fee for any additional training programs and/or seminars that we provide to you or your personnel at your request. You must also pay all expenses you or your Operating Principal, general manager and other personnel incur in participating in any additional training, including costs of travel, lodging, meals, and wages. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Exclusive |
| Exclusive Territory | Yes |
| Territory Size | generally consist of the contiguous property, controlled by the landlord, in which the Restaurant is located, such as the shopping mall, strip mall, university campus, or hospital. |
| Description | Under the Franchise Agreement, Franchisee is assigned a Primary Area of Responsibility, which is an exclusive territory, generally consisting of the contiguous property controlled by the landlord where the Restaurant is located (e.g., shopping mall, strip mall, university campus, or hospital). The franchisor reserves the right to advertise and promote the System in the territory and to sell collateral products or food/beverage services through alternative distribution channels or other marks, without compensating the franchisee. However, the franchisor will not establish or authorize others to establish a FIVE GUYS® Restaurant within the franchisee's Primary Area of Responsibility during the term of the Franchise Agreement, provided the franchisee is in compliance. For Development Agreements, the territory is non-exclusive for development rights. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 10 years |
| Renewal Term | additional consecutive 10-year terms |
| Renewal Conditions | You must give notice at least 7 months in advance, repair and update equipment and Restaurant premises, not be in breach of any agreement with us, have the right to remain in possession of Restaurant premises, sign current agreement and general release, and comply with current qualification and training requirements. You may be required to sign a new contract with different terms and conditions than your original contract, but the material terms and conditions of your original contract (i.e., the fees, protected territory and renewal rights) will remain the same in the new contract. |
| Transfer Fee | $5,000 |
| Transfer Conditions | You must pay all amounts due us, not otherwise be in default, sign a general release, and pay a transfer fee. Transferee must meet our criteria, attend training and sign current Franchise Agreement. |
| Termination for Cause | Each of your obligations under the Franchise Agreement is a material and essential obligation, the breach of which may result in termination. We may terminate you for cause if you fail to cure certain defaults, including: if you or any of your affiliates fail to pay any monies owed to us or our vendors, and do not cure within 5 days after notice (or longer period required), fail to procure and maintain required insurance within 10 days after notice, use the Marks in an unauthorized manner, conduct or otherwise participate in an unauthorized Interview, and fail to cure within 24 hours after notice, fail to comply with the requirements of any other franchise agreement, development agreement, or other agreement to which you and we a party, fail to cure any other default that is susceptible of cure within 30 days after notice. Non-curable defaults include: if you become insolvent, make a general assignment for benefit of creditors, file a petition or have a petition initiated against you under applicable bankruptcy laws, have outstanding judgments against you for over 30 days, sell unauthorized products or services, fail to acquire an accepted location within time required, fail to remodel when required, fail to open Restaurant when required, fail to comply with any term and condition of any sublease or related agreement, or any other franchise agreement, development agreement, or other agreement with us and have not cured the default within the given cure period, abandon or lose right to the Restaurant premises, are convicted of a felony or other crime that may have an adverse effect on the System or Marks, transfer any interest without our consent or maintain false books or records, failure to comply with applicable laws. If we determine that you are repeatedly in default for failure to comply with the requirements of any other franchise agreement, development agreement, or other agreement to which we are parties or in material default for failure to substantially comply with the requirements of any other agreement, we may terminate the Franchise Agreement and/or the other franchise agreement, development agreement or other agreement. If we terminate the Franchise Agreement it is considered an event of default agreement under any other agreement between us, and we have the right to terminate the other agreement. |
| Non-Compete Period | during the term of the franchise and two (2) years thereafter |
| Non-Compete Details | You are prohibited from operating or having an interest in a similar business during the term of the franchise. After termination or expiration, you and your Controlling Principals are prohibited from operating or having an interest in a similar business which is located, or is intended to be located within a 25-mile radius of any Restaurant in existence or under construction as of the earlier of (i) the expiration or termination of, or the transfer of all of your interest in, the Franchise Agreement or (ii) the time a Controlling Principal ceases to satisfy the definition of a Controlling Principal, as applicable. Non-competition provisions are subject to state law. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | When you sign the Agreements, you must designate and retain at all times an individual to serve as the Operating Principal under the Agreements. If you are an individual, you must perform all obligations of the Operating Principal. If you are a corporation, partnership or other form of entity, the Operating Principal must be one of your “Controlling Principals” and must continue to hold ownership interest in you or any entity that directly or indirectly controls you. The Operating Principal (or his designee, if applicable) must devote substantial full time and best efforts to the supervision and performance of the Restaurant under the Agreements. The Operating Principal must sign the Agreements as one of your “Controlling Principals,” and will individually guarantee all of your obligations, and will be jointly and severally bound by all of your obligations and the obligations of the Operating Principal and your Controlling Principals under the Agreements. |
| Required Suppliers | Five Guys Bakery, our affiliate, is currently the only approved supplier for the hamburger and hotdog buns and rolls that you must use. PAR Technology Corporation is currently the only approved supplier of the Point-of-Sale system. |
| Supply Restrictions | You must purchase or lease and install all fixtures, furnishings, equipment (including electronic cash registers, computer hardware and software), décor items, signs and related items we require, all of which must conform to the standards and specifications in our Manuals or otherwise in writing, unless you have first obtained our written consent to do otherwise. You must maintain in sufficient supply and use and sell at all times only those food and beverage items, ingredients, products, materials, supplies and paper goods that meet our standards and specifications. Except as described in this Item 8, you must purchase promotional material incorporating our Marks and proprietary products only from approved suppliers. All menu items must be prepared using the recipes and procedures specified in the Manuals or other written materials. You must not deviate from these standards and specifications by the use or offer of non-conforming items or differing amounts of any items, without obtaining our written consent first. You must sell and offer for sale only those menu items, products and services that we have expressly approved for sale in writing. You must offer for sale all products and services required by us in the manner and style we require, including dine-in and carry-out services. You must not deviate from our standards and specifications without obtaining our written consent first. You must discontinue offering for sale any items, products and services we may disapprove in writing at any time. We can, and expect to, modify our standards and specifications as we deem necessary. We will provide you notice of any changes in the Manuals. |
| Franchisor Revenue from Suppliers | For the year ended December 31, 2022, $49,299,201 in revenue was derived by our affiliate Five Guys Bakery from the sale of hamburger and hotdog buns to our U.S. and Canadian franchisees, which amounted to 77% of Five Guys Bakery’s total revenue for 2022. Neither we nor our other affiliates derived any other revenue from required purchases or leases. We or our affiliates will receive, and expect to continue to receive, rebates from some of our designated suppliers as a result of our franchisees’ required purchases from these suppliers. We estimate that these rebates will range from 1% to 5% of franchisees’ purchases for products such as Coca-Cola beverages, Dr. Pepper beverages, Heinz products and Musiktoday. In 2022, approximately 95% of the proceeds expensed from the rebate funds collected were used to compensate the system-wide, third-party administrators for the secret shopper program, MarketForce, and to issue Coca-Cola related rebates to Five Guys franchisees. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | We do not offer, either directly or indirectly, any financing arrangements to you. We do not guarantee your notes, leases or other obligations. |
FIVE GUYS Franchise Earnings — Item 19
FIVE GUYS does not make an Item 19 financial performance representation in their FDD. This means they do not disclose revenue, profit, or earnings data for franchised locations. Before investing, ask the franchisor directly for franchisee contact information so you can speak with existing owners about their actual financial performance.
FIVE GUYS does not include an Item 19 financial performance representation in their FDD. Contact information for current and former franchisees is listed in Item 20 of the FDD.
FIVE GUYS Litigation & Risk Flags
1 Pending Action ListedReview the full FDD for details on pending litigation.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
FIVE GUYS System Growth
Total Units
1477
Franchised
899
Company-Owned
578
FIVE GUYS currently operates 899 franchised locations and 578 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2020 | 95 | 28 | 1008 |
| 2021 | 30 | 59 | 979 |
| 2022 | 38 | 118 | 899 |
Transfers: 31 | Closures: 12
State Registrations
Registered in 14 states: CA, HI, IL, IN, MD, MI, MN, NY, ND, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$1.0M
Net Income
$-59,093
Total Assets
$922K
Audited by Deloitte & Touche LLP for year ending December 31st.
FIVE GUYS Franchise — FAQ
The total investment to open a FIVE GUYS franchise ranges from $256,200 to $591,250, per their Franchise Disclosure Document. This includes the initial franchise fee of $25,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
FIVE GUYS charges a royalty fee of 6% of Gross Sales of gross sales, plus a Up to 2% of Gross Sales (Currently 2%) for Creative Fund; Not less than 2% of Gross Sales annually for Local Advertising; Maximum 1½% of Gross Sales for Cooperative Advertising. contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the FIVE GUYS Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from FIVE GUYS to ensure you have the most up-to-date version.
FIVE GUYS does not provide an Item 19 financial performance representation in their FDD, which means they do not disclose franchisee revenue or earnings data. Prospective investors should contact existing franchisees directly (listed in Item 20 of the FDD) to gather real-world financial performance information.
FIVE GUYS has been franchising since 2017. The FDD shows an investment range of $256,200-$591,250, a 6% of Gross Sales royalty, and no Item 19 earnings disclosure. There are 1 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $25,000 and the total investment ranges from $256,200 to $591,250 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from FIVE GUYS and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with FIVE GUYS or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com