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Description
Investment Icon

What Are the Initial Investment Requirements for a Five Guys Franchise?

To open a Five Guys franchise, you will need to make a significant financial commitment. The initial investment ranges from $256,200 to $591,250, which includes a franchise fee of $25,000. Additionally, you must have a net worth of $500,000 to $1,000,000 and be prepared for ongoing royalty fees of 6% and a marketing fee of 2% of gross sales. Having sufficient cash reserves is crucial for covering these costs and ensuring smooth operations during the startup phase.

Fees Icon

What Are the Average Revenues and Financial Performance of a Five Guys Franchise?

Five Guys franchises generally see robust financial performance, with an average annual revenue of approximately $1,182,254 per unit. The median annual revenue stands at $877,394, while the lowest recorded revenue is $780,050. However, the highest annual revenue can reach around $1,182,254. Despite the impressive revenue figures, it's important to note that operating expenses can be high, and franchisees may face challenges in achieving profitability, as indicated by an EBITDA of (42,387), representing a negative margin.

Revenue Icon

What Is the Breakeven Timeline for a Five Guys Franchise?

Franchisees can expect to reach their breakeven point within approximately 12 months of operation. This relatively quick breakeven timeline can be appealing to aspiring entrepreneurs, as it suggests a faster return on investment. However, it's essential to consider the overall investment payback period, which averages around 24 months, ensuring that franchisees plan their finances accordingly to sustain operations during the initial phases.

Breakeven Icon

How Many Five Guys Locations Are There?

As of 2023, Five Guys operates a total of 1,521 locations, with 924 of those being franchised units and 597 corporate-owned units. The growth trajectory has been consistent, with an increase in total units from 1,458 in 2021 to 1,521 in 2023. This growth reflects the brand's strong presence in the fast-casual dining sector and its appeal to both franchisees and customers alike.

Five Guys Burgers and Fries Franchise Financial Requirements

Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.

Net Worth Required icon The minimum total assets (minus liabilities) you must possess.

i Net Worth Required:

$500,000 - $1,000,000
Investment Payback icon The estimated period to recoup your total investment.

i Investment Payback:

24 Months
Franchise Fee icon The initial fee paid to join the franchise system.

i Franchise Fee:

$25,000
Royalty Fee icon Ongoing percentage of revenue paid to the franchisor.

i Royalty Fee:

6%
Marketing Fee icon Regular contribution toward the franchise’s advertising fund.

i Marketing Fee:

2%
Breakeven Time icon The estimated timeframe to recover your initial costs.

i Breakeven Time:

12 Months
Initial Investment icon The total amount required to launch the franchise.

i Initial Investment:

$256,200 - $591,250
Cash Required icon The minimum liquid capital you must have on hand.

i Cash Required:

$256,200 - $591,250
Average Revenue icon The typical yearly revenue generated per franchise location.

i Average Revenue:

$1,182,254
Median Revenue icon The middle value of yearly revenue among franchise locations.

i Median Revenue:

$877,394
Highest Revenue icon The largest reported annual revenue among franchisees.

i Highest Revenue:

$877,394
Lowest Revenue icon The smallest reported annual revenue among franchisees.

i Lowest Revenue:

$780,050
Industry icon A broad sector defining similar types of franchise businesses.

i Industry:

Restaurant Franchises
Category icon A more specific division within the broader industry.

i Category:

Quick-Service Restaurants
Leadership icon The key individuals guiding the franchise’s strategy and growth.

i Leadership:

Shane Thompson
Corporate Address icon The official business address of the franchisor’s headquarters.

i Corporate Address:

10718 Richmond Highway Lorton, Virginia 22079
Funding Year icon Available financing options to help start the franchise.

i Funding Year:

2017
Parent Company icon The main organization that owns the franchise brand.

i Parent Company:

Five Guys Franchisor, LLC

Five Guys Burgers and Fries Franchise Unit Growth Summary

A breakdown of corporate, franchised, and total units, with yearly net changes.

The overall number of operating franchise locations.

Total Units i

1521
The number of locations owned by independent franchisees.

Franchised Units i

924
The number of locations owned and run by the franchisor.

Corporate Units i

597
Units 2021 2022 2023
Total Units 1458 1477 1521
Net Change YoY 19 44
Franchised Units 979 899 924
Net Change YoY -80 25
Corporate Units 479 578 597
Net Change YoY 99 19
Investment About

Initial Investment

The initial investment required to open a Five Guys Burgers and Fries franchise ranges from $256,200 to $591,250. This includes a franchise fee of $25,000, which grants the franchisee the rights to operate under the Five Guys brand. Additionally, potential franchisees should prepare for ongoing costs such as a 6% royalty fee on gross sales and a 2% marketing fee.

Potential About

Revenue Potential

Five Guys franchises have demonstrated strong revenue potential, with an average annual revenue per unit of $1,182,254. The median annual revenue is reported at $877,394, showcasing the brand's ability to generate significant sales. This strong performance can be attributed to the brand's loyal customer base and popular menu offerings.

Metrics About

Breakeven and Payback

Franchisees can expect to reach their breakeven point within approximately 12 months of operation. The investment payback period is estimated at 24 months, allowing franchise owners to recoup their initial investment relatively quickly, provided they effectively manage their operations and maintain sales momentum.

Fees About

Franchise Growth

As of 2023, Five Guys operates a total of 1,521 units, with 924 being franchised locations. The brand has experienced steady growth, with an increase in both franchised and corporate units over the past few years. This growth reflects the brand's expanding market presence and consumer demand for its offerings.

Breakeven About

Financial Performance

The average financial performance of Five Guys units shows a gross profit margin of 77.7%, indicating efficient management of cost of goods sold (COGS). However, operating expenses are reported to exceed revenues, resulting in a negative EBITDA of $42,387. This highlights the importance of controlling operational costs to achieve profitability.

Units About

Operational Expenses

Franchisees should anticipate various operational expenses, including lease payments ranging from $7,500 to $20,000 annually. Additionally, marketing and advertising costs are set at 2% of gross sales, along with other administrative expenses. Understanding these costs is crucial for maintaining a sustainable and profitable franchise operation.

Frequently Asked Questions

The initial investment for a Five Guys franchise ranges from $256,200 to $591,250, which includes a franchise fee of $25,000.