Five Guys

Five Guys charges a $25,000 franchise fee (veterans get $10,000 off for their first restaurant). But most franchise agreements require a Development Agreement as well, which costs $50,000 per restaurant to be developed — so the actual entry cost for a single restaurant is $75,000 in franchise and development fees combined.

The buildout is substantial. Leasehold improvements run $500,000 to $750,000 — the single largest line item, reflecting the brand's commitment to a specific aesthetic in a 2,000–3,000 square foot inline or urban space. Furniture, fixtures, and equipment (including the grill station, fryer, ice machine, and custom decor) run $300,000 to $400,000. Signage adds $20,000 to $40,000, POS systems $20,000 to $35,000, and architectural fees $15,000 to $30,000.

Total all-in for a single restaurant: $977,850 to $1,375,750, not including the $50,000 development fee (which brings it to $1,027,850 to $1,425,750). The FDD explicitly notes these estimates do not include potential tariff increases as of the FDD date.

Ongoing fees: 6% royalty on gross sales (8% for Alaska, Hawaii, and Puerto Rico). The Creative Fund advertising contribution is currently 2% of gross sales but can increase to 4% — and local advertising cannot exceed the gap between what you've contributed to the Creative Fund and 4% total. The technology fee is approximately $5,000 annually for POS upgrades. Transfer fee is a modest $5,000.

Five Guys also requires ongoing weekly purchases of proprietary hamburger and hotdog buns from Five Guys Bakery, an affiliate — the ongoing supply chain relationship with a related party is worth tracking.

Five Guys does not make any financial performance representations. Their Item 19 states explicitly: 'We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets.'

There is no FDD-sourced data on average unit sales, EBITDA, or operator income for Five Guys. This is legal and represents their policy choice — but it means you're investing $1M+ with zero franchisor-disclosed financial benchmarks.

External industry data suggests Five Guys locations typically generate $1.0M–$1.5M in annual revenue for a typical inline unit, with premium urban locations doing more. The brand's premium pricing ($15–$20 per person) and lean menu (burgers, hot dogs, fries, milkshakes) typically support higher ticket averages than fast food but lower volume than QSR-priced concepts.

If you're evaluating this franchise seriously, you need to do your own due diligence: talk to current franchisees, review their financial statements if they'll share them, and model your specific location costs against independent benchmarks. The FDD itself will not help you here.

Five Guys' unit trajectory shows a system that's slowly rebuilding franchised capacity while corporate grows aggressively. Franchised locations went from 979 at end-of-2022 to 899 (a massive drop — including 106 reacquisitions by corporate in 2022 alone), then recovered to 924 in 2023 and 945 in 2024. Company-owned locations grew from 479 in 2022 to 613 in 2024 — corporate is actively acquiring franchise locations.

The 2024 franchised opening pace of 35 locations against 14 closures is modest net growth of 21 units. Significantly, 361 franchise agreements had been signed but restaurants not yet open as of December 31, 2024 — a very large pipeline relative to annual openings. This suggests either significant deal-signing activity or slow execution on existing commitments.

The 2022 mass reacquisition of 106 franchised locations is worth asking about when doing due diligence. Corporate reacquiring 12% of the franchised system in a single year is unusual and reflects either troubled operators or a deliberate corporate strategy.

The lack of Item 19 disclosure is the headline risk. Five Guys is one of the few major QSR brands that doesn't give prospective franchisees any FDD-sourced revenue benchmarks. This puts the entire burden of financial modeling on you — which requires talking to current franchisees who may not be willing to share.

The development fee of $50,000 per restaurant is non-refundable and paid upfront. If you sign a development agreement for 3 locations, you're committing $150,000 before you open a single door.

Five Guys Bakery is an affiliate that supplies proprietary buns on a weekly basis via electronic wire transfer. Ongoing related-party supply relationships create a potential conflict of interest in pricing and quality over time.

The corporate reacquisition pattern in 2022 — 106 locations taken back in one year — warrants specific inquiry: what triggered that? Were these struggling operators, or was corporate executing a geographic consolidation strategy? The answer matters for understanding what your exit options look like.

At 8% royalty in Alaska, Hawaii, and Puerto Rico, the economics change materially if you're considering those markets.