Five Guys Franchise FDD, Profits, Costs & Fees (2024)
Five Guys, founded in 1986 by Jerry Murrell and his family, is a renowned fast-food franchise known for its high-quality burgers and fries. Starting as a small carry-out joint in Arlington, Virginia, the brand began franchising in 2002, leading to rapid expansion.
Now headquartered in Alexandria, Virginia, Five Guys is celebrated for its simple yet customizable menu, featuring burgers, kosher-style hot dogs, sandwiches, and milkshakes.
A key differentiator is their commitment to freshness. They do not have any no freezers, only coolers, ensuring all ingredients are fresh and made to order.
Five Guys Franchise Stats
Five Guys
Number of units: 899 franchises
Initial investment: $256,000 - $591,000
Average revenue (AUV): $1,869,000
Five Guys Franchise Initial Investment
It costs on average between $256,000 – $591,000 to start a Five Guys franchised restaurant.
This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of restaurant you choose, the location, and whether the franchisee chooses to lease or purchase the property.
| Type of Expenditure | Amount |
|---|---|
| Initial Franchise Fee | $25,000 |
| Leasehold Improvements | $100,000 – $300,000 |
| Lease Payments and other rental expenses | $7,500 – $20,000 |
| Equipment | $55,000 – $105,000 |
| Signage | $6,500 – $20,000 |
| Initial Inventory | $10,000 – $15,000 |
| Architectural/ Engineering | $7,000 – $25,000 |
| Electronic Cash Register System with Modem | $15,000 – $25,000 |
| Facsimile Machine | $350 – $500 |
| Travel, lodging and meals for initial training | $100 – $5,000 |
| Business Supplies | $4,000 – $8,500 |
| Business licenses, permits, utility deposits, etc. | $5,000 – $15,000 |
| Delivery and catering expenses | $0 – $1,000 |
| Insurance deposits and premiums | $750 – $1,250 |
| Additional Funds for first 3 months | $20,000 – $25,000 |
| Total | $256,200 – $591,250 |
Five Guys Franchise Average Revenue (AUV)
A Five Guys franchised restaurant makes on average $1,869,000 in revenue (AUV) per year.
This compares to $1,548,000 yearly revenue for similar restaurant burger franchises. Below are 10 Five Guys competitors as a comparison:
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Five Guys Franchise Disclosure Document
Frequently Asked Questions
How many Five Guys locations are there?
As of the latest data, Five Guys operates approximately 1,470 locations across the United States. This network spans all 50 states and territories, with the majority of locations being franchise-owned. California leads with 124 locations, making up about 8% of the total.
What is the total investment required to open a Five Guys franchise?
The total investment required to open a Five Guys franchise ranges from $256,200 – $591,250.
What are the ongoing fees for a Five Guys franchise?
The ongoing fees for a Five Guys franchise include a royalty fee of 6% of gross sales, which increases to 8% for locations in Alaska, Hawaii, or Puerto Rico. Additionally, franchisees must contribute up to 2% of gross sales to the Creative Fund, which covers national and regional marketing efforts.
On top of this, franchisees are required to spend at least 2% of gross sales on local advertising. If participating in cooperative advertising programs, franchisees may contribute up to 1.5% of gross sales, which is credited towards the local advertising requirement.
These fees are designed to support the overall operations, marketing, and brand development of the franchise.
What are the financial requirements to become a Five Guys franchisee?
To become a Five Guys franchisee, the financial requirements include an initial investment that ranges from $256,000 to $591,000. This investment covers construction, equipment, signage, inventory, and other startup expenses. Franchisees must also have a net worth between $500,000 and $1.5 million, which demonstrates financial stability to sustain the business long-term.
Additionally, franchisees are required to have liquid assets of at least $150,000 to $250,000, ensuring they can cover initial operating expenses. The initial franchise fee is $25,000, with ongoing royalty and marketing fees applied during the franchise operation.
How much can a Five Guys franchise owner expect to earn?
The average gross sales for a Five Guys franchise are approximately $1.87 million per location. Assuming a 15% operating profit margin, $1.87 million yearly revenue can result in $280,,500 EBITDA annually.
Who owns Five Guys?
Five Guys is owned by the Murrell family. The business was founded in 1986 by Jerry Murrell, his wife Janie, and their sons. The name “Five Guys” refers to Jerry and his four sons, who were involved in the business from its inception. Over time, a fifth son was born, and all five brothers (Jim, Matt, Chad, Ben, and Tyler) now play active roles in running the company.
The Murrell family has maintained control of the business, even as it expanded to a franchise model in 2003, growing into an internationally recognized burger chain. The family’s close involvement continues to be a key part of the brand’s identity.
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