"Five Guys" Franchise Cost, Profit, How to Apply, Requirement, Investment, Reviews| SkillsAndTech

“Five Guys” Franchise Cost, Profit, How to Apply, Requirement, Investment, Reviews| SkillsAndTech

Five Guys is a family owned and operated restaurant company. It was established in1986. It started franchising in 2002.

Five Guys Wiki

Five Guys is grown from five restaurants to over 1500 locations in sixteen countries. 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.

Total Units1,580
Incorporated Name:Five Guys Burgers & Fries
Franchising since:2002
Industry:Food Services
Subsector:Restaurants

Five Guys Franchise Cost

How much will it cost to open a Five Guys franchise? Five Guys requires between $315,000 – $700,000 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 $1.5 million to even be considered. 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.

Financial Requirements and Fees

Here is a base overview of what the essential finance requirements are for a Five Guys outlet:

Fees/ ExpensesAmount Needed
Liquid Capital$150,000
Net Worth$500,000
Development Fee$50,000
Franchising Start-up Fee$25,000

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.

FeeLow-End CostsHigh-End Costs
Royalty Fee6%6%
Training Fee$100$5,000
Operational Fund Fee$20,000$25,000
Advertising Fee2%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.

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.

Fees and costs required of owning a Five Guys outlet in detail

Type of FeeAmount
Royalty Fee6%
Start-Up Inventory$10,000 – $15,000
Signs and Advertising$6,000 – $20,000
Equipment$55,000 – $105,000
Leasehold Improvements$100,000 – $300,000
Insurance and Premiums$750 – $1,250
Business Supplies$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$1,000
Funds for First Three Months$20,000 – $25,000

Average Sales / Revenue per Year

Five Guys restaurants typically make around $1.2 million in sales and revenue each year. 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.

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.

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.

Location – Where you can open Five Guys Franchise Restaurants

Five Guys is currently interested in franchise partners for select international markets only. 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.

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.

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 requires between $300,000 and $650,000.

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.

Main Advantages

  • 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.

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.

Main Challenges

  • No financial aid from the franchisor.
  • Heavy competition from other fast food joints.

Is Five Guys Franchise Profitable?

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.

How to Apply for Five Guys Franchise?

You can apply for Five Guys Franchise through their website. You will have to fill up the application form for Five Guys Franchise. Click here to apply

You can apply for Five Guys Franchise for U.S. and Canada. Fill all the personal information, Location and Capital. You will be contacted by Five Guys Sales Team.

Conclusion

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.

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