Five Guys Franchise Cost: What the FDD Shows

The Number Every Five Guys Buyer Searches For

Five Guys is one of the most recognized burger brands in the US - and one of the more straightforward franchise systems to underwrite. The brand discloses total investment range in its FDD: $300,000 to $700,000 per location, depending on size, market, and whether you're building out a new space or converting an existing restaurant.

The franchise fee is $25,000 - modest for a brand of this size and recognition. What drives the total investment range is primarily build-out cost, which varies between a vanilla shell in a suburban strip center and a renovation of an existing restaurant space.

Most locations land in the $400,000–$550,000 range for a standard inline format in an established retail corridor. The higher end of the range typically involves urban markets with expensive construction, or new builds that require significant plumbing and ventilation work for the open-kitchen format.

Fee Breakdown: Every Line Item

Franchise fee: $25,000. For multi-unit development, Five Guys negotiates area development agreements separately - a common path for buyers looking to commit to 5+ locations in a defined territory.

Build-out and leasehold improvements: $100,000–$400,000. Five Guys stores use an open kitchen concept - no walls between food prep and the dining area. This brand standard requires specific build-out whether you're in a new space or a conversion. A second-generation restaurant space with compatible infrastructure comes in toward the low end.

Equipment: $75,000–$150,000. The Five Guys model has no freezers. All beef is fresh, never frozen. Equipment includes fresh fry stations (Five Guys uses hand-cut fries), burger grills, and refrigeration designed for fresh product cycling. No microwave, no heat wells.

Signage: $10,000–$25,000. Brand-mandated exterior and interior signage, non-negotiable.

Initial inventory: $5,000–$15,000. Higher per-unit than most QSR brands given fresh product turnover.

Training: $3,000–$8,000. Required attendance at a certified Five Guys training location, plus travel.

Working capital: $30,000–$75,000.

Total investment (FDD Item 7): $300,000–$700,000. The range is wide because location type and build condition matter significantly.

Ongoing Fees: Royalties and the Low-Ad Model

Royalty: 6% of gross sales, paid weekly. Standard for QSR.

Marketing contribution: approximately 1.5–2% of gross sales - among the lowest in the category. Five Guys built its brand on word-of-mouth rather than national advertising. The chain spent almost nothing on paid media for its first decade of franchise growth. The low ad fund contribution is structurally meaningful: on $1.5M in annual sales, a 4% ad fund costs $60,000/year. A 1.5% rate costs $22,500. That $37,500 difference passes directly to operator profit compared to brands like Dunkin' (5% ad fund) or Wingstop (4% ad fund).

Technology and digital ordering fees: vary; Five Guys has expanded delivery platform integrations in recent years and charges a technology fee for digital infrastructure.

Combined ongoing fees (royalty + ad fund): approximately 7.5–8% of gross sales. Compared to Dunkin' at 10.9%, Wingstop at 10%, or McDonald's at 9–10% - Five Guys' fee load is lighter.

What Five Guys Franchisees Actually Earn

Five Guys does not publish widely-cited Item 19 AUV data in the same format as some competitors. Based on operator disclosures and industry research, US Five Guys locations average approximately $1.4M–$1.6M in annual gross sales.

Example unit economics at $1.5M AUV: - Revenue: $1,500,000 - Royalty and ad fund (8%): -$120,000 - Food cost at 33% COGS: -$495,000 - Labor (owner plus staff): -$320,000 - Occupancy (rent, CAM, NNN): -$180,000 - Other operating (utilities, maintenance, insurance): -$80,000 - Pre-tax owner income: approximately $305,000

These are estimates based on disclosed ranges, not Item 19 certifications. Individual unit performance varies significantly by location.

Debt service consideration: A $450,000 SBA 7(a) loan at 10.5% over 10 years runs approximately $6,050/month or $72,600/year. After loan payments, a median-performing unit generates approximately $230,000 annually for the owner-operator. Strong performers in high-density markets do considerably better.

The Variable Most Articles Miss

Most Five Guys franchise cost articles stop at the initial investment range and the royalty rate. Two realities shape the investment thesis more than those numbers:

Food cost is structurally higher than standard QSR. A QSR brand with frozen beef and heat lamps holds COGS at 28–30%. Five Guys' fresh model runs 30–35%. On $1.5M in sales, a 5% COGS difference is $75,000 annually - the equivalent of a part-time employee. Operators who model Five Guys financials using standard QSR food cost assumptions overestimate profitability. The premium price point ($10–12 average ticket vs. $7–9 for standard QSR) partially offsets this, but the math still requires careful underwriting.

There are no drive-thrus. Five Guys has never built a drive-thru location. Every sale comes through dine-in, carry-out, or third-party delivery. This means your location's foot traffic and pedestrian accessibility directly determine revenue in a way that delivery-first brands like Wingstop can partially offset with digital orders. A Five Guys on the wrong block, with limited parking or poor sidewalk access, generates meaningfully lower sales than one in a high-foot-traffic corridor.

Score any Five Guys target location before signing a lease. The brand's dine-in dependency makes site selection more consequential here than at most QSR concepts.

Frequently Asked Questions