How Much Is a Five Guys Franchise? Costs, Fees & Requirements

How Much Does a Five Guys Franchise Cost? (Quick Answer)

Opening a single Five Guys restaurant requires a total investment between $440,600 and $940,600, according to Item 7 of the most recent Franchise Disclosure Document. The initial franchise fee is $25,000 per unit. But here’s the catch most prospective franchisees miss: Five Guys almost exclusively awards multi-unit area development agreements, meaning you’re committing to open 5 or more locations within a defined territory over a set timeline.

That changes the real financial picture dramatically. A five-unit development agreement means you’re looking at $2.2 million to $4.7 million in total capital deployment over several years — plus the area development fee paid upfront.

Before diving deeper into the numbers, make sure you understand what a Franchise Disclosure Document contains and how to read one critically.

Full Five Guys Startup Cost Breakdown

Initial Franchise Fee

The per-unit franchise fee is $25,000. For area development agreements, Five Guys charges an additional development fee based on the number of committed units. If you’re signing a 5-unit agreement, expect to pay $25,000 for the first unit plus reduced fees for subsequent units, typically totaling $100,000-$125,000 upfront.

This fee grants you the right to use the Five Guys brand, operating system, recipes, and supplier network. It does not cover build-out, equipment, or any physical assets. For context on how franchise fees work across the industry, see our franchise fees explained guide.

Real Estate, Build-Out & Equipment

This is the largest single cost category, ranging from $250,000 to $600,000 depending on your market.

Cost Component	Low Estimate	High Estimate
Leasehold improvements	$150,000	$375,000
Kitchen equipment & smallwares	$65,000	$130,000
Furniture, fixtures & decor	$20,000	$50,000
POS system & technology	$15,000	$45,000

Five Guys locations typically occupy 1,500-2,500 square feet in inline retail or endcap positions. The brand’s open kitchen design means a significant portion of the build-out budget goes toward the cooking line, exhaust systems, and grease management infrastructure. Markets like Manhattan, San Francisco, or Chicago suburbs push costs toward the high end. Secondary and tertiary markets can come in closer to the low estimate.

Inventory, Signage & Pre-Opening Costs

Cost Component	Low Estimate	High Estimate
Initial food inventory	$8,000	$15,000
Exterior and interior signage	$15,000	$40,000
Pre-opening labor and training	$25,000	$50,000
Grand opening marketing	$10,000	$25,000

Five Guys uses fresh ingredients — never frozen beef, hand-cut fries, peanut oil — which means your opening inventory costs are higher than frozen-product burger concepts. Pre-opening training requires you and your management team to spend several weeks at Five Guys’ headquarters and an existing location, with travel and lodging on your dime.

Working Capital Reserves

Five Guys recommends $50,000 to $100,000 in working capital to cover the first 3-6 months of operations before the restaurant reaches steady-state revenue. This covers payroll, utilities, rent, and food costs during the ramp-up period. Experienced franchise consultants — including our team — generally recommend budgeting closer to 6 months of operating expenses, which can push this figure higher in expensive markets.

Cost Comparison Table: Five Guys vs. Shake Shack vs. In-N-Out vs. Smashburger

Factor	Five Guys	Shake Shack	In-N-Out	Smashburger
Franchise fee	$25,000	Not franchised	Not franchised	$30,000
Total investment	$440K-$940K	N/A (company-owned)	N/A (company-owned)	$575K-$1.1M
Multi-unit required?	Yes (5+ units)	N/A	N/A	Preferred
Liquid capital required	$250,000+	N/A	N/A	$300,000+
Net worth required	$1,000,000+	N/A	N/A	$1,000,000+
Royalty rate	6%	N/A	N/A	5.5%

A critical distinction: Shake Shack and In-N-Out are entirely company-owned. You cannot franchise either brand. This leaves Five Guys and Smashburger as the primary “better burger” franchise options, with Five Guys commanding stronger brand recognition and higher average unit volumes.

Browse other franchise opportunities in our franchise directory or use the AI franchise matcher to find brands that fit your investment range.

Ongoing Royalty, Marketing & Tech Fees

Five Guys charges three recurring fees that come directly off your top-line revenue:

Fee Type	Rate	Basis
Royalty fee	6%	Gross sales
Advertising/marketing fund	3%	Gross sales
Technology fee	~$1,500/month	Flat fee

The 6% royalty is right at the industry median for QSR burger franchises. The 3% marketing contribution funds national and regional advertising campaigns. The technology fee covers the POS system, online ordering platform, and back-office reporting tools.

Combined, you’re paying roughly 9% of gross sales in ongoing fees before you account for rent, labor, food costs, or any local marketing beyond the required fund contributions. For a deeper look at how royalties work, read our guide on franchise royalty fees explained.

Item 19 Snapshot: What Five Guys Locations Actually Earn

Average Unit Volume from the Latest FDD

Five Guys’ Item 19 financial performance representation shows average unit volumes (AUV) around $1.1 million to $1.3 million for franchised locations. Top-quartile locations exceed $1.5 million, while bottom-quartile units fall below $900,000.

These figures represent gross revenue before any deductions. Understanding Item 19 financial performance representations is essential before drawing any income conclusions from these numbers.

Estimated Cash Flow After All Fees

Working backward from a $1.2 million AUV location:

Line Item	Amount	% of Revenue
Gross revenue	$1,200,000	100%
Food costs (30-33%)	-$384,000	32%
Labor costs (25-28%)	-$312,000	26%
Occupancy/rent (8-12%)	-$120,000	10%
Royalty (6%)	-$72,000	6%
Marketing fund (3%)	-$36,000	3%
Technology fee	-$18,000	1.5%
Other operating expenses	-$96,000	8%
Estimated pre-tax cash flow	$162,000	13.5%

This back-of-envelope math suggests a mid-performing Five Guys generates roughly $130,000-$180,000 in pre-tax owner earnings. Top performers do considerably better. Bottom-quartile locations may struggle to clear $60,000, which barely justifies the capital at risk.

Use our franchise investment calculator to model these numbers against your own financial situation.

Hidden Costs the Five Guys FDD Doesn’t Highlight

Multi-unit timeline pressure. Your area development agreement includes a strict opening schedule. Miss a deadline, and Five Guys can terminate your rights to remaining units — or the entire agreement. Delays from permitting, construction, or landlord negotiations don’t necessarily buy you extensions.

Remodel requirements. Five Guys mandates periodic remodels, typically every 7-10 years. These can run $100,000-$250,000 per location and are not optional. The cost is not included in the initial Item 7 investment estimate.

Fresh food waste. The “never frozen” commitment that makes Five Guys popular also creates higher spoilage rates than frozen-product competitors. Daily food cost management requires discipline and experienced kitchen managers.

General manager compensation. In tight labor markets, a qualified GM for a Five Guys location commands $55,000-$75,000 in salary plus benefits. If you’re running multiple units (which you will be), you need a GM at every location, making labor costs your biggest ongoing challenge.

A franchise attorney can help you identify risks buried in the franchise agreement that go beyond what the FDD discloses.

Why Five Guys Costs More Than Most Burger Franchises (And When It’s Worth It)

Five Guys is not the cheapest entry point into burger franchising. Brands like Rally’s/Checkers ($300K-$600K) or Sonic ($1.2M but with drive-in format revenues) offer lower per-unit costs. So why pay more?

Brand strength. Five Guys consistently ranks among the top 3 burger brands in consumer preference surveys. That translates to opening-day traffic and sustained customer loyalty that newer or weaker brands can’t match.

Simplicity of operations. The menu is deliberately limited — burgers, fries, hot dogs, milkshakes. No breakfast daypart, no complicated LTOs, no drive-through (in most locations). This operational simplicity reduces training time, lowers error rates, and keeps labor costs more predictable.

Proven AUV. A $1.2 million average unit volume in a 2,000 square foot footprint produces strong revenue per square foot. Many cheaper franchise concepts generate $600,000-$800,000 AUV, meaning the absolute dollar return on Five Guys’ higher investment can still be superior.

The investment makes the most sense for operators who can commit to the multi-unit model, have experience managing restaurant teams, and target markets where Five Guys has limited existing penetration. If you’re evaluating whether franchising or starting your own business is the right path, Five Guys represents the high end of the franchise investment spectrum with correspondingly strong brand support.

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