Five Guys Franchise Costs, Fees & FDD

Year Business Began: 1986

Franchising Since: 2002

Headquarters: Alexandria, Virginia

Estimated Number of Units: 1,800

Franchise Description: The franchisor is Five Guys Franchisor, LLC. Five Guys franchises are fast casual dining restaurants which specialize in the sale of hamburgers, French fries, and related accompaniments in accordance with the franchisor’s comprehensive and unique system. Five Guys restaurants are typically located in retail shopping centers and other urban locations which are acceptable to the franchisor. However, the franchisor may consider other sites such as train stations, sports arenas, airports, university campuses or other captive market spaces on a case-by-case basis.

Training Overview: The operating principal, general manager, and one assistant manager must attend and complete the initial training program to the franchisor’s satisfaction. This training will be conducted at the franchisor’s corporate headquarters or at another location it designates. The initial training program will generally last about two weeks. However, up to six weeks of training may be required. Franchisees may also have additional personnel trained by the franchisor or its designee for the restaurant, although it may charge $1,500 per person for that training. For the opening of the franchisee’s first restaurant, the franchisor will provide one of its trained representatives. The trained representative will provide on-site pre-opening and opening training, supervision, and management assistance for 10 days. If the franchisee reasonably requests or as the franchisor deems appropriate, it will, during the term of the Franchise Agreement, subject to the availability of personnel, provide the franchisee with additional trained representatives who will provide on-site remedial training to restaurant personnel. Any additional training the franchisor considers necessary must be attended by the franchisee (if an individual), the general manager, and at least one assistant manager.

Territory Granted: The Franchise Agreement grants franchisees the right to operate a restaurant at a single location that the franchisee selects within the assigned area and that the franchisor approves (primary area of responsibility). The Franchise Agreement and the manuals describe the then-current site selection guidelines for each restaurant. During the term of the Franchise Agreement, if the franchisee is in compliance with the Franchise Agreement, the franchisor will not establish a restaurant or authorize any other person or entity to establish a restaurant within the primary area of responsibility. Generally, it will consist of the contiguous property, controlled by the landlord, in which the restaurant is located, such as the shopping mall, strip mall, university campus, or hospital. The primary area of responsibility may be limited to the specific physical space occupied by the restaurant. In the event the primary area of responsibility is limited to only the specific physical space occupied by the restaurant, franchisees will not be receiving an exclusive territory.

Obligations and Restrictions: If franchisees are individuals, they must perform all obligations of the operating principal. If franchisees are a corporation, partnership or other form of entity, the operating principal must be one of the “controlling principals” and must continue to hold ownership interest in the franchise or any entity that directly or indirectly controls the franchise. Franchisees must retain at all times a general manager and the other personnel as are required to operate and manage the restaurant. The general manager must satisfy the franchisor’s educational and business criteria as provided in the manuals or other written instructions, and must be individually acceptable to the franchisor. Franchisees must comply with all standards and specifications relating to the purchase of all food, food products and beverage items, ingredients, supplies, materials, fixtures, furnishings, equipment (including electronic cash register, computer hardware and software), utensils and other kitchen items and products used or sold at the restaurant. Franchisees must sell or offer for sale all menu items, food products, and other products and services the franchisor requires, in the manner and style it requires, including dine-in and carry-out, as expressly authorized by the franchisor in writing.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the date of the Franchise Agreement unless terminated earlier. The agreement may be renewed at the franchisee’s option for additional consecutive 10-year terms, if requirements are met.

Financial Assistance: The franchisor does not offer, either directly or indirectly, any financing arrangements to franchisees. The franchisor does not guarantee a franchisee’s notes, leases or other obligations. The franchisor currently offers qualified honorably discharged military veterans or wounded warriors a reduced franchise fee.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$25,000	$25,000
Leasehold Improvements	$500,000	$750,000
Lease Payments and Other Rental Expenses	$7,500	$25,000
Furniture, Fixtures, Equipment and Decor	$300,000	$400,000
Signage	$20,000	$40,000
Initial Inventory	$10,000	$15,000
Architectural/ Engineering	$15,000	$30,000
POS Systems	$20,000	$35,000
Travel, Lodging and Meals for Initial Training	$100	$5,000
Business Supplies	$4,000	$8,500
Business Licenses, Permits, Utility Deposits, etc. (for first year)	$5,000	$15,000
Delivery and Catering Expenses	$500	$1,000
Insurance Deposits and Premiums	$750	$1,250
Additional Funds for first 3 months	$20,000	$25,000
ESTIMATED TOTAL	$977,850	$1,375,750

 
Other Fees

Type of Fee	Amount
Royalty Fee	6% of gross sales. If the restaurant is located in Alaska, Hawaii or Puerto Rico, the royalty fee is 8% of gross sales.
Creative Fund	Up to 4% of gross sales (currently 2%).
Bread Products	Varies, depending on the franchisee’s bread product needs.
Local Advertising	Not less than 2% of gross sales.
Cooperative Advertising	Maximum – 1.5% of gross sales, which will be credited towards local advertising.
Interest	The lesser of (i) 10% per annum or (ii) the maximum rate allowed by applicable law.
Advertising & Promotional Materials	Varies, depending on franchisee’s advertising needs.
Prohibited Product or Service Fine	$250 per day of use of unauthorized products or services.
Initial Training of Additional or Replacement and Successor Personnel	$1,500 per person.
Additional Assistance	If franchisees request additional assistance, they must pay the current per diem charge for the franchisor’s employees used to provide the assistance and our associated costs. Current per diem is $500.
Cash Register Upgrades	Approximately $5,000.
Transfer Fee	$5,000 to reimburse the franchisor for reasonable costs and expenses in reviewing the transfer application.
Additional or Remedial Training	Cost in providing the training (currently $1,500).
Inspection and Testing	Cost of inspection or testing (currently estimated at $5,000).
Vendor/Equipment Approval Fee	$5,000 to reimburse the franchisor for reasonable costs and expenses in reviewing and approving vendor equipment.
Audit Fee	Cost of audit (currently estimated at $5,000).
Late Payment or Reporting Fee	$50 per day the franchisee is late.
Site Evaluation Fee	A reasonable amount to be determined (currently $500).
Relocation Fee	$7,500 to reimburse the franchisor for its time, costs and expenses in reviewing the relocation application as well as the current and future sites.
Gift Card Program	Varies.
Time Extension Fee	$10,000 per time extension.

The above information has been compiled from the FDD of Five Guys. Year of FDD: 2025.
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