Analysis
Five Guys Franchise Cost: $1M In, Zero Revenue Disclosed
Five Guys costs $928K-$1.38M but does not disclose revenue or profit data. The FDD has a transparency gap that every prospective buyer should understand.
Five Guys asks you to invest nearly a million dollars but refuses to tell you what you will earn. That single fact should define how you evaluate this franchise.
The investment: $927,850 to $1,375,750
The 2025 FDD Item 7 discloses a total initial investment of $927,850 to $1,375,750. The franchise fee is $25,000. Here is where that money goes:
| Cost Category | Low | High |
|---|---|---|
| Franchise fee | $15,000 | $25,000 |
| Equipment & fixtures | $300,000 | $400,000 |
| Leasehold improvements | $350,000 | $600,000 |
| Signage | $25,000 | $75,000 |
| Opening inventory | $15,000 | $25,000 |
| Working capital (3 months) | $20,000 | $25,000 |
| Insurance, legal, other | $30,000 | $50,000 |
| Total estimated investment | $927,850 | $1,375,750 |
That puts Five Guys in the upper tier of QSR investments. The average QSR franchise in our database costs $327K to $860K. Five Guys starts above the average high end. You are paying a premium for the brand, and the question is whether you can verify the return.
No Item 19: the critical gap
Five Guys does not disclose financial performance data in its FDD. No average revenue. No median sales. No net income figures. Nothing.
For a franchise asking nearly $1.4M at the high end, this is a significant omission. The FDD is designed to give prospective franchisees enough information to make an informed investment decision. Choosing not to disclose what units actually earn makes that evaluation substantially harder.
Industry estimates (not from the FDD) peg Five Guys average unit volume at $1.2M to $1.5M, which would put it roughly in line with the broader QSR category. But you cannot verify that from the franchise disclosure, and Five Guys will not confirm or deny it during the sales process.
6% royalty on gross sales
Five Guys charges a 6% royalty on gross sales plus a 2% advertising contribution. The 8% combined fee load is slightly below the QSR average when you include advertising. On estimated revenue of $1.3M, you would be sending about $104,000 per year to Five Guys corporate.
The royalty itself is reasonable for a brand of this stature. It is lower than Crumbl (8%) and Subway (8%), comparable to Wingstop (6%), and above McDonald's (4%). The advertising contribution of 2% is actually modest, though Five Guys has historically relied more on word-of-mouth and earned media than paid advertising.
SBA data: small sample, zero defaults
Five Guys has 35 SBA 7(a) loans on file with a 0.0% charge-off rate. The average loan size of $1,236,877 is consistent with the investment level.
Zero defaults sounds great, but 35 loans is a small sample. For comparison, McDonald's has 1,247 loans at 0.0%, which is statistically meaningful. Thirty-five loans at 0.0% is encouraging but not conclusive. What it does tell us is that the operators who got SBA financing were capitalized well enough to service their debt, which aligns with Five Guys' strict financial requirements.
Growth has stalled
Five Guys has 1,558 locations, up from 899 to 924 to 945 franchise units over three years. Wait. Those Item 20 numbers show 945 franchised units with 613 company-owned. The growth rate is 2.3% year-over-year, which is below the QSR average of roughly 3%.
For a brand that is not yet at the saturation point of a McDonald's or Subway, 2.3% growth is tepid. It suggests either limited franchisee demand (possibly due to the high investment and absent Item 19) or selective development by corporate. Five Guys has historically been conservative about expansion compared to peers.
The franchise agreement
Key terms from the 2025 FDD:
- Term: 10 years with 10-year renewal. Standard for QSR.
- Territory: contiguous property. You get the physical location, not a radius or population-based exclusive area. This is minimal protection.
- Manager-run: not allowed. Five Guys requires the franchisee to be the operating principal. You cannot hire a GM and step back.
- Non-compete: 2 years. If you leave Five Guys, you cannot operate a similar restaurant within your area for two years.
- Transfer fee: $5,000. Reasonable if you decide to sell.
The owner-operator requirement is important. Five Guys is not a passive investment. You are buying a job with a $1M price tag, and the franchise agreement requires you to be in the restaurant. That limits multi-unit expansion and restricts the type of buyer who can make this work.
Litigation note
The FDD discloses 2 litigation matters, including a 2024 case involving the COO (defamation and business interference claims) and a historical 2005 Maryland Consent Order for pre-registration franchise sales. The COO litigation raises questions about leadership stability, though it may not directly affect franchisee operations.
The bottom line
Five Guys is a strong brand with a weak FDD. The food is good, the customer base is loyal, and the SBA data (what little exists) is clean. But asking a franchisee to invest $928K to $1.38M without disclosing what units earn is a transparency problem. The owner-operator requirement and slow growth rate compound the concern.
If you are considering Five Guys, your due diligence needs to go beyond the FDD. Talk to existing franchisees (the FDD lists them in Item 20). Ask for trailing-twelve-month P&Ls. Validate the revenue estimates independently. Do not invest a million dollars on brand loyalty alone.
Check our Five Guys profile for the complete data picture, or compare against other premium QSR brands on the screener.
Related franchise research
Continue your research with our Arby's franchise cost breakdown, Burger King franchise analysis, and best food franchises guide.
Research Five Guys further
- 📄 Download the Five Guys FDD summary — $5 per brand
- 📞 Get Five Guys's verified franchisee contacts — $49 per brand. Call real owners before you sign.
- 📊 Category profitability report — $99. See how Five Guys ranks against every competitor.
Frequently Asked Questions
- How much does a Five Guys franchise cost?
- A Five Guys franchise costs $927,850 to $1,375,750 in total investment, per the 2025 FDD. The franchise fee is $15,000 to $25,000. The high investment is driven by equipment costs ($300K-$400K) and leasehold improvements ($350K-$600K) for the brand's premium restaurant build-out.
- How much does a Five Guys franchise make?
- Five Guys does not disclose financial performance data (Item 19) in its FDD. Industry estimates place average unit volumes at $1.2M to $1.5M per year, but these figures cannot be verified through the franchise disclosure document. Prospective franchisees should request financials directly from existing operators.
- Does Five Guys require owner-operators?
- Five Guys requires franchisees to be actively involved in operations and typically looks for multi-unit operators with restaurant experience. The $1M+ investment and no revenue disclosure combination means you need strong industry knowledge to evaluate the opportunity independently.
- How does Five Guys' royalty compare to category average?
- Five Guys charges a 6% royalty plus 4% advertising fund, totaling 10% of gross sales. The QSR average is approximately 5.4% royalty. Combined with the lack of revenue disclosure, the above-average fee load makes it difficult to model profitability from FDD data alone.
- Can you open just one Five Guys location?
- No. Five Guys requires multi-unit development agreements, typically committing franchisees to open 5 or more locations within a defined territory and timeline. This means the true capital commitment is not the $927K-$1.38M for a single unit but potentially $5M+ across the agreement. Combined with the lack of Item 19 earnings data, this multi-unit requirement raises the risk profile significantly and limits the opportunity to first-time franchise buyers who cannot meet the financial threshold.