Five Guys Franchise Analysis 2026

Investment & Fee Data

Investment Overview

Franchise Fee$35K

Total Investment$360K – $900K

Royalty Rate6.0%

Ad/Marketing Fund2.0%

Total Fee Burden8.0%

System Size & Growth

US Locations1,700

Unit Growth Rate+6.5%

Founded2001

Franchising Since2003

FDD Item 19Yes ✓

🔒 Premium Data Available

Avg Unit Volume (AUV)$2.1M

Owner Earnings$180K

SBA Default Rate1.8%

5-Year Survival97%

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💡 What This Means For You

The combined fee burden of 8.0% is within the industry average of 8-10%. Beyond the listed investment, expect approximately $163K in hidden costs (working capital, legal, insurance, tech fees) — bringing your realistic total closer to $793K.

Financial Performance & Risk Analysis

Financial Performance

Avg Unit Volume (AUV)$2.1M

Net Profit Margin15%

Est. Owner Earnings$180K

Breakeven12-18 months

Payback Period2.5-3.5 years

Capital Requirements & Operations

Liquid Capital Required$250K

Net Worth Required$500K

Staff Required20-30

Training8 weeks

TerritoryDesignated area

Multi-Unit RequiredNo

Term Length10 years

Risk & SBA Safety Data

SBA Default Rate1.8%

5-Year Survival97%

Renewal Fee$3,500

Transfer Fee$5,000

💡 Financial Analysis

The revenue-to-investment ratio of 3.3x is excellent — every dollar invested generates $3.3 in annual revenue, well above the 2x industry benchmark. At estimated owner earnings of $180K/year, the simple payback period is approximately 3.5 years.

Due Diligence Deep Dive

The data franchise brokers don't show you — real costs, owner lifestyle, franchisee satisfaction, exit options, and FDD transparency.

💰 True Cost of Ownership

Working Capital (6 mo)$100K

Legal & Accounting$15K

Insurance (Annual)$12K

Tech/Software (Monthly)$800/mo

Lease Deposit Est.$20K

Grand Opening$15K

Total Hidden Costs$163K

👤 Owner Reality Check

Hours Per Week45-60

Absentee Owner Friendly?Yes ✓

Manager-Run Possible?Yes ✓

Seasonal VariationLow

Labor Cost (% of Revenue)34%

Absentee-owner friendly with strong GM. 45-60 hours/week for hands-on owner. Simple operations but labor scheduling critical.

📊 Franchisee Health

Satisfaction Score84/100 (Good)

Annual Turnover Rate2.8%

Litigation Count (Item 3)1 cases

5-Year Closure Rate2%

Avg Franchisee Tenure9 years

Franchisee AssociationNo

🚪 Exit Strategy & Resale

Resale Value Multiple2.8-3.8xx earnings

Transfer RestrictionsFranchisor approval required

Non-Compete Period2 years

Non-Compete Radius5 miles

Avg Time to Sell3-6 months

Exit DifficultyEasy

📋 FDD Transparency Report

Item 19 QualityComprehensive

Item 19 Includes:

✓ Revenue by location

✓ Labor analysis

✓ Cost breakdown

Territory ProtectionModerate

Territory provided; growth potential within market

Required Suppliers?No

Supplier Markup RiskLow

Renewal Terms10-year renewable

🚩 FDD Red Flags & Green Flags

⚠️ Watch Out For:

8% combined feesLabor-intensive

✅ Positive Signals:

1.8% SBA default$2.1M AUV15% margins6.5% growth

💡 Due Diligence Verdict

A franchisee satisfaction score of 84/100 is a strong positive signal — happy franchisees usually mean good support, realistic expectations, and a healthy franchisor-franchisee relationship. Only 1 litigation cases in the FDD is a positive sign of a healthy franchisor-franchisee relationship.

AI Disruption Risk Assessment

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AI Risk Analysis

See how AI will impact Five Guys over the next 5-10 years — threats, moats, and disruption timeline.

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Territory Saturation Analysis

0.51

Units per 100K pop.

0.20x

Saturation Index

vs. Fast Casual avg (2.59/100K)

States with Presence

Low Saturation

Five Guys has significant whitespace opportunity relative to its category.

Geographic Distribution

No units

High density

Most Saturated States

State	Units	Population	Per 100K
Washington DC	35	671,000	5.22
Wyoming	29	581,000	4.99
North Dakota	38	781,000	4.87
Vermont	28	645,000	4.34
Alaska	26	733,000	3.55

Least Saturated States

State	Units	Population	Per 100K
California	69	39,029,000	0.18
Florida	57	23,555,000	0.24
Texas	83	30,503,000	0.27
North Carolina	32	10,849,000	0.29
New Jersey	30	9,290,000	0.32

Growth Opportunity States

High-population states where Five Guys has minimal or no presence — potential expansion territories.

Maryland Oklahoma Connecticut New Mexico New Hampshire

Investment Thesis

Five Guys carries a BUY signal with a FutureScore of 84/100. Quality fast casual burger concept with solid fundamentals. $2.1M AUV, 15% margins, and 1.8% SBA default rate signal a well-run system. 6.5% growth sustainable.

Ideal Investor Profile: Single-unit fast casual operator

Strengths

$2.1M AUV with 15% margins1.8% SBA default (excellent)6.5% unit growthSimple, replicable burger systemStrong franchisee satisfaction

Risk Factors

8% combined fees (moderate)Labor-intensive modelTrendy burger format riskPremium pricing vulnerability in recession

Five Guys

What is Five Guys?