Five Guys Franchise Loan: Complete Franchise Financing Guide

Opening a Five Guys franchise is a proven path to owning a premium fast-casual burger restaurant with a devoted customer base — but securing the right Five Guys franchise loan is the critical first step. With total investment costs ranging from $315,000 to over $700,000, most aspiring franchise owners need structured financing to cover startup expenses, equipment, and working capital. In this guide, we break down every financing option available for Five Guys franchise owners, how to qualify, and how Crestmont Capital can help you get funded fast.

What Is Five Guys Franchise Financing?

Five Guys franchise financing refers to the various loan products, credit facilities, and funding strategies used to cover the capital requirements of opening and operating a Five Guys Burgers and Fries franchise. Founded in 1986 by the Murrell family in Arlington, Virginia, Five Guys has grown to over 1,700 locations worldwide, becoming one of the most recognizable names in the better-burger segment. The brand is consistently ranked among the top fast-casual franchises in the United States by industry publications including Forbes and Entrepreneur Magazine.

Because Five Guys does not offer direct in-house financing to franchisees, prospective owners must secure funding independently through lenders such as banks, credit unions, alternative lenders, and SBA-approved lenders. The good news is that Five Guys' strong brand recognition, consistent revenue model, and well-documented franchise disclosure document (FDD) make it an attractive candidate for lenders — particularly for SBA 7(a) and SBA 504 loan programs. Lenders appreciate the proven track record, which reduces underwriting risk and often results in better loan terms for borrowers.

Five Guys franchise financing typically needs to cover several categories: the initial franchise fee, construction and build-out, kitchen equipment and fixtures, initial inventory, technology systems, signage, and working capital to sustain operations through the ramp-up period. Understanding which financing instruments apply to each category — and how to layer them effectively — is the key to a successful franchise launch.

Whether you're opening your first Five Guys location or expanding an existing multi-unit portfolio, the right financing strategy can make the difference between a smooth launch and a capital-constrained start. Franchise-specialized lenders like Crestmont Capital understand the unique dynamics of restaurant franchise lending and can structure financing packages tailored to the Five Guys model.

Startup Costs and Capital Requirements

Before applying for a Five Guys franchise loan, it's essential to understand the full scope of investment required. According to Five Guys' Franchise Disclosure Document (FDD), the estimated initial investment for a traditional Five Guys location ranges from approximately $315,000 to $702,000, depending on location size, market, lease terms, and build-out complexity. Non-traditional locations such as airports or sports venues can vary significantly.

Here's a breakdown of the primary cost categories you'll need to fund:

• Initial Franchise Fee: $25,000 (for a single-unit agreement)
• Leasehold Improvements & Construction: $100,000–$350,000+ depending on the condition of the space
• Kitchen Equipment & Fixtures: $75,000–$150,000 for commercial fryers, grills, refrigeration, and smallwares
• Signage & Décor: $15,000–$45,000 for exterior and interior brand standards
• Technology Systems (POS, security): $10,000–$25,000
• Initial Inventory: $5,000–$15,000 (fresh ingredients, packaging)
• Training Expenses: $10,000–$30,000 (travel, lodging, wages during training)
• Working Capital: $50,000–$75,000 for the first several months of operations
• Additional Funds: Variable, covering miscellaneous pre-opening costs

Five Guys requires franchisees to have a minimum net worth of approximately $500,000 and liquid assets (cash or equivalents) of at least $150,000 to $250,000, though requirements may vary by market and development agreement size. Multi-unit developers are often expected to have significantly higher net worth to support parallel location development.

One important aspect of Five Guys franchise costs is that most locations are leased rather than purchased outright. This means franchisees don't typically need to finance real estate acquisition — but they do need to finance build-out costs, which can be substantial depending on the condition of the space. Some landlords provide tenant improvement (TI) allowances that can offset construction costs, effectively reducing the loan amount needed.

According to the U.S. Small Business Administration, understanding your complete startup cost picture before approaching lenders is critical — it helps you right-size your loan request and demonstrate financial preparedness to underwriters. A well-prepared franchisee with a detailed use-of-funds breakdown will typically achieve better loan terms than one who comes to the table without documentation.

Financing Options Available

There is no single "best" financing option for a Five Guys franchise — the ideal strategy typically involves layering two or more products to cover different categories of expense. Below are the primary financing options available to Five Guys franchisees:

1. SBA 7(a) Loans

The SBA 7(a) loan is the most commonly used financing product for franchise startups. With loan amounts up to $5 million, repayment terms up to 10 years for working capital and up to 25 years for real estate, and government-backed guarantees that reduce lender risk, SBA 7(a) loans offer some of the most competitive rates available for franchise financing. Five Guys is listed on the SBA Franchise Registry, meaning lenders can expedite the approval process without needing to review the franchise agreement independently.

2. SBA 504 Loans

For franchisees who plan to purchase commercial real estate or acquire significant fixed assets (heavy equipment, major build-out), the SBA 504 loan program offers long-term, fixed-rate financing. The 504 program works in conjunction with a Certified Development Company (CDC) and typically requires a 10% down payment from the borrower. While less common for restaurant franchise startups (which usually lease rather than own), it can be a powerful tool for multi-unit operators purchasing a building.

3. Conventional Business Term Loans

Traditional bank term loans can be used for Five Guys franchise financing, particularly for borrowers with strong credit history, existing business collateral, or established banking relationships. Conventional loans typically offer faster processing than SBA loans but may require higher down payments (20–30%) and carry shorter repayment terms. They work well for experienced franchisees who don't want to navigate SBA documentation requirements.

4. Equipment Financing

Kitchen equipment represents a major capital expense for any restaurant franchise. Equipment financing allows you to fund fryers, grills, refrigeration units, and other fixed assets using the equipment itself as collateral. Terms typically range from 3–7 years, and because the loan is self-collateralized, approval requirements are often more flexible than unsecured loans. This is an excellent way to preserve working capital and reduce the size of your primary SBA or conventional loan.

5. Business Line of Credit

A revolving business line of credit gives Five Guys franchise owners flexibility to manage cash flow during the ramp-up period — covering payroll, vendor invoices, or unexpected expenses without taking out a fixed loan. Lines of credit are drawn and repaid as needed, and interest accrues only on the outstanding balance. This is particularly useful in the first 6–12 months of operation when revenue may be building toward break-even.

6. ROBS (Rollover for Business Startups)

Some franchise investors use ROBS to fund their Five Guys investment by rolling over existing retirement funds (401k or IRA) into their new franchise business without paying early withdrawal penalties or taxes. This strategy can provide a substantial injection of equity capital, reducing the amount needed from lenders. However, ROBS is complex and requires specialized legal and tax guidance.

7. Franchise-Specific Lenders

Specialized franchise lenders — including Crestmont Capital — have deep experience structuring loans for restaurant franchises. These lenders understand FDD requirements, franchise operations, and the seasonal dynamics of the fast-casual segment, which means faster approvals and more creative structuring options than a generalist bank.

SBA Loans for Five Guys Franchise Owners

The SBA loan program is widely regarded as the gold standard for franchise financing — and for good reason. SBA-backed loans typically offer lower interest rates, longer repayment terms, and lower down payment requirements compared to conventional financing. For Five Guys franchisees, SBA loans are often the cornerstone of a comprehensive financing strategy.

According to the U.S. Small Business Administration, the 7(a) loan program supports small businesses with financing for working capital, equipment, real estate, and startup costs — all of which are relevant to a new Five Guys franchise. Loan amounts up to $5 million are available, with interest rates tied to the prime rate plus a lender spread (typically Prime + 2.25% to 2.75% for loans over $50,000 with terms longer than seven years). As of 2024, effective SBA 7(a) rates typically ranged from approximately 10% to 12%.

Five Guys and the SBA Franchise Registry

Five Guys Enterprises LLC is listed on the SBA's Franchise Directory, which is a significant advantage for borrowers. When a franchise brand is registered, SBA-approved lenders can process your loan without submitting the franchise agreement for independent SBA review — streamlining the process and potentially reducing approval timelines by several weeks. This "expedited" review status is particularly valuable when timing is critical for lease execution or construction.

SBA 7(a) Loan Structure for Five Guys

A typical SBA 7(a) loan for a Five Guys franchise might be structured as follows:

• Loan Amount: $300,000–$500,000 (covering 80–90% of project costs)
• Borrower Down Payment: 10–20% of total project costs
• Term: 10 years for equipment/working capital; up to 25 years for real estate
• Collateral: Business assets, personal guarantee, sometimes personal real estate
• SBA Guarantee Fee: Varies by loan size; currently waived for loans under $1M for certain borrowers

SBA 504 for Equipment-Heavy Build-Outs

If your Five Guys build-out involves substantial fixed-asset acquisition (custom kitchen equipment, major structural improvements), the SBA 504 program can be layered with a conventional first mortgage. The 504 structure typically involves: 50% from a bank (first lien), 40% from a CDC/SBA (second lien, fixed rate), and 10% down from the borrower. This structure preserves maximum working capital while locking in long-term fixed rates on major assets.

Documentation Required for SBA Franchise Loans

Lenders will typically require the following for SBA franchise loan applications:

• Completed SBA application forms (SBA Form 1919, 413)
• Personal and business tax returns (3 years)
• Personal financial statement
• Business plan with financial projections (3–5 years)
• Franchise Disclosure Document (FDD) and signed franchise agreement
• Lease agreement or letter of intent for the location
• Construction/build-out estimates from licensed contractors
• Equipment quotes and specifications
• Resume demonstrating relevant business or restaurant experience

Working with a franchise-experienced lender like Crestmont Capital can significantly streamline SBA documentation — our specialists know exactly what underwriters need for restaurant franchise deals and can help you prepare a complete, compelling loan package from day one.

How to Qualify for Five Guys Franchise Financing

Qualifying for a Five Guys franchise loan requires meeting both the franchisor's financial requirements and the lender's underwriting criteria. While every lender has different standards, here are the key qualification factors most underwriters will evaluate:

Credit Score Requirements

For SBA loans, most lenders require a minimum personal credit score of 680, though scores of 700 or higher will significantly improve your chances of approval and the terms you receive. Conventional business loans may require 700+ scores. Equipment financing and lines of credit may be available with scores as low as 620–650, depending on the lender and collateral strength. A CNBC report on small business loan qualification notes that credit scores are among the top factors lenders weigh for startup business financing.

Net Worth and Liquidity

Five Guys itself requires prospective franchisees to demonstrate a minimum net worth of approximately $500,000 and liquid assets of $150,000–$250,000. Lenders will independently verify these figures through personal financial statements and bank statements. The purpose is to confirm you can absorb early losses, cover your down payment, and sustain operations through the break-even period without defaulting on loan obligations.

Business Experience

While restaurant experience is not always mandatory for Five Guys franchisees, it is highly valued by lenders and the franchisor alike. Applicants with a background in restaurant management, food service, or multi-unit retail operations will generally receive more favorable loan decisions. If you lack direct restaurant experience, partnering with an experienced operating partner or hiring a strong GM can help address lender concerns.

Business Plan Quality

A well-constructed business plan is one of the most powerful tools in a franchise loan application. Your plan should include: an executive summary, market analysis for your chosen trade area, competitive landscape assessment, detailed financial projections (monthly P&L for Years 1–3, annual for Years 4–5), use-of-funds breakdown, management team bios, and your personal investment rationale. Lenders use business plans to assess your preparation, market understanding, and financial acumen.

Collateral

SBA loans technically require borrowers to pledge all available collateral — business assets first, then personal assets including real estate. However, the SBA does not decline loans solely due to lack of collateral; it's one factor among many. Equipment financing is self-collateralized. For conventional loans, lenders may require a first lien on business assets and a personal guarantee.

Debt Service Coverage Ratio (DSCR)

Lenders evaluate your projected DSCR to ensure your Five Guys location will generate enough cash flow to cover loan payments. Most lenders require a minimum DSCR of 1.25x — meaning your projected annual net operating income must be at least 125% of your annual debt obligations. Restaurant industry average EBITDA margins range from 15–25% of revenue for well-run QSR/fast-casual concepts, which generally supports healthy DSCR ratios at Five Guys' revenue levels.

How Crestmont Capital Helps Five Guys Franchise Owners

Crestmont Capital is the #1 rated business lender in the United States, with deep expertise in franchise financing across the restaurant, retail, and service sectors. Unlike traditional banks that may treat franchise loans as generic small business applications, our team understands the specific financial structure of fast-casual restaurant franchises — and we know how to structure deals that work for Five Guys operators.

Here's what sets Crestmont Capital apart when it comes to Five Guys franchise financing:

Multiple Loan Products Under One Roof

Rather than forcing you to shop multiple lenders for different funding needs, Crestmont Capital offers a full suite of franchise financing solutions:

• Small Business Loans — Term loans for franchise startup and expansion
• SBA Loans — Government-backed financing with low down payments and long terms
• Equipment Financing — Dedicated loans for kitchen equipment and fixtures
• Business Lines of Credit — Flexible revolving credit for cash flow management

Our franchise financing specialists will analyze your complete capital requirements and build a layered financing strategy that minimizes your out-of-pocket investment while maximizing your borrowing capacity.

Franchise-Specific Expertise

Our team has helped hundreds of franchise owners across the U.S. secure financing for restaurant concepts including McDonald's, Chick-fil-A, Subway, and dozens of other major brands. We understand FDDs, franchise royalty structures, and the operational dynamics that drive profitability in fast-casual restaurant franchises. This expertise translates into faster approvals, better loan terms, and financing structures designed for long-term success.

For a comprehensive overview of franchise financing strategies, see our Complete Franchise Business Loans Guide and our detailed breakdown of SBA Loans for Franchise Businesses.

Speed and Transparency

Traditional bank SBA loans can take 60–90 days from application to funding. Crestmont Capital's streamlined process is designed to move faster — our team pre-qualifies borrowers quickly, identifies the right loan products upfront, and manages the documentation process so you're never left wondering where your application stands. Many of our franchise clients receive funding commitments within 2–3 weeks of submitting a complete application package.

No Prepayment Surprises

We structure every franchise loan with full transparency on rates, terms, fees, and prepayment provisions. There are no hidden costs or surprise balloon payments. Our advisors walk every borrower through their complete loan obligations before closing so you can make informed decisions about your franchise investment.

Real-World Financing Scenarios

Understanding how Five Guys franchise loans work in practice can help you model your own situation. Here are four realistic financing scenarios for different types of borrowers:

Scenario 1: First-Time Franchisee — Single Unit, Mid-Size Market

Profile: Marcus, 42, former regional manager for a national retail chain. Strong credit score (720), net worth of $550,000, liquid assets of $180,000. No prior franchise ownership but extensive management experience.

Project Cost: $525,000 total investment (leased end-cap space requiring full build-out)

Financing Strategy:

• SBA 7(a) Loan: $420,000 (10-year term, ~11% rate)
• Equipment Financing: $80,000 (5-year term, 9% rate — covers commercial kitchen equipment)
• Borrower Equity: $25,000 (down payment + franchise fee)

Outcome: Marcus leveraged his management experience and clean credit history to secure SBA financing with just 10% down. Monthly debt service of approximately $5,500 was well-covered by projected Year 1 revenue of $1.2M and a projected EBITDA margin of 22%.

Scenario 2: Experienced Restaurant Operator — Conversion Location

Profile: Diane, 51, existing Subway franchisee with two locations. Looking to diversify into the premium burger segment with a Five Guys franchise in a converted inline space. Excellent credit (750+), strong personal financial statement.

Project Cost: $385,000 (partially built-out space with landlord TI allowance of $75,000)

Financing Strategy:

• Conventional Business Term Loan: $280,000 (7-year term, 9.5% rate — based on existing business relationships)
• Business Line of Credit: $50,000 (revolving, for working capital management)
• Borrower Equity: $55,000 (down payment plus reserves)

Outcome: Diane's existing franchise track record and banking relationships enabled her to bypass the SBA process entirely, reducing closing time by four weeks. The line of credit provided a safety net during the ramp-up period and was used sparingly in months 2–4 before the location reached break-even.

Scenario 3: Multi-Unit Developer — Three-Location Area Development Agreement

Profile: The Okonkwo family partnership, with two existing Five Guys locations and a signed ADA for three additional units. Combined net worth exceeding $2M, strong existing franchise revenue.

Project Cost: $1.65M (three locations, phased over 24 months)

Financing Strategy:

• SBA 7(a) Loan (Location 1): $480,000
• SBA 7(a) Loan (Location 2): $510,000
• Equipment Financing (all three): $210,000 (structured as master equipment facility)
• Business Line of Credit: $150,000 (working capital across portfolio)
• Equity Investment: $300,000

Outcome: By using a phased multi-loan approach, the Okonkwos preserved equity capital while building a self-reinforcing portfolio where cash flows from established locations supported debt service on new openings. Crestmont Capital structured the financing as a coordinated package, streamlining documentation across all three deals.

Scenario 4: Career-Changer Using Retirement Funds — ROBS + SBA Combination

Profile: Kevin, 48, former corporate attorney leaving law to pursue entrepreneurship. Excellent credit (740), substantial retirement savings ($400,000 in 401k), limited liquid cash outside retirement accounts.

Project Cost: $490,000

Financing Strategy:

• ROBS (Rollover for Business Startups): $150,000 equity from 401k (no taxes or penalties)
• SBA 7(a) Loan: $310,000
• Equipment Financing: $30,000

Outcome: Kevin's ROBS contribution significantly reduced his SBA loan amount, improving his debt-to-equity ratio and helping him qualify for better SBA terms. The ROBS required a specialized legal setup, but once in place, Kevin launched his franchise with a strong balance sheet and manageable monthly debt service.

Frequently Asked Questions

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Conclusion

Owning a Five Guys franchise represents a compelling opportunity to build long-term wealth in the fast-casual restaurant segment — but realizing that opportunity requires smart, strategic financing. Whether you're funding a single flagship location or building a multi-unit portfolio, the right combination of SBA loans, equipment financing, and working capital solutions can dramatically reduce your financial risk while maximizing your growth potential. Crestmont Capital has the franchise financing expertise, product depth, and speed of execution to get Five Guys franchisees funded quickly and on favorable terms. Apply today and take the first step toward owning one of America's most beloved burger franchises.

Disclaimer: The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.