Five Guys Burgers and Fries has built one of the most beloved burger franchises in the world. With its commitment to fresh, never-frozen beef and hand-cut fries, Five Guys has amassed a passionate following and now operates more than 1,700 locations across the United States and internationally. For entrepreneurs looking to tap into this proven brand, securing a Five Guys franchise loan is the critical first step toward ownership.
Opening a Five Guys franchise requires significant capital investment. Between the franchise fee, buildout costs, equipment, and working capital, total startup costs typically range from $306,200 to $963,600 depending on location size and market conditions. Most aspiring franchisees need a combination of personal equity and outside financing to make their investment work.
This guide covers everything you need to know about Five Guys franchise financing, including loan types, SBA options, qualification requirements, and strategies to maximize your chances of approval.
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Founded in 1986 in Arlington, Virginia, by Jerry Murrell and his five sons (hence the name), Five Guys grew from a single burger joint into a global franchise powerhouse. The brand officially began franchising in 2003 and expanded rapidly, earning accolades from food critics and loyal customers alike for its made-to-order burgers, extensive topping options, and hand-cut fries cooked in peanut oil.
Today, Five Guys ranks consistently among the top burger chains in customer satisfaction surveys. According to Forbes, Five Guys has repeatedly been cited as one of America's top franchise opportunities for investors seeking strong brand recognition and proven unit economics.
Five Guys is selective about its franchisees. The company typically requires franchisees to have strong operational experience in the restaurant industry, adequate liquidity, and a commitment to upholding the brand's quality standards. This selectivity actually benefits franchisees from a financing perspective: lenders view Five Guys as a lower-risk franchise investment compared to lesser-known brands.
Five Guys franchise territories are limited in many major markets. Prospective franchisees should contact Five Guys corporate early in the process to confirm territory availability before investing time and resources into financing applications.
Understanding the full scope of your investment is essential before approaching any lender. Five Guys provides detailed financial disclosure documents through its Franchise Disclosure Document (FDD), which outlines expected startup costs. Here is a breakdown of the typical investment range:
| Cost Category | Low Estimate | High Estimate |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Leasehold Improvements / Build-Out | $150,000 | $600,000 |
| Equipment and Fixtures | $75,000 | $175,000 |
| Signage | $5,000 | $20,000 |
| Opening Inventory | $5,000 | $15,000 |
| Training Expenses | $5,000 | $10,000 |
| Working Capital (3-6 months) | $30,000 | $100,000 |
| Other / Miscellaneous | $11,200 | $18,600 |
| TOTAL ESTIMATED INVESTMENT | $306,200 | $963,600 |
The wide range in total investment reflects different factors including whether you are building a new location or converting an existing space, your market, and local construction costs. High-cost urban markets like New York City or San Francisco will typically push costs toward the upper end of the range.
Five Guys typically requires franchisees to demonstrate:
These requirements mean that most franchisees will need to finance a significant portion of their startup costs rather than paying entirely out of pocket. Understanding your financing options is essential.
Multiple financing products are available to Five Guys franchise investors. The right combination depends on your credit profile, existing assets, and the specific scope of your project.
The SBA 7(a) is the most popular financing option for franchise startups. These government-backed loans offer competitive rates, long repayment terms (up to 10 years for working capital, up to 25 years for real estate), and access to capital up to $5 million. Five Guys is listed in the SBA Franchise Registry, which streamlines the approval process significantly.
If your Five Guys location involves purchasing commercial real estate or major equipment, the SBA 504 loan program could be an excellent option. These loans typically cover 40% of project costs at below-market fixed rates, with the borrower providing at least 10% equity and a conventional lender covering the remainder.
Small business term loans from banks and alternative lenders can fund everything from leasehold improvements to equipment and initial inventory. Terms typically range from 3 to 10 years, and rates vary based on creditworthiness.
Grills, fryers, refrigeration units, point-of-sale systems, and other equipment can be financed separately through equipment financing programs. Equipment loans are typically secured by the equipment itself, making approval easier and preserving other credit capacity for working capital needs.
A business line of credit provides flexible access to capital for ongoing operational needs, seasonal cash flow gaps, and unexpected expenses. Most franchisees establish a line of credit in addition to their primary term loan.
If you have significant retirement savings in a 401(k) or IRA, a ROBS arrangement allows you to use those funds to invest in your franchise without incurring early withdrawal penalties or taxes. This can provide a substantial equity injection that improves your financing options significantly.
Some franchisees bring on silent partners or investor capital to meet the equity requirements. This can work well but requires careful legal structuring to avoid complications.
Many successful Five Guys franchisees use a combination of an SBA 7(a) loan for the bulk of startup costs, equipment financing for kitchen equipment, and a business line of credit for working capital. This layered approach optimizes terms and preserves maximum flexibility.
The U.S. Small Business Administration offers several loan programs that are particularly well-suited for franchise investments. Because Five Guys is a nationally recognized brand with a proven track record, lenders are often more willing to approve SBA loans for Five Guys applicants than for unproven concepts.
Five Guys is registered in the SBA Franchise Directory, which means the SBA has pre-reviewed the franchise agreement and confirmed it meets SBA affiliation and control standards. This registration speeds up loan processing significantly, often reducing review time by several weeks compared to non-listed franchises.
According to data from the SBA, franchise businesses have historically enjoyed higher loan approval rates than non-franchise businesses, partly because of the training, systems, and brand support that come with franchise ownership.
Before applying for a Five Guys franchise loan, it is important to understand what lenders look for. Meeting these benchmarks significantly improves your chances of approval and can help you secure better interest rates and terms.
Most lenders require a minimum personal credit score of 680 for SBA loans, though scores of 720 or higher will give you access to better rates. Your business credit profile (if you have existing businesses) will also be reviewed. If your credit needs work, explore bad credit business loan options or focus on improving your score before applying.
Expect to contribute 10% to 30% of total project costs as a down payment. For a $600,000 project, that means $60,000 to $180,000 in personal funds. Lenders want to see that you have "skin in the game" and are not overleveraged from day one.
Prior restaurant management or ownership experience is highly valued by both Five Guys corporate and lenders. Operators with direct foodservice backgrounds will find the approval process smoother. Even if you do not have direct restaurant experience, significant business ownership or management experience helps.
SBA lenders are required to take all available collateral, including business assets and personal assets like home equity. While insufficient collateral alone will not disqualify you, strong collateral reduces lender risk and can improve your terms.
Be prepared to provide:
Understanding the process helps you prepare properly and avoid costly delays.
Before investing time in the formal process, speak with a lender like Crestmont Capital to assess your financing options and likely qualification. This involves a soft credit review and basic financial review, which does not impact your credit score.
Gather all required financial documents, your business plan, your signed franchise agreement (or confirmation of territory), and details on your intended location. The more complete your package, the faster the process goes.
Submit a complete loan application to your chosen lender. For SBA loans, your lender will prepare and submit SBA-specific forms on your behalf.
The underwriting process typically takes 2 to 6 weeks for SBA loans and 1 to 2 weeks for conventional financing. The lender will review your financials, the franchise opportunity, and the proposed location during this period.
Once approved, you will attend a loan closing where documents are signed. Funds are then disbursed, either directly to vendors or into your business account, depending on the loan structure.
Crestmont Capital can help you understand your options and begin the pre-qualification process with no impact to your credit score.
Start Your Application →Lenders do not just look at your qualifications, they also evaluate the viability of the franchise itself. Five Guys has a strong performance record that supports loan approval. According to franchise industry analysts cited by CNBC, Five Guys has consistently ranked among the top burger chains for same-store sales performance.
For a unit generating $1.5 million in annual sales, a 15% operating cash flow margin yields approximately $225,000 per year. That level of cash flow can comfortably service debt on a $600,000 to $700,000 loan while providing the owner a meaningful salary or return.
Most Five Guys locations break even within 18 to 36 months of opening, depending on location, local competition, and operating efficiency. Understanding your break-even timeline helps you and your lender structure appropriate repayment terms and working capital reserves.
You can also compare this opportunity with other franchise investments. See our analysis on the Whataburger franchise loan for context on QSR burger franchise financing broadly.
Beyond meeting the baseline requirements, here are strategies to strengthen your loan application.
Your business plan should include detailed market analysis for your target location, realistic financial projections based on comparable Five Guys units, your management plan, and your marketing strategy. A strong business plan demonstrates that you have done your homework and are committed to success.
Lenders evaluate location viability closely. A location with strong demographics (high foot traffic, favorable income levels, limited competition) will be viewed more favorably than a marginal location. Invest in a quality site selection process before finalizing your franchise territory.
If your credit score is below 700, take 3 to 6 months to pay down revolving debt, dispute any errors on your credit reports, and avoid new credit applications before seeking your franchise loan.
Having more liquid reserves than the minimum required signals financial strength to lenders. Showing 4 to 6 months of projected operating expenses in reserve (not counting your down payment) significantly improves approval odds.
Not all lenders have franchise expertise. A lender like Crestmont Capital that understands franchise economics, the SBA Franchise Registry, and the specific nuances of QSR financing can streamline your process and optimize your terms.
If you are evaluating multiple franchise opportunities, check out our guide on Club Pilates franchise financing for comparison on boutique fitness versus QSR franchise investment profiles.
Many successful Five Guys franchisees operate multiple locations, and multi-unit deals require different financing strategies than single-unit investments.
Five Guys may offer development agreements to qualified franchisees who commit to opening multiple units in a defined territory over a set period. Development agreements often come with reduced territory fees and enhanced corporate support, but they also require more capital upfront.
For multi-unit deals, lenders evaluate the overall portfolio rather than individual unit viability. Options include:
A common strategy is to stabilize and demonstrate profitability at the first location before financing the second. Lenders respond positively to actual performance data from an operating unit when evaluating additional financing. This approach can unlock better rates and terms for subsequent loans.
Many aspiring franchisees make costly mistakes during the financing process. Awareness of these pitfalls can save you significant time and money.
New restaurant locations typically ramp up over 6 to 18 months. Underestimating working capital can lead to cash flow crises before the business reaches stable revenue levels. Budget conservatively and maintain a buffer of at least 6 months of operating expenses.
Multiple hard credit inquiries in a short period can negatively impact your credit score. Work with a financing advisor who can help you identify the right lender before submitting formal applications.
A poorly written or generic business plan raises red flags for lenders. Invest in developing a customized, location-specific plan with realistic financial projections based on comparable Five Guys units in similar markets.
Many franchisees default to seeking a single bank loan and overlook the value of layering financing products. Equipment financing, for example, is often faster and easier to obtain than conventional business loans and can free up SBA loan capacity for other uses.
Applying for financing before you have secured a territory or signed a franchise agreement puts the cart before the horse. Have your franchise agreement in hand (or at minimum a letter of intent from Five Guys) before approaching lenders.
Crestmont Capital's franchise financing specialists help you navigate the process efficiently, from pre-qualification through closing, so you can focus on preparing to open your doors.
Talk to a Specialist →When it comes to franchise financing, working with a lender that understands the unique dynamics of the franchise industry is a significant advantage. Crestmont Capital is a leading U.S. business lender with deep expertise in franchise financing across QSR, fitness, personal care, and service franchise categories.
Whether you are financing your first Five Guys location or expanding to your fifth, Crestmont Capital has the expertise and lending relationships to get you funded efficiently. Explore our franchise business loan options or apply now to get started.
The total investment to open a Five Guys franchise ranges from approximately $306,200 to $963,600. This includes the $25,000 franchise fee, leasehold improvements, equipment, signage, initial inventory, training expenses, and working capital. Costs vary based on location size, market, and whether you are building a new location or converting an existing space.
Most SBA lenders require a minimum personal credit score of 680 for franchise loans. Scores of 700 or higher typically access better rates and terms. Credit scores above 720 significantly improve your approval odds and can reduce your interest rate. If your score is below 680, work on improving it before applying or explore alternative financing options.
Yes, Five Guys Enterprises is listed on the SBA Franchise Directory (formerly known as the SBA Franchise Registry). This listing means the SBA has pre-reviewed Five Guys' franchise agreement and confirmed it meets affiliation and control standards required for SBA financing. This speeds up the loan approval process significantly.
For SBA loans, you typically need to provide 10% to 20% of the total project cost as an equity injection (down payment). For a $600,000 project, that means $60,000 to $120,000 in personal funds. Some lenders may require higher down payments if your credit profile or collateral is considered higher risk.
SBA loans for franchise startups typically take 45 to 90 days from application to funding. Conventional business loans and equipment financing can fund in as little as 1 to 4 weeks. Working with an experienced franchise lender and having your documents prepared in advance can significantly reduce processing time.
Five Guys charges a royalty fee of 6% of gross sales and a marketing fee of 1.5% of gross sales, for a combined ongoing fee of 7.5% of revenue. These fees are important to factor into your cash flow projections and debt service coverage ratio calculations when planning your financing.
Yes, a ROBS (Rollover for Business Startups) arrangement allows you to use 401(k) or IRA funds to invest in your franchise without incurring early withdrawal penalties or taxes. ROBS can be used alone or in combination with SBA loans. This strategy requires careful legal and financial structuring, so work with a qualified ROBS provider and your accountant.
While restaurant experience is strongly preferred by both Five Guys corporate and most lenders, it is not always an absolute requirement. Strong general business ownership or management experience can sometimes substitute, especially if combined with a well-developed business plan, strong financial profile, and a management team with relevant restaurant experience.
Average annual unit volume for Five Guys locations typically ranges from approximately $1.2 million to $2.2 million per year, depending on location, market size, and operating performance. Well-run locations in high-traffic urban or suburban markets can exceed these averages. Detailed financial performance data is available in the Five Guys Franchise Disclosure Document (FDD).
SBA lenders are required to take all available collateral, which may include business assets (equipment, inventory, fixtures), personal real estate equity, and other personal assets. The SBA does not require sufficient collateral as a condition of approval, but lenders will document what is available. Strong collateral reduces lender risk and can improve your loan terms.
Obtaining franchise financing with poor credit (below 620) is challenging. If your credit is between 620 and 680, you may qualify for some alternative financing products, though at higher rates. The best approach is to work on improving your credit score before applying, address any derogatory items on your report, and explore all available options with an experienced franchise lender.
The FDD is a legal document that franchisors must provide to prospective franchisees at least 14 days before signing any agreement. It contains detailed information about the franchise system, fees, financial performance representations, litigation history, and more. Lenders use the FDD to evaluate the franchise opportunity. Make sure your lender has reviewed the most current Five Guys FDD as part of the underwriting process.
Five Guys is considered a premium fast-casual investment with higher average ticket prices than typical QSR burger chains. The brand commands strong customer loyalty and has demonstrated resilience through economic cycles. Investment costs are mid-to-high relative to the broader burger franchise category. The brand's established reputation and SBA eligibility make it an attractive option for well-qualified investors. Industry publications like the Wall Street Journal and Bloomberg have noted Five Guys' consistent performance relative to peers.
If your franchise faces financial difficulty, communicate proactively with your lender. Options may include loan modification, deferral of payments, or restructuring. The SBA has specific guidelines for troubled loan situations. Five Guys corporate may also provide operational support. Avoid missing payments without notifying your lender, as this limits your options and can trigger default proceedings.
Yes, refinancing is possible and can be beneficial if interest rates have declined, your creditworthiness has improved, or you want to pull equity out of an appreciated asset. SBA has specific rules around refinancing existing SBA loans. Work with your lender to evaluate whether refinancing makes financial sense for your situation. Typically, there should be a net tangible benefit to the borrower to justify refinancing.
Crestmont Capital offers fast, flexible franchise financing. Apply now and receive a decision in as little as 24 hours.
Apply for Franchise Financing →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.