Five Guys quietly closed over a dozen locations

Many fast casual dining brands built their business by offering higher-quality food for higher prices.

Chipotle, for example, charges more than Taco Bell, but few would argue that it does not offer a better product. These brands use a quick-serve model to save money on having servers, but they offer a food quality that's similar, if not equal to, sit-down chains like Chili's, Applebee's, Red Lobster, and others.

Consumers seemed to understand the difference between price and value when the economy was stronger. That, however, has changed as more Americans have been trading down to cheaper brands.

"When gas prices cross that $3.50 threshold, we don't just see a reduction in consumer spending; we see a fundamental migration of market share," Victor Fernandez, chief insights officer at Black Box Intelligence, told QSR Magazine. "For limited-service brands, this is a prime acquisition moment. You are receiving an influx of guests trading down."

That's backed up by data from Placer.ai,

"Budget-conscious diners are trading down to cheaper promotions or shifting spending to grocery, dollar, and convenience stores," the report showed.

That's a positive for chains like McDonald's, which have leaned heavily into value, and chains already perceived as cheap (like Taco Bell), but it has been a challenge for pricier players like Five Guys.

Five Guys faces a pricing challenge

Five Guys has closed over a dozen locations across seven states.

That's a function of its core product being too expensive, RTMNexus CEO and TheStreet retail advisor shared.

"We are seeing a massive correction where the middle-tier brands like Five Guys that sit between fast food and sit-down dining are getting squeezed by a consumer who is watching their wallet," he said.

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At some point, for consumers, it becomes about price, not quality, he explained.

"When a burger, fries, and a drink hit the $25 mark, the consumer is going to start to lean more towards that value meal even more," he added.

McDonald's improves its burgers, adds to its value offerings

Five Guys' struggles have come as McDonald's has made an effort to improve its product through its "Best Burger" initiative. That program isn't an effort to equal a chain like Five Guys, but an effort to make subtle, but meaningful improvements across all its hamburgers.

The changes include (in McDonald's words):

• Softer, pillowy buns that are freshly toasted to a golden brown
• Perfectly melted cheese that will make you want to savor every last bit off the wrapper
• Juicier, caramelized flavor from adding white onions to the patties while they're still on the grill
• Even more of everyone's favorite Big Mac sauce, bringing more tangy sweetness in every Big Mac bite
  
  Source: McDonald's

The chain has also been focused on regaining consumer perception as a value brand. That's something CEO Christopher J. Kempczinski noted has been working.

"The $5 Meal Deal continues to resonate with consumers as we recently celebrated the 1-year anniversary of the program. We've also continued to see incrementality from our McValue platform which also includes our Buy One, Add One for $1 deal, which launched at the beginning of this year," he said during the chain's second-quarter 2025 earnings call.

He also noted the importance of the $2.99 price point and shared that McDonald's brought back its Snack Wrap after a nine-year hiatus to deliver value at that figure.

"We will continue to remain agile with respect to our value offerings to ensure the U.S. strengthens its leadership in value and affordability," he added.

Five Guys is closing restaurants

Five Guys does not have the same menu agility as McDonald's. It can offer specials, combo meals, and other pricing incentives, but the chain's higher-quality ingredients and beefier burgers, during a period when beef prices have been high, limit its ability to be price-competitive.

At least 14 Five Guys locations have closed or will close during the first half of 2026, spanning 7 states: California, Florida, Illinois, Iowa, Louisiana, Georgia, and Nebraska.

The closures are concentrated most heavily in California, where 4 specific locations have been documented through state filings, resulting in a combined 55 job losses, according to the Los Angeles Times.

The company cited "financial hardship" as a reason for the closures, according to a filing.

Five Guys has been hurt by the economy, according to Tasting Table.

"Five Guys has always had a reputation for higher-quality food with elevated prices to match. It has yet to compromise its main selling point, but customers may no longer be biting - leading the company to cut off locations that are more costly to maintain," the website reported.

It's also important, Black Box's Fernandez noted for restaurants, Five Guys included, to focus on more than just the economy.

"If your traffic is dropping faster than your specific segment and local market average, you can't just blame gas prices. The macro environment is the catalyst, but execution is what determines if a guest trades down or stays loyal," he said.

Related: Costco has a powerful weapon as gas prices rise

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This story was originally published May 13, 2026 at 10:35 AM.