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Does a sale of Five Guys indicate waning business or just a corporate change of heart?

Published: 24 Jul. 2025, 18:06 Updated: 24 Jul. 2025, 19:08

CHO YONG-JUN
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Five Guys' Seoul Station branch in Jung District, central Seoul on July 23 [CHO YONG-JUN]

Five Guys, the U.S. burger chain based in Virginia, made such a splash in its 2023 debut in Korea that customers who joined the waitlist around lunchtime didn’t receive their burgers until dinnertime.

Two years on, the hype has subsided: The kiosk that was positioned right outside the first Five Guys branch in Gangnam, southern Seoul, which allowed customers to "virtually" queue is long gone, as anyone can walk in and order without much waiting.

Hanwha Galleria — which owns FG Korea, operator of the burger chain in the country — is in discussions to sell the franchise rights for Five Guys. FG Korea had already chosen a sales adviser and sent out teaser letters to private equity funds, according to the Korea Economic Daily on July 18.

Many speculated that the company's decision to sell its franchise rights was a result of yet another premium franchise brand struggling in Korea after the initial hype died down, like how Tim Hortons' recently closed its first branch in Korea and how the San Francisco-based burger chain Super Duper pulled out from the Korean market in March only after three years it came to the country.

Five Guys' Seoul Station branch in Jung District, central Seoul on July 23 [CHO YONG-JUN]

Past the initial frenzy, yet far from forgotten

Many have criticized Five Guys' higher prices, well above the burgers sold at McDonald's and Burger King. The five Five Guys branches in Seoul had an average review score of 3.1 out of 5 on Kakao map, with many of the one-star reviews by customers complaining about the high price. "It's got the worst price-to-performance ratio," one review reads.

But it’s not like Five Guys is doing terribly in Korea — there are currently five branches in Seoul and two branches in Gyeonggi, including locations in Seoul Station, Apgujeong in Gangnam District and Yeouido in Yeongdeungpo District. A new branch in Yongsan District, central Seoul, is also set to open this month, with another one expected to open by the end of this year.

In fact, the Five Guys branch in Seoul Station, central Seoul, was packed during a weekday lunchtime. While nobody had to queue outside the restaurant in such hot weather, tables were packed with customers enjoying their burgers, with many scanning the room with eagle eyes to find an open seat.

Hanwha Galleria, confirming that business is fine on Thursday, said the company is in the process of “considering a variety of ways,” which includes selling the operating rights of Five Guys in Korea, while emphasizing that it is not selling the franchise rights because it is doing poorly.

FG Korea, which recorded a 1.3 billion won ($948,000) loss in 2023, quadrupled its revenue to 46.5 billion won in 2024 and made 3.4 billion won in profit last year.

"It is simply not true that we are selling Five Guys Korea because its profitability is decreasing," Hanwha Galleria, the parent company of FG Korea, said on Thursday. "The profit we achieved in 2024 includes the brand royalty we paid and the company is growing every year."

“As Five Guys Korea achieved great success in a short amount of time […] we made the decision that selling the franchise rights to make a profit can also serve as a logical business strategy.”

But the case of the parent company itself says otherwise. Hanwha Galleria, which logged a profit of 8.6 billion won in 2023, turned to the red and reported a loss of 1.1 billion won last year, citing investments in new businesses and the purchase of a 22.5 billion won building in Gangnam District as the cause of the loss.

Five Guys hamburgers and fries [FG KOREA]

Vice president's new interests

With the franchise reportedly doing well, Hanwha’s decision to sell the rights may also be a result of Hanwha Gallaeria's Vice President Kim Dong-seon's shifting interests running up against a tumultuous second quarter for the parent company.

When Hanwha announced that it would bring Five Guys to Korea in 2022, Kim was at the center of the spotlight, as the man who "flew multiple times to the United States" to convince Five Guys to make a deal with Hanwha. The vice president was also busy promoting the franchise during the press preview the following year, boasting how he and his company spent one and a half years "finding the perfect potatoes" for its fries.

Kim was also credited for the introduction of Benson ice cream to Korea earlier this year.

But the vice president, with higher aspirations, may have just turned his eyes to the resort business. Kim is also the vice president of Hanwha Hotel & Resorts.

Online media Namdi reported July 15 that Kim and Hanwha Hotel & Resorts were looking to acquire Paraspara Seoul, a five-star resort in northern Seoul.

BY CHO YONG-JUN [[email protected]]