EXCLUSIVE: American fast casual chain Five Guys slated to enter ANZ

Local partner Seagrass Boutique Hospitality Group will start with outlets in Sydney.

Five Guys, the American fast casual chain known for their signature hamburgers, hot dogs, and French fries, is set to enter the competitive premium burger markets in Australia and New Zealand.

QSR Media can exclusively reveal that the chain entered into a master franchise agreement with Seagrass Boutique Hospitality Group, the parent company of the Ribs & Burgers, Italian Street Kitchen and Butcher and the Farmer restaurant brands.

Establishing their first restaurant in 1986 in Virginia in the United States, Five Guys has since grown to over 1,600 stores internationally, garnering a cult following.

Despite mature burger segments in ANZ, Five Guys chief operating officer Sam Chamberlain says he believes there is “plenty of room” for a number of competitors in almost any market.

“I don’t believe we approach a market the same way most retail brands do. ANZ is a proven market for rewarding brands with a passion for high quality and fun,” he said in an interview. “Our growth, since the beginning, has been fueled by demand. We hear from consumers in Australia on social media and with direct requests to come to ANZ.”

Chamberlain said the chain found “the perfect partner” in Seagrass, saying CEO Bradley Michael approaches business “with a very similar philosophy.”

“First, we are both family owned businesses. Second, we are both fanatically focused on great food, great people and great experiences. It’s a trifecta,” he said, adding that their franchising model allows partners to “build their own legacy within the Five Guys brand and network.”

First locations in Sydney eyed
Under the terms of the partnership, Seagrass is expected to open approximately 20 stores in Australia, and is already looking for sites in Sydney’s CBD for its first locations.

Seagrass chief marketing officer and franchise representative David Ovens describes the addition of the Five Guys to their homegrown portfolio is “entirely incremental” and would not affect cannibalise sales from its Ribs & Burgers brand.

“Ribs & Burgers offers ribs, plated meals and side dishes as its point of uniqueness beyond the burgers themselves. We believe the Five Guys concept will attract a different user group and satisfy different occasions,” he explained.

“Compared to Ribs & Burgers, the Five Guys brand offers only one protein (beef) in a limited burger menu, encourages endless customization, uses a specific potato grown exclusively for Five Guys that is cut and cooked in-house, and a highly distinctive design aesthetic that is largely the same anywhere in the world. Ultimately the way to avoid direct cannibalisation is to avoid locating both brands in close proximity or in the same street.”

In this context, he says, the store development strategy for both brands would be different to prevent such direct cannibalisation.

Out of the 20 planned sites, Ovens says there is no set number by state or city, citing supply chain as a factor.

“The Five Guys supply chain arrangements demand that fresh beef and burger buns are delivered to stores daily, so we’ll need to build that capability by city as we progress. The broad goal is to start with the first 3-5 stores in Sydney and specifically in and around the CBD. When we progress to either Melbourne or Brisbane, then the intent is to open 2 to 4 sites before progressing to the next city. The overall time frame is over a ten year period but we believe we’ll get there sooner.”

Five Guys is known for their signature hamburgers, hot dogs, and French fries. Photo: Supplied

Limited stores, high visibility
Assisting Seagrass’ expansion is Five Guys veteran Chris Goodchild, the chain’s director of operations in Asia-Pacific. Before moving to Sydney with his new role, Goodchild came from a seven-year training background within the chain, helping launch the brand and build training teams across Europe and Asia.

“Five Guys is a destination brand, we target key areas in a country to establish the best possible presence in very specific locations. Without flooding the market, we aim to have limited stores in key areas that give us high visibility. Launching in any new market, it is critical to have the best possible accessibility to the maximum number of customers and help us establish a healthy foothold,” Goodchild explained.

In their 21 country entries, Goodchild further explained their CBD approach, citing having prime real estate as the means to deliver the best brand awareness.

“Although we are in a stage of limited travel and footfall, we hope to help restore employment, consumer confidence and city centres that we know will always be hubs for people traffic whether that be business or social. Our brand has a phenomenal following of fanatics and amazing employer ratings and Australia has a fantastic premium burger market with excellent competitors,” he said.

Five Guys is also expected to work with multiple local service providers and establish a strong off-premise strategy.

“We have great relationships with key delivery companies and work with well-established partners to service our Five Guys app as well as online orders. We want all our customers to be able to ‘Rock our Burgers and Fries’ at their convenience,” he added. ###