Five Guys entered Korea with premium pricing — Korean consumers chose value instead

Five Guys Korea's operator Hanwha Galleria announced on July 17, 2025 that it was seeking a buyer for its subsidiary FG Korea, putting the American burger chain's Korean business up for sale just two years after its June 2023 Gangnam launch. Despite ramping revenue from ₩10 billion in 2023 to ₩46.5 billion in 2024 and achieving an operating profit of ₩3.4 billion, the business could not overcome its structural cost burden.

Five Guys entered Korea with its US premium pricing strategy intact: burgers at ₩14,000–18,000 ($10–13), positioning it at the top of Korea's burger market alongside Shake Shack. While the Gangnam opening drew 200,000 visitors in its first year, the novelty faded quickly. Korean consumers, facing rising inflation and prioritizing value (ga-seong-bi), increasingly chose cheaper alternatives.

The structural costs were the killer. FG Korea paid the US parent 9% of revenue in royalties — about ₩4.2 billion in 2024 alone — plus fees tied to imported ingredients that were vulnerable to exchange rate and inflation shocks. Combined with a ₩1.3 billion operating loss in 2023, these cumulative burdens meant even a ₩3.4 billion operating profit in 2024 was insufficient to build a sustainable Korean business.

Five Guys also faced competition on multiple fronts: Shake Shack had first-mover advantage, local chains like Lotteria and Mom's Touch offered burgers at half the price, and even McDonald's and Burger King ran aggressive value promotions. The premium burger segment had already lost Super Duper (withdrawn earlier), and analysts noted that 'premium without value' was an unsustainable position in Korea's cost-conscious dining market.