The American fast food franchise "Five Guys" failed in Germany and rumors are the German branch is going to file for bankruptcy soon.
Five Guys started to expand in German in 2017, and has at the moment 35 locations. Rumors are that the company lost around 60 million Euros since its start. So far the mother company paid the bills, which is why they are still operational here.
Five Guys didn't adapt their concept to the German market, they just went over here with the American business model. And this failed now. Other burger joints are doing pretty well here.
Reasons why Five guys failed are as follows:
* too high price tag for a quality which is perceived to being nearer McDonald's than a local, domestic burger joint
* the interior is looking sterile, too clean, not inviting to spend time but designed to drive customers out as quickly as possible. The red and white tiles do remind many people of a train station toilet or subway station, not exactly the ambience people want to eat.
* the quality of Five Guys burgers' is considered to be a little bit better above average at best, so not a great improvement
* for around the same price tag people can in many cities go to a local burger joint, some operated by former US soldiers which stayed here, instead which has a way friendlier interior with actual waiters instead of self-service, much better food quality and overall having a way better dining experience.
And that's the problem: Five Guys failed to position itself in the German burger market in a good spot. The quality of food and dining experience puts Five Guys much nearer to McDonald's or Burger King while charging prices, for which many local burger joints often deliver way better quality and dining experience.
So either Five Guys has to raise its standards, or instead drop the prices and start competing with McDonald's and such. Both is unlikely to happen.
This is even more worse for Five Guys, since the overall market share of system gastronomy in Germany from 2017 to 2024 increased from 36 to 56%. Five Guys failed to cat a piece of that cake.
Five Guys kämpft in Deutschland trotz des Fast-Food-Booms mit finanziellen Schwierigkeiten: Die Filialen erwirtschafteten bis 2023 rund 60 Millionen Euro Verlust. Warum sich das Konzept trotz des anfänglichen Hypes nicht durchsetzen konnte.
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