Rising costs and shifting consumer habits are continuing to pressure fast-food chains across California, and now another major burger brand is preparing to scale back. Five Guys plans to close several locations across the state in the coming months as the company faces mounting financial challenges.
California closures announced
Five Guys has confirmed plans to shutter four California restaurants between late May and early July. Locations in Whittier and City of Industry were expected to close in May, while restaurants in Merced and Hanford are scheduled to shut down later this summer. State WARN filings indicate the closures will eliminate approximately 55 jobs.
Reports say the closures were tied to “financial hardship,” as operators continue grappling with California’s rising labor, rent, and operating costs.
Industry pressures continue mounting
The closures come as many restaurant brands across California attempt to adapt to higher wages, inflation, and more cautious consumer spending. Fast-food chains have increasingly raised menu prices over the past several years, but analysts say some customers are beginning to pull back on premium-priced dining options.
Five Guys has frequently faced criticism online over menu prices, with some customers pointing to burger-and-fries meals that can exceed $20 in certain markets. Industry analysts quoted in recent reports suggested the chain’s premium pricing model may be more difficult to sustain as diners become more budget-conscious.
Brand still expanding overall
Despite the California closures, Five Guys is not disappearing nationwide. The company still operates more than 1,500 U.S. locations and nearly 2,000 restaurants globally. Reports indicate the chain posted a net gain in locations last year and continues opening stores in several other states.
Still, California appears to be one of the company’s toughest markets at the moment, with the state accounting for a significant share of Five Guys’ recent closures.
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