Burger Giant Five Guys Launches Major Investment Search
Telecoms billionaire Sir Charles Dunstone has initiated a search for new investors to acquire a significant stake in Five Guys Europe, the popular casual dining brand he introduced to Britain more than ten years ago. According to exclusive information obtained by Sky News, Sir Charles's investment vehicle, Freston Ventures, has appointed bankers at Goldman Sachs to find a buyer for a substantial portion of the burger chain.
The European operation employs approximately 9,000 people across the continent, with about 6,000 of those based in the United Kingdom. City insiders revealed this weekend that up to 50% of Five Guys Europe could be made available to prospective bidders, though all potential options remain under consideration.
Valuation and Expansion Plans
Teaser documents have been circulated by Goldman Sachs to interested parties in recent weeks, with large buyout firms reportedly among those showing interest. One informed source suggested that based on projected earnings, the entire Five Guys Europe business could be valued around £600 million.
The investment process follows a significant deal where Sir Charles acquired the 50% stake in Five Guys Europe previously held by the Murrell family, who originally established the business in Arlington, Virginia, back in 1986. Under this new arrangement, Five Guys Europe will pay a royalty fee to the US brand-owner for future use of the brand.
Sir Charles first brought Five Guys to Britain in 2013 after striking a deal with the Murrell family following a holiday in New York. The first UK location opened in Covent Garden, central London, with the chain reaching 100 outlets just six years later. The company now operates nearly 300 stores across European territories including France, Germany, and Spain.
Market Position and Recent Performance
In the United Kingdom alone, Five Guys maintains 177 outlets, while the global business encompassing the US operation boasts more than 2,000 stores across 26 countries. The company continues to expand, with plans to enter new markets including Italy and Portugal.
Five Guys Europe recently completed a £185 million debt refinancing, securing its borrowings on a longer-term basis amid challenging conditions for restaurant operators. The company is led by chief executive John Eckbert and has remarkably bucked the trend of struggles affecting many casual dining businesses.
The broader hospitality sector remains cautious ahead of the budget, with concerns about potential increases in business taxes aimed at addressing the Treasury's estimated £30 billion fiscal shortfall. Last year's budget saw Chancellor Rachel Reeves increase employers' national insurance contributions, prompting warnings from hospitality and retail employers about potential job losses and business failures.
Since then, several casual dining businesses have entered administration, including most recently Pizza Hut's UK operation. Other well-known chains like Cote and TGI Fridays have changed ownership in recent months.
The pandemic proved particularly challenging for gourmet burger segment businesses, with Byron Burger experiencing multiple insolvencies in recent years. Five Guys Europe has defied this pattern and now commands a substantial share of the UK's premium burger market.
Goldman Sachs was selected for the Five Guys Europe mandate following their recent work on similar transactions, including the disposal of stakes in Wingstop to investor Sixth Street in a £400 million deal and the Indian restaurant group Dishoom, which received backing from private equity firm L Catterton in a transaction valued at approximately £300 million.
Sir Charles, best known as co-founder of Carphone Warehouse and TalkTalk, remains actively involved with the latter company, which is currently undergoing its own sale process. When approached by Sky News for comment this weekend, Sir Charles declined to provide any additional statements.
