This month, burger chain Five Guys is quietly pulling out of four California locations, including two in Los Angeles County, a set of closures that will cost about 55 workers their jobs. The affected restaurants are in Whittier and City of Industry in L.A. County, plus two Central Valley spots in Merced and Hanford. The shutdowns land in the middle of a broader round of restaurant pullbacks across the state as operators wrestle with higher wages and rising operating costs.
State filings reviewed by TheStreet show the company plans to permanently close four stores in Whittier, City of Industry, Merced and Hanford, with staffing levels listed as 13 workers in Whittier, 15 in City of Industry, 13 in Merced and 14 in Hanford. The effective dates are staggered from late May through early July, and the notices add up to roughly 55 job losses. Separate California WARN filings compiled by layoff trackers also list the stores' addresses and planned closing dates, according to WARNact.
“Financial hardship and increasing business expenses made it impossible to keep the grills fired up at these locations,” Five Guys told the New York Post. That explanation is similar to what franchisees and company operators have been saying as they scrutinize underperforming units. The playbook is familiar in the franchise world, where owners often shutter weaker stores to shore up the rest of the portfolio, even if the timing feels abrupt to regulars and staff who still see a line at the counter.
Analysts point to mounting cost pressures that have pushed many mid tier chains into strategic retreat. California’s AB 1228 established a 20 dollar per hour minimum wage for covered fast food workers effective April 1, 2024, according to the legislative text at the California Legislature. Industry coverage has tracked a growing list of closures and consolidation moves as higher wages, commercial rents and ingredient costs squeeze margins for restaurants that cannot easily raise prices again or slash overhead quickly enough, according to reporting by QSR Pro.
Local storefronts and timing
The two L.A. County closures, in Whittier and City of Industry, will be the most visible for local neighborhoods. Public filings list the Whittier unit at 10140 Carmencita Road, with a closing date of May 25, and the City of Industry restaurant at 1552 S Azusa Avenue, set to close May 26, according to WARN notices compiled on WARNact. The Merced and Hanford locations are scheduled to shut down later, as franchise operators wind down staffing and sell through remaining inventory.
What workers are owed
Because the company filed the notices as permanent closures, affected employees should fall under federal and California WARN rules that require 60 days of written notice and provide remedies if employers do not comply. The California Employment Development Department explains that the 60 day notice requirement applies in these cases and that employers who violate WARN may be on the hook for back pay and benefits for up to 60 days. Workers who need help can contact the EDD or the Department of Industrial Relations for information on benefits and local job center services, and the EDD maintains guidance on WARN requirements and filing procedures.
Observers say Five Guys occupies a tricky middle ground in the fast food landscape. Customers expect fresher ingredients and hefty portions, but a typical full order can creep into the mid 20s, which makes it harder to compete with cheaper quick serve rivals. That pricing comparison, and tighter unit economics at marginal sites, helps explain why franchisees may trim weaker restaurants first, analysts told TheStreet.
Customers wondering whether their neighborhood Five Guys is on the chopping block can check the brand's store locator at Five Guys. For now the chain has not flagged a broader systemwide retrenchment beyond the closures already filed, but these four exits add to the pattern of restaurant reshuffling across California as operators and franchisees adjust to post pandemic cost structures.
