Hanwha mulls selling burger chain Five Guys

Five Guys' second restaurant in Korea at The Hyundai Seoul is crowded with visitors on its opening day on Oct. 13, 2023. Courtesy of FG Korea

Hanwha Group is considering selling the operation of burger chain Five Guys in Korea, just two years after launching the brand amid much hype.

Hanwha Galleria, a food and shopping mall company, said in a regulatory filing Thursday that it is currently "looking into various options with the U.S. headquarters to enhance the brand competitiveness of Five Guys in Korea."

Regarding a news report alleging the exit, the company said it has not reached a decision, adding that it will announce its decision through regulatory filings.

Five Guys is operated by FG Korea, a wholly owned subsidiary of Hanwha Galleria. According to industry officials, FG Korea recently appointed a lead manager and distributed teaser letters to several private equity firms inviting their investment.

FG Korea last year posted 46.5 billion won ($33.4 million) in sales, up 10 billion won from a year earlier, and an operating profit of 3.4 billion won.

Despite the profit, Hanwha Galleria apparently decided to put the brand up for sale because of its unpromising profitability. Industry officials assume that fixed costs including operating costs and royalties to its main office in Virginia prompted the company to reconsider continuation of Five Guys' operation here.

Five Guys has been known as Hanwha Galleria’s flagship fast-food brand and allowed the company to engage in a fierce competition among domestic burger firms.

Hanwha Galleria Vice President Kim Dong-seon, the third son of Hanwha Group Chairman Kim Seung-youn, launched Five Guys in Korea in 2023.

Together with its premium ice cream brand Benson launched under new subsidiary Better Scoop Creamery in May, the company has been bolstering its food businesses. The company also runs a beverage brand, Pure Plus.