Five Guys is closing several restaurants in California, with the latest shutdown confirmed for Merced on June 26. The closures will eliminate dozens of jobs as operators across the fast-food industry continue to face rising labour and operating costs.
The restaurant chain, known for its made-to-order burgers and hand-cut fries, joins a growing list of brands reducing their footprint in the United States. According to state filings cited by multiple reports, the closures are linked to financial hardship and come during a difficult period for the wider fast-food sector.
The Merced restaurant, located in the Yosemite North Shopping Center, first opened in June 2016 and has operated for nearly a decade. According to The Sun, the location will permanently shut its doors on June 26, affecting 13 workers. A restaurant manager also confirmed the closure date to the publication.
Five Guys has built its reputation on cooked-to-order burgers, fries prepared in peanut oil, and hand-spun milkshakes. The company expanded from the Washington, DC area into an international fast-casual chain with locations across Europe and Asia. Yet recent filings suggest the company is now reassessing parts of its California business.
California Closures Reflect Wider Industry Strain
According to TheStreet, Five Guys Operations has confirmed four permanent restaurant closures across California during 2026. The affected locations include Whittier, City of Industry, Merced and Hanford. Together, the closures are expected to affect 55 employees, including crew members and general managers.
The reports state that workers impacted by the shutdowns do not have bumping rights, meaning they cannot automatically transfer into roles at other locations. The closures are concentrated in densely populated areas where labour and rental costs have continued to rise.
The fast-food industry has been under mounting financial pressure in recent years. Operators have faced increased wage obligations, higher food costs and rising rents, while consumers have become more cautious about spending on takeaway meals. According to a CDC report referenced in the coverage, nearly 32% of young people were still consuming fast food daily in 2023, although the proportion of calories coming from fast food has declined over time.
California’s fast-food minimum wage increase has also intensified pressure on restaurant operators. According to TheStreet, industry observers say businesses are struggling to balance operating costs with customer resistance to higher menu prices.
Premium Burger Brands Face Changing Consumer Habits
Analysts cited in the reports suggest premium fast-food chains are encountering particular difficulties as inflation continues to affect household spending. Five Guys occupies a position between traditional fast food and casual dining, where prices are generally higher than value-focused competitors.
According to RTMNexus chief executive Dominick Miserandino, consumers are becoming more selective as meal prices increase. He told TheStreet that customers are increasingly turning towards cheaper meal options when burgers, fries and drinks approach higher price points.
TheStreet also quoted retail analyst Daniel Kline, who said Five Guys’ emphasis on quality ingredients contributes to higher operating and menu costs. He noted that some restaurant locations may no longer make economic sense under current conditions.
Five Guys is not the only chain reducing operations. According to reports referenced by TheStreet, several major restaurant brands have announced closures or restructuring plans during 2026, including Wendy’s, Pizza Hut, Papa John’s, Jack in the Box and Panera Bread. The latest closures add to a broader shift across the American restaurant industry, where companies are attempting to manage higher costs while responding to changing consumer spending habits.
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