KBRA assigns preliminary ratings to two classes of notes from Five Guys Funding, LLC, Series 2023-1 (Five Guys 2023-1), a whole business securitization (WBS). In conjunction with the issuance of Series 2023-1, KBRA anticipates affirming the ratings on the Five Guys Funding, LLC (the Master Issuer) outstanding Series 2021-1 Class A-2 Notes, Series 2022-1 Class A-2 Notes (the Existing Notes, and, together with the Series 2023-1 Notes, the Notes) and withdrawing the ratings on the Master Issuer’s Series 2017-1 Class A-2 Notes and Series 2021-1 Class A-1 Notes, which are expected to be redeemed in full primarily through the proceeds generated from issuing the Series 2023-1 Notes. The ratings are consistent with the results of our cash flow analysis following the addition of the Series 2023-1 Notes.

Five Guys is the world’s largest premium hamburger fast casual restaurant concept by both sales and the number of restaurants. As of September 30, 2023, the Five Guys restaurant system included 1,835 locations of which 1,502 were located in North America, with annual system-wide sales of approximately $3.2 billion. The transaction is supported by royalties from 913 franchise locations and 589 company-operated restaurants, representing approximately 60% and 40% of total North American locations, respectively. The transaction also benefits from certain Company-owned stores, license revenue related to locations outside of North America and other income. Approximately 82% of the restaurant locations are within North America with the remainder across 23 countries.

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Related Publications

• Five Guys Funding, LLC Comprehensive Surveillance Report
• Five Guys Funding LLC Series 2022-1 New Issue Report
• Whole Business Securitization Global Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

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Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

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Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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