Assignment 1: Entrepreneurial Leadership
This assignment will discuss the successful steps that the owners of the Five Guys Burgers and Fries have been able to accomplish due to the simple business plan that was put into place prior to opening their restaurant. We will see that the basic human principles about how we should treat others; will also allow a company to become successful. The success that has been possible for this hamburger and fries restaurant could have easily failed against the big name restaurants known for burger and fries, such as, McDonalds, Burger King, Checkers and Sonics. However, the company is has become a great success even through a tough economic recession. In this assignment, topics such as their philosophy sets them apart from other fast food restaurants, the original values of the company, three factors that have contributed to their success and external markets and how ethical and societal practices that they provide for their customers and employees. The Murrell family was a close knit family who supported their two sons who decided not to attend college after their graduation from high school. They had dreams of owning their own family restaurant. Their parents invested the money that they had been saving over the years and allowed them to begin their first business. Although they were not sure if the business would be a success or a failure, they were supportive of their sons ideas and dreams with the hamburger restaurant allowed them the chance to begin the restaurant that many of us know today as, Five Guys Burgers and Fries. The entrepreneurial attitude along with the supportive family venture allowed this family to become successful in their business endeavors. In this case study we will look at a few important aspect of this family business and see why they have been so successful in such a short amount of time.

Determine How Five Guys’ Philosophy Sets it Apart From Other Fast-food Chains Five Guys Burgers and Fries began their business with a very basic business plan; which stated, “Sell a really good, juicy burger on a fresh bun. Make perfect French fries and do not cut corners” (Case Study, 2012). This seems like a very basic business plan, but their fundamental principles have been that the meat that makes their famous hamburger must be made by meat that is 80% lean, always fresh, never frozen and the factories and plants that cater to the restaurant chain must be so clean that you could come into the plant and eat from the floor. The quality of the fresh vegetables that sit on top of the mouth watering hamburger must never be of a lower quality vegetable. The solid foundation has been set since the inception of the business in 1986 and no matter what is happening in the economies or the higher prices of the products that are used to create this award winning hamburger and French fry combination there is no way that the family will allow a below their standard product to be sold to their customers. This could really be detrimental to the business that they have built over the many years that they have been in business. Their success has been built on quality products; and these are the products that their loyal customer base has been built upon. When customers come into the Five Guys Burgers and Fries Restaurant they have come to expect that they will be able to purchase a hamburger with all of the available fixings or just a few of the seventeen available toppings and the Idaho potatoes (Case Study, 2012) that are used in their delicious French fries and what makes the products special is that the meat is fresh, the bread is flown in from one of the two bakeries that are contracted to provide the bread for the franchisees all of the country and throughout the many countries that the restaurant is being operated in.

Analyze the Original Values for the Start-up Company and How it Remains Strong Today
The first Five Guys Burgers and Fries restaurant opened its doors in 1986 and the core values have not changed their restaurant franchise. The core quality of the product is one of the key factors to the tremendous success that they have achieved. The freshness of the food, the perfect cut French fries that are soaked and placed in hot peanut oil to fry, this allows the fries to be removed from the grease and not have that soggy feel and greasy taste to them. Lastly, no matter what the economy may bring or terrible weather which may have an effect on the produce that dresses that lovely, mouth watering burger the customers have grown to love so much, the franchisees can not cut corners on the final product. If the hamburger and the fries are not tasting as they are supposed to taste a customer will be more than happy to let other people that they know that Five Guys Burgers and Fries sells inferior, high priced hamburgers and fries; which they would not even think about saying if they had received a high quality product. One of the reasons that they company does not spend much money on marketing; the founders feel that it is more important to learn about their delectable foods from their loyal customers. If one customer comes into a restaurant orders a high quality product they will tell their friends and family about their experience approximately 1 in 5 customers; on the flip side of that same coin, if a customer gets an inferior product they will tell 2 or 3 of their friends and family members about their negative experience in the restaurant. Conversely, the first impression is always a lasting impression, so if a customer feels welcomed into your place of business and they are served a high quality product they will return again, even if they are not from that area and are visiting from out of state family members.
As the company grew between 1986 and 2001 five locations opened around the Arlington, Virginia and Washington, DC. However, in 2002, Five Guys Burgers and Fries decided to start to franchise in the states of Virginia and Maryland so that they would be able to spread their marvelous hamburger and fries combination to a larger audience of consumers; what a great idea; because people all over the country and in other countries love a great hamburger and fries combination; especially when there are over 250,000 possible ways to order a hamburger at Five Guys Burgers and Fries (n.a., 2012); you do not get that type of sandwich anywhere else in the fast food hamburger chains; such as, Mc Donald’s, Burger King or Wendy’s. Five Guys Burgers and Fries will not have a hot and steamy hamburger ready for you when you arrive; as Mc Donald’s but they will offer you the opportunity to try another hamburger restaurant if you choose not to wait for that special burger that is especially made to the standards of the customer paying for the hamburger. At Five Guys Burgers and Fries you truly get it “your way” as other competitors in this market claim to offer their customers. There is no way possible that Five Guys Burgers and Fries could have expanded to over 1,000 location in 47 states and in six Canadian provinces (n.a., 2012) if their core values and products where not of a high quality and if the service being provided to the customers were not of the highest quality.
Enumerate Three (3) Factors that Contributed to Five Guys’ Success in Such a Short Time and What Effect, if Any, External Markets Had on These Factors
One of the primary factors that has led to the success in such a short time is that they were willing to step out of their comfort zone and take a risk knowing that although there were many restaurants that served hamburgers and fries that they would make sure that they were successful. They believed enough in themselves that they took that risk. Their business plan was simple- Sell a really good, juicy hamburger on a fresh bun. Make perfectly good French fries and do not cut any corners in that process (Case Study, 2012). Their hamburgers are made to order; which is time consuming for the customer; however, there are seventeen different toppings that will grace the top of the completed burger. This shows that they are putting the customer first and ensuring that they have the best burger possible; they “get it their way.” The basic principle and business plan has helped them in their quest to be the best in their industry; as they have been voted the “Number One Burger” for the past seven years by the Washingtonian Magazine (Case Study, 2012).
Another factor to their success is that they use the same suppliers; year after year, and do not spare the cost to ensure that the fresh bread comes from one of two bakeries in the United States that have been working with them since 1986; this keeps the food taste consistent. The potatoes that are used to make the French fries come from northern Idaho were the potatoes have plenty of time to grow so that they taste as they always taste in every Five Guys Burgers and Fries; the owners are dedicated to the freshest tasting French fries in the industry because the potatoes are never frozen and are used soon after they are pulled from the ground and are cooked in high quality peanut oil, this ensures that they are not full of grease and are a tasty side dish to the high quality hamburger that they serve to every customer that comes through their restaurant doors.
The third factor of success is that when they decided to begin to franchise their Five Guys Burgers and Fires that they required a commitment from the franchisees that they would have no less than five restaurants each, over a period of time. This allows them to build one restaurant and continue to build more restaurants in their geographic areas. This will allow their bottom lines to build up over time and the Murrell family will have their Five Guys Burger and Fries in every state but three throughout America and there are even restaurants in Canada. The primary reason for beginning to franchise the restaurants was to ensure that people around the country could enjoy the mouth watering taste that comes from the made to order hamburger with all the toppings and daily cut, fresh French fries. The same order that you place in Washignton, DC would be the same tasting burger you would get in the Savannah, Georgia Five Guys Burgers and Fries. Their commitment to a quality product has not been surpassed by any other hamburger restaurant in the industry.
The quality product has allowed Five Guys Burgers and Fries to have such an explosive growth during the beginning of the “Great Recession.” Between 2007 and 2009 the company managed a sales growth of 125% in only two years. This can be explained by the number of new franchises that sprung up during that period in time; as many people were losing their jobs all over the country; they may have seen an outlet to invest their 401k plans into this franchise seeing an excellent opportunity to continue to build a comfortable nest egg for their families over several years. This company was the fastest growing fast food chain in 2009. The growth that they saw was happening at the height of the economic crisis in America and the numbers of people unemployed has at an all time high. The population around the country did not mind paying a little extra or waiting the extra time it took to make their order; because the employees were friendly, the products were of a high quality and the company values were unmovable. The company began a loyalty program for their customers who were frequent visitors and award them five free meals per month. This allows the company to make great customers tell their friends, who tell their friends and so on. The advertising is done by the customer; saving the company potentially millions of dollars all over the country that they can then put back into the business to ensure the greatest quality product.
The factors that are driving the demand for this product is evident in the tremendous statistics that Five Guys Burgers and Fries. In a timeframe where many businesses are operating in the “red” they are continuing to build a loyal fan base; not because of massive advertising campaigns but because they are committed to their customers, the quality of their product and they reward their employees with incentive for doing their jobs to the best ability because when the safety and sanitation inspections happen on a weekly basis to ensure that the high standards are happening in every restaurant across the country the store is awarded with a $1000 bonus that is split between the crew members that are at the restaurant at the time of the inspection. This allows the employees to “police” each other to ensure that they are ready at anytime to pass the high quality standard inspection at any time. The employees are then excited because now they have an extra $150 to $200 added to their pay checks on the next pay period. This is a wonderful incentive that Five Guys Burgers and Fries offers to their employees; this allows helps to keep the employee turnover ratios to a minimum and the profits for the company at a maximum. All of the factors that have been discussed are reasons that Five Guys Burgers and Fires have had such a wonderful level of success and it continues to boom every week with the opening of at least four stores a week.
The factors that drive supply and demand for the Five Guys Burgers and Fries are the burgers and fries that are of the highest quality, and the high quality services that the customers receive in the restaurant. So many people in the local communities are continuing to support the Five Guys Burgers and Fries restaurants even with a slump in the economy because the customers know that they will get a high quality product that they will return to eat, time after time. This has been proven because even through people losing their jobs and some getting reductions in pay; they are still willing to get the Five Guys Burgers and Fries. This is a testimony to the high quality product and the best service in the industry.
Assess How Ethical and Social Practices are Part of the Five Guys’ Culture and Provide Examples to Support Your Choices Five Guys Burgers and Fries have an excellent set of business ethics; which is the standards of conduct and the moral values that are used to govern the actions of what happens in the workplace (Boone & Kurtz, 2012, p. 36). This has been something that has been the focus of this family since the inception of the restaurant in 1986. They felt that the best salesperson for their restaurant chain would not be advertising in every publication in the near vicinity; but instead they would treat their customers right, they will leave your business and sell the products to other people; so this type of treatment to customers has allowed the family to spend more money on high quality products instead of money on advertising, fancy building décor inside and outside of their restaurants nor anything else that is not critical to the delivery of the high quality hamburger and fries that their loyal fan base has come to enjoy; often times the sandwiches are so good that that you can not even put words to it; as to how great it tastes. The owners decided in 196 not to offer delivery services to its customers; as this would decrease the amount of money they could spend on their high quality products. Even after many requests from the Pentagon in Washington, DC to make delivery to the Pentagon, they rapidly declined the offer; however, the employees who worked at the Pentagon would still come to the restaurant to order those special one of a kind hamburgers and fries. The company has stood fast on their decision, not to offer a delivery service of their foods. I can understand why they had made that decision, because it would defray at the costs that they would be able to use on the quality products that everyone has grown to love over twenty years after the first Five Guys Burgers and Fires opened their doors for business. Societal practices that are practiced within the Five Guys Burgers and Fries franchises are honesty and integrity. A person is able to see this when you read through case studies and you see that no matter who asked then for a delivery which was not a part of their original business plan in 1986; they did not waiver, even when asked by employees of the Pentagon to deliver their fine food morsels; they declined. This shows that there is honesty and integrity in following through with the original plans that the company was conceived upon. The employees of the Pentagon still came to the restaurant to place their orders and take them back to their jobs. If the employees of that particular restaurant near the Pentagon would have made a delivery just one time; that would have violated the integrity of the company atmosphere and that would have been a step towards a potential short fall within that particular restaurant. Five Guys Burgers and Fries also give incentives to their employees for upholding the high quality standards in their individual stores; which is not an incentive in many of the other fast food restaurants. The company has mystery shoppers that go into the restaurants and check for cleanliness, serviceability of the employees and how they treat their customers. If the mystery shoppers note that they had a positive experience in the restaurant, then the employees on duty at the time will be rewarded with $1000 that is split between all of the employees. This type of incentive will allow the employees to do the right thing in the restaurant to make the restaurant a success; whether it is treating the customers with respect or keeping the toilets clean, or sweeping the floor when they notice it needs to be cleaned; however, ultimately they ensure that they all treat each customer with respect and allow all of the customers to have a positive experience with Five Guys Burgers and Fries; that way they are able to see success where they work and they also get to split that extra “incentive” of $1000 between the employees on shift; which is a great incentive in a hardened economy such as we are experiencing at the current time. In conclusion, we are able to see that the success of Five Guys Burgers and Fries has been because they had a simple business plan that they never waivered from. They used the basic principle about how to treat people and give them high quality products that they will return to your restaurant not only over and over again but they will tell others about the great, service and quality products that are sold at your restaurant and they are your advertising; so that the company will not have to spend a lot of money; the customers will do that for the company. The success that has been possible for this hamburger and fries restaurant could have easily failed against the big name restaurants known for burger and fries, such as, McDonalds, Burger King, Checkers and Sonics. However, the company is has become a great success even through a tough economic recession this is a testimony to when you treat people good; they will treat you good in return. This successful company will continue to grow through the millennium as long as their franchisees continue the traditional business plan that is was built upon. As long as they continue down the path of treating the customer’s right and giving the wonderful incentives to their employees they will continue to be a great success story in the restaurant industry.

References
Blumer, A., Hall, J., Hagos, M., Naujelis, B. (2012). Five Guys Burgers and Fries: A Competitive Loyalty Program Brand Campaign. Retrieved on October 24, 2012 from www.fiveguys.com
Boone, L. E. & Kurtz, D. L. (2012 Update). Contemporary business (14th ed.). Hoboken, NJ: John Wiley & Sons. n.a., (2012) Case Study II: Five Guys Burgers and Fries: A Recipe for Success Retrieved on

October 25, 2012 from http://edugen.wiley.com/edgen/courses/crs6266/boone

Five Guys Burgers and Fries Website. (2012) About Us. Retrieved on October 24, 2012 from http://fiveguys.com/about -us.aspx

Garret, Jared. (2012). Five Guys Burgers and Fries: A Fast Food Success Story. Retrieved on October 24, 2012 from http://helium.com/items/1932674-about-five-guys-burgers-and-fries

Welch, Liz, (2010). How I Did It: Jerry Murrell, Five Guys Burgers and Fries. Mansueto Ventures, LLC Retrieved on October 24, 2012 from www.inc/magazine/20100401/jerry-murrell-five-guys- burgers-and-fries_Printer_Friendly.html