Five Guys Burgers and Fries:
Ingredients for Success

Contemporary Business 508
July 21, 2012 Five Guys Burgers and Fries: Ingredients for Success

By sticking to the basic philosophy of keeping it simple, Jerry Murrell, original owner of Five Guys Burgers and Fries, has grown a small family business to one of the largest and fastest growing franchise in America. “Sell a really good, juicy burger on a fresh bun. Make perfect French fries. Don’t cut corners.” That’s been the business plan since Jerry Murrell and his sons opened their first store location in 1986. (Welch, 2010, p. 76) This philosophy is different from competitors who rely on gimmicks and advertisements to entice customers. It is not unusual for competing fast food chains such as McDonalds, Burger King and Wendy’s to introduce new menu items. The new menu item may establish a permanent presence on the menu or disappear, never to be heard of again, shortly after the introductory period. The life span of the new item, unfortunately, is determined by customer response. These chains cater to our wants, our desires and our convenience. In the words of Burger King – “have it your way”. Most of us have experienced at least one of these chains, if not all, and can attest that the customer experience with food quality, facility and service often varies by location. Then there is Five Guys Burgers and Fries with a philosophy that has not changed since the day it opened. While it is unchallenged they care about their customers, they have refused to cater to our desires or conveniences, best proven when the original store refused delivery service to the Pentagon. This mom and pop business learned early what works for them and what does not work. They have experimented with different menu items such as chicken sandwiches and coffee, but it did not work. What did work was their simple concept, understanding that people who visit their chains do so because they want a good burger with fries, and they want a quality product. They use the freshest ingredients for the 17 staple toppings. The 80/20 ground beef patties are shaped by hand and never frozen. The French fries are cut and prepared daily [from Idaho potatoes]. The buns are baked fresh, in-house. And aside from a handful of hot dog and grilled cheese offerings, that is where they capped the menu (Janowitz, 2007, p. 32). According to Doug McKinney, director of training for the Lorton, Virginia based Five Guys, “the limited menu allows the chain to focus all of its energy on executing those few items perfectly.” McKinney also attributed Five Guys success to the “value that the customers think they’re getting. It’s a lot of food for the money. And while it is more expensive than some of the other chains, the customers feel like they’re getting value for their money.” Three days before the first store location was set to open, John Murrell read an article about JW Marriott and his Hot Shoppes chain. Marriott was quoted as saying, “Anyone can make money in the food business as long as you have a good product, reasonable price, and a clean place.” (Welch, 2010) The Murrells has perfected the simplicity of this statement. They began with what they knew and liked (burgers and fries), established a standard that continues to be duplicated through franchises and monitors for quality control. Their consistent values earned awards as best large chain and overall market force in 2011 consumer rankings. Five Guys Burgers and Fries never advertise. In an interview with Inc. Jerry Murrell stated, “We figure our best salesman is our customer. Treat that person right, he’ll walk out the door and sell for you. That’s why the decor is so simple – red and white tiles. We don’t spend our money on décor, or on guys in chicken suits. But we’ll go overboard on food.” (Welch, 2010) Some of the money saved is used to offer bonuses to the restaurant teams to encourage them to have an ownership in the quality of service and keeping the restaurant up to standards. Brand loyalty has provided Five Guys Burgers and Fries with a sustainable advantage over its competitors. What happens when the average customer walks into Burger King, McDonalds or Wendy’s on any given day and sees a fluctuation in the price of a burger? What happens when the preparation of the burger takes longer than what the average customer expects? These minor inconveniences are the expectations of the loyal customers of Five Guys Burgers and Fries.
Three factors that have contributed to the success of Five Guys Burger and Fries are:
1. Value for the money.
2. Simplicity of food and décor.
3. Expansion.
While using premium ingredients, Five Guys Burger and Fries aims to keep their prices as close as possible to their competitors. Customers are willing to spend an extra buck or two for a cheeseburger because they know the ingredients are fresh, the meat is never frozen and they are going to receive what they perceive to be a high quality burger. By all accounts, their perception is reality. “Sure, you can find a cheaper burger, and it takes longer for us to prepare the meal,” stated Molly Catalano. “But we appeal to people looking for freshness and higher quality food.” (Janowitz, 2007, p. 32) In addition, quality control guidelines for Five Guys require flipping each ground beef patty once and cooking to well-done (without a timer), shaking fries exactly 15 times, right down to how the burger is assembled.
Providing value for the money and maintain quality control has not been easy for Five Guys. The company consistently place demands on US Foodservice by requesting items they normally would not carry. Expansion required a review of logistics to ensure stores received fresh baked buns daily and other ingredients that are delivered fresh and not frozen. Rather than skimp on quality or eliminate menu items, the prices will fluctuate due changes in the market.
In his interview with Nation’s Restaurant News, Doug McKinney stated, “The sparse furnishings reflect the simplistic Five Guys menu and highlight the chain’s ‘no nonsense’ approach. It is also reflective of an old fashioned diner, addressing consumer desire for nostalgia and the ‘rosy’ time of their youth.” From the beginning, the Murrells have kept to this concept. They do what they know and like – burgers, no frills.
Since making the decision to franchise in 2002, Five Guys Burgers and Fries currently have more than 1,000 locations nationwide, and 1,500 more in development. “The more simple the concept, the easier it is to expand,” according to John T. Bowen, dean of the hospitality school at the University of Houston. The franchises are strictly monitored to ensure loyalty to the brand. Because of the unwillingness to change their standards for quality and service, the Murrells now own approximately 75 locations (they find it easier to buy the store back than to force others to conform). Franchisees must have a net worth of $1 million and be financially able to buy the franchises in lots of 5. With the franchises, Five Guys Burger and Fries rank at the top in growth over larger chains such as Chipotle Mexican Grill and Jason’s Deli.
Five Guys Burgers and Fries success can be attributed, in part, to the franchisees and their employees. Therefore, their ethical and social responsibilities play a pivotal role in how they manage. Relying on the franchisees to maintain branding, Five Guys provides regional managers to provide guidance. For those who cannot grasp the concept, Five Guys remains committed to the chain and will repurchase the store and run it themselves. They pride themselves in having a low turnover rate among their employees who must be just as committed to the brand. To encourage their loyalty and buy-in to their quality standards, they are offered monetary incentives. Five Guys has taken an extra step to help retain their competitive advantage by using mystery shoppers to evaluate the staffing, food quality and cleanliness of their stores.
The decision made by the Murrells in 2002 to franchise Five Guys Burgers and Fries has proven to be the best they could have made. The chain has thrived in a downturn economy, and all signs ahead indicate continuous growth as they expand into other global markets. References
Datamonitor (2010). Five Guys case study: Maintaining growth in fast food with a simple menu and quality focus, January 2010, CSCM0295.
Janowitz, N. (2007). Five Guys sticks to burger-and-fries formula. Shopping Centers Today, 28(7), 32-33.
Licata, Elizabeth. (2009). Five Guys Specialized burger concept aims to fulfill customers’ cravings. Nation’s Restaurant News. P. 58.
Romeo, Peter (2011). Hot and not QSR ratings rank/confuse. Restaurant Business, 16.
Weise, K. (2011). Five Guys. Bloomberg BusinessWeek, (4242), 70-73.
Welch, L. (2010). Jerry Murrell. Inc., (32(3), 76-80. http://www2.qsrmagazine.com/articles/interview/104/jerry_murrell-1.phtml http://www.fiveguys.com/about-us.aspx