Five Guys Burger and Fries: A Simple Recipe for Success Contemporary Business BUS508 October 28, 2012

Five Guys Burgers and Fries started in Arlington, Virginia in 1986 by Jerry Murrell and his wife Janie. The business was a way to keep their two eldest sons employed and at home after deciding that college was not in their future. The Murrell’s used the money intended for their college education as capital to start up the take-out burger joint. The company’s name stemmed from the Murrell’s five sons (Five Guys), whom are all a part of the business. Today Five Guys has branched out into over 570 franchises in the United States and Canada (Boone & Kurtz, 2012, p. 78). Their growth since 2002, when they opened their first franchise, has doubled and tripled over the years with revenues reaching an estimated $570 million (Burke, 2012). Inquiring minds are interested in the rapid success of the restaurant and what are the ideologies behind it as well. This paper will reflect on Five Guy’s philosophy as its set apart from others, examine the core values that the company portrays, identify factors that have contributed to their success, and determine the social and ethical standards practiced by the company. Five Guys definitely has a philosophy that’s sets them apart from the average fast-food restaurant. Simply put from Jerry’s own mouth, “Sell a really good, juicy burger on a fresh bun. Make perfect French fries. Don’t cut corners” (Welch, 2010). While most fast-food chains focus on profits and advertising, Five Guys focal point is on the quality of their product. The Murrell family believes that if you provide a great service, great product, in a clean environment, a customer will walk out the door and sell you better than what any ad or commercial can(Welch, 2010). While the average small business takes a percentage of their proceeds to promote and advertise, Five Guys uses 1.5% of all franchises proceeds to go towards employee rewards. The company invests in an intensive secret shopper program. An unknown secret shopper comes and evaluates the crew on customer service, food preparation, and cleanliness. If the crew receives high scores from a secret shopper, the crew then gets $1000 to be divided up between them. In any given month a crew can add hundreds of dollars to their income and with the average crew member making $8-$9 per hour; this can really make a huge difference (York, 2009). Other companies like McDonalds, Burger King, and Subway also use the secret shopper program but employees aren’t benefited from positive reviews. It’s usually the management team that is benefited. Unlike most successful small businesses Five Guys does not have a PR firm to represent it and does not solicit any attention from local or national media, which goes back to their motto of having the customer to sell them. However, their non-proactive approach to marketing themselves does not keep the media at bay. The company received massive exposure when President Obama visited one day while filming a segment of a day-in-the-life interview with Brian Williams (York, 2009). Quality of food, great customer service, and making each employee feel valuable to the company have always been the values that Five Guys has set forth to accomplish and is the focal point of how the business is still ran today. Quality is something that has been forfeited recently among some American companies where profit is the main goal. At Five Guys, quality is what you are going to get all the way around. Jerry Murrell has always wanted the customers to know that they put all of their money into the food (Welch, 2010). Most of the their potatoes are from Idaho, north of the 42nd parallel, where they grow more solid because they grow in the day but stop when it cools in the evening. Yet buying the potatoes from Florida or California would be cheaper and more convenient. The French fries are soaked in water and pre-fried to force out steam and make a seal around the French fry so when it is fried a second time the seal absorbs the oil and the fries aren’t greasy. The meat used for the hamburgers is 80% lean beef and it’s fresh not ever frozen. The buns are toasted on a grill instead of a bun toaster which is cheaper and faster. The buns are also made by a bakery and delivered to each store daily (Welch, 2010). Customer service is also very important area that is taken very seriously by the company. This is how the company promotes by treating each customer with the upmost respect. Word of mouth has always been the best promotion tool because the consumer is getting the information from someone who has already experienced the product and service and is more inclined to try it for themselves (Kaplanidou, n.d.). When starting and maintaining a successful business, employees should always be taken into consideration. When employees feel appreciated they tend to perform better and have a better attitude all around. Employee incentives also make an employee feel appreciated and Five Guys has a very impressive incentive program that allows employees to add extra cash to their income in any given month. This creates friendly competition which engages employees to be more involved while working. A good working environment promotes happy employees and happy employees results in satisfied customers. Five Guy’s success can be contributed to a number of things but the most influential factors are first and foremost their product, their unique marketing technique, and their decision to franchise the company. The amount of preparation that’s put into making a Five Guys burger and fries is the number one key to their success. In order to have a successful business, there must first be a product and/or service that consumers are in need of and a “good juicy burger and perfect fries” is what Five Guys provides at a reasonable cost. In today’s society, where financial resources are scarce for a great deal of people, consumers are willing to pay for quality. Five Guys success can also be linked to how they advertise. Most fast-food companies spend millions of dollars on commercials, billboards, radio announcements and the like to promote their business. Five Guys keeps it simple. Provide a great product with good service in a clean environment and the consumer will walk right out the door and sell you (Welch, 2010). Instead of spending money on advertisements and a PR agency, Five Guys utilizes those funds to reward employees. It’s as simple as it gets and word of mouth has been the company’s only intentional marketing scheme since its beginning. The company began to franchise in 2002, although Jerry Murrell was absolutely against it but decided to go along with his sons’ wishes. As a requirement for each franchisee, there is a five store minimum (Roger, 2009). Each franchisee has to be able to weather the difficult financial storms that the business world experiences and sign a Franchise Development Agreement outlining the exact procedures and customs of the Five Guys business (Welch, 2010). This has been a significant reason for their success in such a short period of time. A business that wants to prosper over a significant amount of time, should consider business ethics and social responsibility (Boone & Kurtz, 2012, p. 36-37). A company that represents ethical and social issues demonstrates integrity and consumers identify with and support these types of companies. Five Guys “believes in the importance of international labor and human rights standards and we are committed to lawful, ethical and fair business practices” (Five guys, 2010). They have set in place policies that will guarantee just treatment of all those employed within their supply chain. The company will not knowingly employ trafficked persons and will adhere to all local, state and federal and international laws concerning human trafficking. Employees are also required to adhere to all laws concerning trafficking and will be terminated if found not doing so.
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References
Boone, L.E., Kurtz, D.L. (2012). Contemporary Business (14th ed.). Hoboken, N.J.: John Wiley & Sons
Burke, M. (2012). All in the family. Forbes, 190(2), 92-97
Five Guys Burgers and Fries (2010). Retrieved October 27, 2012, from http://www.fiveguys.com/california-supply-chains-act-disclosure.aspx
Kaplanidou, K. & Vogt, C. (n.d.). The role of word-of-mouth and how it can be used to develop a competitive advantage for a destination. (p. 3), Retrieved from http://www.travelmichigannews.org/mtr/pdf/WOM_Research_Paper.pdf
Roger, Y. (2009). Five guys is simply successful. USA Today
Welch, L. (2010). Jerry murrell. Inc, 32(2), 76-80
York, E. (2009). Five guys. Advertising age, 80(39), 28

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