Determine how Five Guys’ philosophy sets it apart from other fast-food chains.
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 burger joint in 1986. When they began selling franchises in 2002, the family had just five stores in northern Virginia. Today, there are 570 stores across the U.S. and Canada, with 2009 sales of $483 million. Overseeing the opening of about four new restaurants a week, the Murrells are proof that flipping burgers doesn't have to be a dead-end job.
Four years ago, before franchising, Five Guys was just a little family burger operation with five locations and a steady, if cultish following, in Northern Virginia. Today the business is by some estimates heading toward $1 billion in value. Five Guys has 87 locations. Most are in the Washington region, but a hundred more will open along the East Coast this year, and another thousand are being phased in. Each store, the company says, pulls in about $1 million a year.
How Janie and Jerry Murrell and their five sons, the Five Guys, so quickly bit into the nation's $58 billion-a-year burger business is a little bit of a burger whodunit. The Murrells can be gregarious, but they are given to moments of silence when asked how their business grew so big. Their success probably includes a combination of ingredients, though: keeping the business strategy simple (sell burgers and fries) while implementing quick and crucial cooking procedures (press down on the burger just once) that result in a quickly delivered, but juicier, more upscale burger than McDonald's. Their reluctance eased a few years ago. They made the decision to franchise after -- true story -- Matt gave his father the book "Franchising For Dummies," which is co-authored by Wendy's founder Dave Thomas. They had also been approached previously by Dan Rowe at Fran smart, who was working with former Redskins kicker Mark Moseley. Rowe and Moseley convinced the Murrells they could make it work on their terms.
The Murrells are self-described control freaks. No detail is too trivial. So they decided to limit the number of franchise owners so there wouldn't be too many people to control. Thus, you can't buy one Five Guys franchise. You have to buy at least five -- essentially filling up a small territory. The current price for each one is $45,000, plus 6 percent of annual sales. By comparison, a new McDonald's franchise fee is $45,000.
Requiring a large purchase of stores also, the Murrells said, attracts more professional owners. High-tech executives, former Marriott executives, and owners of fine restaurants have signed up. "They see something that's a good opportunity," said Moseley, who owns Five Guys franchises and works full time selling them for the company. "There's a better than even chance to be really successful in something that belongs to you."
The Five Guys franchising contract is rather specific, stipulating the number of bacon strips (two) and pickles (four) placed on burgers should those items be requested. The Murrells send in secret customers to make sure, for instance, that the hand-cut French fries are shaken 15 times after seasoning. The Murrells have found through extensive study that this tactic takes off just the right amount of grease.
In an age when everything seems to be mediated and staged, the tough love from Five Guys feels refreshingly real. The restaurants cultivate that through what Gilmore calls the “texture” of their operations. The stores typically have bags of potatoes stacked up to be cut into French fries—a holdover from early locations that didn’t have storage space in the kitchen. A chalkboard on the wall lists the specific farm that grew the spuds. Self-serve buckets of peanuts let customers munch as they wait for their orders, while employees are encouraged to be personable and avoid Jerry Murrell bursts through the swinging glass doors of a hamburger restaurant at a shopping center in suburban Virginia. Van Morrison is rocking through the speakers, and line cooks are shouting orders across the open kitchen. Murrell, 67, who is tall with sporty sunglasses perched atop his bald head, enters as if he owns the place, which he does. The founder and chief executive officer of the Five Guys burger chain approaches the counter, takes his place in line, and makes a show of slipping a crisp $100 bill into the tip jar.
Analyze the original values for the start-up company and how it remains strong today.
Murrell founded the company with his wife and sons in 1986. For 16 years they ran a handful of local stores in the Washington (D.C.) area, perfecting their limited menu and building a devout local following. Then in 2002, after much nudging, the boys convinced Murrell to open the floodgates to franchising. By the end of this year, Five Guys expects to have almost 1,000 stores open around the country and over $1 billion in sales. They’re growing so fast that the Murrells are racing to hold on to the simple, authentic vibe that made the place so beloved. Murrell passes up Five Guys’ regular cheeseburger, which comes with two patties and 840 gluttonous calories, and orders the “Little Burger”—a single patty with lettuce and tomatoes. No cheese or jalapeños, no mushrooms or any of the other 11 free toppings. Not even ketchup. Though he’s proud of the offerings, chosen by his sons who help run the business—“Every little one was a decision,” Murrell says. Today he keeps it simple. What started as a modest burger shack in a Virginia strip mall has exploded into America’s fastest-growing restaurant chain, with five stores opening each week. Five Guys serves up made-to-order burgers with beef that’s never frozen and absurdly large servings of hand-cut fries. The fresh, generous meals allow them to charge more than fast food chains such as McDonald’s and Burger King.
The Murrells also shun national advertising campaigns, which they find fake, and instead rely on word of mouth. When President Obama moved to the White House, a Five Guys staffer suggested sending him a T-shirt. “That’s cheap!” Murrell shot back. Playing coy worked, and soon Obama, trailed by TV cameras, stopped by a store. He ordered a cheeseburger with lettuce, tomato, fresh jalapeños, and mustard—a classic example of Five Guys’ formula that sells 2 million burgers a week and was named Zagat’s “best fast food burger” for 2010.
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.
They figure their best salesman is their customer. Treat that person right, he'll walk out the door and sell for you. From the beginning, Murrell wanted people to know that they put all their money into the food. That's why the décor is so simple -- red and white tiles. They don't spend our money on décor, or on guys in chicken suits. But they will go overboard on food.
Most of their potatoes come from Idaho -- about 8 percent of the Idaho baking potato crop. They try to get their potatoes grown north of the 42nd parallel, which is a pain in the neck. Potatoes are like oak trees -- the slower they grow, the more solid they are. They like northern potatoes, because they grow in the daytime when it is warm, but then they stop at night when it cools down. It would be a lot easier and cheaper if they got a California or Florida potato.
Most fast-food restaurants serve dehydrated frozen fries -- that's because if there's water in the potato, it splashes when it hits the oil. They actually soak their fries in water. When they pre-fry them, the water boils, forcing steam out of the fry, and a seal is formed so that when they get fried a second time, they don't absorb any oil -- and they're not greasy. Their food prices fluctuate. They do not base our price on anything but margins. They raise our prices to reflect whatever their food costs are. So if the mayonnaise guy triples his price, we pay triple for the mayonnaise! And then they'll increase the price of our product. About five years ago, hurricanes killed the tomato crop in Florida, and prices went from $17 to $50 a case. So a few of their franchisees called and said, "We're not using tomatoes. The prices are too high." I suggested using one slice instead of two. My kids were furious: "It should be two! Always!" They were right -- it's too easy to start slipping down that slope. They stuck with two slices, and so did our franchisees.
Assess how ethical and social practices are part of the Five Guys’ culture and provide examples to support your choices.
Murrell studied economics at the University of Michigan. Murrell had no money and needed a place to stay, so he ran a fraternity house's kitchen. Murrell got the cook a raise and let her do the ordering. They started making money, because she knew what she was doing. His parents died his last year in college. Murrell married, had three kids, divorced, then remarried. Then he moved to northern Virginia and was selling stocks and bonds. His two eldest sons, Matt and Jim, said they did not want to go to college. He supported them 100 percent.
Instead, they used their college tuition to open a burger joint. Ocean City had 50 places selling boardwalk fries, but only one place always has a 150-foot line -- Thrashers. They serve nothing but fries, but they cook them right -- high-quality potato, peanut oil. That impressed me. Murrell thought a good hamburger-and-fry place could make it, so they started with a takeout shop in Arlington, Virginia. Their lawyer said, "You need a name." Murrell had four sons -- Matt, Jim, Chad are from his first marriage, and Ben from his second to Janie, who has run their books from Day One. So Murrell said, "How about Five Guys?" Then they had Tyler, their youngest son, so Murrell out! Matt and Jim travel the country visiting stores, Chad oversees training, Ben selects the franchisees, and Tyler runs the bakery.
Three days before they opened, Murrell was still working as a trader in stocks and bonds and was in a hotel for a meeting in Pittsburgh. I found a book in the nightstand, next to the Bible, about JW Marriott -- he had an A&W stand that he converted and built into the Hot Shoppes chain. He said, anyone can make money in the food business as long as you have a good product, reasonable price, and a clean place. The magic to their hamburgers is quality control. They toast their buns on a grill -- a bun toaster is faster, cheaper, and toasts more evenly, but it doesn't give that caramelized taste. Their beef is 80 percent lean, never frozen, and their plants are so clean, you could eat off the floor. The burgers are made to order -- you can choose from 17 toppings. That's why they can't do drive-through -- it takes too long. They had a sign: "If you're in a hurry, there are a lot of really good hamburger places within a short distance from here." People thought he was nuts. But the customers appreciated it.

Use at least five (5) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.
Boone, L. E. & Kurtz, D. L. (2012 Update). Contemporary business (14th ed.). Hoboken, NJ: John Wiley & Sons.

Washington Dulles International Airport (VA/DC); LaGuardia Airport (NY); Reagan National Airport (VA/DC); Norfolk Naval Base (VA); McPherson Square (DC)

"History". Five Guys Holdings, LLC. Archived from the original on July 19, 2011. http://web.archive.org/web/20110719011137/http://www.fiveguys.com/history.aspx. Retrieved April 11, 2011.

Rosenwald, Michael S. (April 3, 2006). "Five Guys, Taking a Bigger Bite". The Washington Post.http://www.washingtonpost.com/wpdyn/content/article/2006/04/02/AR2006040200723.

Noah Galuten (May 28, 2010). "CSPI Releases Its Annual List Of The Fattiest Foods In America". LA Weekly. http://blogs.laweekly.com/squidink/food-lists/fattiest-foods-extreme/. Retrieved May 28, 2010.

"Virginia Beach Best Food & Dining". HamptonRoads.com. Landmark Media Enterprises L.L.C. Archived from the original on August 27, 2007. http://web.archive.org/web/20070822030857/http://home.hamptonroads.com/best/winners/directory07.cfm?c_id=6&meta=274&postback=1. Retrieved June 26, 2007.