Presented by: Dawan R. Barfield
Professor: Dr Sersland
Business 508- Contemporary Business
July 19, 2013
Determine how Five Guys’ philosophy sets it apart from other fast-food chains.
The business plan since Jerry Murrell and his sons opened their first burger joint in 1986 has been to sell a good juicy burger with perfect cut fries, and not cut any corners! When they began selling franchises in 2002, the family only had five stores in Northern Virginia. Today, there are over 570 stores across the United States and Canada with sales reaching over $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 like many people think.
Four years ago, before franchising, Five Guys was just a little family burger operation with five locations and a steady following in Northern Virginia. Today the business is, by some estimates, heading toward $1 billion in value. Five Guys has just about 87 locations today. Most are in the Washington region, but a hundred more will open along the East Coast by the end of 2013, and another thousand are being phased in after that. The company says that each store 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 still a little bit of a burger mystery. The Murrells can be extremely outgoing and sociable, but there are moments of silence when asked how their business grew so big. Their success probably includes a combination of ingredients. One appears to be their knack for keeping the business strategy simple, sell burgers and fries. The other may be implementing quick and crucial cooking procedures, which include pressing down on the burger just once, that result in a quickly delivered, but juicier, more upscale burger than McDonald's and many other leading fast food restaurants. Their reluctance to speak out eased up a few years ago. They made the decision to franchise after Matt, one of the sons, gave his father the book "Franchising for Dummies," which is co-authored by Wendy's founder Dave Thomas. Wow! 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 individuals outside of the family of owners to manage. They decided, in order to keep the number of franchisees down, one can't buy a single 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”