IE 11 is not supported. For an optimal experience visit our site on another browser.

Five Guys' biggest struggle is to stay the same

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.
Image: Five Guys manager Kely Guardado
Five Guys employees are encouraged to be personable and avoid scripted greetings. Reuters
/ Source: Business Week

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.

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.

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.

Five Guys stores don’t have drive-throughs or molded plastic seats bolted to the floor. The walls are covered in crisp white and red tiles, the kitchen is open for everyone to see, and the menu doesn’t change. As Jim Gilmore, the co-author of "Authenticity: What Consumers Really Want," explains, Five Guys stores seem to say, in the most loving way possible, “Shut up, sit down, and eat.”

Gilmore says that 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 scripted greetings.

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.

For this reporter, evaluating the burger first-hand was problematic: I’ve been a vegetarian for more than a dozen years. So I tried calling some expert tasters. Pulitzer Prize winning food critic Jonathan Gold says he doesn’t much care for Five Guys — he finds the burger “boring” — but understands why people like them. “There’s that goopeyness, and it does fit that kind of American profile.” Gilmore, the marketing consultant, calls the burgers “a couple pounds of carnivorous pleasure.” Then he adds, “It’s almost enough to make me feel sad for you.”

I started to see how Five Guys, with its fresh beef patties, made in a sparkling kitchen for all to see, appeases picky people, like myself, who fear the questionable provenance of typical fast food. At the oldest extant Five Guys store, in Alexandria, Va., I finally ordered a burger of my own. An employee called out order No. 93, and I picked up my “Little Burger” with lettuce and tomato, grilled onion, and pickles. I sat there, gripping it with both hands, and, at last, took a bite. My first thought was that it tasted … meaty. The beef’s texture was a little tough, though I really liked how it worked with the sweet bun and tart pickles. Then I noticed the juice dripping down my hand and onto the foil wrapper. No veggie burger can do that. I started to feel like I’d been missing something.

“I’m a small town boy,” Murrell likes to say. He grew up in northern Michigan and has fond memories of the local burger joint in his hometown. While he studied business at the University of Michigan, Murrell ran a kitchen in a fraternity house to cover the rent. He had three sons and moved to Virginia in the 1970s, where he remarried, sold insurance for AXA Equitable, and eventually had two more boys.

When his oldest son was about to graduate from high school, Murrell saw his kids weren’t interested in college and made a suggestion: how about using the tuition money he’d saved up to “try our luck with the hamburger business,” recalls Chad Murrell, who was 14 at the time. Murrell even had the name picked out — Five Guys, after himself and his four sons. (When Tyler, the youngest, was born several years later, the name came to represent just the boys.) “It was a no-brainer,” says Chad.

They found a little shack in the back of a parking lot in northern Virginia that had potholes so big “you could fish in them when it rained,” Murrell says. For years he kept his day job while the boys oversaw the operations. They were the ones running to BJ’s to buy out the stock of Mt. Olive pickles, arguing over how to properly stack a burger and tweaking the menu. They realized, for example, that the big, Fourth of July style burgers they initially prepared were often dry on the outside because it took so long to cook the inside. They switched to two thinner patties, which they continue to use today.

Over more than a dozen years they opened up five more stores, all in the D.C. area, and divvied up the work: Janie, the matriarch, kept the books. Matt, always high-energy and restless to expand, took on opening new stores. Chad, a calm charmer, became the head of training, and Jim, the oldest son, had the scary job of driving from store to store each night to collect the cash. Ben, still in diapers when Five Guys opened, began helping out once he was a teenager.

Chad says he was hesitant to franchise Five Guys at first. “They go to heck once they franchise!” he thought. “We were scared to death.” Eventually the boys decided it would be the quickest way to grow — they only had to convince their dad, who thought it would be hard to teach strangers the Five Guys culture. After many family meetings, Murrell relented.

Businesssweek: In-n-Out Burger professionalizes fast food 

In the first two years they sold the rights to 300 stores, which the franchisees run as independent businesses but according to Five Guys’ standards. In the next two years they sold the rights to another 1,000. As they grew, they never shook a quirky aspect of their management style: frequent yelling during meetings. “It’s weird how it works,” says Sam Chamberlain, the baby-faced COO who joined Five Guys in 2005. “You end up at the answer.”

Perhaps nothing embodies the awkwardness of Five Guys’ teenage growth spurt more than its hamburger buns. The family insists on using a special roll that’s sweeter and eggier than a typical bun. In the early days, Janie’s favorite local bakery, Brenner’s in Alexandria, made the bun. When Brenner’s closed, Five Guys hired two of their bakers and started cooking the rolls in-house, barely keeping up with the demand. “I don’t want to say it was a nightmare,” says Chad, “but it was pretty close to one.”

Everyone was constantly juggling. “I spent three or four months driving a bread truck,” recalls Chamberlain. Chad remembers getting a frantic call one morning from the franchise in Blacksburg, Va., who didn’t get his regular bun delivery. Chad raced to the bakery, filled his car with buns, and started driving south. Hours later, he arrived at the store — just as his dad and brother pulled up with a truck full of buns. When stores opened in Florida, they FedEx-ed buns since they didn’t yet have a local bakery. They finally contracted professional bakeries, overseen by Tyler, to produce the buns. Some franchises still have a love-hate relationship with them. “To us, it’s expensive,” says Tom Horton, one of Five Guys’ largest franchisees. “But it’s also a very good product.”

Businesssweek: Inventing a better burger

Last year, Five Guys sold out the rights to all of the U.S. and Canada — more than 2,500 stores in total. By the end of this year around 25,000 employees will work in Five Guys stores. In California they’re competing against that West Coast cult favorite, In-N-Out Burger.

The Murrells built their business around a series of simple absolutes. No timers in the kitchens — good cooks know when food’s done. French fries must be shaken fifteen times, no more, no less. Onion and bacon go below hamburger patties, pickles and tomatoes go above. Trying to maintain the Five Guys experience — from the quality of the food to the enthusiasm of the staff — has become the biggest worry.

“The more simple the concept, the easier it is to expand,” says John T. Bowen, dean of the hospitality school at the University of Houston. At the same time, growing so quickly means Five Guys must teach their idiosyncratic ways to thousands of people a year and primarily rely on franchisees to represent the brand. “We’ve got the tiger by the tail, and we’ve just got to hold on,” says Ben.

Businesssweek: The 25 fattiest fast foods

When the menu’s so minimal, errors or poor quality become obvious. As franchisee Horton says, “We can’t hide with tofu and sprouts.” Franchises nonetheless often ask to add salads, milkshakes, and chicken, but the Murrells refuse, saying that early experiments with chicken and roast beef sandwiches were just distractions. Chamberlain, the COO, says even he has had a tough time grasping the Murrell way. He recalls once skipping lunch at Five Guys because it didn’t sell milk he could give his baby. The next day, Chamberlain asked Murrell why milk wasn’t on the menu, noting, “It seemed like that would be logical.” Murrell laughed and said “it was the stupidest question he’d ever heard.” They don’t serve milk, Murrell explained, because kids don’t actually like milk, and kids like Five Guys because it’s a treat.

The Murrells realized that while many franchisees clicked with the brand, others never quite got on board. They’ve since bought back around 75 stores and run them themselves. Much of the company’s financing — which includes a $30 million investment from the private equity firm Miller Investment Management and a $100 million line of credit from GE Capital — is funding the development of corporate stores. “It’s a whole lot easier just to run ’em yourself than to try to convince other people how to do it,” Murrell says.

Back at the Virginia Five Guys, Murrell finishes his food and announces that it’s time to go back to the office for the weekly management meeting with his sons, where the family is debating even more growth. As we hop into his pickup truck he explains, “We’re getting pulled real heavy toward Western Europe.” They’ve already started looking for suppliers and potential business partners. Making the final turn into headquarters, Murrell says that, like other decisions, they’ll only move once everyone’s ready. “All my family has is Five Guys,” he says. “We don’t want to screw it up.”