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Five Guys Simply Done Right

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Five Guys Simply Done Success
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BUS508 Assignments and Rubrics
January 28, 2012

Five Guys Simply Done Success The Five Guys phenomena is simple and true by never cutting corners, letting the products speak for itself, never over delivering but let customers spread the word of their goodness and hiring a well trained staff (White, 2009). The founder of Five Guys developed these strategies in each of the initial five stores. The same strategy would be used subsequently in all of the 200 company stores and the 839 franchise stores in the United States and Canada (Burke, 2012). In each of the 1000+ stores the menu is the same, burgers are made fresh daily, French fries cut daily featuring the name of the farm that grows the potatoes, and a kosher hot dog. The only menu choice a customer might have is what they want on their burger. Murrell decided that a simple menu of food made perfectly was the key to their success (Welch, & Murrell, 2010). Too many menu items would result in employees not making something right, followed by negative press eventually putting them out of business. Sticking to the basics has taken the chain on a path of success which has garnered them a market share of $1.1 billion dollar of a total $2.2 billion dollar industry in the “better burger” market (Burke, 2012). Simply making burgers has proven to be the best investment made by Jerry Murrell as a means of keeping his family close. Five Guys concept is as simple as the burgers made at any Memorial Day or Fourth of July cookout. This chain seems to have gotten it right when most businesses overextend themselves providing too many choices while trying to please a broad customer base (Burke, 2012). Too many choices will send customers to too many places for less than great food. Five Guys learned early on that focusing on a few select menu items was the key to their success (www.fiveguys.com). Not only did they learn that a few select items would be the key, but they also learned cooking each item to perfection was also a key. Each staff is trained on the preparations of the menu items until they get it right every time. Five Guys Burgers and Fries has taken the phrase, “keeping it simple” to the next level. Their mission statement is simply, “We are in the business of selling burgers,” lend true to their initial cult following (www.fiveguys.com).

Walk into any Five Guys restaurant and you will find a sign hanging over the beverage machine known as the Service Promise: “You the customer are the most important visitor on our premises. You are not dependent on us, we are dependent on you. You are not an outsider in our business—you are a part of it. We are not doing you a favor by serving you –you are doing us a favor by giving us the opportunity to do so” (Five Guys Restaurant Mission Statement - Burgers Are the Business & the Mission, 2013). Now talk about keeping it real and keeping it simple, Five Guys has let the customer know that they are only as successful as the customer allows. Great service for a great product has taken on new meaning in the world of fast food.

Great customer service in any business module will bring customers back. However, Five Guys has found a way to take that service to a new level even by the way they maintain longevity of their employees. Getting employees and eventually franchisees to buy-in to the simple is best concept was both challenging and later rewarding to all. Checking behind the employees working for minimum wage using a 46-item checklist in order to incentivize them has proven to be one of the best processes any company has put in place (Weise, 2011). The evaluation measurements are used to provide the store that receives high marks with a monetary award on a regular basis resulting in longevity of staff (Weise, 2011). Mystery shoppers are used to evaluate each store on a regular basis to ensure that they are providing the best quality service to customers and a product they love (Frumpkin, 2010). A minimum wage earner receiving a monetary reward for service bar none will make any employee soar high and do well in any environment. Just think a few simple decisions have made Five Guys a leader in establishing franchises in a ten year span. Five Guys franchises have grown exponentially when one of the biggest decisions was made in 2002 as a result of Matt presenting his father with a copy of Franchising for Dummies (www.fiveguys.com). Jerry read the book and the family voted to franchise the business. The family met with Fransmart, a franchise-development company, and three days after the decision was made the rights to all franchises in Virginia were sold (Burke, 2012). Fransmart used its national database opening the door for potential franchisees to Five Guys one of the fastest growing franchises in the country. Every step Five Guys management team has made has catapulted them into leading the nation in revenues and new start-ups. However, the spark that lit the fire on franchise openings came in 2009 when President Obama dropped by for a cheeseburger with the media in tow (www.fiveguys.com). Potential franchisees wanted in and Murrell set about to create a formula for those that wanted to be a part of Five Guys. Each franchisee must have a net worth of $1.5 million dollars and a liquidity of $500,000 (White, 2009). Start-up costs include an upfront fee of $20,000 and $75,000 per store in additional fees. Each franchisee has between ten and fifteen stores with each store costing $300,000 to $500,000 to open and they average annual revenues of $1.2 million dollars (Frumpkin, 2010). “Better burgers” never tasted better until Five Guys came along. There have been many chains to start up since the 1940s, however, none as successful, and with a simple philosophy as Five Guys. The likes of In-N-Out Burger in the west, Fuddruckers, Smashburgers and Shake Shack have come along providing a great product, but Five Guys has surpassed them all (White, 2009). Franchises break even in as little as two and a half years making it a very wise investment. Though there have been a few problems with franchisees the most common frustration is the constant attempt to add additional items on the menu (Weise, 2011). However, no matter how many request for milkshakes, coffee, and chicken sandwiches the menu at Five Guys stays the same. Five Guys have bought back several stores due to the company’s stance on a simple menu (Weise, 2011). The rights to franchises have sold out in the United States and Canada at a rate of increase of 792% in a ten year period. An agreement has been signed with Freston Road Investments to open 200 to 300 stores in Great Britain (Frumpkin, 2010). It is no wonder there are requests for new franchises made daily. A company destined for success as simply done as spreading the word about a great burger and fries. Five Guys further keep it simple as they do not advertise. However, they do have social media accounts such as a Facebook page and Twitter account (DATAMONITOR: Five Guys Case Study, 2010). Social media has played a part in spreading the word about the delicious burgers and fries from Five Guys with the help of over 800,000 plus subscribers. Advertising has never been easier or cheaper with word of mouth spreading the word about the best burgers and fries made all across the country. Five Guys has so far gotten it right. They have taken a simple concept and made it the milestone of success for a company whose main focus was to keep a family close (Welch, & Murrell, 2010). They have focused on producing a perfect product while keeping an eye on flooding the market with franchises. Little did Jerry Murrell know that when he told his three sons they could either go to college, or they could take the money, and start a business (Welch, & Murrell, 2010).
References

Burke, M. (2012). All in the family. Forbes, 190(2), 92-97. Business Source Complete,

EBSCOhost (accessed January 25, 2013).

DATAMONITOR: Five Guys Case Study. (2010). Five Guys Case Study: Maintaining Growth

in Fast Food with a Simple Menu & Quality Focus, 1-11. Business Source Complete EBSCOhost (accessed January 25, 2013).

Five Guys restaurant mission statement - Burgers are the business & the mission (2013)

http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Five-Guys-Mission-Statement.htm. Retrieved January 25, 2013

Frumpkin, P. (2010). High 'five'. Nation's Restaurant News, 44(16), 3-14. Business Source

Complete, EBSCOhost (accessed January 25, 2013).

Five Guys burgers and fries (2013). http://www.fiveguys.com/about-us.aspx.

Retrieved January 23, 2013.

Weise, K. (2011). FIVE GUYS. Bloomberg Businessweek, (4242), 70-73. Business Source

Complete, EBSCOhost (accessed January 25, 2013).

Welch, L., & Murrell, J. (2010). Jerry Murrell: Five Guys burgers and fries /. Inc, 32(3), 76-80.

Business Source Complete, EBSCOhost (accessed January 25, 2013).

White, R, (2009). Lessons from a burger joint. Electrical Wholesaling, 90(3), 53.

Business Source Complete, EBSCOhost (accessed January 25, 2013).

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