ENTREPRENURIAL LEADERSHIP
The Five Guys Story
Jeanne M. Catalano
Strayer University

Authors Note
This paper was prepared for Bus 508 Contemporary Business
Taught by Professor Dr. Nayak

Passion, creativity, and the desire for the Benjamin ignites the flame in which entrepreneurship grows. One such man, Jerry Murrell gave his kids an option: college or run a business, and thus, Five Guys and a Burger was formed in Arlington, Virginia. (Boone, 2012, p. 78). Like all other small businesses’, Jerry faced obstacles such as competition, supply and demand, and capturing market share all while trying to maintain an ethical and socially responsible business. Jerry has maintained this success by following one simple recipe for success: burger and fries (“Five Reasons,” 2010). This simple concept along with his 5 rules of the business: best salesman is the customer, every position has ownership, know what your good at and stick to it, quality is everything, and employee incentives has catapulted Five Guys into over 16 years of business. (“Five Reasons,” 2010). Since 1986, despite the recession, the beef crisis, and competition, Five Guys have not only sustained their business but have almost doubled in size. Over the years, Jerry has stood by his original value to just sell burgers and fries and execute it well (Joiner, 2012). His philosophies have remained strong and his success can be attributed to three main factors: Product specialization, human resources, and branding. Product specialization, has given Five Guys the competitive differentiation they need in the market. Burgers are made to order and fresh never frozen with up to 15 free toppings (Boone, 2012, p. 78). This leads to over 250,000 burger combinations (FGH, 2012). Under FAQ’s they only use 80/20 chuck ground beef for quality and cow fat is absent. They always cook their burgers well done to ensure a consistent juicy flavored product across the board that meets health code standards (FGH, 2012). Buns are baked fresh from a bakery and toasted on the grill for a caramelized taste (“Five Reasons,” 2010). Fries are fresh cut from Idaho potatoes and employees even have to go to fry calibration classes in order to learn how to make the perfect fries (Burke, 2012). In order to maintain social responsibility to the public, FGH (2012) posts on their website a nutritional chart in order to aid the diet conscience. In the FAQ area, Five Guys supports humane treatment of animals. They also state warnings for consumers with peanut allergies and use no trans-fat and also only cook in peanut oil (FGH, 2012). Joiner (2012), reasons they pay higher prices for their food products to ensure quality. Like Joiner (2012) states, “the ability to deliver a consistent taste and flavor sensation or much tailored taste and sensation is critical to the long-term success" (Doing one thing, para. 2). The second strength is Jerry’s human resources and social responsible of his employees. Boone (2012 p. 47) states social responsibility is, “management’s acceptance of the obligation to consider profit, consumer satisfaction, and societal well-being of equal value in evaluating the firms performance.” Jerry devotes a lot of time in developing a quality work force and rewards his staff through means of incentives, health compensation, and more instead of having a marketing budget (Joiner, 2012). This rewards hard work, ensures quality control, and motivates employees to continue their success (“Five Reasons,” 2010). Boone (2012, p. 9) emphasizes that “Effective, well-trained human resources provide a significant competitive edge because competitors cannot easily match another company’s talented motivated employees.” Joiner, (2012), quotes him saying, “Hire well-paid people and they’ll stay with you” (Treating para. 1). Relating to his philosophy of employee ownership, incentives and a voice are two powerful concepts to get accountability and loyalty from his people (“Five Reasons,” 2010). The third main factor for their continued success is their branding. Branding creates an identity in the eyes of a consumer and helps to identify the products or attributes of the particular company (Boone, 2012, p. 15). The branding of Jerry’s message, image, and experience is his best marketing asset. Five Guys brand message is very simple and straightforward. By having a selective menu, consumers do not have to constantly figure out what they want. (Burke, 2012). Every Five Guys location has a simple red and white checkered décor because their money is spent on the food (“Five reasons,” 2010). This décor also fosters an image of being clean, simple, and friendly. The last element to branding is the experience. Five Guys offers free peanuts to consumers waiting in line to combat the wait which definitely eases the impatience. There are no drive up windows in order to showcase custom made orders. By having an easy to choose from menu and offering optimum quality of fresh never frozen food consumers leave with a taste on their pallet (Joiner, 2012). Five Guys solidifies the ultimate experience by ensuring customer service is always up to par through secret shoppers. (“Five reasons,” 2010). In the end when you think burger and fries you think Five Guys. Five Guys is just one player in the mass Burger Empire and has fared positively well compared to the industry against competition and market factors. Big name burger joints are now trying to offer Angus Burgers, but they attract their consumers by offering the next best thing on the value menu. FGH (2012) states, “We do not discount the price of our product because we refuse to discount the quality of our product” (FAQ’s, bottom page). Jerry’s pricing much like the competition is reflective of supply and demand. Since he only buys the top quality products when beef prices rise so do the price of the burgers (Burke 2012). Hirsch (2013) recalls that beef prices rose 10% in 2011, and consumers felt that in their pockets when prices skyrocketed in restaurants. Simply put there are less cows and Hirsch (2013) feels, “supply pressure from high feed costs and rising demand as consumers shift to less expensive protein choices from beef” (line, 42). The drought hurt everyone but Five Guys still tapped into the market that will pay that top dollar for pure quality and survived the competitive drive of cheap meat and discount pricing. Another strength over competition is innovative business decisions. While the detriments of a recession which crushed a lot of the competition, Jerry capitalized on cheaper rents and competitive labor. Recruiting during a recession gave him a higher competitive advantage in his human resources. Five Guys franchising rights have sold out even during this time because Jerry doubled the equity value (Burke, 2012). Jerry has decided he wants to maintain his company as private. He likes to have the ownership to know he is running a quality business to the standards in his business plan. Five Guys has even maintained another competitive advantage by not going into the global market full force like some of the other brands. Jerry is playing it smart and only now after 20 years in the business has decided to open a five guys in Great Britain. Jerry wants to make sound business decisions in order to ensure his brand remains true to his dream (Joiner, 2012). By sustaining his original values, Five Guys has grown into a solid household name. His idea of free marketing as quoted in “Five Reasons,” (2012), Every Position at the Company Has Value
Know What You’re Good at – and Stick With It
Quality Is Everything
Employee Incentives Go a Long Way
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 Five Guys Burgers and Fries in 1986. Today, there are 570 stores across the U.S. and Canada, with 2009 sales of $483 million. Though we weren’t able to coax out his secret recipe, Murrell shares with us five things that helped him expand one lone burger joint into a national franchise.
"Treat that person right, he’ll walk out the door and sell for you" has remained true (p.2). His belief in employee and consumer responsibility has made him into an ethical leader. Many other businesses would find it hard to maintain a consistent brand, Burke (2012), attributes Five Guy’s continued success by the strict reins Jerry has with his franchise agreements. In the face of adversity, Jerry sticks to his guns: the menu doesn’t change, the design doesn’t change, and the expectations do not change. Capitalizing on his product specialization, his human capital, and his branding, Five Guys has truly shown the world it’s as simple as burger and fries.

References

Boone and Kurtz. (2012) Contemporary Business. Hoboken, New Jersey: John Wiley and Sons.
Burke, Monte. (2012, July). Five Guys Burgers: America's Fastest Growing Restaurant Chain.
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Joiner, Lottie. L. (2012, August). Five Guys found simple recipe for success: Do it right. USA Today.
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