“We are pleased to announce that we are currently sold out in the United States and in Canada.” Five Guys Burgers and Fries We bet they’re pleased. So how have they done it in just ten years? Why are both burger lovers and entrepreneurs now queuing up for Five Guys in Britain? Do Five Guys’ burgers live up to the hype? And what are Five Guy's 10 secrets for building your own cult business?

1. How to build a
cult following
for your business

2. “We arepleasedto announcethatwe arecurrently
sold out intheUnitedStatesand in Canada.”
Five Guys Burgers and Fries
We bet they’re pleased. So how
have they done it in just ten years?
Why are both burger lovers and
entrepreneurs now queuing up for
Five Guys in Britain? And do Five
Guys’ burgers live up to the hype?

3. Five guys is on a roll.And boy, whata roll.
When they made the decision to start franchising in 2003, they
had just five stores around the Washington DC area. Eighteen
months later they had sold more than 300 franchised locations,
catching the attention of the national restaurant industry.
Now they not only have more than 1000 stores but a further 1500
under development. And they’ve just opened a store in London
that had people queuing overnight and round the block before the
opening, and announced a plan to open up to 300 stores over the
next five years in the United Kingdom.

4. Whatarethesecretsof FiveGuys’ success?

5. Secret#1:Use franchisingto expandyour business
Five Guys’ founder Jerry Murrell was
initially against franchising. “I just
wasn’t sure I could get strangers to buy
into our concept,” he said. But his
sons—the ‘five guys’ in the business’s
name—pushed him.
"I didn’t know what I had at first," Murrell said in the low-key way
he has of talking. "Everything was telling me it was a good
opportunity to be successful."

6. Secret#2:Hirechampions
Once the decision had been made to
franchise the business, Murrell enlisted the
help of specialist franchise development
company, Fransmart, and met Mark
Moseley, a former American football star.
Trying to prove he could make it big in
business as well as sport, Moseley had
suffered a string of business failures since
retiring from football. Murrell recognised
Moseley’s hunger for success, but he had no
idea how successful he would be.

7. "Mark said he could sell 100 stores the first
year,” Murrell says. “I’m thinking this is just
another football player talking. I crossed out
100 [on the contract] and wrote 20. He sold
something like 350. Mark’s been a really big
asset for us. People trust him.”

8. Moseley hasn’t been Murrell’s only
brilliant hire. One of his earliest
employees was his director of franchise
development for the North-East United
States, a man who goes by the name of
McGuire – just McGuire, one name like
Sting and Madonna.
He is famous for dispensing free burgers at conferences and
events, explaining that one bite into a Five Guys burger is a better
sales pitch than anything he could say in words. He has been
described as part of “this edge, the thing that sets Five Guys apart,
that has fuelled its fast growth and its quick acceptance by burger-
lovers in search of a mystique to call their own.”

9. Secret#3: Don’t deviatefrom thecore
“The only thing we did right was stick to our guns,” says Jerry
Murrell.

10. Five Guys is as famous for whattheydon’tdo as what
theydo.
They don’t do chicken burgers, only beef.
They don’t have drive-throughs because Murrell didn’t think they
were suitable for an establishment that prides itself on hand-
made burgers and “slow” fast food.
They don’t advertise.
They don’t use any other oil for frying but peanut oil, even though
by doing so they eliminate as customers the one in every hundred
people who have peanut allergies.

11. And theydon’tdeliver.evenwhenrequested,
famously, bytheWhiteHouse.
“When the President of the United States wanted to get Five Guys,
he had to go get it himself,” Murrell says. You can bet Five Guys
took full advantage of that photo opportunity.

12. Secret#4:Maintaincontrol
The Five Guys franchise agreement is so
tight that even Murrell says he isn’t
sure he’d sign it. But that hasn’t put off
Tim Horton, their largest franchisee
with 75 stores and the rights to open a
further 275, even though he says:
“They [Five Guys] maintain first right of refusal. If you make a deal
to sell your operation to a guy who’s wearing green shoes, the
Murrells can decide they don’t like green shoes and nix the deal.”
The deciding factors for Horton were trying the product and liking
it, and the quality of the investment.

13. Secret#5: Let theproductsellthefranchises
for you
Despite criticism in some quarters of
the greasiness of their patties and the
unhealthiness of their menu in general,
Five Guys has established itself as an
American favourite, as the survey
results in the next slide show.
“We believe the best salesperson we’ve got is the customer
standing right in front of us,” Murrell says. “If we treat him right,
then he’ll go out and tell everybody about it. That’s marketing to
us.” And where customers go, franchisees will follow.

15. Secret#6:Buy backpoor performingfranchises
Five Guys’ franchisees tend to be raving
fans of Five Guys, but despite this and
the Murrells’ rigorous selection criteria,
every now and again a franchisee will
come on board who doesn’t quite click
with the brand and fit with the culture.
Five Guys’ strategy is simply to buy them out. So far they’ve done
that with around 75 stores. “It’s a whole lot easier just to run ’em
yourself than to try to convince other people how to do it,” Jerry
Murrell says.

16. Secret#7:Buildtherightculture
As we’ve seen, a major factor in Five
Guys’ success has been motivated and
engaged employees, and that’s as
important on the shop floor as it is in
management. To ensure employees are
as motivated and engaged as they
should be, Five Guys uses mystery
shoppers to audit every store’s performance . They reward
exceptional customer experience with a bonus of $1000 per week
per store, to be divided up amongst all the staff, so everyone is
incentivised to perform.

17. Secret#8: Embracethehottestconcepts
Would Five Guys have been so
successful if they hadn’t ridden on
the back of two of the hottest
trends in the food service industry
today – the “better burgers” boom
and the “fast casual” dining format
? We think not, no matter whether
this happened by good luck or
good management.

18. Secret#9:Sellmultipleunit franchises
You can’t buy a Five Guys franchise for a single store, only for a
minimum of five stores, which provides individual franchisees with
the opportunity for enormous growth – provided they have the
required startup capital, access to credit and the right location.

19. Here’san advertisementon thebizbuysell.com
websiteintheUnitedStates:
“Exclusive 22 store franchise territory with 4 established and profitable
locations located in Western United States within a two county area.
Purchaser must qualify to franchisor and be financially qualified to
expand and develop territory in a strategic manner within a 5 year period.
It is anticipated that a new store will open approximately every 5 months.
Annual revenue $4,611,514 and owner cash flow $596,970. With the
addition of 4 more stores between October 2012 and December 2013, it
is anticipated that weekly revenue will double with a corresponding
doubling of owner cash flow to approximately 1.1 million. All exclusive
territories in North American currently have been sold and are being
developed. Sellers liquidating to pursue other business ventures.”

20. Secret#10: To expandoverseas,workwiththelocals
In keeping with its strategy of
providing local franchisees with the
opportunity to open multiple
stores, but on a larger scale, Five
Guys has an agreement with a
British investment firm run by Sir
Charles Dunstone, the founder of British mobile phone retailer
The Carphone Warehouse, to open 200 to 300 stores in Great
Britain. They also have plans to enter the massive Chinese market
and have had offers from Middle Eastern investors, but are
treating Great Britain as a test case. “We’ll get our feet wet in
England first,” says Morrell.

21. Buthas FiveGuys got whatit takesto makeit in the
UK?
The first British Five Guys restaurant
opened on the fourth of July to queues
of enthusiastic and patient Londoners,
but critics have been lukewarm.
“In a really crowded market, it’s
branding and personality that separate
them [burger chains], so I think the interesting thing with Five
Guys … is whether London will give a shit,” says Gavin Lucas, writer
of burger reviews blog Burgerac.

22. Thetruetestmay bewhatBritonsthinkof Five Guys’
famous burgers
In a review of several London burger establishments entitled “In
search of the perfect burger”, Guardian writer Marina O'Loughlin
had this to say about the Five Guys Cheeseburger:

23. Meat: Two grayish patties, granular and super-greasy. Cheap-tasting with
a weird boiled quality.
Bun: Clammy, sesame-topped – it looks like it came from Burger King. And
then someone sat on it.
Toppings: "There are over 250,000 ways to order," they crow. My sugary
relish and gooey orange cheese means I'm not trying the remaining
249,999.
USP: DC import brought to us by boss of Carphone Warehouse; queues of
up to two hours for one of these foil-wrapped disappointments. Can only
attribute it to mass hysteria.
1/5

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