Five Guys, Taking a Bigger Bite
Monday, April 3, 2006
What a lovely day Tosca Campbell and her daughter Angela Zier are having together. The women just had their nails done at Elizabeth Arden. Look at those nails, painted bright red. But truth be told, there is one more stop that will make their afternoon complete. They'd like a nice, juicy cheeseburger.
So off they go to main street in the stylish Kentlands development in Gaithersburg, bypassing the Thai place, the 1950s-style diner, Latin American food, Indian, sushi, Greek, even Starbucks. Their destination: Five Guys Famous Burgers and Fries, a little joint with all the charm of an RFK Stadium bathroom. The walls are tiled red and white. The floor is a cement slab, covered with peanut shells. The music -- Kiss -- is too loud. And the burgers are flying off the grill, wrapped in aluminum foil, stuffed in greasy brown bags and handed to real estate agents, bankers, UPS drivers, physical therapists, cops, lawyers and women with freshly painted nails.
"This is a good old-fashioned American hamburger, like the kind my mom used to make," said Zier, pausing between bites of her cheeseburger. She is married to Bennett Zier, who heads Daniel Snyder's new Red Zebra Broadcasting venture.
"I mean, look at my mom -- she's just eaten that whole burger." And her nails still look fabulous.
Four years ago, before franchising, Five Guys was just a little family burger operation with five locations and a steady, if cultish following, in Northern Virginia. Today the business is by some estimates heading toward $1 billion in value. Five Guys has 87 locations. Most are in the Washington region, but a hundred more will open along the East Coast this year, and another thousand are being phased in. Each store, the company says, 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 a little bit of a burger whodunit. The Murrells can be gregarious, but they are given to moments of silence when asked how their business grew so big. Their success probably includes a combination of ingredients, though: keeping the business strategy simple (sell burgers and fries) while implementing quick and crucial cooking procedures (press down on the burger just once) that result in a quickly delivered, but juicier, more upscale burger than McDonald's.
"We are the burger alternative to fast food," said Todd Stallings, an owner of the Kentlands franchise. "At McDonald's, the food waits for you. Here you wait for the burger. By doing that, the burger is just coming off the grill. People just appreciate that kind of special quality."
Anyone can flip burgers. What the Murrells have is a singular obsession for flipping burgers, almost as an art form, and the ability to infuse that passion in their franchise owners. All five sons bypassed college to work in the business; the two youngest, Tyler, 19, and Ben, 23, were born into it. Their passion is so strong that arguments have erupted over topics such as: Should the pickles go on top of the tomatoes or should the tomatoes go on top of the pickles?
"Me and Chad, we used to always argue about this," said Matt Murrell, at 37 the second-oldest son, who is in charge of store development. "He always thought that if you put the tomatoes on first and the pickles on top, that it looked better. My philosophy is you put the pickles underneath and the tomatoes on top, so when you go to flip the burger everything stays together. Who won? Me. The pickles go under the tomatoes."
There is a little more to the growth story than resolutions about the orderliness of pickles and tomatoes. For starters, there is the fertile location of the chain's birth. The Washington area is densely populated, and lately a good chunk of that population is in the habit of coveting things that are slightly better than what everyone else has. People don't just want an iPod; they want the iPod Nano. They don't just want a hamburger; they want what Five Guys offers, two freshly formed patties grilled to order right in front of them. Price: $4.49.
"You could get a cup of coffee your whole life from home or from 7-11, but now you're not happy unless you go to Starbucks," said Dan Rowe, chief executive of Fransmart, a Virginia consulting firm that helped launch the Five Guys franchises. "You could get a sandwich at a million places, including Subway, but people go to Panera Bread instead."
Rowe is hinting at a phenomenon called "trading up," which is typically thought to include purchases of high-priced goods. But there is trading up at the other end of the price chain, including fast food. "The tide raises all boats," he said. "If you have an environment where people are trading up, it affects everything from cars to clothes and even to food. Think about what a simple indulgence it is to trade going from McDonald's to Five Guys."