In the last few years the business press has been inundated with stories of business failure. In this post I want to write about a business that has continued to soar in spite of the challenging economic environment: Five Guys.
Five Guys is a fast food franchise restaurant company that focuses on hamburgers and fries. In 2012 the company’s sales are expected to exceed $1 billion and Five Guys was recognized as the fastest growing US restaurant chain by Nation’s Restaurant News. In the past year Five Guys’ sales have grown 31.84% with unit growth of 24.73%. The company now has over 1000 restaurants across the U.S. and Canada with plans to expand overseas to the UK in the upcoming year.
Here are five reasons for Five Guys’ success:
1. Word of Mouth Marketing: There are no Five Guys restaurants in my area yet, however this restaurant has gained a cult following similar to that of In & Out Burger, so it’s hard not to have heard about them. Recently on a trip back from California my husband and I stopped at the one in Roseville a few miles off the freeway, to see what the fuss was all about. Surprisingly it lived up to the hype! Five Guys are a word of mouth phenomenon, having built their brand on customer referrals and media reviews. Even the Kardashians have promoted Five Guys for free! As these tweets show:
2. Simplicity: Five Guys have a very simple menu, but it is this simplicity that is key to their success, as Inc. columnist Jeff Haden acknowledges:
3. Top Notch Ingredients: Five Guys are focused on offering a quality product made using the best ingredients. Even though this causes high costs and higher than average prices, the great food justifies it and keeps customers coming back. This focus on food quality differentiates Five Guys from many of their fast food competitors and has earned them numerous cuisine awards including Zagat survey appearances every year since 2001.
4. Treat Customers Right: Fast food restaurants are not necessarily known for good service.however Five Guys may be the exception. On entering the Five Guys restaurant in Roseville an employee took the initiative to approach us and ask if we’d been to a Five Guys before. On learning that we hadn’t, the employee took the time to explain how the orders worked, available topping options and portion sizing. Five Guys’ focus on their customers extends to their public acknowledgement that their success is dependent on their patrons. Check out this sign posted in many of their restaurants:
5. Treat Employees Right: Five guys CEO Jerry Murrell, advocates treating both employees and customers’ right. This approach is very reminiscent of the fast food restaurant described in Greg Blencoe’s SuperManager book which I reviewed in a past post. Employees are paid above minimum wage and many of the restaurants offer health insurance to crew members, which is outside the industry norm. Even more surprising the company does little advertising in order to give employees bonuses.
Five Guys have soared in recent years and time will tell if their success can be sustained. But what do you think? Share your thoughts in the comments section below. And if you haven’t been to Five Guys, visit their website to find your nearest restaurant.
Marie Wiere's Blue Sky Management Blog 
Marie,
I’ve never been to a Five Guys fast food restaurant before. But I really like what you mentioned about how they treat customers and employees. I’m glad you and your husband had such a good experience there. And I love the Thank You Customers sign.
Thanks so much for mentioning how their approach is similar to the fast food restaurant in The Supermanager. I really appreciate it!
I clicked on the store locator link and there is a Five Guys restaurant in an area of Knoxville that I usually go multiple times per week. I’ve just started trying out a vegan diet, but they mention on their website that their fries are OK for vegan diets. Therefore, I may go there soon and have some fries. I always love seeing businesses that are well managed.
Thanks Greg, if you go it will be interesting to see if your experience is consistent with my visit and research. Their fries are great too!
Marie,
I went to a Five Guys location in Knoxville earlier today. I was really impressed.
I spoke with an assistant manager for about 5-10 minutes. He was really, really nice. Also, I gave him a copy of The Supermanager.
And you were right about their fries!
Thanks for writing about this impressive company.
That’s great Greg. I love that you had a similar experience in the Knoxville location. Its brilliant you gave the assistant manager a copy of the Supermanager, he will love it i’m sure. It would be great if some of these restaurants would partner up with you and give all their managers a copy of your book.
Five Guys just opened here in Winnipeg. The line ups are long and according to my son and his girlfriend, the food outstanding and well worth the price. Five Guys, like another pizza restaurant here in Winnipeg, (http://www.dianasgourmetpizzeria.ca), made the conscious choice not to compete on price and instead focused on quality product and great service. By doing so, they eliminated the cost-conscious consumer from their customer base, but as they so clearly demonstrated, there are a lot of people willing to pay more for both those qualities.
Thanks for your insights Laurie. Its interesting to hear how similar an experience Five Guys customers are having in other local markets.