Five Guys was founded in 1985 by Jerry Murrell in suburban Washington DC. Murrell had four sons who didn’t want to go to college, so Murrell thought of using the money he had saved for college to start a burger business. He named it Five Guys after his four sons and himself. In 1987, a fifth son was born and the chain is now named for his five sons.
When he developed the Five Guys concept, Jerry wanted to capture the authenticity of a burger joint in the small town in Michigan where he grew up. Five Guys created a new twist in the fast-food burger market. The burgers are not mass-produced, like they are at McDonald’s and Burger King, but are made to order and served with a large helping of hand-cut fries. Five Guys serves only hand-formed burgers grilled to perfection. The fresh-cut fries are cooked in pure peanut oil.
Five Guys has helped to build what has become known as the “Better Burger Category” of fast-casual restaurants. “Better Burgers” are hamburgers which sell in the $8 range. “Better Burgers” are now a $2.2 Billion segment of the hamburger market that grew 16% in 2011. Five Guys has nearly 50% of that segment. The entire fast-food burger category is a $40 billion industry in the United States that is dominated by McDonald’s, Burger King and Wendy’s. Growth in this segment has been more modest at about 3%. Americans are falling in love with a better burger product.
Other “Better Burger” chains existed before Five Guys. In-N-Out Burger, which started in California was founded in the late 1940’s, Fuddruckers started in 1980. The category really took off around 2005 with the rise of Five Guys. Burger Lounge, based in San Diego, is offering a grass-fed beef in its burgers and has a unique place in this growing category.
Today Five Guys has more than 1,000 stores nationwide. The Murrell family runs 200 of them and the rest are franchises. All of the franchise territories in the United States and Canada have been sold.
Five Guys has built a strong loyal following through word of mouth. Five Guys has also benefited from some great press. In 2009, President Obama stopped in for a cheeseburger, with dozens of cameramen in tow.
Five Guys is a great example of brand that has been built by focusing on delivering a great product and an excellent customer experience. They have for the most part avoided traditional advertising.
Who makes your favorite hamburger?