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Five Guys: just burgers and fries

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in Leaders & Managers

When his first two sons decided to open a burger joint using their college tuition money, Jerry Murrell said, “Go for it.”

Murrell has a few simple operating principles for Five Guys Burgers and Fries, which started with a takeout shop in northern Virginia and now has 570 franchises.

Just before the first store opened in 1986, he stumbled across a book about J.W. Marriott, who said anybody could make money in the food business with three things: a good product, a reasonable price and a clean place. It is difficult to budge Murrell off these principles:

1. Never cut corners on quality. Murrell noticed only one fry place at the beach consistently had long lines because it used the best potatoes and peanut oil.

Most Five Guys potatoes come from Idaho—he buys about 8% of the state’s baking potato crop—because he wants them grown north of the 42nd parallel.

“Potatoes are like oak trees—the slower they grow, the more solid they are,” he explains. “We like northern potatoes because they grow in the daytime when it is warm, but then they stop at night when it cools down. It would be a lot easier and cheaper if we used a California or Florida potato.”

2. Let food prices fluctuate. Five Guys bases its prices purely on margins, so what customers pay reflects food costs.

A few years ago, hurricanes killed the Florida tomato crop, shoving up prices from $17 to $50 a case. Some franchisees wanted to stop using tomatoes, so Murrell suggested using one slice instead of two per burger.

“My kids were furious: ‘It should be two! Always!’ They were right—it’s too easy to start slipping down that slope,” he says. “We stuck with two slices, and so did our franchisees.”

3. Keep the premises spartan. Five Guys joints are small and spare, with red-and-white tile walls and floors scrubbed clean.

Murrell has one more secret: He expects a lot from associates and franchisees, and in return he places a lot in their hands. Five Guys accepts only financially sound franchisees that can weather down markets with no help from banks.

But this anecdote is probably the key to Jerry Murrell: As a broke college student, he ran the kitchen at a fraternity house, where he got the cook a raise and let her do the ordering. “We started making money because she knew what she was doing,” he says.

Of course she did. And so did he.

— Adapted from “Jerry Murrell: Five Guys Burgers and Fries,” as told to Liz Welch, Inc. magazine.

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