![]() ![]() Both McDonald’s and Burger King have introduced burgers made with higher-quality Angus beef, moves Darren Tristano, an analyst at Technomic, views as a direct response to the “better burger” chains. Should McDonald’s and the others be worried about Five Guys? “We could never compete with them on price,” says Murrell. Growth there has been slower, at 3.2% last year. (Five Guys represents nearly half of the segment.) The entire burger category is a $40 billion industry in the U.S., dominated by McDonald’s,Īnd Wendy’s. Not a bad return on an initial investment of less than $70,000.įive Guys rules what’s known as the “better burger” category (hamburgers in the $8 range) of fast-casual restaurants, a $2.2 billion segment that grew 16% last year. The company is worth an estimated $500 million, which puts the Murrells’ stake somewhere around $375 million. Miller Investments, a boutique Philadelphia firm, owns 20% of the company, and a few of Murrell’s school buddies own the remaining 5%. The seven Murrells each own equal shares of the company, which add up to 75%. Corporate revenues, from company-owned stores and franchise fees, will be roughly $275 million, with a cash flow of $50 million. The entire chain, including sales at the franchises, will surpass $1 billion in revenues this year, up from $950 million in 2011. (Its nearest competitor is Jimmy John’s, which grew 241% over the same period and has 1,329 stores.) Five Guys, with a mix of company-owned (200) and franchised (839) stores, has sold out all of its franchise rights in North America. ![]() Since 2006 the company has grown 792%, according to Technomic, a Chicago-based food industry research group. and Canada, and another 1,500 committed to build. And the money? The private burger chain has 1,039 stores open in the U.S. He, his wife and all five of his sons (the “five guys”) work for the company, live within 20 minutes of one another and vacation together every summer. Murrell initially had the idea for a higher-quality burger restaurant back in 1986, as a way to keep his family nearby and, perhaps, make a little money on the side. Such are the problems of being the fastest-growing restaurant chain in the U.S., which has doubled its number of stores since 2009. “We work day and night on them, all the damn time.” “Fries are much harder than burgers,” says Murrell. For the past two days this store, along with a dozen others, has been involved in an intense “fry calibration” class led by Murrell’s third-eldest son, Chad, who has drilled them on the proper mix of starch, water and temperature needed to create the perfect french fry (Murrell believes cooking is about feel there are no timers in his restaurants). Murrell.” They have reason to be nervous. The staff-a gaggle of twentysomethings-is jumpy, deferentially calling him “Mr. ![]()
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