Building a (Better) Burger Empire

By Daniel P. Smith of Michigan, university life—and the Five Guys founder shocking array of on-campus s a U-M student, Jerry Murrell, brainpower—delivered a life-changing, ’67, took a job at a local diner Jerry Murrell discovers soul-motivating lesson. “With all these near the campus bookstore, scholars around me, I thought I was a greasy-spoon setup that success with a simple out of my league. It woke me up to the couldn’t hold but 20 guests. competition I was going to face in life “The guys who ran it always drove plan and inspiration and made me humble,” Murrell says. anice cars, and I thought people were Responsible for paying his way selling the business short,” through school, Murrell worked in the Murrell says. In other words, it didn’t from his college days. dorms and later managed the kitchen seem like a viable career path to others, at the Kappa Sigma fraternity house even though Murrell saw its potential. on Hill Street. Unknowingly, he began “It seemed to me a good little food laying the groundwork for a world he place could make a lot of money.” could sell a good and give would inhabit some two decades later. Turns out, Murrell’s suspicion was a good haircut, you’d be OK in this “Running the frat house kitchen was right. world,” Murrell says. “I don’t know probably the most fun I had in college,” As the president and CEO of Five about the haircut, but they were dead Murrell says.

orones Guys Enterprises, Murrell’s family-run on about the hamburger.” Walking to class one frigid winter burger-and-fries empire boasts more than Back in the 1960s, Murrell never day, Murrell stepped into an Ann 750 with sales approaching could have envisioned his current Arbor restaurant with nothing more $1 billion. The company, based in reality. A native of Alpena, Michigan, than pocket change for coffee. The Lorton, Virginia, has experienced a a northern mining and timber town of owner dropped a plate of pancakes and rocket-ship rise and emerged the top 11,000, Murrell long dreamed of eggs in front of him. “That impressed

M ike by ar t icle os th is player in the surging, and increasingly attending the University of Michigan. in me the value and importance of t o crowded, “better burger” segment. “I only applied to one school,” he service,” he says.

all p h “My parents always said if you says. For a kid who had never been out It was that cozy, greasy-spoon diner

Michigan Alumnus | Late Fall 2011 | umalumni.com 31 “Jerry’s a natural salesman and charismatic. In his unique way, he makes things look effortless.”

as their bread supplier, established boys entered the business. relationships with high-end meat and “Some of the boys are more organi­ produce suppliers, and learned the zational, others are more hands on, optimal way to cook a french fry. but they’ve all found their own The group, which added Murrell’s niche,” Murrell says, adding that four third son, Chad, adopted a simple menu grandchildren now earn a Five Guys of hand-packed burgers, hand-cut paycheck. At the century’s turn, Five fries, hot dogs, and a few vegetarian Guys claimed a quintet of successful that paid him an entry-level wage, . Sans a freezer or micro­ stores in northern Virginia. Murrell however, that planted seeds of a wave, Five Guys food would be fresh, thought he hit the jackpot. restaurant career in his mind. The a tradition it continues today. Then, he pulled the lever—ever so restaurant world possessed some magical Seeking a moniker for the burger joint, reluctantly—again. quality that captivated his imagination. Murrell gave a nod to the family. The Kicking and screaming, Murrell “I kind of regret I didn’t stick with it,” name Five Guys honored Murrell and his entered the game in 2002. Murrell confesses. “I often thought I’d four sons at the time: Jim, Matt, Chad, In meetings with his wife and sons rather be in the restaurant business and Ben. When the family welcomed fifth as well as business partners, Murrell than going to school.” son Tyler, the name came to represent questioned if the family-owned business After graduating in 1967, Murrell all five Murrell boys. In September could succeed outside its Mid-Atlantic put his economics degree to use. He 1986, the Murrells were ready to open base and ensure its trademark quality began working for a life insurance their first store—a shop in Arlington, when relying on others. “I worried company, then ventured to the nation’s Virginia, that no one could find. about herding chickens and cats,” he capital to start his own financial “You couldn’t see it from the road says. “Franchisees are customers, not planning business. Throughout the and there was no parking,” Murrell employees.” 1970s and 1980s, he married and had says. “But there was a method to our Larry Bedard, ’66, MD’70, a three sons. Divorced. Remarried and madness: we wanted to see if we had childhood friend of Murrell’s, became had another two sons. He traded stocks something. We didn’t advertise or sing one of the earliest investors in Five and bonds and carved out a comfortable songs. We kept it as simple as possible.” Guys. Bedard then linked his college professional and personal life. The original Five Guys turned a roommate Alan Gelband, ’65, MBA’67, When his eldest sons, Matt and Jim, profit on day one and never retreated. and Murrell. An investment banker, rejected college studies, Murrell struck By the end of 1986, local food critics Gelband spurred the equity capital- a deal: the family would use the cash started penning favorable reviews of raising relationships to fund the tucked away for the boys’ college the hole-in-the-wall eatery with no aggressive expansion of Five Guys. education to fund a burger joint the frills, no drive-through operations, and “I trust Jerry explicitly,” Bedard says. boys would run. no delivery. “He told me Five Guys had the potential Little did Murrell know the world Lines grew, profits accelerated, and to make money, but guaranteed me it he had unlocked. Largely ignoring the Murrells opened a second outlet, wouldn’t lose money. It was a hand­ prices, the trio and Murrell’s wife, then a third, fourth, and fifth. With shake deal built on decades of trust.” Janie, landed the “best baker in town” the success, the two youngest Murrell Franchising, it turned out, became

32 Michigan Alumnus | Late Fall 2011 | umalumni.com “My parents always said if you could sell a good hamburger and give a good haircut, you’d be OK in this world.”

In his unique way, he makes things Diners select from up to 17 toppings to create one look effortless.” of 250,000 possible burger combinations. Amid the recession, Five Guys “And the plan is to open up to blossomed from regional chain to 40 units in Michigan,” says Michael national fast-food giant. In 2008, Five Abrams, ’81, a managing partner with Guys sales stood at $302 million; in BAC Holdings, the Bloomfield Hills, 2009, revenues jumped to $457 million; Michigan-based firm that holds Five in 2010, sales exceeded $716 million. Guys develop­ment rights in the Great the Five Guys menu started with fresh ingredients, a tradition it continues today. The average Five Guys store earns more Lakes State. than $1.1 million. Already developing A 30-year veteran of the restaurant the game changer for both Five Guys in Canada, the company is currently business, Abrams noted Five Guys’ and Murrell. It forced the family- exploring international markets in positive momentum and signed a long- owned operation to mature with both Europe and Asia. term agreement with the company more sophisticated systems and the Five Guys continues embracing its to develop its Michigan presence. He integration of top-notch administrative time-tested philosophy: keep it simple. made his decision after meeting with talent. Indeed, part of Murrell’s success After humility-delivering trials of Murrell and touring Five Guys’ Virginia resides in knowing what he doesn’t coffee and a chicken , the headquarters. know, a recognition that has compelled company largely sticks to its burger- “Jerry and his management team him to fill the Five Guys office with and-fries staples. Diners select from are clear on how they want things credible industry professionals yet up to 17 toppings to create one of done. They don’t compromise, and retain the core features that have 250,000 possible burger combinations, that’s the beauty of the brand,” spurred the brand’s ascent. while employee-incentive programs Abrams says. Five Guys’ recent Five Guys first entered the promote cheerful customer service. appearance in Michigan, meanwhile, Southeast and then began moving “We have no secrets,” Murrell says. holds symbolic and personal meaning west, inking deals with franchisees “Good food. Good service.” for Murrell. committed to opening multiple stores. In 2010, Five Guys added 195 “My heart has always been in Murrell thought the development surge restaurants, elevating the company’s Michigan, and I know the struggles would end at the Mississippi. No chance. total count to 736, about 150 of which the state has faced,” he says. “To Five Guys emerged as a national remain company owned. know we’re getting in there and phenomenon with a cult following. The growth hasn’t slowed in 2011 as boosting the economy and delivering Minus splashy advertising and Murrell’s company has continued to open good food is a positive feeling.” corporate pitchmen, but not without outlets across the country, including a a touch of good fortune, Five Guys two-level eatery in Ann Arbor at State continues rushing through the ranks and Liberty Streets where the Shaman Chicago-based journalist Daniel P. Smith under Murrell’s guidance. Drum Bookshop once resided. The Ann is a senior writer for the restaurant trade “His success doesn’t surprise me Arbor spot is among 15 Five Guys publication QSR. He is also the author of in the least,” Bedard says. “Jerry’s outlets opened in Michigan during the “On the Job: Behind the Stars of the a natural salesman and charismatic. first nine months of 2011. Chicago Police Department.”

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