CEO Q&A: Jerry Murrell, Five Guys

Brittaney Kiefer talks to Five Guys CEO Jerry Murrell about investing heavily in staff programs and keeping it simple amid global expansion.

Why did Five Guys expand outside North America with a location in London?
We've had a lot of people approach us from Great Britain, but when Sir Charles Dunstone [founder and chairman of cellphone retailer Carphone Warehouse] came to us, we really liked his group and they convinced us that they could help us over there.

Dunstone is well-connected in the UK and feels it's a good thing for us to do. It has taken about 18 months to make this happen and this will be our first international location outside of the US and Canada.

Explain Five Guys' approach to marketing and communications.
We are firmly dead set against paying for any marketing such as advertising. We keep it simple: the crew and the food is everything. That is where we put our money.

To me, the best marketer in the world is the person standing behind the counter when the customer comes in. How that consumer is treated is more valuable than everything because when the customer leaves, they will tell other people.

In the US, we put about $20 million into our secret shopping program last year. Twice a week, two independent auditors come into our stores who are unknown to the employees, and they score the stores on how they are treated. If the store gets a good score, we'll give the team who was working at that time a big chunk of money.

When you go into our stores, our employees are smiling and happy and keeping the stores clean because they want to get that money. We have always done this.

When we were just a family business, we would always ask friends and neighbors to stop by our store and see how our employees were doing. That's the major way we keep our customers too.

Will that same approach carry over into your London operation?
We will do the same thing in the UK as we do in the US. We will put a lot of money into the secret shopping program and giving employees bonuses, which we think is going to help improve morale because people don't tip as much in Europe.

We sent our own people to London to help with the opening. The employees and managers who are going to be running that store came to the US for a month of training. The people who have come over to the US from London are excited about the way we treat people. I think that will carry over.

Dunstone believes 100% in our philosophy that the crew is everything. But with his technology background, he'll also be able to give us a lot of help in how to connect with customers there online.

What role does PR play with the company and what agencies do you use?
PR is everything - without it, you cannot do anything. Our PR team is small, but we do a lot of online outreach. We have tried to convince our franchisees that the way we communicate and market ourselves works, so that they don't stray and try to advertise or wear chicken suits to work.

Until recently, we never used any PR agencies, but we wanted to start communicating better with franchisees so we hired Ogilvy Public Relations to help us improve our relationship with them and our employees.

How does Five Guys engage staff?
When I was going to college, I was hungry all the time. I used to work in a kitchen, and got fired one day because I took a dessert. I try to encourage my franchisees to let employees eat what they want to eat without charging them. They also have flexible hours, get paid better than industry standards, and have a lot of room for growth. We lose very few employees in our corporate-owned stores.

We also have a large intranet site, so staff can go online and find out what a particular store is doing or what kind of rewards employees are getting. They can also take courses online to advance their positions. We think that's important.

There is a district manager for every 10 stores, They are trained in the basics of how to help guys run the stores. Everything is transparent so each district manager knows how their store is doing compared to others. They're the guardians of our brand, and we're constantly in contact with them.

We've had a lot of people from other fast food chains coming to us, especially during this economic recession. We just hired a woman recently who spent 31 years at a big fast food chain. She wanted to join Five Guys because we've stayed the same - it's all about the crew and the food.

As Five Guys continues to expand, how do you keep your brand consistent?
It's hard to do. Every day we have to make sure we're not opening up a little door that can get bigger. Here's one such example. One time a franchisee told me the price of tomatoes was going up and he didn't want to serve tomatoes anymore. So I said put just one tomato slice on the burger, but people were unhappy about that. You can't change who you are - you have to stick to your guns. That's our biggest challenge every day.

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