Five Guys Burgers: America's Fastest Growing Restaurant Chain

Jerry Murrell says it’s time for lunch, and he knows exactly the place to go. The 68-year-old founder and chief executive of the brightest star in the restaurant industry jumps into his blue Ford pickup parked at the company’s headquarters, a redbrick building in an unremarkable office park hard by Interstate 95 in Lorton, Va. He negotiates the back roads of the town—once home to a 10,000-inmate correctional facility—to a strip mall, which, of course, has one of his restaurants, Five Guys Burgers and Fries. He ambles in and, without glancing at the sparse menu he personally designed, orders a burger and some fries.

The staff—a gaggle of twentysomethings—is jumpy, deferentially calling him “Mr. Murrell.” They have reason to be nervous. 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). “Fries are much harder than burgers,” says Murrell. “We work day and night on them, all the damn time.”

Such are the problems of being the fastest-growing restaurant chain in the U.S., which has doubled its number of stores since 2009. 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. He has succeeded grandly on both counts. 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. And the money? The private burger chain has 1,039 stores open in the U.S. and Canada, and another 1,500 committed to build. Since 2006 the company has grown 792%, according to Technomic, a Chicago-based food industry research group. (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. The entire chain, including sales at the franchises, will surpass $1 billion in revenues this year, up from $950 million in 2011. Corporate revenues, from company-owned stores and franchise fees, will be roughly $275 million, with a cash flow of $50 million.

The seven Murrells each own equal shares of the ­company, which add up to 75%. Miller Investment Management, a boutique Philadelphia firm, owns 20% of the company, and a few of Murrell’s school buddies own the remaining 5%. The company is worth an estimated $500 million, which puts the Murrells’ stake somewhere around $375 million. Not a bad return on an initial ­investment of less than $70,000.