What Makes Five Guys the New Burger Masters

What Makes Five Guys the New Burger Masters
What Makes Five Guys the New Burger Masters

Five Guys Burgers and Fries may or may not be the "next McDonald's," a moniker frequently attached to whichever quick-service restaurant is the latest to grab customers' and pundits' attention. But according to ratings juggernaut Zagat, it is surely the next In-N-Out Burger. The Zagat survey results released Monday indicate the upstart chain has supplanted its cult-favorite predecessor in the Best Burger category, and in the process demonstrated a success worth emulating by the real McDonald's (MCD) and its fast-food peers.

Co-founder of the survey company Tim Zagat says he hasn't yet eaten a Five Guys burger. "But I'm planning to very soon," he told me Monday afternoon, because of all the praise heaped on the chain by his reviewers' comments. "They were overwhelmingly positive. They were so positive I felt like going out and buying a franchise, but I thought that would be a conflict of interest."

Could the company's success, I asked, be more about the Five Guys mystique and not as much about the quality? After all, In-N-Out Burger is known not only for its great burgers but for its eccentricities: the extremely limited menu (burger, cheeseburger or 'Double-Double', fries and milkshakes); the "secret" menu (you have to Google it); the around-the-block lines; the long-time lack of indoor seating. Everyone says the burgers are fantastic, of course, but could some of the deliciousness be rooted in cognitive dissonance? You worked so hard to get here, you went to the trouble to learn about the burger "animal style"; now, you have to love it, or kick yourself for wasting the energy.

Fresh Meat, Lots of Toppings: Is It Really That Simple?

Zagat didn't buy my premise: He believes perceived quality and actual quality go hand-in-hand. Both new No. 1 Five Guys and old No. 1 In-N-Out have strikingly similar menus and commitments to ingredient quality. Neither uses frozen meat, ever, going so far as to insist on not having freezers in their stores. In-N-Out advertises that it doesn't have microwaves or heat lamps, either. Both cut their potatoes for french fries in the store. Neither chain uses trans fats: Five Guys displays its cases of peanut oil in stacks next to the entrance door. The "real" and "authentic" and "fresh" is in-your-face: Watch your burger made in front of you, the way you like it best.

If there is a distinguishing factor between Five Guys and In-N-Out, it's in the matter of the toppings: At Five Guys, you get whatever toppings you want, from lettuce to grilled mushrooms to jalapeno peppers, at no extra charge. Zagat tells me this, but he adds a big caveat: that No. 2 is no losing position.

"I would suggest that, being No.1 and No. 2 for burgers, there may not be a hell of a big difference between the two," he said when I pressed him on why Five Guys was winning. "I wouldn't make too much of that." But Five Guys has got it, he says: "The fresh ground beef and unlimited fresh and interesting toppings has caught the public imagination and taste."

But saying that the key is fresh ground beef seems almost too easy. Is it really that big a difference? I ask. Zagat responds with certainty based on the opinion of his co-founder and spouse, Nina. "My wife won't touch frozen meat," he said.

Expanding Fast, With Enthusiasm

It's certain that Five Guys is on to something. Since the company's founding in Arlington, Va., in 1986, the chain has grown to over 625 locations in 40 states and four Canadian provinces, with most of that growth occurring in the past seven years. It's a growth curve to which In-N-Out can't relate: That company went from one store in 1948 to 18 in 1976, and only picked up the pace after the death of its very conservative founder, expanding to 249 locations today.

In-N-Out has stayed so small because of its owners' desire to keep the company family-owned and not to franchise the concept, but also because of its commitment to ingredient quality. With Five Guys' similar concern for the quality of ingredients -- it goes so far as to display the restaurant's current potato supplier on a chalkboard next to the cash register (as if the wall-of-potato sacks wasn't enough) -- it's a wonder the upstart chain is able to maintain its edge as well as its fast growth. Other chains undergoing similar growth spurts have not fared as well.

I am looking to find this edge, the thing that sets Five Guys apart, that has fueled its fast growth and its quick acceptance by burger-lovers in search of a mystique to call their own. I find what I think might be it in a Planet Money radio show from late 2009. It's Maguire, the company's head of franchise development for the Northeast. If you want je ne sais quoi, he's got plenty. He goes by one name. He wears a bright red mohair suit jacket. He brings burgers and cheer to a conference of shopping centers in a down economy. There are burgers everywhere he goes -- good ones, too. What strikes me about him is his uncanny and uncharacteristic enthusiasm.

I see the same enthusiasm in the customers of In-N-Out Burger, yes. I still remember a trip to Los Angeles with several senior members of the Charlotte investment bank where I worked in my early twenties. As soon as our bank meeting had concluded, we drove straight to the In-N-Out Burger -- to which they'd asked me to print directions back in Charlotte. No restaurant in New York had met with such anticipation and obvious delight. Today, when I tweet about Five Guys, I'm surprised to see a few of the most ardent foodies among my friends respond immediately with exclamation points and acclaim for the "hand cut and double-fried" french fries.

Five Guys: No Threat to McDonald's

Tim Zagat sees the enthusiasm, and to his mind, it's born of the chain's quality and momentum. It's easy to see that "you're moving the ball" when you're a little company growing fast. Larger chains don't get such an impact from one or two deals, and their employees don't have such a fanatic belief in the parent. It's easy to be sincere, he says, when everyone really loves your superior burgers.

The market can take this enthusiasm and this simple equation -- small menu, fresh ingredients, hand-cut fries -- and go one of two ways. Either Five Guys will continue to expand unfettered until its salespeople lose their enthusiasm and the chain gets too large to continue to source high-quality fresh ingredients. Or the big chains will see the handwriting on the wall -- "The people want good, fresh meat and potatoes they recognize as potatoes" -- and find a way to deliver that in their thousands of worldwide chain restaurants.

I'm betting on the first option, based on a few other results from the Zagat survey, in which McDonald's was crowned champion of french fries for the third year in a row, as well as Best Drive-Thru, Best Value Menu and Best Breakfast Sandwich. We may love the enthusiasm and fabulous toppings of Five Guys. We may be willing to wait in line for 20 minutes to order a 3x3 at In-N-Out Burger. But we love best the french fries that are in our hands now, whether they are fresh, frozen, hand-cut, double-fried or none of the above. And for many years to come, those fries will most often be from McDonald's.