Last week, I ended up at a Five Guys Burgers & Fries again. Whilst I wouldn’t describe myself as a Five Guys regular, I’ve eaten at several of their restaurants over the years. And usually it’s because I’m hungry and it happens to be the least-worst option that’s available.
Ten years ago, there were almost no Five Guys restaurants around in the UK (the first restaurant in London opened in 2013). Now, there are 174 restaurants in the UK, of which 48 are in London. Leeds has four – indeed, what prompted this blog post was that I was eating in the new Five Guys location on the top floor of the Trinity Leeds shopping centre, and it’s a literal stone’s throw away from their existing Duncan Street restaurant. I mean it – you could stand on the roof of one, and throw a stone to the other – they’re that close to each other.
My concern is that it’s growing rapidly, and that the owners and/or franchisees are following an overly-rigid operating model. I’m going to cite two case studies as evidence.
Patisserie Valerie
Firstly, let’s look at another chain restaurant that grew rapidly before suddenly contracting: Patisserie Valerie. Founded in the 1920s, it had eight shops in 2006 and 192 a little over ten years later. It turned out that, underneath that massive growth, was (alleged) financial fraud, and its auditors were fined over £2m for not spotting the errors in the company’s accounts. Now, Patisserie Valerie is back down to 10 shops, with none in the North of England; I walked past the one in Leeds which seems to have closed recently, judging by the Christmas decorations that were still in the window. However, its cakes are now available to buy at larger Sainsbury’s supermarkets.
Now, I’m in no way alleging fraudulent accounting practices at Five Guys, but its growth in the UK followed a similar pattern to Patisserie Valerie. Has Five Guys grown too fast, too quickly?
Five Guys in Bradford
There is (at least) one place where Five Guys opened, and then closed a restaurant in the UK: Bradford. And I want to use it as a case study because I think it’s a good example of where Five Guys didn’t adjust their offering to suit a local market.
Around about one third of Bradford’s population is Muslim. Muslims, in the main, don’t drink alcohol, and will only eat halal meat. Other chains, like KFC, Nando’s and Subway, are conscious of this, and so you’ll often find outlets from these chains will serve halal meat in their restaurants in places like Bradford. Five Guys didn’t.
Five Guys also serves alcohol. Well, a small selection of lager. Like I said, I wouldn’t consider myself a regular customer of Five Guys but I have never seen anyone buy lager from there. Some muslims will not enter an establishment that serves alcohol, so again, you’re alienating a significant portion of your customer base to sell a product that, anecdotally, not many people buy anyway.
It’s also worth noting that Bradford is not a particularly well-off area, and Five Guys is expensive compared to, say, McDonalds. A similar meal at Five Guys typically costs three times more than at McDonalds. I accept that the quality at Five Guys is much better, and the ingredients are fresher, but every time I have been I’ve always felt like I’ve been fleeced.
If you’re wondering, the outlet where Five Guys used to be in Bradford is now a branch of Metro Bank. Also, ironically, it used to be opposite a Patisserie Valerie, which itself is now a Pret a Manger.
Nuts about
Besides the two case studies, there’s also Five Guys’ attitude to nuts. According to this meta analysis, about 4% of people in Europe report having some kind of nut allergy – so, one in every 25 people. Five Guys cooks all of its fries in peanut oil, and used to have open bags of peanuts in its restaurants. Now, whilst there will be some variation in the severity of peoples’ nut allergies, for some, they literally cannot be in the same room as nuts.
I’m sure that the decision to use peanut oil is related to the fries tasting better that way. But that decision has to be balanced against alienating well over an estimated 2 million Brits who self-report having a nut allergy (assuming the 4% prevalence).
Every Five Guys is basically the same
With the exception of the Five Guys in York city centre, which is in an old building on Low Petergate, every other Five Guys is basically the same. There’s no variation on decor, and the menu is the same everywhere too. Now that’s probably good for consistency, but it’s also, well, boring.
Indeed, I mention the Five Guys in York because we went there on Boxing Day in 2023. Inside, however, you would not know it was Boxing Day, because there was no attempt to make it feel like Christmas. Pretty much every other restaurant will have got out their Christmas decorations, and maybe even added some special items to their menu for a limited time. Not Five Guys. It’s the same menu all year round. And it’s a very limited menu – basically just burgers and hotdogs. Now, I’ve seen enough episodes of Gordon Ramsey’s Kitchen Nightmares to know that having a limited menu can be an advantage (doing a few things well), but could they expand it a bit?
Sure, you can have different toppings on your burger each time, or a different flavour milkshake. And there’s the Coke Freestyle machines, which provide one of the few ways of getting Mezzo Mix in the UK. But there’s only so many times you can read a scanned copy of the Nantucket Business Monthly April 2009’s review of their Five Guys outlet on the wall.
What I think Five Guys needs to do
So, to summarise:
- Five Guys needs to give individual store managers or franchisees some freedom to adapt the offering for local markets – e.g. halal meat or not serving alcohol.
- Add a few more items to the menu. Maybe offer chicken as well as beef?
- Offer limited edition items related to events like Christmas.
- Are the magazine articles on the walls really necessary now? Many of them are regional US magazines for places some Brits may have never even heard of, and it seems kind-of desperate. Consider taking these down, or limiting them to British magazines.
- Consider their pricing, and whether they need to lower prices in areas where the local population has lower disposable incomes.
- Consider whether they can reduce their use of nuts in their restaurants.
Overall, Five Guys feels like the sort of place where a very rigid concept has happened to have done well, and so it’s being recreated without any regard for local variations. And, in the long term, I just don’t think it’s sustainable.
