Remaining Loyal to a Business Model Through Expansion

Success in this business typically leads an operator to think about expansion. Thousands of people have followed this path and expanded. However, just as there’s no blueprint for success in this business, there are no guarantees when it comes to opening a new store within an existing chain. Many operators learn to be flexible and modify their business model in the name of growing. This could mean a variety of things, including:

Working with different vendors
Adopting a new menu
Filling a different type of commercial space
Compromising standards to get the door open on time

There are instances in which most expanding restaurant operators have no choice but to change their business model in order to grow, and sometimes this works out well for everyone. But in many cases, operators become distracted from their recipe for success – the very reason they reached the level in which expansion was possible.

Five Guys Burgers and Fries

Five Guys is a family-owned hamburger joint that has grown rapidly from five stores in Northern Virginia to more than 1,000 in less than a decade. Their model is fairly unique – they don’t have a drive-thru lane and they don’t have chicken. They’ve resisted changing vendors, relying on the same Idaho potatoes and bakeries throughout their growth. They stubbornly grill their own buns and avoid the temptation to offer milkshakes or onion rings, even as they’re guests have asked them to.

Remarkably, they’re fast food without the fast. They prepare every meal to order, even if it means that customers have to wait. But this model has worked in every store they’ve opened and shows no sign of slowing down. More than a few franchisees have asked the owners of Five Guys to take another look at reality. There are cheaper vendors and untapped revenue streams. The corporate brand has mushroomed in the last few years. Why not work a little cheaper and get improved results?

Knowing What You Do Best

Five Guys is led by a father and his four sons. Each family member plays a major role in the growth of the organization, but none more so than the father, Jerry Murrell, who knows not to fix something unless it’s broken.

More of us in this business could learn from this sage wisdom. Knowing when a business model is working is the foundation of steady growth into multiple stores. It is essential to maintaining quality when there becomes too much for one person to see. Certainly, Five Guys could benefit from reducing costs and expanding into different product lines. But loyalty to quality and service equates to loyalty to the profit margin, and these five guys know all about both things.

Know When it Becomes Overexpansion

The expanding business model is usually among the last to know when it has overexpanded. This is because it becomes harder to see every facet of every building. This is true for a one-man-band independent operator and a corporate giant. Business owners who are expanding do so because they’ve struck success and are passionate about duplicating it. But too many of us in this business become distracted by the new building and forget the basics of what got us there.

The message here is simple but very difficult to execute. It’s about energy and capital; about paying attention to the little things. But really, the answer is maintaining loyalty to what got you there. A football coach wouldn’t sit is star players in the championship game. In the same way, a restaurant operator has to stick with his stars during expansion.

At Five Guys, there’s one star that has led them to their great performance, and that’s quality. For operators intent on expanding the scope of the business – as most of us are at some point – it is important to remember the first steps that led to success. In this way, keeping it simple is a critical mindset for expanding the operation.