How Five Guys Really Makes Their Money
When it comes to fast food, there seem to be two schools of thought — constantly innovate, or keep it simple. Whereas McDonald's has taken the approach of constant innovation and rolls out new menu items all the time, Five Guys has opted for the less flashy path. Way back in 2011, Bloomberg Businessweek praised the company and highlighted that its growth challenge would be retaining the no-frills approach it took to its food. Aside from rolling out milkshakes back in 2014, their menu remains pretty simple (via Eater).
So with such a simple menu, which item is Five Guys making bank on and using to fuel its year-over-year sales growth of 12.5 percent (via Restaurant Business Online)?
Nobody can pass up fresh french fries
One might assume that burgers are the biggest moneymaker at Five Guys, but that's likely not the case. After all, the name is Five Guys Burgers and Fries and cooking up potatoes is much cheaper than beef. According to a 2020 report by the USDA, a 50-pound bag of russet potatoes can be as cheap as $13 a bag. Good luck getting 50 pounds of ground beef for $13!
There's also the cost of the ingredients that go into making the burger. The cost of the beef, veggies, cheese, and bun all factor in, whereas fries merely require the potatoes and seasoning. A little cheeseburger at Five Guys has an average price of $5.69, which isn't that much more than the $4.19 cost of a regular fry, but as it turns out, Five Guys is making more profit on the fries (via Fast Food Menu Prices).
At Five Guys, fries are the only side item offered. Sure, you could count the free peanuts, but burgers and fries are an unbeatable duo, and Five Guys is betting on you ordering fries with your burger. Five Guys founder Jerry Murrell knows this, which is why the company tries to make them as perfect as possible. "Fries are much harder than burgers," Murrell told Forbes in 2012. "We work day and night on them, all the damn time."
When you factor in that Five Guys has everyone convinced that they're getting more fries for their money with that extra scoop, it gives customers just that much more reason to order them.