I'd never been to a Five Guys until I moved to the DC area two years ago. In fact, I'd never heard of it. Now it's the only burger place my wife and I enjoy.
With only around 800 locations in the U.S., Five Guys Burgers may well be the best burger you've never eaten. Sales are estimated to have grown by 38% last year, to $625 million, as store count swelled 35%. So where can you scoop up shares of this fast-growing company? (Hint: You can't, and it might be better that way.)
Five Guys is riding the wave of "better burger" establishments that have swept the U.S. over the last decade or so. The outfit began franchising in 2002, and while the company has some 800 locations now, more than 1500 are in development and all its U.S. franchising territories are sold out.
Much like publicly traded peers Chipotle
CEO and founder Jerry Murrell insists the company's meat is never frozen and bakeries for the company's buns are closely vetted. Says Murrell: "We don't ever shop around for prices on our food. If we have a pickle for us that's costing us 10 times as much as it costs McDonald's
While McDonald's, Wendy's/Arby's Group
But part of what allows Five Guys to maintain such devotion to the burger experience is the fact that the company is private. Without the madding crowd of public investors clamoring for ever-greater profits, the company can maintain its culture and focus on the best burger experience for its customers, even if those perfect pickles do cost more.
That pressure from Wall Street is something that Costco
Maintaining a company's culture is more than just looking at the bottom line, as Sinegal and Murrell realize. It's about focusing on the best customer experience and driving that throughout the organization. If that food experience requires the company to remain private, then I'm all the happier that I can still enjoy the company's great burgers, even as I continue to hold McDonald's stock.
Jim Royal, Ph.D., owns shares in McDonald's. The Motley Fool owns shares of Costco and Chipotle. Motley Fool newsletter services have recommended buying shares of McDonald's, Chipotle, Costco, and Panera Bread. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.