The Risky $5M Gamble That Made Five Guys Global

0:02Let me take you way back to 1986. Janie and Jerry Morell were just a regular US family living in a small town in Virginia. And they had five sons, right? So college was looming and college was going to be expensive, obviously. So they gave their kids a choice that I think is fascinating and brilliant, right? Go to college or build a family business. In the end, they spoke about it, the business won, and they opened a small burger restaurant. You may have heard of it. It's called Five Guys. Since that meeting around the family table, almost 40 years ago, it has become an institution. Yet Five Guys was only in the US until today's guest, John Ekberg, came along.

0:42John wanted to take one of America's most beloved brands into uncharted territory, to take them global. And I was so keen to have this conversation because what I love about this is John's vision and John's ambition. I think it's what all great businesses are built on, actually. So what actually happened in that room? Well, it all came down to a single meeting on a sunny Tuesday in Washington. John was face to face with the entire Morell family. The future of Five Guys was being decided. This is the show that takes you into rooms you never knew existed to understand seminal moments like never before.

1:19Brought to you by IFS. This is The Room Where It Happened with today's guest, John Egbert.

1:31so john what does the room look like gosh it looks like uh it's a boardroom so you have you know way too many chairs yeah uh and there's um you know and all of the morel family are there and when i say all the morel i mean all seven members shareholding members of the morel family are, you know, present. Pictures on the walls of branded five guys kind of, you know, and, you know, a refrigerator with, you know, with drinks and such that, you know, that you can serve. And then a view, skyline view kind of out of Washington, D.C. in the background. So, yeah, it's, I wouldn't say it wasn't particularly intimidating, but it was definitely intense.

2:17When did the intensity begin? When you walked in or before? Well, you know, I mean, I guess the first thing to say, you know, Five Guys is a family-owned business, right? I mean, there actually are five guys. And it was found, you know, the mom and dad, you know, founded it with these five boys. So there are actually seven of them. But, you know, they all show up every Tuesday for a family meeting. And that's kind of how the business is run. Every family business is going to be very different and reflect the temperament and the values of the founding family. So it's not at all corporate, right?

2:58I mean, there's not business suits and lawyers everywhere. I mean, this is a family. That dynamic is present in the room. So you can imagine a bunch of brothers ranging in a wide range of ages who grew up fighting and building the business. Some of them grew up with the business as part of their upbringing. That kind of very direct way of doing business is definitely part of the five guys' temperament. And when you have a family dynamic, it's really different and that, you know, things get, you know, really actively. I mean, in some ways, you'd have to say decision making is actually better because it's really tested by disagreements amongst equals who have very different perspectives.

3:55Charles and I, I think, actually formed a really powerful combination. I think the combination of those two really gave the Morels a higher level of comfort. They were actually talking with another family about bringing the business to the UK. And they were like, no, actually, I think Charles and John are the right guys to go with. So you and Charles arrived. You flew in. Yeah. Do you remember kind of the moments before that meeting when you're waiting outside to be called in? What was going on? Yeah. So I remember riding up in the elevator and, you know, we'd fresh off the plane from Heathrow.

4:30We'd landed in Dulles and just outside Washington, D.C. And, you know, D.C. is a city that's built to intimidate. Right. It's built by this French guy, you know, to intimidate everybody. So it is. I mean, you know, these long boulevards and amazing buildings that are, you know, imposing and you're driving by, you know, all these institutions of American power and wealth. And then you arrive at Five Guys, rode up in the elevator. And I can remember kind of looking at each other going, we have no idea what's going to come next. I mean, you've put so much thought and work and aspiration and energy into creating that opportunity to be in the room with the Morels.

5:19And that's an accomplishment in and of itself, right? I mean, that's not easy. to be in a room where, you know, the future of a brand who's thinking about going global, you know, just being in the room is an accomplishment just, you know, full stop. But, you know, going actually, you know, and it's a family, you know, I mean, they haven't given a tell, right? There's no read, you know, hasn't been on a quarterly earnings call. So you really had no idea at this point. Had no idea where it was going. Not interested, not interested, mildly interested. No, and actually some of the execs who give you some way to access the family's thinking process have actually managed your expectations to that, to go, actually, we don't know where the family's going.

6:13There's lots of good arguments on both sides of the table. There's some people who are kind of thinking that it's a good idea, some people who are a bit skeptical. So good luck. You know, and so, you know, you kind of walk in there without any, you know, there's no way that we could have known which way it was going to go. So it was fully, fully, you know, all the options were, you know, were on the table. Do you remember the last thing you said to Charles or he said to you before you walked in? It was kind of a look. It's kind of, you know, kind of an eye contact of like, you know, here we go.

6:44You know, we've done everything we can. And, I mean, actually, we could have backed away from the principles that we thought were key to the deal. And I think that's one of the great things about the way that Charles and I happened to work in that scenario. It was like we really believe that what we had agreed was the right way to approach the deal. Because we think, you know, and actually just before this, Charles, we knew that Five Guys was a great concept. We liked it. I was familiar with it having been in America, but Charles had never had the product before. So actually there was a moment where he had flown to New York and gone to eat at a Five Guys and was like, and like taking a bite of a burger and the fries.

7:29It was like, we need to do this deal. You don't really, when you walk into a corporate meeting, there's kind of a range of expectations, right? You know, I mean, there's going to be some Harvard business people. There'd be some, you know, some really smart lawyers. and you kind of know some McKinsey consultant-type people. And the range of discussion is really probably well-defined. With the family, you have no idea what's important to them. What is it that they're going to make a decision on? And, of course, ultimately, that kind of connection that they have with the business people is going to disproportionately play a role in the decision, you would think, going into it.

8:11And I think that was really right. And what I think the Morels experienced and wanted to experience was that entrepreneurial thread. And obviously, the Morels built this business from scratch as a family. So I think that connection of entrepreneurship was what really drove the meeting in the right direction. But I will tell you, for most of the meeting, I had no idea how we were doing. right so you know so we walk in there we shake hands we sit down and like the family just like starts talking amongst themselves like about us like in front of us saying what sort of thing you know i don't you know who are these guys you know these really the right guys they want to do this joint venture we want to franchise is that the right deal why do we want you know why do they want to do and you're sitting in the room we're sitting there and charles and i're just like sitting here like you know let's should we say something or maybe just let them run with it for a while.

9:08And at that moment, I thought we might have lost, you know, we might have lost the family and, you know, that might have been, you know, the end of the conversation. And there actually were, you know, powerful voices in the room of like, you know, we don't want to do this. You know, this is not our, the way we do business. And, you know, these two, you know, seem like really two good people, you know, good, good businessmen, but, you know, that's just not, you know, the right structure for us. So when the family were having this debate, were you sort of tempted to chime in if you disagreed with things they were saying or anything that's such a that's such a great you know uh you know a great judgment you know what's what's the right you know do you you know is the right thing to argue you know do you do you like uh refute the the points um you know and uh and actually you know charles and i both i think there were moments where we both leaned in to kind of give the counterargument.

10:05And just when we were, another family member kind of came in and made exactly the right point. So the family was getting there. And actually, I think if we had interrupted the process, it probably would have been bad chemistry. So knowing how to let them run with their decision-making process, I think was actually essential to making it happen. So it was tough. You're kind of holding back, holding back. I know the perfect argument. I actually have all the words. I have the phrases perfectly set. And just let them make the argument themselves. And I think that was really important. I think that self-control needs to be applauded because you know what you want to say and to kind of let it go, it does take a bravery not to dive in at that moment.

10:55Yeah. Yeah, no, but I mean, I think we sensed that this was how the family dynamic works. It's a bit of business. Let them play it out. Yeah. The future of Five Guys, the future of Charles Dunstan, the future of you is being discussed, and you're strong enough to say nothing. I think that takes quite a lot of willpower. Yeah, well, I mean, obviously more so for, you know, Charles has lots of other investments, and he's successful in many other ways. For me, it probably was a lot more riding on it. Really? Tell me about that. Well, I mean, I just, you know, in terms of what's going to make a difference to my career, you know, Five Guys has changed everything.

11:35Did you allow yourself to think about that in that moment or not? Yeah, I think that would definitely cloud your judgment to try and allow, you know, thinking about all the dominoes that fall, if it wins or doesn't. There'll be time to count the wins later, but let it play out as it should. But then Jerry, the dad, it kind of fell quiet after they'd been discussing, kind of fighting about what was the right thing to do. Jerry says, you know, I really think that we should really look hard at this. I really think this might be the right way to go. and it was like the temperature changed in the room and suddenly the kind of reasons to do the deal and to engage with Charles and me and to think about why it would work maybe even better than a franchise.

12:31On the actual day of the meeting then, did you actually need to say very much? At that point, I think we leaned on a couple of points and then got up and shook hands. We're like, so it's done. So it's the moment where you go, so do we have a deal? Or does someone ask that question? Exactly. So we're agreed then. So basically it's like say a couple things, stand up and say, great, so we're doing this together. Let me shake your hand. And, I mean, at that point, I think that that's one of the things is how do you read when someone's ready to close, right? And you don't need to oversell at that point.

13:05You know, if someone's given you that buying indication, then at that point, I think, you know, Charles and I was like, they want to do the deal. Let's get up, shake hands and say, thank you very much. We really look forward to being great partners. You know, I love this conversation because you've got to remember that Five Guys is not your average corporation. It's still like, well, it's still a family business, just a very big one. and the Morels get in a room every Tuesday and hash out business decisions just like a family do. And the foundations of the entire company may have been built around a kitchen table, but years later, very little has changed.

13:44I mean, obviously the room has changed. It's now an imposing boardroom in the heart of America rather than a family kitchen. And that's why I think this is special because I love the belief shown by two insiders to just stroll in and try and explain to the owners of the business how they planned to sink a vast amount of money into a single restaurant in central London. But if it paid off, it would take Five Guys to a whole new level. No longer an American company, but a global one. And I guess you'd think it would take mountains of guile and all the right connections to try and get a meeting at the very top of a business like Five Guys.

14:20Well, that's not the case. This might surprise you, actually, because all it really took was a moment of inspiration and filling out a standard online form. So tell us the story behind the decision to go with Five Guys. Yeah, so Charles and I were talking about, you know, what direction we could move in. And the cover of Bloomberg Magazine had Jerry Murrell eating a Five Guys saying the fastest growing food and beverage brand. And we were like, that's got to be worth a try. And so that was where we, you know, where I, so then it fell to me. I mean, that, you know, great, great flash of, of aspirational brilliance, but then you have to figure out how, how do you make that happen?

15:02Right. I mean, that's, that's, you know, they're a family business on the other side of the Atlantic, you know, they don't, they have no idea who we are. So how do you actually go about making that connection work and doing a deal with them? And that was the next step in the journey. What was it then about the article that made you sit up and take notice? Well, you know, obviously America is famous for burgers and fries. And I always thought that, you know, you should give preference to a country, something that a country is famous for. If you're going to, you know, if you were, if I were a Frenchman, I would, you know, go for crepes or cheese or champagne or, you know, perfume or something like that, right?

15:43Something they're famous for. And you'll sell that La Catane all around the world or whatever. It was uniquely French. But burgers and fries are quintessentially an American thing. So if you are setting America on fire with being the best burgers and fries, that's something really special, right? I mean, the country's famous for it, and you're winning in that category, in that segment. That's got to play. And then, of course, McDonald's has done such a great job of proving around the world that everybody loves a burger and, you know, you could serve this product literally, you know, around the world.

16:21So between those two things, you're like, this looks like a really, you know, plum opportunity. So how do you go from seeing Jerry Murrell on the front cover of Bloomberg Magazine to actually getting in front of him? Yeah, very, very, very boring, you know, kind of like very, you know, just open your laptop, pull up the website, type in, I want to build a business in the UK. You know, will you take my meeting on their like form on their website? You did like, you kind of approach them in a really simple way that any member of the public could do. Just a cold, cold approach. Why did you do that rather than speak to some of your great contacts to see if they knew someone who knew someone?

17:09Gosh, you know, sometimes the direct way is just the simplest. And, you know, I mean, look, I'm sure that if it hadn't worked, we would have used whatever banking connections that you could find. But, you know, sometimes the best way is just walk in the door and ask for the opportunity. And what was the instant response to the filling in of the online Five Guys form? Nothing, nothing. No, so, I mean, you know, I did then, you know, Chase. So you heard nothing back from that? Heard nothing back. So, you know, Chase, you have to chase. What did you type on the form? Do you remember what you said?

17:44I think I said, you know, like, you know, I work with Charles Dunstan. You know, he's a pretty accomplished European, you know, British entrepreneur. And, you know, we've been kind of chatting and saw the article. And, you know, we'd love to look at bringing your brand to the UK. And silence. Silence. It's like, oh, no. But, you know, I mean, I think, you know, the food and beverage business and most businesses is very human. So, you know, there are human beings who are behind these, you know, channels of communication. So it's like there's a human being who's responsible for looking at, you know, how to expand the brand.

18:25So I'm going to find that human being. So how did you do that? I found any number that I, you know, like Google, you know, phone number for, you know, five guys, you know, headquarters and, you know, calling up saying, you know, who can I talk to about, you know, global expansion franchise opportunities? And so eventually, and actually Mark Mosley's daughter was answered the phone. And I was like, you know, she's like, oh, my dad's responsible for that. I was like, well, can I talk with him? I was like, yeah, okay, here he is. Brilliant. And that's what led to that first meeting? That's what led to the first meeting.

18:56You know, it's interesting. This Mark Mosley guy was a former Washington Redskins Super Bowl champion, American football player. So, you know, I kind of like recognized his name. And, you know, it was like talking to a Super Bowl MVP on the phone. And he was responsible for vetting prospective partners for the family. And so, you know, told him the story and said, look, I'm going to be there. You know, can we meet up? and I'm coming through DC and yeah, would the family take a meeting? And he said, I don't know, let me see. And so they said, actually, yeah, the family meets next Tuesday. If you're still in DC, come on by.

19:41Wow. So just explain then the difference between a JV joint venture and a franchise. Yeah. So most brands that are looking to expand around the world would sell a franchise, maybe a master franchise for a whole country. And they would say, you have development rights for the UK, and we think you're going to build a couple hundred stores over 10 years. And you're going to pay 8 % of sales and royalties back to us, but you're going to own the whole business. It's your business. You build it. You own all of it. It's 100 % yours. And if it's successful, It could be amazing. And if it's not, you know, then maybe it won't be, but you'll have paid us 8 % all along the way.

20:26And so it ends up being a very, you know, it's collaborative, but it's an arm's length business deal. and where, and if you build stores that have a lot of sales, but not much profit versus stores that are quite profitable, the brand is equally benefits. So you as the franchisee can have a range of success, some being, you know, great, some being not so, not so much. So we wanted to have a joint venture where the parties equally owned the business and there wasn't a preferred royalty payment back to the brand, all the profits of the business would stay in the business and be dedicated to the expansion and growth of this particular opportunity.

21:18So there was definite personal risk for you going again with Five Guys. Do you remember the emotion you felt when you realized, hold on, this is going to happen? You know, I think this is a personal trait of mine that I'm really terrible at celebrating victories. I mean, you know, I'm, which, I mean, I'm sure my team hates me for that. Cause like, like something amazing happens. Like we should all go, like, go out and celebrate, you know, and we, and we, and we do, we've, I've gotten, I've gotten a bit better at it. But I mean, my brain just immediately flipped to, holy shit, do you know how much we have to do now?

21:54I mean, it's like, you know, we have definitely, this, we're the dog that caught the, you know, caught the car and, you know, we have got so much, you know, we've got to hire the team. We've got to get the property right. We've got to, you know, get the supply chain. So my brain like immediately went into kind of execution mode, which, you know, that's, I guess that's one of the, um, yeah. I mean, I guess it's, it's sometimes your strengths are also your weaknesses, but, uh, but, uh, I think that was the, that was the immediate, I think, well, I think we walked out and we definitely like, like, we just got that deal.

22:24Didn't we? Yeah, we definitely did. So there was definitely a sense of that was worth it. We did it right. But it was a risk. The whole JV strategy was a risk because it was so different. But it was a real risk to ever doing the deal. And sticking with it felt like high stakes. And so, you know, having it work was definitely, you know, a moment of relief and of satisfaction. Surely you went and had a drink or a meal somewhere. There has to be a moment of celebration. Absolutely. No, we did. We certainly did. But we also had to get on a plane to get back, too. So, no, it was definitely a high moment.

23:18You know, I mean, it's there are, you know, business does have adrenaline rushes just like just like sport does. And that was certainly one of the moments. And, you know, it's interesting that the anxiety, you know, is always part of the euphoria. Right. So, you know, the kind of success is fueled by the what's at stake and whether you're going to actually walk out with the prize or not. And away from Charles and away from the Morell family, how big was the risk for you if this hadn't gone well? You know, it was a real inflection point for me, Jake, because I had been like a banker. Most of my life, I had been, you know, a suit and tie, you know, transactional mergers and acquisition type banker.

24:02I'd done high yield bonds. So, I mean, it was, I was very used to transactional life. I'd never really been involved in the operational side of the business. So this was the kind of the fulcrum of my professional life where I flipped from being that transaction deal guy to being a food and beverage exec. So the family and Charles asked me to step in and run the business after, you know, after we had formed the joint venture. So, you know, I'm a fully qualified, you know, black shirt and a five guys. I can make your burgers and fries. Make your kids their burger and fries next time they come in.

24:36You know, worked in, you know, one of the busiest hours we've ever done doing top bun dressings. Really? Yeah, at Oxford Circus just around the corner here. And then building a team. You know, I mean, this is something that I think is really different from banking to food and beverage. Just how, I mean, banking, there's a lot of prima donna pirouetting. You know, look at me. I'm the most important thing here. And in food and beverage, it's all about your team. You know, how can you get people with diverse talents and capabilities to throw their talent on the table and shake it up and go, now, that's more than any of us could have done on our own.

25:19And that's just so satisfying. You know, there's no deal closing that can compare to having, you know, an exec team that's worked together and achieved, you know, building a brand like Five Guys in Europe. I mean, that's so special to get together with your general managers who run the store. We get together every year and have a celebration. We have a celebration of what was great in the past year. I mean, honor all the awards and achievements and records that have been broken. And that is just a better high than any deal closing that you could do as an individual. Well, let's talk then about how you got to this point.

26:00So you walk out of the meeting, you've done the deal, great relief, a moment of celebration. But then, of course, you have to actually create the five guys, brand, restaurants, staffing levels. The whole thing has to be created from zero, not just in the UK, but now across the whole of Europe. Where on earth do you begin? Yeah, well, it always starts with the people. So, you know, we interviewed and found Julie Spear, who was a Five Guys operator in the U.S., and convinced her to come abroad. And she still lives here, by far the most important person in the business. And, you know, so many businesses you see where people get carried away with, you know, the glamour of the job, being able to be here on a podcast with Eugene.

26:49Whatever it is that's glamorous about it. And like, no, no, no, we're burgers and fries. You know, don't ever forget that it's, you know, some that's – and it's the hardest job in food. beverage. I mean, it is really, it's very physical. I mean, you know, everything is done by hand, fresh on the site, on the day, you know, and standing in front of a hot grill, hot fryers, and shaken fries, that's the hardest, hardest job of all. I mean, it's in 25 kilo bags of potatoes get carried back in, hand cut, washed, and, you know, speed is, speed matters. And so, I mean, it's a really physical job. So it's really important that the people who are actually doing what really matters, making a burger for a customer, making sure they get your kids' burgers right, they know that all of us understand and celebrate and honor what the business is and that we don't have some other conception of what the business is because we have a computer that we have to work on sometimes.

27:48So to me, that's the key to any food and beverage business success is making sure that you don't ever disconnect from what the business really is, Burders and Fries, in our case.

28:08I think the way that we talk about business can sometimes be difficult to grasp. I don't know, it can seem mysterious and a bit secretive. Yet I think the simplicity here is actually the genius behind John's approach. He flew to the family. He went with just his business partner, not a whole bank of lawyers. He sat back and he allowed the family space. He made sure he was on their level. He let them take the lead. I think there's lessons for all of us there. But also John was really sure of his approach. Remember, he wasn't asking the family to just follow the same route that all the giants before them had taken and just do a franchise deal.

28:42He wanted to start a partnership, which obviously came with huge risk. And he made it clear that it was the only deal on the table. Did it work? I'll let John pick up the story. One of the things we believe, we believe the product was world-beating, world-class, best in class in the world. Let's put this amazing burger and fries in AAA Prime property. And we think it's worthy of that kind of environment. And that'll send a message about the quality of the product that we're going to be serving inside. But I can remember when my property director came back and told me that they'd signed Covent Garden.

29:22That was another one of the kind of like, okay, this is really going to throw a stake in the ground for this brand. We paid two and a quarter million pounds to pay the bar to leave and then put another three million pounds into building out the restaurant. So we were 5 million plus pounds into this venture without taking a single sale. Wow. And in the joint venture structure, is that yours and Charles' risk or is it a 50-50? Well, anybody can put money into the joint venture. Any partner could invest in the joint venture. It ended up being mostly Charles who invested into it, but it could have been either one.

30:03So fast forward to the day when we were opening up the first restaurant in Covent Garden. and Five Guys doesn't do like grand openings. So, you know, you can create this kind of false appearance of a very busy restaurant and a big deal by like inviting celebrities like yourself or, you know, your other guests who would, you know, show up and kind of make a big red carpet thing of it. And so it feels like it's a big deal opening up. But Five Guys doesn't do that. They just like turn on the lights. I've noticed the two Five Guys in the city where I live just appeared. And I'm like, oh, there's another five guys.

30:40And of course, my kids were straight in. Ah, fantastic. Yeah, we love the young crowd. So, you know, we had no, we couldn't do that. You know, we were just like, we're just going to turn the lights on and have people. So we're there the Sunday before it opens up, you know, on Monday morning. And Charles and I are just like, we're cats on a hot tin roof. I mean, we are just like, you know, what is going to happen? What have we done? You know, we've done this joint venture. We're in for, you know, a lot. I mean, if this doesn't work, this could fail really quickly. And Jerry was just so calm. He was like, you know what?

31:15You guys have picked a good site. A lot of people walking by outside. If nobody comes, somebody will come in. We'll make them a great burger, and they'll tell their friends, and we'll build a great business out of it. And actually, the first person arrived at 4 a.m. the next morning, put their chair down outside the door, And we had queues around the block for the first five years. And how helpful was that message from Jerry at that moment? I mean, it was great to see his confidence. It was definitely a help. But, I mean, we were still like, thank you for your confidence. We appreciate that. If anything, it puts more pressure on you.

31:52This guy really does trust us. And the response, the customer response, that there's this emotional connection with five guys here in the UK, gave us so much confidence to go to Europe and the family to go abroad. And really that everywhere that, I mean, they've opened in, you know, Korea and Singapore and, yeah, Hong Kong and Singapore and Australia. And everywhere you go, there is a line out the door of people waiting to, you know, for five guys in that country. So you said that two of the brothers were there cooking? Actually, all the morels came over for the Covent Garden opening. And actually, you could say that it was a bit of a recreation of the boardroom where the decision was made, but yet in the kitchen at Covent Garden.

32:38And there was a real, I think it was a real magical moment for the family to be, you know, hear these, I mean, think about these brothers. They had opened their first store in 1986. And between 1986 and 2002, they had opened up five stores. and they worked the stores themselves. I mean, they opened, they closed, they hired, they cooked burgers. I mean, they were working in the stores, making the brand happen. And then fast forward to 2013 and we're opening up the 4th of July in London, this glamorous, bright lights, glamorous city in this amazing flagship store. and there are hundreds of people queued around the corner and they're inside cooking, it's kind of an amazing journey.

33:32And you could get a sense about the sense, the pride that they felt at having come from that small beginning. They had fryers in their garage that blew up and almost burned the house down. So they'd come from that to this kind of world stage. And seeing the family cooking burgers and fries, doing what they had always done as the brand of Five Guys. And in that context, it was beautiful to watch. And I think that, though, in itself speaks volumes about them as a family. Because by the time Covent Garden opens, they're wealthy. They're successful. They could have come over, stayed in a five-star hotel, cut the ribbon, eaten a burger for the cameras and left.

34:19Yet there they are in the kitchen with the staff. Listen, the family has been so laser-focused on the product. And that is the genius of the family, which is don't ever take your eye off burgers and fries. If you do that right, so many things will fall in line. and don't compromise on the quality of the ingredients. Don't compromise on the portion sizes of the product. Be generous. And that kind of foundational urge has been, I think, the secret success for Five Guys. And have they done JVs in all those countries? No, no. Most of it has been a franchise relationship. So you almost remain the only people that managed to convince the Morell family to do a JV.

35:08Yeah, we're the only JV in the family business. And obviously, it's been an amazing journey for all of us to see this business grow this fast. And we knew that we had a great venture backer in Charles. And kind of one of his attributes is when you see an opportunity, absolutely just mash your foot on the gas and go how far and how fast can we go. And once we saw that this worked, we were like, hell for leather. How fast can we take advantage of this opportunity and cover? We went to Champs-Elysees in Paris and Granville in Madrid and Frankfurt and Munich in Germany. Go to all the capital cities of Europe and put flags right in the most high footfall streets you can possibly find.

36:04How did you know that that was the right approach? You said, you know, that you told the family, listen, you need stores in better locations. How did you know? You know, I guess, I mean, I guess ultimately we didn't. I mean, it was a guess. But, you know, I think Charles has made some really smart bets. And when he saw this, when he tasted the product, you know, he knew what was available in Europe, in London particularly. It was like, this will work if we give it the platform and the stage to play on. And he was very much right in that case. So I think it's so interesting, this idea of risk taking.

36:47Do you feel like it was a risk? It was. It was, of course, on that Sunday before we opened up, it felt like a terrible risk. You know, I mean, every insecurity you've ever had, you know, kind of pours out of you. And then, again, you have this tremendous relief. And I can remember, so this guy shows up at 4 a.m. And I was like, okay, that's kind of cool, right? That's, like, really promising. Like, I'm feeling like maybe it's not going to be a complete disaster. And then the line is, like, around the building. And you can just feel this. I mean, that anxiety turns into, like, panic. Because, like, you know, what's going to happen?

37:30And there was another moment where one of the chief operating officers said, you know, look, you should turn on your online ordering because, you know, if you turn it on right when you open, then customers get used to that and they'll keep doing that along the way. And we were like, I'm really not sure that we should do that. We really should probably just focus on these people who are kind of in the queue outside. He's like, no, no, no, you really, really should turn it on. And we could see online that like 6 ,000 people were downloading the app. And so we're like, oh, no, I really don't think we should do this.

38:01And he's like, no, no, you should definitely do it. Like, do it. So we turned it on, and the printer, like, burnt out. I mean, it's just like the entire spool of the printer. So we had, like, 700 orders. It was like as many as they could print, like, immediately from online ordering. It's like all these people are queued outside, and we've got 600 orders from people who just ordered online. What are we supposed to do? So this kind of anxiety turned into, like, just outright panic. What did happen? It was a night we crashed the kitchen. I mean, the kitchen just completely blew up. I mean, it was a good crew.

38:37They knew how to cook. We had the original Morell brothers here cooking, you know, on the cook line. So some of the best operators you could get. And it was just we broke records. I mean, you had the best hour, the best day, the best week. You know, it was just, you know, all were covered and guarded. So did all those orders that came through get served? Yeah, we did. Essentially, we took every merchandise that we had, and we walked the queue, and we said, like, we are so embarrassed. We're so sorry. It's going to be a painful process to get you in through your order because we've got to get these.

39:10We obviously turned the online ordering off. That was a disaster. Do you remember how many online orders came in? I think it was like 600. It was a lot. It was a lot. But we were like, no more. No more. We're going to turn it off, and we're going to deal with the people who are actually here trying to get it. So how many, do you know, you must know the number, how many burgers or something you sold on that day one? Gosh, let's see. We would have, it would have been, you know, it would have been thousands. In the thousands? Yeah. So what was the greater thrill for you? Walking out of the meeting with the Morels, knowing you'd done the deal, or the end of day one in Covent Garden when you knew you'd done a deal for something that was going to work?

39:46Yeah. Well, I think that seeing the reaction to the actual customer interfacing with the brand is the most thrilling thing that you can see. I mean, and again, it was kind of like I would draw the distinction. We had done the deal, and that was intense. That's the top of – that's the Everest for a transactional person. So that's a pretty great mountain to climb. But the beautiful thing about food and beverage or retail, seeing a customer fall in love and engage and kind of have this kind of passion, interface, connection with what you believed. It's like the thesis worked, right? I mean, people fall in love with Five Guys and the great burgers and fries and the freshness, all that kind of stuff.

40:39Like, that's magic. What's the biggest thing that you've taken from this journey? The satisfaction of being a part of a team. You want to be the superstar and you want to get the glory. And actually, the kind of secret to food and beverage success is how can I make the guy, the gal who's cooking burgers on the grill on a Tuesday, How can you make them feel the glory of us sitting here talking about this business proposition? Make them feel like they're the essential part of that success. And so kind of reflecting whatever success and accolades the brand gets to the people who are actually doing it.

41:30Gosh. Well, you learn to celebrate them. and make sure that, and, you know, being in stores, you know, I mean, there's, you know, any day that you can actually be in a store is always going to be, you know, a fantastic experience. You know, the energy, you know, if you, we've spent a lot of time, you know, really building the culture of Five Guys and going into a store and seeing it come to life is just so, I mean, it's amazing. It brings such energy to me personally to see somebody who's been with the brand for six months. And people who have been in store now 10 plus years. We have people who have been with the business since the beginning.

42:18And seeing them grow. I mean, I guess that's the other thing is seeing career progression. People who grew from – I was a crew member at Covent Garden on day one. And, you know, they're all over the business now and higher, you know, places of responsibility. And that's really cool to see. I think it's so brilliant that you've shared the story right from those kind of early moments of doubt all the way to where you've taken it now. Who on that day in the room, which remember the Morell family was the sort of the most negative about this JV, would you say? Gosh, you know, I can't remember, you know, but, you know, I have great sympathy for all the skepticism.

42:54The only reason I ask is, have you had a conversation since with those that doubted you and you said, come on, it wasn't a bad move in the end? At that point, everybody's seen what's happened. And I think everybody can celebrate in the backside. But, you know, I mean, I guess it goes back to fundamentally. I think our purpose as human beings is connection. and you know and food and beverage is such an amazing environment for that right you know you're hungry you're tired maybe you're a little angry because you're hungry and tired you walk into a five guys and we're going to take care of you we're gonna give you some you know great burger and this whole idea of hospitality and um you know really that's the you know we're in the business of taking care of you know hungry people um and being a part of something that does that you know when you're a banker i mean i could my parents didn't even had no idea what i did right You know, like, what is your job?

43:51I get that you, you know, put a suit on and go to work, but I have no idea what you do. And obviously with the five guys, it's, you know, clear. We're making burgers and fries. And also, I guess it's a more emotional connection to your life. I mean, when you're a banker, it's the numbers, right? And it's very black and white, whereas this is more ethereal, but it feels more real, doesn't it? Very tangible, this business. Yeah, and real satisfaction of, I mean, look at how many people do we connect with. I mean, it's millions, right? All the people who've come into our stores across all these different countries and discovered Five Guys.

44:26I mean, that's, you've really, you know, someone orders Five Guys on a delivery bit and kind of, you know, it sneaks into their home when they're watching a Premier League game or something like that. And we're a part of that, kind of the stuff of life. There's a great moment. We just put some kiosks in our stores. And I walked in to kind of see how the customers were responding to it. And there was a dad with his 10-year-old daughter at the kiosk. And she was ordering a milkshake. And we have unlimited toppings. You can get it whenever you want. It's milkshake and then whatever toppings you want.

45:03And she had pressed like five toppings. Like Oreo, peanut butter, fudge, and bananas. And there was this look on her face, looking up at her dad, like, is that okay? Can I put whipped cream on top? And it was like this amazing, really human moment. And it was between them. It was a beautiful father-daughter moment. And we got to see it. We were kind of part of that equation. We were in the mix. Lovely. And that's just really, that's a currency that you don't count in the till. It reminds me of a great book I've read called The Go-Giver. Because you know the word sell comes from the old English word selling, which is to give.

45:48So to sell to people is not about getting something from them. It's about giving them something. Interesting. So you're selling if you give them more than you get. So you can look at it and go, you know, it's like, I'll take eight quid of your money, but you're giving them so much more than eight pounds back. Well, that was always - Do you know what I mean? You're giving, you're not getting - That's brilliant. I didn't know that. But that's always been a part of the Morel ethos, which is, you know, we're a generous brand. I mean, it's not cheap. You know, it's definitely, you know, you can go places and buy cheaper food, but you're not going to find a more generous brand.

46:21You know, you have this extra scoop of fries. You get fries, you get an extra scoop in it. You know, you get a hamburger and it's two patties. You know, a little burger is one patty. and free refills and you get free peanuts. And, you know, there's so much generosity built into the brand to, you know, there's a respect for how hard every customer's worked to step into a Five Guys and buy burgers and fries. We want to make sure that you have an amazing sense of value that you get back for it. And for people that might be listening to this, and their business may well not be F &B, they might be in something completely different.

46:57They might be an employee, an employer, a self-starter, an entrepreneur. What would you like to leave them thinking about in terms of your biggest lesson from business that you think is most valuable to people? Gosh, yeah. I mean, to me, it's the human element. And both in the team that I get to work with, you know, the satisfaction. I mean, I took a meaningful pay cut to go from banking to this job. and the currency that I've been paid with in terms of the satisfaction of the people that I get to work with is, you know, is, is incalculable. And then also feeling connected with the customer, you know, I mean, you know, you, you wear a five guys jacket down the street and you can kind of see people connect, you know, they're like a little moment where like, they're like, you know, like they're not smiling because I'm, you know, they recognize me or I'm good looking.

47:49I mean, it's, you know, it's the five guys on the, you know, on the jacket that they're like, you know, Yeah, that's cool. I like that. And so having that connection with your customer and the person on the street is pretty great. And how many stores across Europe now? 280. Wow, just the 280 stores from that one meeting that day in Washington. Indeed. It's been an amazing journey. It was well worth taking that meeting for the Morell family. Well worth you flying to the States. And, you know, just that moment where the whole future of five guys hung on the balance, and there was kind of that quiet moment in the room.

48:25And then Jerry, you know, just, and he wasn't, he didn't like say, we're doing it. You know, he said, I really think this might be the right thing to do, which was so interesting because it allowed for the respect for the whole family, you know, to go, I'm not telling us, but I'm thinking that this really might be right. And that made all the difference. What I find interesting about that is that Jerry allowed the debate first. He didn't say, but I think this is right. Now let's have a debate, did he? He kind of sat there and allowed the conversation to happen, which was probably quite important.

49:02And it could have gone the other way, right? I mean, I don't think that he had necessarily knew what was going to happen even before he said it. So when they were having that debate, do you think that he was sitting there and actually, depending on what was said by the other family members, he could have still said, this isn't for us? I think it could very well have gone the other way. I think it very well could have. And we'll never know how tight it was, how close it was. If he'd said, I'm not sure, do you think you could have won them around or would that have been it?

49:35I don't know. I think if he hadn't opened the door and said, I'm really leaning towards thinking that this might be right, I don't think there was any amount. I don't think there was a brilliant soliloquy that either Charles or I could have come up with that would have turned the tide. On reflection, all these years later, with all the success that you've had, if you take us back into that room in Washington, what do you think is your own personal biggest lesson from being in the room where it happened? Yeah, I think maybe a couple of things. One is business is done between human beings. And whether it's a family business or a corporate, I think in both cases, they're actually human beings behind the decisions that are being made.

50:18And showing up really matters. And with so much online communication and video conferencing, it's so different to sit in a room with somebody and sense, feel how they're thinking and responding and the body language and the eye contact. I mean, all that really matters. So physically showing up makes a huge difference, I think. I mean, it shows interest, commitment, and presence. I mean, all of that, I think, really matters. And then I think in the midst of the debate, that urge to interject a positive argument on our behalf and resisting that, I think actually was key to letting. And I think underneath that was a respect for the family and an appreciation that even though we really didn't know how decisions were made, it kind of became clear to us that this was how the decisions were made.

51:23And it was okay. And so I think being at peace that actually, however they resolved it, would be right. But also letting them resolve it, I think was key to them seeing that we could contain ourselves and restrain ourselves when the family needed to make a decision together as a family. Love it. Thank you so much. Honestly, that was so interesting. Thank you so much for taking us into the room. Well, I really hope that you enjoyed our conversation today. I thought it was fascinating. So many lessons for me personally, because we're surrounded by businesses, you know, the successful ones and the struggling ones, those that have good fortune, those that just seem to be unlucky.

52:06But actually to truly understand what is going on in those businesses, you have to lean in and learn from them. You have to ask the right questions. You have to be there. You have to be in the room where it happened. And if you enjoyed today's episode in partnership with IFS. Don't forget, you can subscribe to the show, follow us on Instagram, and be the first to get the very latest episodes.