Five Guys CEO: How we built a burger empire WITHOUT ANY Marketing: John Eckbert | E168 | Transcription
Transcription for the video titled "Five Guys CEO: How we built a burger empire WITHOUT ANY Marketing: John Eckbert | E168".
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You know, when Barack Obama left the White House and go pick up five guys, we gotta go pick up some burger. Party one. That's what makes Five Guys a Treat and Special. John Eckberg, the CEO of Five Guys Europe. Five Guys has a global cult following Five Guys Burger and Fries. It was a day in. The Cuff and Garden was the very first Five Guys outside of the US. We knew that we weren't going to be advertising. We were entirely relying on someone tasting a great burger and frying it and telling their neighbors to their friends. It has to be. That's fucking fantastic. That Cuff and Garden location sold more than any in the world. It did. Yeah, by far. I'm responsible for 225 restaurants now. How'd you stop getting a little bit sloppy and complacent? We've actually gotten better. The key to that is... As the CEO of a business that's gone through such chaos, when was your hardest time? So I had two young children. The fact is that there were moments where they woke up and needed both their parents and I wasn't there. You'll hurt the people you care about. In ways that you don't intend. In ways that you don't understand. So without further ado, I'm Steven Bartlett and this is the DiR over CEO. I hope nobody's listening. But if you are, then please keep this yourself. John, I've read quite extensively through your story and I guess my first question is, when you think back to your pre-20s, right, what are the most important things from that era of your life that shaped your perspective and approach to the world and to business today?
Business Mentality And Operation Insights
What shaped your business mentality? (01:26)
Well, first I grew up in a very counter-cultural isolationist family. So we didn't watch TV. We didn't celebrate birthdays or holidays. I kind of got up at 5am to practice violin for an hour before school and had music lessons after school every day. And so it was very different. And I think I grew up feeling different with this kind of longing to have a sense of belonging. And that was always something that I was looking for in my professional life, I think, as well. I would have been a fourth-generation doctor if I had gone into medicine. And my father told me that the profession was changing and it wasn't so much about patients and doctors and kind of the relationship that can develop in terms of health and bringing your health to your doctor and getting advice. And it was changing in America dramatically. And so he said, "Don't do medicine. I'm not encouraging you to do medicine." So I knew I had to kind of find a different role in life. And I read Anne Rand in high school and not suggesting that she's gotten everything right. But one interesting thing that she did propose was that there could be something noble in business. Being a successful entrepreneur could be a noble thing. And so the kind of orientation from my family was make sure that you do something important or in your life. And that meant taking care of other people or doing something that had some greater purpose to it than kind of just making money. But that seed of a thought that being in business could actually be a noble profession. And you actually could do something important to make people's lives better and take care of people in a different way in business was kind of, I think, an important penny to drop from me when I was 18. But yeah, it was definitely a different upbringing than most. And that sense of belonging was something I've been searching for my whole life. Do you think you've been searching for that sense of belonging more so than the average person? I think so. I think if you have something in abundance, you take it for granted, maybe. And it was something that I definitely didn't have and that I very much felt an outsider looking in. And I saw this, other people had community, other kids had community and kind of broad-based friendships and a sense of really kind of relaxed belonging. And I kind of always had this kind of anxious drive that looking for that. And I think business was certainly lived that out in the business world as well. You had quite a journey through banking and being what we'd call a regional counselor and all these things. Eventually, you came back to the UK, kind of where I wanted to start. This story off in 2010, I believe. That's right. Your good friend, Sir Charles Dunston, who was the founder of Carfern Warehouse, and you went into business originally. And then you went on in search of a new business to sort of partner with him on. And that's kind of where the five guys' stories begin. Yes, well, I'd been a student here a long time ago and lived in a tiny basement, one room flat, much smaller than this studio is. And Charles lived upstairs with his sister and girlfriend. And they invited me up for drinks one day. And they pretty much adopted me for my year abroad. And we went to their parents' home in Cambridge and to Norfolk for a holiday. So they really made England feel like a home. And I always was always my ambition to return with a non-students' budget to England. And so the chance came in 2010 and moved back here. And Charles had just spun talk talk out from Carfern Warehouse. And so I guess you can't be CEO of two publicly traded businesses. So he became chairman of both and CEO of neither and began thinking a bit more as an investor. And we got to talking and thinking, what's the next big business that opportunity that we could leverage his experience in reputation and retail. But we wanted something that Amazon wasn't so much a threat to as electronics. Online felt like a real threat to that industry segment. We thought food and beverage has got to be a segment that's a bit more protected from the online world. You kind of have to show-- this is before delivery kind of blew up. You kind of have to show up in each of food where it's prepared more. So we thought that that would protect you from the online competitive world. And we didn't know anything about food and beverage. Neither of us did. And so we went looking for a great concept that wasn't in the UK that we thought could bring that expertise. We could bring the kind of operational UK property knowledge and hiring practices and market knowledge and partner with someone who would bring that food and beverage experience into the proposition. We talked to so many US concepts that weren't here. And eventually kind of collided with the Morel family. There actually are five brothers and their mom and dad. So there's seven in the family. But five brothers who are the five guys who founded the business. And they were looking to go global, having pretty much allocated the US amongst their franchisees. So how many other concepts did you think you looked at?
Five Guy’s journey (08:20)
Was there any near misses? Was there any that you thought you know maybe any other concepts that you nearly committed your life to? Yeah. So we talked with a lot of different concepts and still in contact with a lot of those concepts. And some of them have been really helpful in terms of building the five guys business here. So if you can use insight from another concept that maybe isn't a competitor isn't here, that can be really helpful. And some of those still may come to play. The why five guys? Well, I think it starts with the product. It's such a simple, fantastic product. It's just burgers. The menu is like shockingly stark. I mean, it is burgers and fries and that's it. And when you take a bite of a five guys burger, when you have fries that are cooked exactly right, it's magical. I mean, it's a world beating product. And that was I think there's so many concepts that had gone broad. There's so many concepts in America where you can get everything in the menus like a Bible and you kind of flip through the section and you're like, how can they possibly be preparing all this stuff at the top of the game? And five guys was going completely against that, which was everybody told the Morelle family, you have to have a salad if you're going to be successful. You have to have chicken. You can't just have a burger on your menu. And they're like, when we add other stuff to our menu, it just like blows our mind. We lose focus on making a great burger. And so I think part of their genius has been focus. We're going to do just one thing and do it really well. I mean, that was the thesis for the founding of the business was if you're going to have your mom over and make burgers, what would you do? You would buy the highest quality ingredients you possibly can. You'd make everything fresh. I think the Morels were so far ahead of their time when they founded the business in 1986 because there's literally not a freezer in the five guys' equipment infrastructure. Everything is obsessively fresh. And right before we signed the joint venture to bring them here, there was a study done that said the number one criteria that anyone across the UK looked for in determining where you were going to eat was the freshness of the food. And whether it was white tablecloth or at a fast food place, it didn't matter. That was the most important criteria. And that was like the Morels thesis. Everything had to be freshly prepared that day or it went. It's interesting because conceivably, it seems to me like they were very much at the right place at the right time. There was this macro change in public perception and awareness around food and what was going into food, organic and vegan. All these kinds of these conversations around food started to emerge, which seems to have had a lot of big brands in a very fatal way, whether it's in the sugar-based fizzy drink industry, whether it's in the fast food industry. It's conceivable that the world could have gone another way. Maybe we could have doubled down on liking even faster food that has more crap in it, right? Yes. So I just wonder how important you think timing was in their thesis catching public, that sort of public wave coming into shore? No, I think you're very right about that. Our fries have three ingredients in it. Potatoes, the peanut oil we cook it in, and a dash of salt. Some of our competitors have like 16, 19 ingredients in their fries. What else could there be in fries? So from our perspective, our fries start as potatoes in the beginning of the day, their hand wash, hand cut, and then twice cooked to a very specific standard. Just keeping it simple. I think it's very much, I think they positioned themselves in front of a tidal wave without knowing it. And that trend of freshness, I think was a huge win for the family. I think the other thing that they did, which was very early on trend, even early for when we found it here in the UK, was customization and having something exactly the way that you want it. We have 15 free toppings, which means that you can have every burger 250,000 ways just by the combinations of those toppings. And everything is made by hand just for you. We don't cook anything until Stephen walks in and says, "This is the burger that I want." Now the challenging thing is that as soon as you've placed your order, there's 249,999 wrong ways to make your burger. One aspect of customer service is getting that right the first time. But customization was new. I mean in America, it goes back to Harry Met Sally and the way she ordered her salad in the restaurant is an example of how Americans want things just the way they want them. But I think that's been a newer thing to Europe. Like the chef should know, "Chef tell me how I should order this." And saying, "No, no, no. It should be exactly the way you want it." And I think that trend is certainly the millennials are very much onto that. I want it exactly the way that I want it. And five guys is really ready for that. The whole machine is like, I liken it to putting a Ferrari engine on top of an ox cart and then racing it around a track. So we're very old school, very analog in our production. It's very manual. Everything's handmade. And yet we can do a 4,000-pound hour out of Oxford Circus making burgers and fries. You'll see 25, 30 people running around madly behind an open kitchen making your food. I think that was the other secret because five guys doesn't advertise. So there literally is no way for us to tell someone who doesn't know five guys what we're about or what makes us different or special. We're entirely relying on someone walking into the restaurant, seeing how the food is prepared, tasting a great burger and fry, and then telling their neighbors or their friends, "Hey, look, you've got it. You've got to try this." So having an open kitchen where you can see that freshness and the customization I think has been part of the success of the business. It's almost like there's a set of really strong values underpinning the business and the business has been reverse engineered. Maybe not even reverse engineered because when it's the case of a founding family still running it, I'm sure it all comes sort of intuitively to them. And so in hindsight, we look at it and go, "That's the point of genius. That's the point of genius." But it all comes from these underlying values. One of those is about freshness of the ingredients and it all being very real. So of course the kitchen would be open because you've got nothing to hide. But in hindsight, you go, "Well, that's genius." No, it would be strange to hide away the kitchen in such a context. That particular point about the kitchen being open at five guys is very different from all the other fast food restaurants that came before five guys that dominated the high street where you would order the burger and then something would go on in the bag. And then you'd get this thing wrapped up given to you. Yes. I've also seen this trend with all these fast salad outlets where they put all of the vegetables, the carrots and the cucumbers on show in front of you as if to say, "These are the carrots that are going to go into your salad." Yes. And you don't really think about it as a customer that much, but somewhere subconsciously it's really, really matters, right? Yeah. I think part of the original founding of the business, Jerry Morrell picked a very obscure location and said, "Look, if we can make this location where we know we have something." It almost was like a speakeasy. We're like, "Knock three times and someone will open the slide window and you give the secret word and then you come in." And so five guys kind of had a little bit of that kind of coolness factor of like, "Hey, let me tell you about five guys. It's amazing. Maybe you haven't heard of it. Certainly haven't seen it on TV or on the radio, but it's amazing. And if you come find out." So when Barack Obama left the White House in his limo to go pick up five guys for his office, that was a great example of how, of course, everybody knows who he is and that's kind of like a megaphone, but that's how five guys was discovered. That's how five guys built its business was one recommendation at a time. I can remember, Covent Garden was the very first five guys outside of the US. And we'd spent a lot of money paying for the bar that was there to leave and then building the first five guys. We were quite nervous. We were well into seven figures for the news for the first store. And the night before opening, we were like, "What happens if nobody comes?" And Jerry Marrell laughed and said, "Look, you picked a good location. Someone's going to walk by here and they'll walk in. We'll make him a great burger and they'll tell their neighbors and it'll be fine." And of course, there was a queue at 4 a.m. in the morning and there was a queue around the building for the first two years that the business was open until we opened up more five guys around there. Because people had tried it in America, including me, I tried it. I think I tried it in America before I tried it here. I was like, "Oh, that's that amazing burger place from America. Is that why there was a queue around the corner when you were talking about it?" There actually is a burger blogger community, this global. And everybody talks about burgers. It's one of those very articulate communities. And there's a lot of debate about who has the best burger and why it's the best burger. And five guys is in that debate, in that mix. And so we're really fortunate for that. And actually, when Charles and I were thinking about who to do business with, it really was when Charles flew over and went to five guys in Manhattan, it was like, "This is fantastic. The product's fantastic." One thing that we did really differently in the UK was the property approach. We thought the product was a category winner. It was the best that we could find. It was positioned from a property perspective, mostly in strip centers, and kind of be locations in America. And we thought, "Let's give it the property presence that it deserves." And I think that positioning was a really important distinction that we made. Richard Collier, who runs our property, has done a fantastic job of picking the flagship locations to say, "There isn't a better premium burger than five guys, and we're going to make sure that you discover us partly because of where we are." So you chose aspirational locations because you wanted to make the brand aspirational essentially? Well, we knew that we weren't going to be advertising. So if you can't tell people about who you are, you have to rely upon the football, and that which essentially becomes a word of mouth accelerator. So if you have a lot of people walking by your store, some will make the decision to come in. And then that larger group who comes in then kind of tells everybody else. And that's really the way the business grew and worked.
Building a successful business without marketing (20:14)
You have this rule where you don't do advertising. Has there ever been a time where you thought, "Fuck, I just want to just run a little Facebook ad." You know, the pandemic comes around, things start changing the world. You think, "Fuck, I just want to..." You know, I know you joined some of the delivery services, which was a big decision for the UK. Because the US hadn't done that previously. But in those moments, do you not think, "Fuck, I just want to run a little..." It's real tempting, isn't it? You know, when you think about the dashboard that most food and beverage executives have, you know, you have an advertising dial that you can... You know, you can choose the quality of your messaging and the budget that you put in it and the way that you spend it. And all those dials are gone and off the table. So, you know, it does focus you on the things that you can do, which is making great burgers and fries, hiring people who are passionate about it. You know, kind of back to the whole people thing. The people who are in the store make such a difference. You know, food fundamentally is about passion. We all have... You know, you remember the great food experiences that you've had. You talk about them and it becomes part of your... You know, if you're on holiday, having great food is part of that experience. And having a passion about food is so important. And having... You know, I'm responsible for 225 restaurants now. And 8,600 people a day get up and put on a red shirt and go into working with five guys. And whether those people who are actually shaken fries and grilling burgers and have a pair about the product that they're making, the food that they're cooking, that's all the difference. Because all we have is the customer eating a great product. It can't be good, right? If a customer takes a bite of a burger and goes, "Huh, that's really good." That doesn't move the dial. Nothing happens. It has to be... That's fucking fantastic. You know, I'm going to go tell somebody who else... Who do I know who likes good food? I'm going to tell them about a burger or a fry. You know, the fries at Five Guys. It has to be that level good. And you only get that level good with people who pour their passion and their care into the food that they're preparing. And having that many people care about burgers and fries is the... I think what makes it successful. You know that sort of psychological device that's making people want to tell their friends. Do you spend much time thinking about exactly why that is? Like, what is the... Why would I care if I've had a great burger? Why would I care psychologically to tell my best mate about that burger? What is it doing for me? That's next level thinking, Stephen. Okay. And actually, one thing we have been able to do is to encourage the Morels to widen their thinking a bit. And delivery was a great example of that, where they opened up a store near the Pentagon and a general called up, Jerry, and said, "I'm like a thousand burgers at noon." And Jerry bought a big sign and hung it up, no delivery, and put it on the side of the building. And the thesis was right, which is that our burgers and fries taste best right off the grill. It's the best food experience you can get. But we convinced him that actually it wasn't just your cheap local guy who was delivering food. It was actually really high quality food. And more and more people were actually looking for really good food delivered. Did he come and try it? Yeah. Yeah. From delivery. Yeah, absolutely. Before it went to delivery. Before it went to America, for sure. But we convinced him that all of the better restaurant concepts were actually heading towards delivery. And so, gosh, five, six years ago now, we launched delivery in the UK and it really worked. It kind of became about 20% of our sales. And they saw that, of course, it's not as good as right off the grill, but it actually is a good product. And people like it and it can work. And if you work with your delivery and you have a commitment from your delivery partner to take care of the food as it's transported to the customer, it can really work. And we did a lot of stuff like telling people to turn your oven on 200, pop the fries in for just a couple minutes. It'll really liven them up before you eat them. So, they saw that it worked here and they picked it up and, of course, during the pandemic, it was our lifeblood. It would have been a very different journey if there hadn't been delivery in the system. But we've been able to convince the Morels that some of those things that were rules of the brand before can actually be good for the brand and can work. And delivery was a good example of that. And I guess that's important because the world is changing. So, like, stubborn values are really good to some extent, but in a changing world, it's almost a bit like the Bible. You have to be able to look at the thing again and go, "Huh." Maybe, you know, so... And indeed, and actually in the Morels defense, they've become successful. Who they are is saying no to change. When everybody told them they should do a chicken sandwich, everybody told them they should do a salad. They were like, "No, no, no, it's too complicated. We take our eye off the ball and the kind of core of what we do." And helping them to discern that delivery actually is okay. You can be the best burger being delivered. Because it doesn't compromise on their values. Those core values of serving food that your mother would love, basically. Exactly, right. So, they're willing to innovate, but I guess they're not compromising on their values then because those core values are still there. But now it's just about distributions changing a little bit. Well, you mean you have a customer who wants a great burger and they happen to be watching the football match. And they're like, "I am not leaving my chair, right? I'm watching the football match, but I want the best burger I can possibly get." So, that customer, you can still reach and you can give them a really good product. When you think about the incumbents then, those... We'll talk about just the burger incumbents that were there in the European market before five guys arrived. Why do you think now, from everything you've learned, that incumbents often fall? What is it? Oh, gosh. All I can say is that I think part of it is the most enduring concepts will survive. And I think if you look at five guys, five guys wasn't successful because we put a slice of avocado on a burger. So, there was nothing trendy about five guys. The kind of the 15 toppings that you can put on a burger, whether it's grilled onions or mushrooms or cheese and lettuce, tomato... How's the fresh? It's trendy. Yeah, it is trendy, but I can't imagine it ever going out of trend. I mean, you know... So, we go back. They're restaurant concepts where you walk into their kitchen and there's a little bank of microwaves. And they pull this stuff out and pop them in the microwaves. I can't imagine that anyone would ever go, "Let's go back to that." I think fresh is now an enduring expectation across price points. You can have five guys that's incredibly obsessively fresh. Why would you not if you could? One of the things that I sometimes think about why incumbents fall is that quality and attention to detail declines as growth increases. So, the more locations we have, quality... I can see from your face that it is. But obviously, I think about... I won't name names, McDonald's. I just think, you know, the more locations you have, especially this underlying franchise model will really ultimately hurt the quality of the product. And if it hurts my quality... Going back to what you said, if I have a bad burger, Milton Keynes, I'm less likely to go into McDonald's in Thailand. Yes. So... I mean, McDonald's, I would say, is actually a really strong competitor. I mean, they give you what they say on the tin. Is it declining? I don't know the numbers. I know you're not trying to slag anyone off here, but is my thesis is those businesses are in decline because there's been this new wave of fresh? And... You know, almost all of our customers also go to McDonald's. And, you know, if you look at the frequency of five guys, McDonald's has huge frequency. Eight times a year, more a year, which actually ends up being people go there a lot. And five guys' frequency is much lower than that. And, you know, five guys is a treat. You know, it's not something, you know, like a competitor of mine that I think very highly have, you know, prepped and done an amazing job with who they are. You can go to a prete pretty much every day, right? And, you know, the subscription coffee stuff, you know, all that kind of stuff works on a routine basis. You can't go to five guys every day. I mean, I go to five guys, you know, pretty close to it. But... You know, eat a burger that I kind of frequently. But, you know, most of the customers are going, you know, a couple times a year. So, from a frequency perspective, I think, you know, that's what makes five guys a treat and special. So, on that point about the incumbents and what makes them fall and scale being one of those key factors, how do you guard against that?
How to stop employees becoming compliant (29:52)
You know, you've got 225 locations you said in Europe that you're managing. Yes. How do you stop the 226th location, you know, getting a little bit sloppy and complacent and then serving bad burgers? Yeah, gosh, Stephen, you know, that was my primary concern when I, you know, I was... Charles and I structured the joint venture together. We hired the first employees, you know, and opened the first restaurant. And, you know, it had such amazing momentum, you know, it was kind of this explosion of five guys. And it was, you know, really fun to be a part of. And the kind of thing that keeps you up is, okay, we're going to grow this business, you know, as fast as we can. Because we know we have something. How are we going to keep the intensity and the energy and the passion that we see in the store in Common Garden? How do we make sure that everyone in these restaurants has that kind of intensity? That was the most... that Common Garden location sold more than any in the world when it launched. It did. Yeah, by far. I mean, we underwrote it for like a five and a half year payback. It paid back in two years. I mean, it was just a phenomenal success. But yeah, I mean, the thing that kept me up at night was, you know, how can we make sure that, you know, we open up in Milton Keynes. We open up in, you know, the smallest, you know, we're going to open up a store in St. Andrews. You know, how do we make sure that those stores have people who are absolutely passionate about burgers and fries and taking care of hungry customers? And that, I will say, has been one of the biggest surprises of my ten years in this business is that we've actually gotten better. And the key to that is hiring, you know, very talented professionals and trusting them. And, you know, my personal style is a very hands-off style of management. I mean, if you expect me to micromanage you, we've gotten off in the wrong places, the wrong fit. You know, we hire professionals who are really good at what they do and let them do their job. And finding those people who are absolutely operators. I'd say the other bit is that we are very operations led. I was a banker before this, but I'm fully qualified in a five-guys kitchen. So I can do every task that you see in, you know, making burgers and fries. I'm certified to do that. There are people who are much better at it than I am. You can do it much faster than I can. But if you have any credibility in the business, you have to be operationally capable. And hiring operationally capable people who are really good at identifying and qualifying those people who can run a store and bring that passion into a store, that's been the secret of the growth of the business. Because having that kind of commitment from the person who's showing up and running a shift, that's what makes us restaurant successful.
Installing company values (33:06)
Going back to that point about values, I would imagine that, you know, from speaking to actually sports teams and speaking to the players and those successful sports teams, whether it's the Manchester United players that were under Sir Alex Ferguson for 20 odd years. And they said something to me, which is really interesting. And I never forgot, Rhea Ferdinand said to me, he said, "How many times do you think Sir Alex Ferguson came into the training ground changing room?" I said, "I don't know." You tell me, he goes twice in 26 years. And I go, "Well, the culture was in there." So he didn't need to come in. And then he told me about when he moved to another football club, and in that same training ground changing room, they're all bickering and talking about how much they're being paid and slagging things off. Whereas Sir Alex Ferguson never needed to walk into that room because the culture was already in there. And it made me think about how, you know, to keep the specialness of what made you successful at one location when you have 225, those values in that culture must be so strong. So if I'm starting at Five Guys in a Management position today, what are you saying to me to turn me into a Five Guys disciple? Well, I guess we do actually have values that we identify with inside the business. And hiring right is essential. I mean, there's so many talented food and beverage professionals who are really good at their job but who are a terrible fit for us. And so being able to find those human beings who work in a Five Guys. So a general manager works in the restaurant with customers, with crew, making burgers and fries, taking resolving problems and issues. There's not a laptop job in a Five Guys. So someone who's looking for kind of, you know, a kind of ice skate above things and, you know, not really getting your hands dirty, that's not the right fit for us. So I guess the first thing we did was, you know, when we opened up, nobody knew who Five Guys were, so we had to beg people to work for us. And of course, that's always a mistake. You hired a lot of the wrong people and you have a lot of churn early on trying to find what that right fit is. And so I remember it was a really important decision we made where it's essentially going to invert the equation. And we said, you know, Five Guys is a really hard job. And it's probably not for you. And then kind of be quiet and look for the woman or the guy who kind of raised their hand and said, that kind of sounds good to me. And so having the kind of negative sell on working at Five Guys, I think was a really important distinction that we made. But once you get into Five Guys, we have five values that we build our business on. And that's integrity. You can't, once you lose your integrity, everything else is easy. So having integrity in how you lead, being competitive and, you know, wanting to win and going after the business, being enthusiastic, having passion and positivity and looking for the solution, family oriented, taking care of people, having a sense about the human beings who are on your crew and the hungry people who are coming into your store and treating them, like family, then getting it done, not over-complicating it. Our business is, you know, our menu simple, our business is simple, but it's really hard. But making sure that you have a very much results oriented focus as a manager. And we actually train and teach those values. And when you look at the pandemic and how Five Guys, comparatively, surfed through the pandemic, it was because we taught those values and we all absorbed those values into how we thought. And then when, you know, you had to be agile and nimble and flexible, you knew what the objective of the business was, and all the managers just beautifully adjusted their business to reflect the opportunities that they could take. How do you go about instilling those values in team members beyond the day when they're hired? Is there certain things you're doing every quarter? Is that daily emails? Like what are the touch points where you're using them as an opportunity to say this is who we are, by the way? Yeah, well, I think the first thing was a card from a deck that you played was we launched an app, right? Like within a week of the pandemic following, we had been planning to have an employee oriented app. But we launched the app right when the pandemic struck, we're like, we have to be able to communicate because none of us knew what was happening. And being able to be in direct touch with every human being in the business was such a great tool. And we immediately had like massive down, I mean, it was universally kind of accepted as a way to communicate with inside the company. So I was recording something pretty much every day to say, you know, here's what's going on, here's what the rules are, here's why it's going to be safe to come to work, here's how we're going to protect you and your family and the crew and the customers in this environment. And being able to have that direct line of communication to the whole company was really powerful, kind of cut through a lot of the fear and uncertainty about it. One, two is that we're now investing massively in learning and development. We, 75% of our managers are promoted internally. So these are people who have joined us, we have people who have joined us crew and gone on to be district managers, area managers now. So that kind of career opportunity is fantastic. So if you're ambitious, if you're have, you know, career goals, come to Five Guys, because we're growing and we need your talent to grow the business. So being able to, first of all, we know that that internal development is kind of the best path to growing inside of Five Guys and having new leaders for all the restaurants that we're opening, we've got to invest in the young people who are joining us. And teaching them not just burgers and fries, but how to manage people. You know, there's so many different kinds of people that it takes to make a restaurant work. How you communicate with one crew member may be very different from how you communicate and motivate with another one and giving our managers tools for how to connect with all different kinds of people who work for them is, you know, an important investment that we make. Before the pandemic happened, I think I said a lot on this podcast and just generally that my single biggest learning, being a young entrepreneur, starting in business and then making all the mistakes and then getting a little bit more mature was the importance of talent.
Hiring the best people (39:27)
And I always say that by definition of the word company, the definition of the word company means group of people. It took me too long to figure that out because when I started, I was 20 years old. You know, you just hire your mate here. 18 years old, I started my first company, hired my friend here, I met someone at a rapper then, I was like, you can be my marketing director, went into Prada, met another guy, I was like, you can be the head of our account. It was just that kind of whoever was willing, right? Right. Great people. Exactly. Probably who I needed at that phase. But for the next phase, you need to, I learned that you need a different caliber of person. And really, I should have been a bit more ambitious from the jump, if I'm being completely honest. And so now I reflect on it and think, damn, in fact, every company is just a recruitment business and it's cool. Like, if I'd hired Steve Jobs, I would have bound them with the right culture and values. I would have had an apple. Right. I would have made an apple. How important do you think it is to hire the best people? And how do you go about that? What is the strategy? Yeah, well, first of all, I think we had the benefit of seeing the success of five guys in the U.S. So Charles and I had a conviction that even before we opened the first store, of course, we were nervous when we opened it. But we thought we had a tiger by the tail because we thought the product was fantastic. So we were able to assemble people who were proven to be really good at what they did from the outset and kind of like across the board and the senior management team. So Julie Spear, who's my head of operations, unbelievable. We wouldn't be where we are without her. Richard Collier, who's head of property, he opened up 2,400 stores for Car From My House all across Europe, really established professional. Those two were essential. We would never be where we are without those two individuals. But then kind of driving that all the way down to the first crew person who you hire for a new store, hugely important because they're actually going to be making the burger and fry for the customer who walks in there. And I think that it's probably an urban myth, but the Shackleton story about putting an ad in the paper for his South Pole expedition, it's going to be dangerous and risky. We may not come back alive, but if we do, it'll be glory. That kind of negative sell, I think was a critical point for us where five guys is a really hard job, huge expectations, physically demanding job. It's not for everybody. And stating that, being confident enough to say, look, you're a very talented professional in food and beverage, but you're just not the right fit for us. And being the confidence to say no in that regard, that was hard, but I think that was a real turning point in the business wars. What about firing people? It's the worst part of the business, really hard. I mean, if you get it wrong, it's so painful. These are people who you know who are human beings, and if the jobs either outgrown them or they were the wrong cultural fit, it's really obviously hard for them, but it's really a soul-crushing moment, which makes it that much more important to hire right in the interview for culture. But when an interview finally gets to my level, I am 100% focused on culture. I mean, the whole qualification of their professional skills has been addressed by the time they get to me, and I am solely focused on are you a good cultural fit? Are you the kind of person who obviously is good at what you do? When we're in the trenches and when the chips are down and we have to make the hard calls, are you going to value the same things that I will and that we do as a company to make your decision? What is your philosophy, though, for moving people? And you have a clear philosophy around hiring people. What is the philosophy for moving people on? Because this is, again, one of my other biggest mistakes in my professional career was allowing people who are clearly not right fit to kind of overstay their journey with my company. I just wish sometimes that I had, because the net damage of that, when your gut tells you this is not the right person, but maybe for whatever reasons, emotional reasons, you don't act fast enough, it's so severe. First of all, I think you have to make the decision that's best for the business and realizing that this business is bigger than any of us, including me. I'm hired and fired by my board. Charles and the Morels can decide any day that I'm not the right guy to leave the business going forward. And certainly at the executive level, to me, my expectation is that everyone should have that expectation. It's a privilege to have the jobs that we do. It's not a right. And if there's a tough decision to be made, making it clearly, cleanly and directly is the best thing, there's no reason to be negative about it. You do have to be very direct about it. Quick is really important in my book. There is a bit of a difference between the UK and the US. The US has favors that quick side of things, and I think I probably fall into that category, and that can be a challenge in an environment where there's like, what about a six-month garden leave? I'm not sure what a garden leave for you. I wouldn't be the way. So I launched a business here, then we took it to America. I'm like, what? Two week, notice period? Everyone has a two week list, so what the hell is this? And it's really just a box, and you probably should leave now in America more than not. It feels like. But I think once you've made that decision, you can't move soon enough, because it's rare that someone is that you would consider to say, I really don't think they're right for the job, and that that person recovers to being a superstar. That almost never happens. So if you do have that, I'm not sure this person's right for the business, either from a talent perspective or from a cultural perspective. I think you need to listen to that urge, because it's probably right. And actually, it's a favor to that human being as well, because whether it's talent or if it's a cultural fit, there may be a fantastic opportunity elsewhere for them, and all you're doing is holding them back professionally because they're never going to fly in your organization, but they might in another culture. So I know it never feels like that to say, look, I'm doing you a favor by telling you not to work here anymore, but if you know someone's not going to be successful in your business, it is best for everybody to do that quickly as soon as you can, actually. How important have you realized it to be in the Five Guys business and for the success of a Five Guys brand to have a real high attention to detail and to sweat the small stuff?
Attention to detail (46:42)
Because a lot of businesses don't sweat the small stuff. They kind of see it as being petty or not mattering, and they kind of focus more on the big decisions they make. But what's your sort of philosophy towards the small stuff? Well, first of all, I think being operationally focused is something that defines your business. And for us, so our details are the standards for cooking burgers and fries, you can never focus on that enough. And if you're not actually cooking burgers and fries, you better be supporting someone who is in the business. So that kind of horrible disconnection that you can sometimes have of a head office, people who call it the head office, we call it the back office, from the actual business, to me, is the death knoll for, certainly for a food and beverage business. So having that connectivity to the detail of the purpose of our business, which is feeding hungry customers, to me, is essential. Now, from a detail perspective, I don't want to get into the details of my IT guy, or my marketing team, or the property team. I've hired people who are fantastic at that, and I don't want to be into the details, I can't be into the details of each of those professional expertise that you hire for, you have to hire talent and let them do their professional expertise. But how do you check that, you know, if something, say something in one of your stores and say, like, we mentioned Milton Keynes, so let's just keep focusing on that. In Milton Keynes, if standards have dropped because of the leadership there, how are you checking that those standards are staying high? Yeah, so we'd mystery shop every store twice a week. Okay. And we put the money that we would typically, that other brands would spend on advertising, we spend an incentive compensation for crew. So we pay out millions and millions of pounds of incentive compensation to crew to be the best of the best. And we grade, so the mystery shop looks like 120 points of what's important, from a burgers and fries perspective, from a cleanliness perspective, from a customer service perspective. And the top rated shops that perform get paid, meaningful incentive compensation. So I'd say that, back to the competitiveness, everybody wants to get paid, everybody wants to compete for that excellence and to be recognized for that. So mystery shopping, I think, is a fantastic way of ensuring that we're all focused on the same thing. If you find a location is continually ranking at the bottom of that mystery shopping scoreboard, what are the next steps of action? Yeah, well, I mean, the first question is in store leadership. Who's leading the store? Are they the right person? Do they have the right orientation? Do they have the right values? Are they trained enough to do their job well? So we have a very flat organization where you go from general manager to district manager, area manager, and then basically the top of the business. So it's pretty quick. And I do what's called a mid-year review. I'm actually missing a couple to be on your podcast today. But we have every GM stand and present their store's performance once a year in June, July, August, in that timeframe. And so I get a view of the in-store leadership. You know, who is that human being who's in charge of that store? What do they have to say about the results that they've delivered both from a financial perspective? Most of all, from a customer service perspective and a quality perspective. So you kind of get a direct view into who is that human being who's running the store. One of the things that's happened over the last couple of years is this pandemic.
How do you keep calm? (50:43)
It's been this very tectonic shift in many industries, but there are a few industries that have been affected more than like the high street and retail and food and beverage. There's been real tectonic shifts in technology and football and all of these things. As the CEO of a business that's gone through such chaos, how do you maintain your own personal calm with all of that chaos? Because it is just never ending. We were talking before we started recording. You've gone from a pandemic to inflation issues to this sort of great resignation and a heart and a talent crisis as they're talking about. All of these things happening at once, you're a human being in the heart of that. How do you enjoy your life and keep calm and not annoy your partner or whatever? Yeah, I'm sure I do all those things. I'm sure I don't keep calm all the time. And that's okay. I think just as we in the business try to keep things simple, focus on burgers and fries. I think there's keeping focused on just a few things and picking the couple of dials that will determine whether you're going to be able to get a little bit of a problem. I think it's interesting. The moments that I consider to be the most intense and the most rewarding as a leader are the human being. I think the way I try and manage myself as a CEO. I think it's interesting. The moments that I consider to be the most intense and the most rewarding as a leader are the human ones where because I'm CEO, people have to explain what's going on in their lives. And those moments are just rich gold for me as a human being where someone comes to me and says, "I've got a parent who's suffering from dimension. I have to spend some time looking after that." Or, "I've had a loss and I've got to figure out how to manage that loss." And those human connection points are an action that feeds back into our family value where we, and as a CEO, I have a smaller direct report community that I have to take care of those human beings. And my view is that if I can take care of those human beings, they'll do their job and take care of their human being. So recognizing that it's not all dollars and pounds and pens, it's not all KPIs that you can manage, it's not quarterly earnings, it's the human beings. And if you focus on them, particularly on the vulnerable moments when they're most upset when they're most at risk, and being able to say, "Yeah, take a week, take a week." What you need as a human being is important for the business because I need you, I need your professional acumen, but I need it focused. So being sure that they're all right in those moments, I think gives me the satisfaction that I'm looking for from the job of Chief Exac. My dad was a psychiatrist and was obviously clearly focused on mental health and well-being and from a chemical perspective. And realizing that whatever chemical, I mean, obviously I'm sure he did important work in that regard, but you can, at work, you have the ability to either build up or tear down someone's mental health. And being able to provide an environment where someone's mental health is protected and perhaps even tended to, I think is a powerful thing for me as a leader. And what I see is that approach carrying out throughout the business. So that style of leadership is contagious as a value in the business. So if someone's in distress in a crew, the shift will suffer and you have to take care of that person who's in distress and understand them and see what it takes to build them back up and to provide them the support and security to be effective in their job. What about your mental health? When was your hardest time?
Hardest moments & how to handle them (55:18)
My hardest time? In your five guys, Johnny? Yeah. Well, I went through a very painful divorce and went through something called Leave to Remove, which I wouldn't wish on my worst enemy. It's essentially the right to have your children taken out of the country. So I had two young children who the court system approved Leave to Remove, which allowed my ex to take my kids back to America, which was incredibly painful. And my whole view of myself, my definition of who I was changed. I thought of myself as a great partner, good husband, good father, devoted father. I was in politics back in America, was involved in my community and church leader and businessman. And I thought, all these things are who I am. And essentially, all of that was quite a large bonfire of vanities. And that was a real dark moment for me. And there were days when five guys was the one thing in my life that was stable and that I could hold on to. And it really pulled me through a very difficult, dark time, personally. How long did that process last? That's part of the UK challenge. It took years. A better part of two years were in that process. And then trying to rebuild those relationships. Thankfully, I'm in an amazing place with my kids now and have accepted that we have had a more adult relationship prematurely. But now that they're both at university, it feels more normal now. And those are hard fought, hard won, recast relationships, which were really important to me. But I was the thought that they were at risk was caused just enormous anxiety. And living with that kind of anxiety on the personal side, having a place where things were more predictable, and being able to work in that way, provide for them, was a real help me through. When your kids are essentially taken away to another country and you've got this huge responsibility of running this big business, how does that impact your ability to show up every day professionally? Well, it was really complex for me because I had a non-compete back in the US for the business that I had sold. So I couldn't just relocate back to America and do my job. So it felt like a huge cash 22 because I had these court-ordered financial obligations. And the only way that I could really fulfill them was to keep doing my job here. So... What did financial obligations is in the separation costs and stuff that you have to pay to a part? Exactly. So it felt like a cash 22. They were allowed to leave, but I had to provide for them, so I had to stay. So it felt like a kind of a indentured servant for a bit. But being able to focus on the important job that I had actually was enormously relieving. Because I knew that for 10 hours a day, 12 hours a day, whatever it ended up being, I could actually do something productive that I knew I was good at that made a difference for them. And that the anxiety of being separated, I could set aside for those hours in a day. And that was really helpful. It could have just kind of overwhelmed me. But work was able to... It was a place where I could escape from that. Did you see your motivation fluctuate? Often when we have these pretty substantial life events, there's an initial period where getting out of bed in the morning is a little bit more difficult. So almost like someone is messed with your why, your reason to get out of bed and your sense of purpose. So you always have to... I've learned from my own experiences that you have to spend a little bit of time. You're almost faking it to get the drive back, if that makes sense. No, of course. I told you I got up at 5am when I was a kid and practiced violin for an hour before school. And I was never a great musician. But what I did find was that if you did something every day, you actually could get better at it, maybe even more than competent. And I think it was something like that that just in me said, "Get out of bed, do the next thing." And things will change. I called a friend of mine who had been through a similar situation. And he said, "Just keep showing up. You know, texting my son every day, calling every day, being as present as I possibly could. And obviously it's imperfect. And it's deeply upsetting, I'm sure to them, as well as to me. But doing it as much as you possibly can to be available and in touch. And then you just have to trust. Trust something that it'll be okay. Trust something. I think just trust life that it will. No, I mean, you know, now we're getting very personal to you. But, you know, I believe in a higher power. I don't pretend to understand it. But I think there's something much more powerful than I am in the world. And what I will say is that it helped me to see the world in two camps. One are things that I can control and some things that I absolutely can't control. And if you spend, if you allocate your mental health and your time on the things that you can't control, you can drive yourself to distraction and eventually madness. So being able to focus on the things that you can control. And realizing that that's your job. You know, your job as a human is to do the things that you can control. And if you, you know, it's just arrogance and ignorance to focus on the things that you can't control. And so identifying those two camps and being at peace with that, accepting that you can't, some things you can't control, that's really hard. But it's hugely important. Yeah, I was at this festival this weekend and there was a, I did one on one meetings with lots of people that were in the audience for three hours. And I found myself being asked over and over again how to deal with exactly that, which is when chaos arrives in our lives, what to do on that day. And people had me recording these voice notes for them for that day. So when that day comes, they just wanted to be able to play it. And what you said there is exactly what I said, which is there are a small list of things you can control. And on that tough day, make a promise to me that you'll spend 100% of your mental energy focusing only on those things. Because you can't, because obviously yesterday, focusing too much on that tends to lead to depression. As I think the loose hour, the philosopher says, focusing too much on tomorrow. And the things that are yet to be in your control will also cause a lot of anxiety. So really focusing on today, I think is just phenomenal advice in terms of A, it's the thing that's most conducive with a successful outcome. But B, it's also the thing that's most conducive with having a healthy mental state in total chaos. No, I think that's absolutely right. I think the other thing is that realizing that our, I believe our purpose in life is human connection. I think that's why we're here. I think we're made to connect. And sometimes it's, you know, we're colliding, you know, more than connecting, but figuring out how to connect with other human beings. And I will say, you know, that was the making of me as being able to, you know, when someone comes into my office and says, you know, I've lost my, I've lost my partner. You know, they passed away, you know, way before their time. You know, being able to connect with that person in that moment of loss is hugely valuable as a company. But hugely meaningful to me as a human being. And I wouldn't have been able to do that if I hadn't been through the loss that I had experienced. So, you know, it's one of those things where you end up being grateful for the most upsetting things that happen in your life because I think they're the making of you in many ways. Because of what you said at the start, this conversation about that importance of feeling like you belonged. And so, it's so evident that that is much of the reason you've also been successful is you're, you mean, even from this short conversation we've had, you strike me as a very empathetic person who's able to connect with others. That moment must have been presumably even more difficult because your sense of belonging in that moment was taken from you to some degree, the family unit, right? No, for sure. That was a defining moment. But now, you know, the thing about five guys is that we have these 8,600 people who get up every morning and have this shared vision mission to make great burgers and fries for hungry customers. And I get to be a part of that. And, you know, I get to be a part of this larger community that has this, and that, you know, winning in business feels fantastic, right? I mean, it's a real high. It's a drug and it's an addiction. And being a part of a community that's accomplishing this thing, you know, we were the 8th fastest growing business in 2016, I think, in the UK, and the fastest growing food and beverage business. And even with that, we never met a budget that I had made. So, you know, we were fastest, but, you know, still behind by my mind. And being a part of this community that shares our values and that are all working towards this is enormously satisfying. And, yeah, it feels something that, you know, has always been empty. Some days, as CEOs, we maybe were tired or, you know, we're in a bad mood or something's off. We can sometimes not show up as our best selves. And sometimes when that happens with me, I regret it. So, I'll go home and think, I just wish I'd, or should handle that situation differently. Does that happen to you a lot? Well, you think, fuck, I wish I'd been in a better mood or I'd slept more today or something. Yeah, Julie tells me when Julie, my head of ops, she comes in and says, "Yeah, you really fucked up that meeting." That was it. But actually having somebody who, you know, to me, one of the worst things that can happen are these, you know, Emperor has no clothes where, you know, where the most important, powerful person in a business has blind spots that, you know, everybody knows about. And somehow you, you know, you work around. And that's just hugely dangerous as a business. And having people who can come into your office and go, "John, that comment was just way out of line or really unhelpful." You know, you now have people thinking, "You like this. Is that what you wanted?" So, people who can confront power with truth, and, you know, to me, that kind of culture is hugely important to a company. Because you can go so wrong with the Emperor has no clothes and people thinking, "God, we know this. We just can't tell them to that person." How did you cultivate that? Because I imagine a lot of CEOs and a lot of team members that work for a CEO think, "Ah, there's no way I could give my CEO and tell him that was wrong or he shouldn't have said that." What? Or she shouldn't have said that. I think publicly owning your shit is really helpful in that way. So showing up at the next meeting and go, "Hey, you know what? I said this to the last meeting, and that was just really wrong. It was off. And I was off my game or I didn't think it through. And it should be the opposite of that." And showing that you can respond to that kind of challenge, I think, is important as a leader. And then you give everybody else permission to do the same thing. You can change your mind. You're allowed to change your mind. You're allowed to be wrong as a fallible human being too. And confessing that, it's powerful. That confession there, when I heard that example, what it actually says to me as well is that as a CEO, you care more about the correct answer not being right. So that might be confusing because of the way I said that. When you stand in front of your team members and say, "Do you know what? In hindsight, I actually got that really wrong and I fucked up." What you're actually saying is, "My number one thing as John is to find the right answer, not for me to be correct." And it's really refreshing here that you're in search of truth and the correct answer, not in search of validating your own opinions and yourself, which, as you say, creates that culture of humility where hopefully others around them will go. I'm also wrong in this situation. Exactly. Well, business shouldn't be an homage to an individual. We're about perfect burgers and fries, hungry customers, clean restaurants, customer service. And that's really simple. I mean, it's not a... And if any of us isn't the right human being to fill the function that we're supposed to be performing, we all should raise our hand and say, "Probably not me anymore."
Critical feedback, standards & customer service (01:09:38)
How do people give... Do you have a system in which people at Five Guys could give... They're working there in the team, could give critical feedback safely? Yeah, so I mean, we do have kind of like the scheduled annual conversations. I didn't often. It was kind of in my... In my "don't micromanage." It was just kind of like people will come to me if they need to. And I think that probably was wrong. And saying, "Look, we're going to have a dedicated time." And really, I don't feel out of form where you did well in this and poorly in that. We don't do that. But I sit and say, "Let's talk about what worked and what didn't, both... " ...you know, a chance for you to tell me what didn't work, but also for us to talk about what didn't go right, you know, and worked this year for you. "And what do we do to fix that? How do we make it better?" So I think having a set time to talk about that actually is a good idea. And I've taken that up somewhat reluctantly. But now enthusiastically. Much of this conversation has centered around five guys sort of central philosophy of really, really caring about the customer. And you talked a little bit about how each store has mystery shoppers that come in and make sure those standards are maintained. Is your objective now to push the standards up even further? Or is it to maintain the standards? No, well, first of all, I think I'm responsible for Germany, France, Spain, Portugal, UK. And in each market has a little different national temperament. And figuring out what constitutes good customer service is a bit of a nuanced thing in each given market. Give me an example of the difference. Does someone want to be checked back on? Someone's sitting there eating their food. One of the things we talk about is first mover advantage. You should have your head on a swivel looking around for people who are looking for a solution to a problem with their meal. I'm sure you've had that. We're like, "I'd like some extra topping or sauce or something." And you can't get anybody's attention. So teaching someone how to be in tune with a customer who's looking for help. And that's very culturally dependent. Someone can communicate that very differently in the different markets. One of the things I've been thinking a lot about because I had that exact problem recently was I was in a restaurant that was very busy. And I feel like I spent 15 minutes trying to get someone's attention to try and get some catch up. The food goes cold. I'm like, then I start eating it by the time they've come. But you really wanted that catch up. It goes like they're really... And it's gone before... Then I asked for the catch up and I've eaten it before the catch up. So I just have a bowl of catch up and no food. And I was thinking I sat there in this restaurant in Spain a week ago. And I was thinking if they just had an iPad on the table, I could have pressed a button and they would have known. And it would have helped them because I'm sure they want to help me. They just weren't aware. And I would have got helped faster. And I'm not considered implementing more technology in the place of human beings. That sounds pretty brutal, but it's just the truth. Yeah. Technology is part of the solution. It's certainly... And actually probably your phone is already there. And there's got to be a way to make this communication tool that you already have in your hand hooked up to an effective way inside the restaurant. Now, more and more young people expect technology to be part of their journey. And they're securing of the things that they want and need. But they're also people who are completely opposed to that. We are a very analog brand in that sense. I think that there's more openness to technology than there ever has been before. So we did curbside service, which essentially is like reverse Uber, where we can kind of track your car as it approaches. And we can prepare your food as we see the countdown for your arrival. And so the kind of perfect scenario, which we often get, is where you drive up and the fries have just come out of the fryer and shaken and salted and ready to go. And it kind of like comes together beautifully at the right moment. So absolutely, we should use technology to meet the customers' needs and to address those people who prefer technology. And also we can't be everywhere and be perfect in terms of responses. So yes, technology will be a part of that interaction going forward. It's somewhat caught between two generations, I imagine, because I was in Nando's the other day. And first time they've told me, "Oh, you can just order from the QR code stuck on the table." And I imagine my dad might not like that experience. For me, it was convenient. That's how perfect it is. I just talked to anybody. Typical millennial Gen Z. Well, and we should be able to adapt for the customer. Because they're human beings who actually view customer service as not having to speak. I really just want to stay in my own world and press a button and get exactly what I want. And we should be responsive to that. How much do you think the structure and the way that the business, the foundations of the business in terms of it being a joint venture with the Morals as opposed to a franchise?
Business decisions and their impact (01:14:53)
And generally, the philosophy towards what you're building and how long that sort of time horizon is has impacted the customer and therefore the success of the company. Well, of course, my experience is incredibly biased because all I've ever known is the company-owned model. And so the franchise model is genius. And it really works and there's a power to it and you can become really strong as a franchise and franchise business. It's really worked well for us. Whenever you form a company and whenever you form a joint venture, you kind of have all these rules and governance and how to make decisions. We've never even referred to it once over the past 12 years. So, you know, having nothing but building a profitable business has been fantastic for me as a chief exec because I knew that my shareholders were completely aligned. And we would never have made the decisions that we did, particularly from a property perspective without being a joint venture. As a franchisee, you wouldn't have paid the premium to buy a 10,000 square foot property on the Chauns of Lise and between the Louis Vuitton corporate headquarters and the Abercrombie and Fitch global flagship store. And there's five guys. It's amazing. It's probably the most high-profile, visible five guys apart from the one that's in the Dubai Mall. So, that property strategy was definitely influenced by the structure of the deal, taking those high investment property decisions to reposition the brand, you know, as premium as we could get it. And it's still running like a family business at its core. Yeah. It's still making those very value-focused decisions as opposed to making decisions for the stock market or... The quarterly earnings report is not a pressure for me at all. The family meets every Tuesday and talks about the future of the business. I meet with Charles on a monthly basis to review the property and the pricing and the positioning of the brand. And those conversations would be different with a different structure, for sure. Because one of the things you said is, "I don't have a time horizon," which means you're not trying to build a business for three years and then jump ship and get out. So you said, "I don't have a time horizon," which allows you to build a really great business. For the long term. Yeah. I can't get in that because there'll be business owners listening to this that are maybe thinking, "Oh, I'll build for two years, then I'll sell it, or I'll build for three years and I'll sell it." But what you alluded to there is that you'll create a much better business if you remove that time horizon. It has been for us. You know, and obviously I've been involved in private equity investments. I mean, there certainly is a place for that. And I'm not saying you can't be successful in those environments. It's really worked for us to be able to focus on an indefinite time horizon and doing the right thing today. I mean, ultimately, private equity wants you to do the right thing today. And whether it plays out next month, next week, next quarter, I think sometimes the interpretation of the urgency of the investment window can be misinterpreted to make urgent decisions rather than the right decisions. And I think it's up to some degree, it's up to the chief exec to say, "Wait a minute, you're all focused on the wrong thing just right now. We could do this, which is going to make more quarterly earnings next quarter, and I'll make my budget. But the right decision is to invest in the medium term, long term, and here's why." So I think there is a lot of pressure, but to some degree it's that position of chief exec where you need to say, "Wait a minute. That's the wrong business decision." And we can build a better business, be more successful by thinking not about next quarter.
What’s the biggest threat to Five Guys? (01:18:46)
What's the biggest threat to five guys? Biggest threat to five guys. I think losing focus on the basics of burgers and fries, thinking that we're something other than being burgers and fries. That laser focused on making the best burger you could for your mom. I mean, that has got to be at the center of who we are and what we're about treating each other like family. And realizing that it's the human beings who are in the store fundamentally, that to me was the biggest inversion from banking. Banking was, it felt like to me, a very primadonna-ish business where very individual accomplishment and you could ultimately get paid by moving from one shop to another and taking credit for work. You might not have been 100% responsible for. And this business, it's all about reflecting any glory that comes to the business to the people who are actually making the burgers and fries, taking care of the business. And to me, whenever we, if we were to ever lose focus on burgers and fries, that would be the end of the business. On a personal level then, what makes you happy outside of the professional stuff, outside of five guys?
Personal Life And Future Plans
What makes you happy? (01:20:01)
What is it, what are the ingredients that make you happy? It's the connection stuff, the painful, gritty, vulnerable connection stuff. And yeah, I mean, like I tell my kids now, I mean, I hope that I'm the guy that you call when something's gone wrong. It's great to get the calls that you got good grades and that you got the job you wanted and things are going well, you got a promotion. That's wonderful, but I want to be the call when something goes wrong, when someone breaks up with you. And your job doesn't go the way you want it to go. To me, that connectivity at the vulnerable place is the currency that is most precious to me. It's much the reason why we started this podcast, to be honest, because sometimes being a CEO, much of it is about, well, I used to think it was about being seen as being perfect and strong. And like you never had me personal issues yourself. I think that's probably what I'd learned about being a CEO and a leader. It was always, you know, you've got to be rock solid. But the reason why this podcast was called the Diary of a CEO is because CEOs are humans too. Successful people are humans too, and it turns out they have all the same bullshit and problems and pain and personal stuff that everyone else has in their lives. And you've talked about much of that today. I know this is a question I've asked a few of my guests recently. I really enjoy asking the question, but it's somewhat of a pun in it, I guess, in this case. If your happiness is a recipe consisting of a series of ingredients and different quantities like, you know, the five guys fries just being three ingredients, what are those ingredients? And is there anything missing? Well, I think vulnerability is probably the biggest new ingredient that I've had to mix into my life. I have to. Yeah. I mean, you know, I think the being separated from my kids forced me to re-look at everything. And I think also realizing that I have massive blindsides that I don't see and that I have convictions about the way I think in my intentions. But actually, there's a huge sea of unconscious motivations that I'm unaware of and purposefully so, right? We build our mental defense constructs to deny the unconscious motivations, but that actually drive us. And that's what my partners helped me to see, that, you know, there's so much that, you know, I think I'm doing something because I'm trying to be generous. And actually, it's not because I'm working out some anger. And I don't want to admit that. You know, I want to be the good guy, right? And being able to see that shadow side of yourself and to acknowledge that and to even embrace that and to say, it's okay. That's part of me. And, you know, that's really, that's been the hardest bit for me in the past couple of years. But I think probably the most valuable. What did you find in the shadows? Oh, gosh. All the stuff you don't want to see about yourself, that you're selfish, that you're, that you, I think, you know, I grew up thinking that I couldn't express negative emotions. You know, I couldn't be angry. I couldn't, you know, and, and, but that goes, I mean, of course you get angry. All human beings do. And that goes somewhere. And if you, if you stuff it somewhere, it comes out in the worst ways that people that you love and care about and in ways that you're probably, that I'm not even aware of. So feeling that it's okay to, to be angry is probably, you know, the hardest thing for, for me. I'm, I'm, I'm just starting to work on that. I don't pretend to be, to be good at it. But being able to be, if I were to tell little John growing up, you know, something, it would be, it's okay to have all of the emotions that you, you know, that you have. And there's room in the world for all, for you to express them into, to feel them into, own them into, you know, to, to be part of you. It's okay. And, you know, even looking at my kids now, trying to say, you know, actually some negative tension in our relationship is really valuable. You to be able to see that it's okay for you to be angry at me, me to be angry at you and to work those out. And then it's going to be okay. And that we're going to be, we're going to be connected. Even with that, that's really powerful because they need to be able to take that into their adult relationships. And, you know, else they'll, you know, they'll struggle, they'll struggle those places too. And it will become that intergenerational negative baggage that gets passed on. So I'm trying to, trying to do something different in that regard. But conversation with younger John about it's okay to be, have a full range of emotions and to be angry. Because if you don't, you'll hurt the people you care about in ways that you don't intend, in ways that you don't understand. And they may not understand. I mean, you know, I'm lucky in my partner that, you know, that she's quite attuned. She has a, she's just finishing her masters in psychotherapy. And so, you know, being able to say, yeah, I mean, I'm getting this from you, even though you don't intend it. You know, let's deal with it. That's a, that's a gift.
What you're talking about there as well is this process of like becoming more self aware about yourself. Because you're completely right. I mean, a lot of the stuff I've been reading recently about psychology talks about how we actually have, as exactly as you said, have this default to just reinforcing ourselves, reinforcing the way we think and believe and searching for evidence that confirms it and confirms the identity we want to have of ourselves. But to become self aware is a very difficult challenge. Requires a huge amount of humility feedback. You know, unlearning, learning. What's, what has been the practical ways that you've gone on that journey to become more self aware? Is it therapy? Is it just the feedback from your partner? What is it? Yeah, well, I mean, I think first go through something really horribly painful where you have to reconsider everything. And, you know, who you are. And to be willing to put those on the, on the table and say, you know, I thought I was being a great partner. I wasn't. You know, and, and being able to, being able to redefine the givens of who you think you are. That's, that's really, that's really painful. And, you know, you, you, you come up with these ways of thinking about yourself for a reason. And they're typically defense mechanisms from a very young age. So these are not easy things to, to give up. But to me, it was, it was, I had to do it. Or I would lose connection with everyone that I cared about. And to me, it was, it was, you know, connection is worth it. And my, I can remember my grandmother, who was one of the first ones who taught me to love food. I had a very strange relationship with food in that regard. But she, you know, she, she was late in her life. She was an amazing cook. And I could see the love, felt the love she had for me and the food that she prepared. And late in life, she was in a retirement home and, and some health inspector deemed some of the food had been passed like it's expiry day. She came to me, she said, they were trying to serve us food that was unfit for human consumption. And we were like, oh, it's terrible. We'll fix that. But I always worried that I somehow, particularly in a, in a romantic partner setting, was unfit for human consumption. And maybe, maybe in my weird, isolated counter-cultural upbringing, there were skill sets that was, that worked in being a business leader. But maybe those very things disqualified me from being successful in a romantic relationship. And so overcoming, overcoming that sense of being unfit for human consumption in a romantic setting is, you know, that's hard. And was that causing some, some form of self-sabotage in the romantic context? Inevitably, inevitably. So in being able to, in being able to go back and accept the negative emotions, you know, it's not up to anybody else to express my anger for me. That's up to me. It should be up to me. And I should be able to spontaneously experience that in real time and express that in appropriate levels. That's, that's a, that's my to-do list. Have you been too much of a nice guy? Is that, I'm like, I'm kind of- Uh, some maybe sometimes. But yeah, I mean therapy is, therapy is great. I highly recommend it. You know, you cannot over invest in your mental health. And that, that comes from, you know, someone who grew up with a psychiatrist for a dad. Um, and maybe, maybe like, you know, the cobbler's kids don't have shoes. Um, you know, I think, you know, now I'm, I'm, I'm vestively in my mental health. There's, there's an unlimited budget for, for that. There's a lot of what you were saying resonates will be very, very, um, terrifyingly. And I, the parts that really I was, I was most, um, intrigued by is I sometimes think in my romantic relationship that I, and maybe negligent. And I justify it to, to myself as because I'm, you know, working so hard and I'm trying to provide so much. And I'm, you know, and I think sometimes I'm, you know, I might think to myself, well, they just don't understand. I'm doing all of this hard work and they should respect me. You know, respect me is they should be more appreciative of all this hard work I'm doing. And it's such a, I know it's such a selfish way to look at a relationship because I'm serving myself and then justifying my, my almost neglecting someone by saying, well, I'm basically serving myself. It is actually, and that's, you were speaking, I was a bit scared that that's me in it some ways. Yeah, well, you remember the film Forrest Gump where he's talking to his girlfriend, Janie, or the girl he loves, and he says, you know, I'm not a smart man, Janie, but I do know what love is. And I feel like I'm the foil for that, where I might, I might in some ways be a smart guy, but I'm not at all convinced that I have any grasp, firm grasp of what love is. And, you know, what, what is love? What is love? Real, it's like authentic, real love look like, and it's probably not what I try to give my partner sometimes. You know, I mean, actually understanding what, what she wants. You know, I mean, sometimes I'm, I'm giving, you know, some imaginary, you know, construct what I think they want and then saying, well, you know, you should have that rather than paint, really paying attention and going, you know, what is it, what is it that makes you understand and feel loved and known and appreciated and valued? And that's what I want to do. Did you not see that growing up at all? Or you just not taught it? You know what I mean? Because sometimes you can see it, but not know what's actually going on behind the scenes. So you can see, oh, they look happy, but you don't know. Yeah, no, I mean, I think when I look back on it, there were people who I felt connection with, and that I felt, you know, some warmth and, and their presence. And, you know, I didn't understand that. I didn't go, that's love. You know, that really is, you know, them seeing me and, and, and, you know, reaching out to me and connecting with me. But, you know, maybe it's only looking back that you can kind of see those things accurately and, and meaningfully.
What’s are the foundations of your future? (01:32:13)
When you look forward, then, what are the big, what are the big goals for you? And I, you know, I'm, I'm not someone that buys into making, you know, vision boards and having a five year plan and all that nonsense. Because I think there's a certain agility required to be successful personally and professionally. And putting your flag too far, you know, in the future is probably not a great idea in that situation. But what are you, what are the found, when you think about your life in 10 years time, what will it, what will the foundations of that life look like for it to be a really great one? Well, I think, you know, from a business perspective, I, I love what I, what I get to do. I mean, it feels like it doesn't, it doesn't, you know, feel like work now. I mean, it feels like a gift to be able to be a part of this business, a part of this, you know, a family who, who believes in the integrity of their product. There's no pressure to compromise in any way this thing that, you know, that we're doing. And, you know, that feels fantastic. So, you know, I think that the team that we've built is, is capable of more. I don't know what that is, but I'm excited to see what that could be. And personally, you know, I think I've got a lot of growth to do. I think I've just kind of scratched the surface of the, all the, the ways that I cover up the motivation, the true motivations that I have. So I want to, I want to, I want to go after that with conviction and competitiveness. You know, I'm a very competitive guy. I love, you know, whatever it is that I do, I, you know, I kind of, I kind of go after it. So, yeah, a lot to read, a lot to, but, you know, I think sometimes that urgency doesn't work in mental health. And that kind of, you can't rush to self-awareness. Sometimes it kind of, sometimes it's, you know, kind of like the bird that kind of lands on your hand when you're, when you're being patient. So I think I've got to expand my repertoire of, of intensity in that regard. One step at a time. And vulnerability, being vulnerable, I think is one step at a time and it's kind of like opening, opening a door a little bit at a time. It has been for me anyway, I think, because I was so scared to be vulnerable, I think, for much of my life that I tried the experiment of being vulnerable and looked around and it seemed to be okay. It seemed to help me, it seemed to help others. I opened the door a little bit further. It helped me, it helped others. And so over the, the last couple of years, this is part of the reason we do this podcast is I've been able to be more vulnerable and it really is such a selfish thing because it's the most unbelievable way to live, to just be able to sit here and talk about masturbation, my sex life, mental health, I got anxiety about this. It's such a free way to live. The science supports that, you think about those that live most, most in tune with who they actually are seem to be happiest, but when I think about the real adverse consequences, you see sometimes in certain communities who are not being allowed to live as they are, the suicide rates spike and everything. So getting closer to your true vulnerable self, I think is such a gift. And then the way it resonates, you'll see as a leader, I'm sure you saw in the pandemic, you know, vulnerable leaders in the pandemic. I think one vulnerable leaders, when it comes to letting people go, always when. So, you know, when I was preparing for this conversation with you, Stephen, I went back and looked at some of the presentations I'd done to my, to my business. And one of the presentations that I did was called, have you known hard times? And, you know, and I went through and talked about my hard times and being able to, and to me, that was a real, that was a real time. And I think that was a real turning point as well, saying, you know, it's okay. It's not only okay, it's really important to acknowledge that we've all had really hard times that like break you apart as a human being and, you know, make you question everything. And that's okay here. And that was a, and then the feedback that I got to say that was, that that was, you know, that was a positive thing. That was, that was amazingly, yeah, fulfilling. I am so excited to announce our new sponsor for this podcast, and that is BlueJeans by Verizon. For any of you that aren't already familiar with BlueJeans, they are a video conferencing and collaboration tool who offer an immersive communication experience that drives pretty unparalleled employee and customer engagement experiences. Me and all of my teams across all of my portfolio companies switched over to BlueJeans a couple of months ago, and we have not looked back. The best thing for us has been the totally frictionless experience. No glitching, no sound issues, no delays, or any of those things that usually make virtual meetings really, really frustrating. We use BlueJeans anywhere on any device at any time, and it's perfect for my small businesses that just have 10 or 20 people to some of my bigger businesses that have hundreds of people. I'm a big fan, as you can probably tell, so I've been quite excited for some time to announce this partnership. In the coming weeks, I'll explain the features and really why it's perfect for you if you haven't considered using or switching over to BlueJeans yet, but if you can't wait, head over to BlueJeans.com to learn more. Honestly, it's been one of the real game changes in my business.
Our last guest’s question (01:37:37)
We do have a closing tradition on this podcast where the previous guests ask the next guest. You've done your preparation. Yes, sure. I'm sure you know. I don't read it until I open the book. The question is, who is the person you'd most like to say sorry to but haven't? Well, I've got a pretty long list. I would say my ex-wife for being so blind to the things that I brought to the relationship that must have upset her for years and insisted that they weren't things that I had said or done. I guess that would apply to anybody who I've had a romantic relationship with that I didn't bring my true authentic self that even though I thought I was living a purposeful life but didn't. But then I'd also I guess I'd say I think there's a dynamic with my parents that probably falls into that category of making amends and as both as the recipient and the perpetrator of some trauma in that regard. And then I guess I'd have to say to Hayden and Lucy my kids for you know for the for not being there in the moments when they needed me. And you know I can blame the UK court system as much as I want but the fact is that there were moments where they woke up and needed both their parents and and I wasn't there. And you know I'm deeply sorry for that. And yeah you know and they're probably there are probably lots of others in that list but that's a that's a short summary. Thank you. Thank you for your time today. Thank you for your wisdom as it relates to business and the story of five guys which is just tremendously inspiring and I it's always such an honor to get to speak to CEOs and operators that have been part of disruption and really underpinning and sort of really unpicking how they've gone about that that's so immensely valuable to me and I've taken so much away from from that in terms of the simplicity in terms of detail in terms of putting the customer first in terms of the importance of talent and this negative hiring concept which I'm going to adopt in all of my companies. But even more importantly for me is is the vulnerability that you've shown and the human behind all of that because that's the thing that ultimately people can resonate with the most because no matter where we reach in our careers no matter how high we climb. It seems so clearly obvious that when none of us are immune from the consequences of just being a human being and we can all relate to that regardless of where we are in the world so thank you so much it's been such an inspiring conversation and hopefully we'll do it again sometime. Absolutely pleasure. Thanks for the time together. I had a few words to say about one of my sponsors on this podcast. My girlfriend came upstairs yesterday when I was having a shower and she said to me that she tried the heel protein shake which lives on my fridge over there and she said it's amazing. Low calories you get your 20 odd grams of protein you get your 26 vitamins and minerals and it's nutritionally complete. In the protein space there's lots of things but it's hard to find something that is nice especially when consumed just with water and that is nutritionally complete. The salted caramel one if you put some ice cubes in it and you put it in a blender and you try it is as good as pretty much any milkshake on the market just mixed with water. It's been a game changer for me because I'm trying to drop my calorie intake and I'm trying to be a little bit more healthy with my diet so this is where your fits in my life. Thank you for making a product that I actually like.