Across the country, new breeds of restaurant chains are popping up to fulfill Americans' endless appetite for the hamburger. From mega-chains in the making to artisan burgers crafted by celebrity chefs, there's a multitude of challengers taking on big players like McDonald's and Burger King. Here now, part one in a five-part series profiling the "better burger" chains. Today: In-N-Out vs Five Guys.
There's an epic hamburger battle going on across America as Five Guys edges in on In-N-Out's territory. People are skipping the "clown and the crown," and these bi-coastal burgeoning superpowers are both on the move to fill the most burger-hungry bellies. Can In-N-Out keep up, or is Five Guys going to take charge of the "better burger" arena?
Over the last eight years, Five Guys has expanded from Arlington, VA to become a ubiquitous fixture in the fast food game across the country. Having grown to over 750 locations, this burger boom is about to face some strong competition from the West coast. Cult favorite In-N-Out Burger has saturated the Southern California market with a staggering 203 locations in California — 66 in the Los Angeles area alone. While expansion outside the golden state has been slow, it's about to get a whole lot faster thanks to the construction of a second meat processing plant in Texas.
In-N-Out: The First Drive-Thru Hamburger Stand
In-N-Out, Santa Clarita Valley. [Photo: ~R. E. ~/Eater LA Flickr Pool]
In 1948, Harry and Esther Snyder opened the first drive-thru burger stand in Baldwin Park, CA. Grounding their fledgling business with stringent control over quality, freshness, and service, the Snyders were slow to expand, teaching the business to sons Guy and Rich along the way. By the time Harry died in 1976, In-N-Out had expanded to 18 drive-thru locations and left the business in the hands of the 24-year-old Rich.
With Guy's help, Rich drove the rapid expansion of In-N-Out by establishing a central headquarters in Baldwin Park and creating the "In-N-Out University" to assert total control over both the ingredients and staffing of all locations. While Rich was president, In-N-Out expanded to 93 locations by 1993 and, under the leadership of Guy, grew to 140 locations in California, Nevada, and Arizona before his death in 1999.
While In-N-Out's expansion has been checked by the company's rigorous and unwavering oversight procedures and private family business model, they have risen to a level of clear regional domination on the West Coast. But, thus far, only on the West coast. Of the 258 current locations, 66 are in the LA area alone, and 203 are in California. The brand has achieved something of a cult status among Californians with staggering digestive feats on the "Secret Menu" and unparalleled market saturation.
Five Guys: Inside the Beltway to National Takeover
Five Guys Burgers, Valencia, CA [Photo: R. E. ~/Eater National Flickr Pool]
The Five Guys phenomenon may have reached more strip malls and airport terminals than imaginable, but this heavily franchised family burger chain has its roots as a Washington insider. The Murrell family founded their first burger restaurant in 1986 in Arlington, VA, when the "five guys" were Jerry Murrell and his four sons. Soon after, the family added a fifth son and, by 2001, they had opened a restaurant per son around the DC metro area.
When Five Guys initially decided to franchise in 2002, they limited expansion to Maryland and Virginia to accommodate the area's burgeoning cult fan base. Yet, when the local territories quickly sold out, they opened the rest of the country for franchising rights. Barack Obama's 2009 Five Guys lunch with Brian Williams only spotlighted the hamburger hubbub. Territories are currently sold out across the country, officially bringing over 250,000 possible burgers and free peanuts to 40 states and four Canadian provinces.
Business Models: Do You Have to Choose Grind or Grow?
To expand into the Texas market, In-N-Out had to design and build an additional processing center because trucking beef that far from headquarters costs too much while undermining the company's promise of never-frozen freshness. While other burger chains can boast that they grind their own meat, none does so in the elaborate and centralized manner In-N-Out has fine-tuned over the last 63 years. From the Baldwin Park plant, the chain's spread has been limited by the ability to truck unfrozen meat that meets the chain's freshness standards. Currently, the farthest beef is sent 685 miles to a restaurant in Centreville, UT. Based on that distance, a plant in Dallas would be able to truck beef to 13 new states for In-N-Out.
Without the limitations of proximity to production, Five Guys has been able to rapidly extend their reach across the country. The company makes no claims about the origin or processing of its meat, and this distinction has facilitated the chain's dispersal. By sourcing meat from more convenient, local purveyors, Five Guys has been able to focus on making the chain profitable and extending the brand nationwide. While Five Guys began as a family business just like its California competitor, franchising has led to massive growth since 2003 and every territory in the United States and Canada has been sold.
Time for a Burger Battle
Thus far, In-N-Out maintains an iron grip on the Southern California market. With rapid expansion and sold-out franchising territories, Five Guys is breaking into the West Coast burger business, outpacing In-N-Out in the San Francisco area. There's also a showdown headed for Sin City: Nine Five Guys locations are scheduled to open in Las Vegas this year, flooding a city that's already home to seven In-N-Out restaurants. In addition, now In-N-Out is headed to Texas.
Five Guys is set to open another 200 locations in 2011. In-N-Out is planning on opening eight restaurants in Texas. While the company has not released official information on how many new locations in total will be opening in their expanded territory, given the construction of an entire new processing facility, they must be planning enough to make the secondary plant worthwhile.
Looks like it's game on for these two. Now, can we get that animal style?
Tomorrow, mega-chains in the making: Mooyah Burger, Smashburger, and Elevation Burger
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