Yesterday, CEO Randy Garutti explained Shake Shack's philosophy as the "anti-chain" chain expands internationally, saying that they stay small by making decisions as though there's only one restaurant. Now in part two of the interview, Garutti talks about how Shake Shack sources ingredients and trains new hires for all of the company's new locations in the US and abroad, as well as how they can ensure the consistency of their iconic burgers. Garutti also shares Shake Shack's end goal for expansion and says that the company's continuing growth "never ceases to surprise even us."
How do you deal with sourcing for all these different locations?
That started at the very beginning, right? Before Pat LaFrieda was on TV, we all worked together to create Shake Shack. Pat is such a gifted butcher and businessman. We love working with him. We created this, no hormones, no antibiotics. Look, we recognize that the burger business has a high impact on the world and we want to lessen the impact wherever we can. We're sitting on benches that were old Coney Island boardwalk 100 years ago.
Yeah. I don't know if you've seen the Westbury, Long Island Shake Shack, but the whole roof is solar panels. We take ten percent of the energy of that building and get it through the sun. The same is true when we talk about animals. You read so much about hormones and antibiotics. We do not use any hormones or antibiotics in our beef or our bacon. When you read things like 75 percent of all antibiotics in the United States are given to animals, we are very proud to not be a part of that. We have great suppliers, great cattle farmers who have pledged to raise their animals the right way.
So how do you ensure consistency at all the locations?
It starts with hiring the right team. We spend a ton of time on hiring and developing our leaders so they can continue to hire and train and retain the best people. It sounds cliche, but that's real work. It's nonstop. We have a much lower turnover rate than any burger joint out there. We have incredible people who work really hard to keep things consistent. And then we have leaders who have been with us. Myself and a lot of our leaders at Shake Shack were fine dining people. The people who run operations and training, they've all come from mostly fine dining positions. They instill that kind of pride and consistency.
How often are you traveling to all the locations and having burgers?
All the time. Not daily, but I probably eat Shake Shack once a week, which I think is an appropriate balance. I do a lot of yoga. And I travel as often as possible. And we have great teams who travel. In every case when we open in a new city, someone who is a veteran Shake Shack leader — or many someones — have moved there.
You have people here that volunteer to move to new cities?
Yeah. We also have training teams of people. There's about a dozen of our team from New York and some people from all over who [go] for about a month at a time to open a restaurant, train people.
What is training like?
It's usually about seven days of active training before we open. And then we have our trainers there for weeks after opening to make sure that the new team is learning and progressing. Doing things right. We spend a lot of money on training and investing in our team. One of the cool things we do is called Shack Dollars. Each month, we take up to one percent of the revenue and we give it back to the team on their paychecks as a bonus. So if you're working in a restaurant that's busy, you want to be busy because you're getting one percent of that on your paycheck. And that's cool. People like it. It's hard to work at Shake Shack. It's busy. It never stops. It's fun, but it's hot, it's relentless and that's hard. So we want our team to feel great about supporting being busy.
Is there a tasting system to ensure consistency?
Not really. One thing we don't like to do — this goes back 28 years for Union Square — we don't lead through fear and lack of trust. So we don't have secret shoppers going in and checking people and telling them how good or not they're doing. We trust our team to do the right thing. When there are improvements that need to be made, we listen to our guests. We'll get a tweet or a post or an email directly to our website that says, "Hey, this wasn't a good experience," and we constantly learn to make it up to people. We're not perfect. We make mistakes. We're serving thousands and thousands of people a day. People make mistakes. And we listen and learn and get better. And over time we just keep upping our game because that's what consumers and our guests are telling us they want to happen.
Now how is that going to be more challenging in London?
You know what? This is the incredible thing about London. It's actually been easier because in Europe and the UK, they don't have antibiotics in animals. They don't have GMOs. So we've been able to sort of take a clean slate and work on developing our supply chain completely over there and making it great with the best products that are available. It's been a lot of fun to do that. I've been on cattle farms in Scotland myself, looking at Angus. Angus comes from Scotland. So that's what we're using. We're getting the real deal, whereas most of what you eat here in America is not Angus to begin with or some different version of Angus that's been bred out over most years. But ours is 100 percent Angus here. And it will be there.
I would ask you what a typical day was like, but I feel like that probably doesn't have a real answer.
No, but I'll tell you what it tries to be. I usually get up, [get] my three kids, get breakfast going. My wife takes them to school around 7:30, I'll get into the office around 8 down in Union Square. We share offices with the Union Square Hospitality Group and Danny. Then I'll generally have a lot of meetings with our teams, our leaders. At some point usually I'll hit a Shack.
Not always to eat?
Not always to eat, but almost always to taste something. I was just in here tasting something. We're always working on different stuff. And then throughout the afternoon more meetings, more connecting. And [we] always talk about where we're going to go to next, debating that. And then try to do some yoga at night, not every night but as often as possible. And get home to put my kids to bed and relax a little bit. But then, as I said, a couple of days a week I'm usually traveling to either current Shake Shacks to check in with the team or new opportunities to go look and understand.
How often do you check in on the current ones?
As often as possible. It's obviously easier in New York to do it and harder out of town, but last week we opened in Boston. So the next day, I spent some time in New Haven, Connecticut and Westport, Connecticut at our Shacks there. The next day I was in Westbury, Long Island. So in two days I was at four Shacks. We don't rest too often here at Shake Shack.
Doesn't sound like it. Is there one location where you do a lot of testing for the new locations?
Usually here at the Upper East Side we do a lot of testing. We have a little bigger kitchen here, so it's a little bit more conducive to testing. Sometimes in Brooklyn we'll do some new things.
In terms of your expansion, you said you've done four a year and this year more...
This year we'll probably do about seven or eight. And then our partners, the people we work with in the Middle East, the people we work with in Turkey and the people we work with in London will probably do about the same number total there.
You guys are so good at keeping things secret. Well, not the rumors.
There's always rumors. And what amazes us is how sometimes the rumors are so wrong. Sites that people say, "They just looked at it today." We're like, no we didn't. It's so funny. And sometimes they're right. But yeah, we don't think it's appropriate to talk rumors until we have a signed lease. Because we can look at sites, but if we haven't signed a lease, who knows what can happen? Any number of a million things can happen. So we don't talk about anything until a lease is signed. Before that it's not appropriate. It's not fair to our team. It's not fair to the press or the community or anybody.
Is there an end goal?
To create the best burger company in the world, for the world and for our team. We want to create a great place to work, where we train people, develop them and allow them opportunities. The amount of people we've had that started in hourly positions making burgers and frozen custard and who have turned it into manager or general manager jobs and support families? that is the best thing.
How many people have done that?
How many people have gone from hourlies to managers? A lot. I would guess at least 20. There's a lot of people who have done that in our company. And the other cool thing is people who go back and forth from the company. So like people who cook at Gramercy Tavern who came to work at Shake Shack. Or vice versa. People who graduated from Shake Shack and went to work at the Museum of Modern Art. That happens. That's the difference, you know, when people compare us to other burger companies growing rapidly. There's no other company that was birthed out of the Danny Meyer Union Square Hospitality Group, that kind of understanding. It changes everything.
So do you want to be in all corners of the world eventually?
I think wherever that makes sense. I don't know that all corners will ever make complete sense, but we never say never. And if you had told us when we opened the first one that we would ever open in the Middle East, that would have surprised us. And then the fact that we opened in the Middle East so early. And then if you would have told us we were going to open in London, who would have thought? So Shake Shack never ceases to surprise even us. Literally, opening in Boston last week, we've been open for 14 days and the line has not stopped for 14 days. I'm amazed and so thankful. As long as we're growing our team, doing good things for our local communities and the world at large, and continuing to build a great company that people just want to be around, we'll keep growing.