In a ‘Head to Head’ CGA Peach 2020 Conference session with Peter Martin, veteran entrepreneur Sir Charles Dunstone shared his views on Five Guys’ stellar success in the UK and some hot issues
On… the strengths of Five Guys
Five Guys’ phenomenal achievements in both the UK and US are no surprise given its superb structure and organisation, Dunstone said. “It’s a phenomenal brand with a phenomenal product, and it’s a phenomenal way they organise and run the business,” he said. ‘It’s the best run business I’ve ever been involved with, right down to the mops… so well organised and so well thought through.” Dunstone takes fellow business leaders inside Five Guys for a masterclass in focus and attention to detail. “They’ve refined absolutely everything that they do. All the energy goes into making the best possible product they can, and into making the rest of it as efficient as possible.”
On… expansion
After approaching the founding Murrell family direct, it took Dunstone a year to wrap up the deal to bring Five Guys to the UK. The first restaurant launched in Covent Garden in July 2013, and the brand is now close to 40 sites—equivalent to a new opening every three weeks. “We’re the kind of people who get up in the morning and get on with things,” he said of the expansion. “We soon knew we had a runaway success on our hands.”
On… marketing
One of the most remarkable aspects of Five Guys’ success is that it has been achieved with no branding or PR work. “There’s a rule at Five Guys that everything has to speak for itself… The only way you are going to get business is by recommendation and word of mouth,” said Dunstone. “Someone once said to me that marketing is what you do when your ideas run our steam… if you have a really amazing idea and a really amazing product then you shouldn’t have to do any marketing.”
On… property
Five Guys has been among the brands paying top dollar for sites, especially in London, and Dunstone likened the operator-landlord relationship to a hamster on a wheel. “We run round and round the wheel and every five years they tell us to run faster [and pay more at rent reviews]. That’s the game and they have the power.”
On… investment
Dunstone told the Conference that angel investors have made access to funding easier than ever for aspiring entrepreneurs. But it is a double-edged sword, with growing businesses expected to give up a lot of equity in return for the capital. “I see so many people with great ideas working hard but giving away so much of their business to get that funding,” he said. “The most precious thing you have is your equity. Give it away as slowly as you possibly can.”
On… the high street
With retailers continuing to be threatened by internet shopping, Dunstone predicted that it will be restaurants that regenerate flagging high streets—though for that to happen they will need help with property legislation like change of use permissions. “[The high street is] going to have to be more about leisure than just a convenient place to pick up products.”
On… MOD
Dunstone’s next import from the US is MOD, the build-your-own pizza concept set up by fellow Conference speaker Scott Svenson. It has huge potential in the UK, he claims—playing, like Five Guys, to the trends of well-sourced ingredients and the customisation of food. “A concept with fresh, authentic ingredients that you can have cooked the way you want it at a really competitive price—that’s what people want.”
On… motivation
After so much success already, with Carphone Warehouse and other businesses, what gets Dunstone fired up for more? “Building businesses and teams is fun, and being involved with brands like Five Guys is fantastic… having to overcome the friction of making things happen every day is what gives life purpose,” he said. “Obviously we want to make money out of it, but doing it is the most enormous fun.”
On… philanthropy
Dunstone has been a very active supporter of the Prince’s Trust and other charities, and thinks it behoves all successful business people to give something back. “I’ve never met an entrepreneur who doesn’t say they were lucky… [but] there’s an awful lot of people who weren’t,” he said. “If you have the self-awareness to know that you have been lucky then you have an obligation to spread some of that luck to other people.”
