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- [00:02]
David Brown
Wondering. It's 2002 in Alexandria, Virginia. Jerry Morrell is seated at a table flanked by his wife Janie and his four sons. Together they run a burger chain called Five Guys, named after the men in the family. Morrell started Five Guys 16 years ago, way back in 1986. His concept was simple. Use quality ingredients for a tiny menu consisting exclusively of burgers, hot dogs, grilled cheese, and fries. Since then, the business has grown to five locations in the D.C. area. But for the past few years, Morrell's sons have insisted that they should franchise. The way they see it, they've built a successful business. Locals love it. So why not expand outside of D.C. morel is not convinced. He's very particular about the way his family runs Five Guys, and he worries that franchising might cheapen or change the business. But recently, his sons have been begging their father to meet with Mark Mosley. Mosley spent 16 years as a famous NFL player. Now that he's retired from football, he's particularly interested in burger chains. And he's had his eye on Five Guys for a while. So finally, Morel has agreed to a meeting with Mosley at Franzmart, the franchising company where he works. And since this is a family business, Morel brought his whole family along. Mosley leans forward and smiles at Morel. Thanks for agreeing to a meeting. You know, I was surprised when you said yes. Well, the boys have been asking me to consider this for years. It's got to the point where my eldest here actually bought me a copy of Franchising for Dummies and with some interesting stuff in there, too. So I figured I might as well agree to a meeting, even if it is just to get these guys off my back. Mosley's been primed on Morel skepticism by Morel Sons. So he launches into his pitch. I think you and your family have built something really great here, and it would be a shame to limit Five Guys to a few stores around Washington. I think there's real potential for something bigger here, and I know we can do that without compromising your standards. Listen, I appreciate that, but I know what happens when people franchise. You know, their businesses change, they lose control. And I don't want that to happen. If we did franchise, we'd have to know that the franchisees are committed to the business exactly as it is. Morel lays out his list of non negotiables. He wants Five Guys to keep its small, simple menu with only a handful of items. He wants to keep using local quality ingredients, even if they are more expensive. And unlike most fast food places, he wants five Guys to only use fresh food. None of the five existing locations have freezers in them, and he doesn't want that to change. Mosley and his colleagues nod. It's a hard sell. But he's convinced five Guys has potential exactly as it is. How about this? We make sure that all of those conditions are met. You have total control and oversight over the menu, and every franchisee has to buy at least five locations. That way, we're only getting people who are truly committed to the business and can afford to run it well. Morel considers this and how much would each franchise cost? We'll charge a franchise fee of $45,000. That's the same cost as McDonald's charges for their franchises. Morell took this meeting mostly to quiet his sons, but the terms Mosley is offering are surprisingly good. As Morrell looks over to his family, he can sense their excitement. For 16 years, his family has built this business together. Morrell realizes that if this is what they all want to do, he shouldn't be the one to hold them back. So he holds out his hand to shake Mosley's let's give this a shot. Without knowing it, the Morell family just locked into an agreement that will turn five Guys into one of America's fastest growing restaurants. Within three days, the Wrights will sell out in Virginia. And Within a year, 80 locations will be in development. And in a culture that prizes burgers as fast food, cheap quick eats, the spread of five Guys will raise some questions. Is a pricey quality burger joint really a sustainable business? And will they ever be able to compete with the mega chains we know and love? After telling hundreds of stories about business battles throughout history, I've learned one constant truth. Having the right support systems in place can make or break a new venture. Trust me, it was a battle even I faced on my business journey. That's why AT&T business makes so much sense for entrepreneurs today. When you're building something from scratch, or even just at the point where you're ready to grow, you need a provider that makes things easy. With AT&T business, you you can have reliable, protected Internet connection you can count on, so you do not miss a beat. Building your dream might take time and a lot of work, but that doesn't mean it can't be a little easier. Wake up to the power of ATT business and turn your vision into reality business.att.com Searching for a romantic summer getaway?
- [05:50]
Philippa Sue
Escape with Rich girl Summer the new Audible Original from Lily Chu the exquisitely talented Philippa Sue Returning to narrate her fifth Lily Chu title. This time, Philippa is joined by her real life husband, Stephen pasquale. Set in Toronto's wealthy cottage country, a.k.a. the Hamptons of Canada, Rich Girl Summer follows the story of Valerie, a down on her luck event planner posing as a socialite's long lost daughter while piecing together the secrets surrounding a mysterious family and falling deeper and deeper in love with the impossibly hard to read and infuriatingly handsome family assistant, Nico. Caught between pretending to belong and unexpectedly finding where she truly fits in, Valerie learns her summer is about to get far more complicated than she ever planned. She's in over her head and head over heels. Listen to Rich Girl Summer now on audible go to audible.com richgirlsommar.
- [06:44]
David Brown
From wondery I'm David Brown and this is Business Wars. You know, today it feels like a better burger restaurant is. On every block of every major city, there are places that serve burgers and fries with premium ingredients. You've seen them around, right? Perhaps you've gone and visited them. There are also premium prices too. They've been a small part of America's burger business for a long time, but in the mid 2000s, that segment really started to grow in earnest. As Jerry Morrell and his family start franchising their Virginian chain, other restaurants like it start popping up throughout the United States. On the West Coast, a chain called In N Out is rapidly growing. In New York City, a famous restaurateur about to open the first Shake Shack. These businesses will join the growing fast casual market, which combines the convenience of fast food joints like McDonald's with the quality and freshness of full service restaurants. When they realize Americans are willing to pay more for better quality, these small businesses will grow into national and even international powerhouses. They'll compete against each other in increasingly overstuffed markets as they shake up America's massive burger industry. They'll also have to go toe to toe against giants like McDonald's who will fight to win back quality conscious customers. But in aiming to become burger behemoths, will these upstarts be able to retain their roots, the quality and focus that differentiated them from the mega chains to begin with? This is episode one, Better Burgers. It's July 2003 in Madison Square park in the heart of Manhattan, and Danny Meyer is starting to sweat in the thick, humid air. Meyer is considered New York's most famous restaurateur. He's the celebrity chef behind A slew of the most popular fine dining restaurants in the city. But today, he's not pouring over fancy menus or wine pairings for high paying guests. Instead, he's manning a hot dog stand. He started this seasonal hot dog stand back in 2001 as part of an effort by the city to revitalize Madison Square Park. It's a project Myers enjoyed for the last few summers. He's put his decades of experience in the industry towards selling high quality Chicago style hot dogs for $2.50 each, made with well sourced ingredients and served with the exceptionally friendly service that's become his trademark. He wants to blend together fine dining's hospitality with blue collar cuisine. Employees make an effort to recognize return customers and remember their orders, treating every guest as well as if it were a five star restaurant. And while the first two summers operating the hot dog stand were slow, with the cart losing money, word of mouth has suddenly made business boom. A long line of people stretches through the park. The stand's popularity is getting written up in outlets like the New York Times. Now, as he watches more people gather in the park, he realizes it might be time for a pivot. Though he's always focused on fine dining, there's clearly a huge demand for affordable classics made with quality ingredients. Meyer decides to turn this seasonal hot dog stand into into a year round business. He'll expand the menu to include burgers and shakes inspired by the movie Grease. He'll call it Shake Shack, aiming to bank on American nostalgia. And before long, it'll become a New York City staple and leave the locals wanting more. You know something? When customers are lining up for something you thought was just a side hustle, pay attention, Danny Meyer. Read this crowd, not the spreadsheets. And then he pivoted. For entrepreneurs, that's the art. Knowing when a slow burn is really a signal fire. It's April of 2004 at a bustling McDonald's in Buffalo, New York. A customer walks up to the counter. Cashier smiles at him.
- [11:27]
Various Reenactment Voices
Hi, welcome to McDonald's. What can I get for you?
- [11:29]
David Brown
Hey, can I get a Big Mac combo with a Coke, please? The cashier nods as she marks the order down.
- [11:35]
Various Reenactment Voices
Sure thing.
- [11:36]
David Brown
Anything else? The customer frowns. It's not the answer he was expecting to hear. In 1987, McDonald's introduced supersizing. When customers order a meal, cashiers are supposed to try upselling them by asking if they'd like it supersized. It meant that throughout the 1990s, for 39 cents, customers get an extra large fry and drink with their combo, and cashiers have been asking that question ever since. Until today. Could I get the meal supersized? The cashier shakes her head. She explains that supersizing has been discontinued, but maybe the customer wants to try one of their new salads instead. Last month, in March 2004, McDonald's announced they would stop offering supersized meals. The announcement came just a couple of months before the theatrical release of Super Size Me, a small budget indie documentary that has since made waves. The documentary follows a man who eats nothing but McDonald's for 30 days and says yes whenever cashiers ask if he wants to supersize his meal. It tracks the negative effects on his physical health. And despite its small budget, the movie's been a super sized success at the box office, which is bad news for McDonald's. The fast food giant is facing more criticism than ever for their negative impact on the health of consumers who are growing increasingly skeptical of its ingredients and impacts. Look, we know that reputational risk can hit harder than market share loss. McDonald's didn't wait for Super Size Me to go viral. They pulled the plug on supersizing right before it dropped the lesson there. In business, the right defensive move is sometimes making the first one. But there's something else here, too. When a low budget documentary can rattle a global brand, that's a reminder public perception isn't just about marketing, it's about vulnerability. In the age of storytelling, one compelling narrative can undo years of messaging. And if you're not shaping your story, someone else will. Now McDonald's is scrambling to win health conscious consumers back with new calorie conscious menu items like salads, fruit yogurt and grilled chicken sandwiches. It's part of a campaign called Real Life Choices, which tells customers that whether they're cutting carbs or fat, McDonald's can help them keep on top of their fitness goals. And this actually works. McDonald's experiences continued growth throughout 2004, despite all the negative press that follows Super Size Me. But as some customers grow weary of the golden arches, they'll be primed for places like Shake Shack and Five Guys, which boast freshness and locally sourced ingredients. It's June 2006, two years after the release of Super Size Me, and it's dinner time in Manhattan's Madison Square Park. It's busy. New York Times reporter Joyce Wadler is waiting through the long line outside of Shake Shack. Customers can expect to stand in line for around an hour and a half before ordering, and Wadler is investigating why Shake Shack is Worth the wait. Two years ago, Danny Meyer converted his seasonal hot dog stand into a year round restaurant in the park with a menu that now features hamburgers and milkshakes in addition to hot dogs. Shake Shack has a sleek modern take on roadside food stands with corrugated iron and a simple menu. And it's literally a stand. After walking up to order, customers sit in the park to enjoy their food. The stand is so tiny that most of the prep is done at one of Myers other nearby restaurants, a fine dining spot called eleven Madison Park. It's a funny image, one of the city's fanciest restaurants being used to prep hot dogs and burger patties. But the lack of indoor seating or proper kitchen that doesn't hinder Shake Shack. This is a clear hit. The line is so long it stretches towards the McDonald's down the road. But even when faced with the temptation of a cheaper, faster meal, Shake Shack customers stay in line. A Big Mac costs $2.35, and for around a dollar and a half extra, you can tack on a drink and fries. But Shake Shack's price? They're almost double that. A cheeseburger costs $3.45. A double cheeseburger is nearly $6, and that's without the extra $2 for fries. Whether because New Yorkers and tourists alike love the next big thing and are drawn to lines for fear of missing out, or because Shake Shack has a kind of halo around it with its promise of better quality and ingredients, this concept is a hit. Shake Shack has gained such a massive following that people travel far and wide to try it. But since they still only have one location, people can expect to wait upwards of a half an hour for a hot dog and cheesy fries. Usually they're waiting much longer than that. To try and combat this, Danny Meyer installs a webcam on top of the shack that livestreams the park along with the slogan plan your time. Check the line so that people can check how long the line is from home. It's fun idea, but demand is still too high. Around 14,000 people are checking that live stream every day. The reporter catches a glimpse of a young man midway through the line, impatiently checking his watch. Wadler jots down a note and moves through the line, hearing more or less the same thing from most people she interviews. Shake Shack gets burned by Wadler's New York Times article though, which questions how useful the webcam actually is and raises questions about security, asking, could a cruel employer bust an employee who had claimed a doctor's appointment? Could one actually Calculate how long the wait would be by looking at an image. And if Shake Shack really wants to become a New York City staple, well, they'll have to spend their unexpected success into a bigger business. Danny Meyer is hesitant to open a second location. He's convinced Shake Shack's success is entirely dependent on its location, and he worries it won't work as a chain. But Five Guys is already finding success throughout the country. And guess what? They're about to move into New York City. It's November 2, 2007. Shake Shack has finally secured plans to open a second Manhattan location a year from now. But today, no one's thinking about Shake Shack. New York's attention is on the new burger shop in town on West 55th Street. Customers are lined up out the door and around the block for opening day at the first Five Guys in Manhattan. Five Guys menu is even more limited than Shake Shack's. Jerry Morrell and his family are still at the helm. And true to their original vision. It still only sells burgers, hot dogs, grilled cheese, and fries. And like Shake shack, eating at Five Guys costs around twice as much as McDonald's. But people rave about the burger's taste and the freshness of the of its ingredients. Customers also love the customization options. They can choose from a slew of toppings, adjusting their order to their preferences. And New Yorkers are so excited to try the famous new burger chain that they're willing to wait over half an hour to talk to a cashier and in some cases, an extra hour and a half for a burger. Opening day at the midtown Manhattan location is a huge success. Clearly, Five Guys has landed on a winning formula. Remember how they only had five locations in 2002 before they decided to franchise? Just five years later, they're raking in nearly $200 million a year. They have around 250 locations across the US and will be adding 200 more in the next year. They're planning to expand throughout New York city too, with 29 more locations planned in Manhattan alone. Hey, listen, franchising is like cloning your business. But the DNA had better be perfect. Morrell's insistence on quality control, a minimum buy in, and non negotiables. Now that's how you scale without selling your soul. If your standards don't come baked in, don't be surprised when the flavor changes. And notice something else here. Five Guys didn't reinvent the burger. They perfected it. Or at least fine tuned it. Tiny menu, no freezers, custom toppings. Sometimes product discipline beats innovation. Flash in saturated markets. Standing out can be as simple as standing firm. Five Guys has proven that there's space to grow in the better burger business. Though it's still a niche part of the burger industry at large, there's a clear hunger for more quality, fast, casual chains. But as all of these chains expand into each other's home turf, they'll have to compete for space and customers. Is your AI built to work with your business's data? IBM helps you integrate and govern unstructured data wherever it lives, so your business can have more accurate AI instead of just more of it. Get your data ready for AI at.
- [21:28]
IBM Commercial Voice
IBM.com, the AI built for business IBM.
- [21:32]
Boar's Head Commercial Voice
Summer Entertaining becomes effortless with Boar's Head. Their premium meats, cheeses and tips elevate any gathering, from casual poolside hangouts to elegant picnics. The new basil pesto and sweet BBQ hummus flavors add a fresh twist to the lineup, while their expanded charcuterie selection, now featuring olives, brings a touch of sophistication to any spread. Whether it's a fantastic Fourth of July celebration or relaxed Labor Day get together, Boar's Head products transform ordinary occasions into memorable experiences. For your next summer event, visit your local deli counter and explore the difference. That true craftsmanship makes Boar's Head committed to craft since 1905.
- [22:25]
David Brown
It's May 29, 2009, at a Five Guys location in Washington, D.C. five Guys started in the Washington area, and though they've now expanded to have 400 locations across more than 25 states, they're still a local favorite. Customers are quietly eating lunch when suddenly a group of men in black suits walks in, followed by a camera crew. One of the men walks up to the counter and begins to order. So then I got a little cheeseburger with lettuce, tomato, ketchup and pickle. Put lettuce on my Recognizing the voice, someone shouts, oh my God. All the customers look up at once, and many start yelling, it's President Barack Obama. Today, NBC is filming a Day in the Life documentary with the president, who decided to make an impromptu stop at the restaurant as he waits for his cheeseburger, which he's loaded up with jalapenos and lettuce. Other customers cheer and shout questions at the new president, who was just inaugurated a few months ago. The visit makes headlines everywhere. People start associating five Guys with the shiny new president. It's an association that'll make a lasting impact, even internationally. Not long after Five Guys announces it'll open its first locations outside of the U.S. the chain will start franchising in Canada. Canadian media has a field day with headlines announcing that the President's favorite burger is going North. And in 2010, the first Canadian Five Guys opens up. It's early July of 2011. By this point, Five Guys has expanded to around 800 locations, with 10 in Canada. But today, Shake Shack is opening up its own international outpost, and we're actually on a different continent altogether. Shake Shack has expanded to just nine U.S. locations, mostly concentrated on the East Coast. It's still tiny compared to Five Guys, but it's proving that the desire for quality fast casual burger shops extends well beyond North America. Because a few months ago, they opened their first international location in Dubai. And today they're opening a Shake Shack in a mall in Kuwait, establishing a foothold in the Middle East. Usually, businesses wait until they've expanded a bit more in their home country before going international. But in 2008, when Shake Shack only had two locations, a middle Eastern franchise operator called Alshaya Group asked if they would be interested in expanding into the Middle east, where other American businesses like Starbucks are also expanding. Proving that there's a growing market, Shake Shack agreed. Now they're the first American fast casual burger chain to break out of North America. And the success of their Dubai outpost has proven that everyone is hungry for American burgers. It's July 11, 2011, just a week after Shake Shack opened its second Middle Eastern location back in the U.S. they've also just expanded into Washington, D.C. challenging five guys in their original stopping ground. A few years ago, Barack Obama's visit to Five Guys spurred positive publicity and a flurry of press. But today, Shake Shack is going to get its own visit from a member of the first family and wind up in the news for the wrong reasons.
- [26:10]
Various Reenactment Voices
The first lady got her grub on and now people are talking.
- [26:13]
David Brown
Lots of you commenting on Michelle Obama's lunch.
- [26:16]
Various Reenactment Voices
Yesterday, she got it at a new Shake and Shack. It's a Washington, D.C. the burger, fries.
- [26:21]
David Brown
And chocolate shake came with more than.
- [26:23]
Various Reenactment Voices
1500 calories, according to the restaurant's website.
- [26:27]
David Brown
The story of Michelle Obama stopping into Shake Shack spreads like wildfire, with the first lady receiving flack from the press. She's been outspoken about healthy living and eating well and runs the let's Move campaign to fight childhood obesity. So while Barack Obama's Five Guys visit made him seem relatable, people think Michelle's makes her seem like a hypocrite. It's possible that the uptick in criticism also comes from the high Calorie count. For a long time, it seems like Better Burger chains were recognized as healthier, more wholesome alternatives to fast food due to their fresh, high quality ingredients. But in the past few years, there's been a push for restaurants to reveal calories on their menus, so Shake Shack quietly added them to their website a few months ago. The First Lady's seemingly innocuous meal sparks a debate about whether or not burgers and shakes can be a part of a well balanced diet, with nutritionists chiming in. But despite the apparent outrage, consumers continue to perceive Shake Shack and Five Guys fare as healthier alternatives to McDonald's. And either way, the burger business is doing quite well in America. In 2011, the burgeoning better burger segment grows 16%, ballooning into a $2.2 billion business in the States with 10 US restaurants by the end of the year. Shake Shack is just a small slice of that business, but it has its sights set on expansion. On the west coast, the segment is dominated by In N Out, which has over 200 locations and is expanding into the American Southwest. But the real king of the Better Burger business is Five Guys, which has become the fastest growing restaurant chain in the US and represents nearly half of the better burger segment. Five Guys revenue in 2010 was $720 million, an increase to $976 million in 2011. And while they're still mostly concentrated in the east, they're now encroaching on In N Out territory by moving into California. Better Burgers are still the little guys, though. Just a tiny piece of America's $40 billion burger industry. It's an industry that's dominated by the big three players. McDonald's, Burger King, and Wendy's. Still, the landscape is changing as growth in the Better Burger segment increases exponentially and growth in the rest of the burger business slows. And now Five Guys is going to take its business both to the west coast and outside of North America and tackle Shake Shack head on. And McDonald's? Well, McDonald's will have to figure out how to adapt under the pressure of this new movement.
- [29:30]
IBM Commercial Voice
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- [30:15]
Various Reenactment Voices
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- [31:02]
David Brown
It's the Fourth of July in 2013 across the pond in London, England. Three years ago, five guys expanded into Canada, but today the chain is finally moving outside side of North America. They've just opened a location in London's famous Covent Garden neighborhood. Too much fanfare. People queue up around the block waiting to try these very American burgers on a very American day. The restaurant is packed with Londoners eager to try their first taste of the famous chain. Five Guys expanding into a new market would have been exciting either way, but the press is eating it up. And that's because Five Guys isn't the only American burger place breaking into Europe. The very next day, Shake Shack will be opening its own London outpost. It's even in the same neighborhood less than a half mile away. And Shake Shack's Grand Covent Garden, opening less than 24 hours later also draws in long lines and curious customers. The virtually simultaneous openings in the same area spark what British media calls a burger battle. Despite being a much smaller chain with fewer options to customize your burger, Shake Shack holds its weight, with many reviewers preferring it. Though Shake Shack hasn't franchised or focused on large scale expansion the same way Five Guys has, consumers have always been quick to compare the two. They represent the same style of business, higher end designer burgers that elevate what McDonald's has been doing worldwide for decades. But Shake Shack's expansion is slow. Danny Meyer is still operating his fine dining restaurants throughout New York, so Shake Shack's not his only priority. Meanwhile, Five Guys continues its unbelievable growth. It plans to open 30 more England locations by the end of the next year, ultimately winning the British battleground It's July of 2014 in Manhattan's competitive food market, the original battleground between Shake Shack and five Guys. On this particular day, two five Guys locations in the area are doing market research by rolling out a new product on their menus. Milkshakes. While bigger chains like McDonald's test out and add new menu items all the time, this is a pretty big deal for five guys, which hasn't really switched things up. Since launching in 1986, Jerry Morrell and his family still run the company. And even during their massive expansion, they've kept the same core business model as their first five restaurants. They've always insisted that they want to focus on a small, classic menu they can make well. So if this test is successful and the milkshakes make it onto permanent menus, it'll be the first new menu addition in decades. Customers have been begging for five Guys milkshakes for a long time, but Jerry Morell has resisted for one reason. His commitment to freshness. That's what he'd say. True to his original vision, every five Guys exclusively uses fresh products, meaning none of the restaurants even have freezers in them. Jerry's always been really proud of that, so he's been resistant to switching things up. But finally, he caves and decides to test it out. And the test locations are an immediate success. You know, every founder has a line they swear they'll never cross. For Jerry Morrell, it was the freezer, right? But here's the truth. Staying true to your values doesn't mean refusing to evolve. It means knowing the difference between which changes enhance your brand and which ones dilute it. And you know what? It is possible to make a killer milkshake without freezing your principles. Many are quick to point out that this feels like a hit to Shake Shack, which has featured milkshake since launching their first permanent location. Either way, people love them. Customers have the option to customize their milkshakes in the same way they customize their burgers with 11 Mex in options ranging from Oreos to bacon bits. By the end of the summer, that test will have expanded out to 25 locations. You know, innovation doesn't always mean going first. Sometimes it's about doing it your own way. Shake Shack may have set the standard with shakes, but five Guys played the long game and still stirred up buzz. Customization, not novelty. That's what keeps customers coming back. That's what these options are really about. Besides, who can argue with a milkshake that comes with bacon bits? I mean, bacon. That's more than just A funky menu option that's what you call a flex. But despite the milkshake's popularity at Five Guys, they're not able to scale them everywhere, because not every location has the space or capacity to add a freezer. To change a core part of their business across all restaurants now would be difficult, especially considering how quickly the business is growing. Just ten years after they started franchising, there are now over 1000 locations, with more than 1500 more in development. So while some locations start to get milkshakes, they're never able to bring them everywhere. Some customers will remain frustrated they can't have shakes with their burgers. But on the whole, the lack of change doesn't seem to affect Five Guys all that much. As its competitors switch up their menus and adapt to the times, Five Guys is largely sticking to the same winning formula they've had since 1986. And it seems to be working. Meanwhile, Shake Shack continues its slow but steady expansion with more than 60 locations, thanks in part to investment from the private equity firm Leonard Green and Partners and the hedge fund Select Equity Group. It's January 30, 2015, at the New York Stock Exchange. Over a dozen Shake Shack execs stand in front of the iconic NYSE bell, which rings to signify the start and close of the trading day. The area is decked out in Shake Shack branding and their classic green and gray iconography. Outside, hundreds are lined up for free burgers at what's been dubbed the New York Shack Exchange for the day. And when the clock strikes 9:30, founder Danny Meyer and CEO Randy Garutti ring the bell together. Shake Shack has made its mark. Nine years after launching the first permanent location, they now have 63 locations with plans to open 450 more. The plans are vague, however. The company says it's aiming to open 10 new restaurants per year, meaning that 450 goal seems very, very distant. And Shake Shack is continuing to shake up its industry because now it's the first better burger brand to become publicly traded, as companies like Five Guys and In N Out remain private. And clearly investors are into it because the IPO is a huge success. Shares start the day at $21 and end at 45:90, more than doubling by the time the closing bell sound. By the end of the day, Danny Myers personal wealth jumps by $340 million, and Shake Shack is valued at over 1.6 billion. You know, when Shake Shack hit the stock exchange, it wasn't just burgers that got priced in. It was a whole lot more. It was brand, it was loyalty. Scarcity Story if you're looking to go public, remember, investors may buy your numbers, but they bet on your narrative. It's May 20, 2015, outside of the McDonald's headquarters in Oakbrook, Illinois. Executives and shareholders are gathered here for the annual shareholders meeting. The year's been off to a rough start for McDonald's. Many say 2014 was the chain's worst year in decades, with profits dipping by 15%. Steve Easterbrook, the brand new CEO who just took the helm two months ago, has been trying to fix things. On a press tour, he says he wants to turn McDonald's into a progressive burger company. He has a ton of ideas on how to restructure the business, streamline processes, engage local communities and improve food quality. But shareholders are not convinced. And while Easterbrook gets grilled in the shareholder meeting, a commotion is unfolding outside of the building. Thousands of workers have gathered outside to disrupt the shareholder meeting. They're advocating for better wages and working conditions as part of a two day protest. Alongside the workers, a coalition of activists is raising awareness against the amount of pesticides in McDonald's potatoes. The Chicago Teachers Union is also here, protesting McDonald's fundraising programs that encourage students to eat at the chain. It's not a good look for a company already struggling with slumping sales and a negative public image, especially in the US which makes up 40% of the company's business. Easterbrook has a lot of work to do to win back the trust of consumers and employees. And while McDonald's struggles, its smaller competitors soar. Throughout 2015, McDonald's finds it hard to catch a break. The chain spends the year trying to respond to the success of fast casual burger shops and claw its way out of a slump. One way it's trying to do this is by constantly adding new menu items like salads. But to critics, it just looks like McDonald's is having an identity crisis. Some say that instead of trying new things, McDonald's needs to focus on improving its core menu. It needs to learn how to make better burgers, increasing the quality of items customers already love. And in some markets, fast casual restaurants are actually starting to hurt McDonald's business. In Canada, where McDonald's is the second most popular fast food chain, they're trumped only by Tim Hortons. Their business is getting cannibalized by the rapid spread of five guys. In an attempt to win back customers who are favoring the quality of better burger restaurants, McDonald's launches a campaign called Our Food you Questions, which aims to create transparency about ingredients and health concerns. They put out a video with one of the hosts of Mythbusters to disprove common beliefs about how McDonald's food is made. But back in the US CEO Steve Easterbrook knows that if he wants to keep McDonald's on top and win back weary customers, he'll need to focus on building a better quality menu and crush customers health concerns once and for all. That'll be easier said than done. And as better burger chains continue their rapid expansion, they'll have to find a way to keep that growth sustainable. Whether better burgers can overtake the fast food behemoths, or if low prices and convenience will win out over growing health concerns, that's what's at stake. From Wondery this is episode one of McDonald's versus the Burger Revolution for Business Wars. Quick note about the recreations you've been hearing. In most cases, we we can't know exactly what was said. Those scenes are dramatizations, but they're based on historical research. I'm your host David Brown. Gabrielle Trolley wrote this story. Sound design by Josh Morales. Kyle Randall is our lead sound designer. Fact checking by Will Taplin. Voice acting by Chloe Elmore. Our managing producer is Desi Blaylock. Produced by Tristan Donovan of Yellowhead and Kate Young. Our senior managing producer is Callum Plutons. Our senior producers are Emily Frost and Dave Schilling. Karen Lowe is our producer Producer Emeritus. Our executive producers are Jenny Lauer Beckman and Marshall Louie for wondering.
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Lindsey Graham
In 1925, 18 year old Howard Hughes inherited a fortune and he wasted no time putting it to use. With a million dollars burning a hole in his pocket, he headed west, determined to conquer America's booming new capital of entertainment, Hollywood. Hi, I'm Lindsey Graham, host of Wondry Show Business Movers. We tell the true stories of business leaders who risked it all, the critical moments that define their journey, and the ideas that transform the way we live our lives. In our latest series, Howard Hughes clashes with Hollywood's power players as he fights to see his name in lights. But Howard has deep pockets and even deeper ambitions and he revolutionizes the movie business by breaking rules and spending big. Because for Howard, the best way to level Hollywood's playing field is is to explode the entire industry. Follow Business Movers on the Wondery app or wherever you get your podcasts. You can listen to new episodes of Business Movers early and ad free right now by joining Wondery Plus.