Business Wars: McDonald's vs The Burger Revolution | The Price is Right | Episode 2

Date: September 3, 2025
Host: David Brown, Wondery

Episode Overview

This episode explores the fierce and evolving battle between McDonald's and the emerging "better burger" chains, Five Guys and Shake Shack. The narrative follows pivotal moments from McDonald’s ill-fated health-driven innovations, the explosive growth and challenges of Shake Shack and Five Guys, the impact of technological shifts, pricing controversies, and pandemic disruptions—all the way through recent leadership changes and scandals. The episode delves into how these key players experiment, adapt, stumble, and recover in the high-stakes burger market, illustrating how price, quality, public perception, and sheer scale define survival and dominance.

Key Discussion Points & Insights

1. McDonald’s Missteps with Health and Tech Initiatives

• Happy Meal Step-It Band Debacle (00:01–06:40)
  • McDonald's, attempting to appeal to parents and health-conscious consumers, launches the Step-It fitness band in Happy Meals in 2016, inspired by the Fitbit craze.
  • The initiative backfires catastrophically as bands burn children and count steps inaccurately, resulting in a massive 32 million-unit recall and a PR disaster.
  • Quote: “Step it? More like step in it.” (00:06:00, David Brown)

2. The Rise (and Bumps) of the Better Burger Boom

• Five Guys vs Shake Shack: Global Expansion

  • By mid-2010s, fast-casual chains Five Guys and Shake Shack expand aggressively, with Five Guys outpacing Shake Shack in the UK and globally.
  • The “first-mover advantage” is debunked as adaptability proves more crucial than timing. Five Guys wins out by executing better once landed in new markets.
  • Quote: “Timing matters, but so does execution. In a new market, the winner isn’t always the first through the door. It’s the one that adapts fastest once they’re inside.” (00:17:10, David Brown)

• Shake Shack’s App & Tech Catch-up (00:23:40–00:25:00)

  • Shake Shack launches a successful app, winning tech awards and aiming to reverse slumping sales and long lines.
  • Five Guys had rolled out their own app years earlier (2011), underlining the need for timely tech adoption in fast-casual.

3. Pandemic Disruption and Adaptation

• COVID Shocks to Better Burgers (00:33:30–00:40:30)

  • Shake Shack sees sharp declines as city centers empty. They launch at-home kits and curbside delivery but also lay off 1,000+ employees, drawing flak for initially taking a $10 million PPP loan meant for small businesses, which they quickly return.

  • Quote: “If you're about to get hit, lean into the punch... own the mistake before it owns you.” (00:38:09, David Brown)

  • Five Guys pivots, launching their first ever drive-thru in 2020 after 34 years, adapting to the new demand for safer, contactless food pickup.

• Shake Shack and the Drive-Thru Era

  • By late 2021, Shake Shack opens its first drive-thru (Maple Grove, MN), signaling a strategy to penetrate suburban markets.

4. Price Wars and Social Media Controversies

• The $24 Five Guys Meal Goes Viral (01:09:40–01:13:00)

  • A $21.91 Five Guys meal receipt hits social media, sparking outrage and memes about “highway robbery.” Critics say such prices make better burger chains less competitive, especially as inflation bites.
  • Quote: “Once your prices hit meme territory, it’s not just a PR problem. You’ve got a brand problem.” (01:11:50, David Brown)
  • Five Guys defends itself by referencing quality and portion size, but the brand suffers a PR blow.

• Wider Pricing Pressures

  • As inflation rises post-2022, all major fast-food chains (including McDonald’s and Wendy’s) raise their prices, but Five Guys stands out for its already high base, exacerbating backlash.

5. Fast Casual Growth vs. McDonald’s Dominance

• McDonald’s Bounces Back
  • While smaller chains wrestle with pricing and expansion limitations, McDonald’s shows resilience: 10% growth in 2022, reduced store count for efficiency, investment in modernization, and fundamental menu shifts (fresh beef, fancier buns, kale options).
  • Quote: “When it comes to pricing, better burgers just can’t compete with the golden arches.” (00:58:50, David Brown)

6. PR Crises and Recovery

• 2024 E. Coli Outbreak at McDonald's (01:19:10–01:23:00)
  • A serious E. Coli outbreak linked to onions on Quarter Pounders leads to hospitalizations, a death, and another brutal blow to McDonald’s image and stock price.
  • Company leadership attempts damage control, but the episode is framed as another in a long line of quickly-forgotten PR disasters.
  • Quote: “Scale creates resilience. For better and for worse. When it comes to consumers, maybe. But scale can magically forgive a multitude of sins.” (01:25:10, David Brown)

7. Investor Pressures and Leadership Changes

• Shake Shack’s Shareholder Showdown (01:00:00–01:05:00)
  • Activist investor Engaged Capital pressures Shake Shack’s leadership for poor performance and slow growth; a proxy battle is narrowly avoided by adding new board members and a Domino’s Pizza executive.
  • Later, CEO Randy Garudi retires, replaced by Rob Lynch (ex-Papa John’s), signaling a shift from boutique ethos to blitz expansion.
  • Quote: “When a growth company taps a franchise veteran, they’re not just hiring a CEO. They’re sending a message to investors. They're signaling a serious shift in strategy—a new chapter.” (01:16:00, David Brown)

8. The Enduring Power of Scale

• Despite repeated blunders, McDonald’s stock and global footprint show inexorable growth, with plans for 50,000 stores by 2027. Even massive scandals and PR nightmares are outlasted by the brand’s sheer size and market presence.

Notable Quotes & Moments

| Timestamp | Quote | Speaker | |---|---|---| | 00:06:00 | “Step it? More like step in it.” | David Brown (narration) | | 00:17:10 | “Timing matters, but so does execution… it’s the one that adapts fastest.” | David Brown | | 00:38:09 | “If you’re about to get hit, lean into the punch... own the mistake before it owns you.” | David Brown | | 00:58:50 | “When it comes to pricing, better burgers just can’t compete with the golden arches.” | David Brown | | 01:11:50 | “Once your prices hit meme territory, it’s not just a PR problem. You’ve got a brand problem.” | David Brown | | 01:16:00 | “When a growth company taps a franchise veteran, they’re not just hiring a CEO. They're sending a message to investors... a serious shift in strategy—a new chapter.” | David Brown | | 01:25:10 | “Scale creates resilience. For better and for worse... scale can magically forgive a multitude of sins.” | David Brown |

Timestamps for Key Segments

• 00:01–06:40: McDonald's Step-It toy backfires; PR disaster
• 09:30–11:00: Shake Shack opens in LA; enters In-N-Out territory
• 12:30–15:00: Five Guys outpaces Shake Shack in UK/Europe
• 23:40–25:00: Shake Shack launches their app
• 33:30–40:30: The pandemic shocks Shake Shack (PPP loan, layoffs) and Five Guys (drive-thru debut)
• 45:00–48:00: Shake Shack steps into drive-thru; suburban expansion
• 58:50–60:00: McDonald’s resurgence post-pandemic, value vs. quality
• 01:00:00–01:05:00: Shake Shack proxy battle & leadership shakeup
• 01:09:40–01:13:00: The $24 Five Guys meal goes viral; price debates
• 01:19:10–01:23:00: McDonald’s E. Coli outbreak; crisis management

The Takeaway

The episode paints a vivid portrait of the ongoing "burger wars," illustrating how fast-casual burger chains struggled to scale, justify their premium pricing, and navigate disaster, while McDonald’s uses its vast resources and reach to weather storms that might sink lesser brands. Ultimately, price and scale win the day—despite consumer talk of values and quality, the low cost and ubiquity of McDonald’s seems destined to ensure its continued supremacy, even as Five Guys and Shake Shack continue to expand and innovate.