Named for five brothers who first opened a carry-out burger joint in 1986 in Arlington, Va., Five Guys Enterprises now has a family that includes more than 1,000 locations nationwide and 1,500 units in development. Risk Manager Randy Jouben, a CLM Fellow since 2010, discusses his role in the fast-growing chain, his biggest success, and the “Five Guys Way.”
Q. Did you find Five Guys, or did they find you?
A. I actually thought I was heading for a career in the military after college. I had completed ROTC and was a commissioned officer, but a torn MCL closed that door and opened another. I started with Prudential Property and Casualty in New Jersey handling personal lines claims. Within three years, I was a home office supervisor with AIG, overseeing complex exposure and high-dollar claims. I then had an opportunity to head up a claims and risk management consulting company, which later helped me obtain a position with the American Red Cross. After that, I became the first director of risk management for the Catholic Diocese of Arlington. When the position for risk manager became available at Five Guys, I thought it was a good time to transition from non-profits. I loved Five Guys’ product and dedication to quality, so it was a natural fit.
Q. What is your approach to risk management?
Some people look at risk management as buying insurance. If this is you, your time in the industry will be short lived. Risk management is about exploring the possibilities—both opportunities and threats—and providing the executive team with a list of options so that they can make the best decisions for the company. Risk management is not about saying no. It is about allowing a company to take educated risks that fall within the organization’s risk appetite.
Q. What is your day-to-day life like as a risk manager for a growing restaurant chain?
A. I provide guidance for the corporate office as well as the corporate-owned restaurants. When I started with Five Guys, we had less than 100 corporate-owned restaurants. Today we have over 200, and we are growing rapidly. My day-to-day life includes tackling operational risk issues, reviewing contracts, identifying new risks, and handling claims issues. We are currently a department of two, making it very much a roll-up-your-sleeves-and-jump-in position.
Q. Describe some of the risks you manage.
A. We face a lot of the same exposures as other fast-casual dining restaurants, but our biggest risk would be to our brand. Five Guys has been successful due to our quality and customer service, and we need to ensure that this same commitment is reflected in everything we do, including claims. We want everyone, including outside insurance companies that may be handling a claim for us, to focus on quality work and great customer service. Since every issue does not result in an insurance claim, risk management also has monthly meetings with our communication department to ensure that we are sending a consistent message, regardless of the issue.
Q. What has been your biggest risk-related success at Five Guys?
A. To date, our biggest success has been the ability to integrate an enterprise risk management focus into the organization. Our message was simple: safety equals quality. Ensuring a safe environment for our employees and customers is an extension of our dedication to customer service.
Q. Have you ever taken a risk and turned it into an opportunity?
A. Like any good risk manager, I see every risk as an opportunity! As long as we are able to mitigate risk to a controllable level and avoid residual risk through planning, we can avoid jeopardizing the sustainability of the organization. That is an opportunity.
Q. How are your claims broken out?
A. We do not self-administer any claims and are working with a number of different adjusters with our insurance carriers. Our size does not currently allow us to have dedicated adjusters, so we put a lot of effort into educating all of the adjusters with whom we work about the “Five Guys Way.” This is a challenge, but we hope to partner with an organization in the future that will allow for dedicated adjusters with whom we can build long-standing relationships so we can deliver even better customer service when it comes to claims administration.
Q. What risks are unique to your industry?
A. In any retail operation, our proximity to the consumer is a unique risk-related challenge. There are only so many procedures and controls that can be put into place without impeding operations. I don’t find it a risk, but a benefit to our business is that we hold ourselves to such a high customer satisfaction standard that we avoid risk simply by having a culture obsessively focused on quality, service, and cleanliness.