In-N-Out Burger (13 page)

Eaton commissioned hundreds of statues and artwork including reproductions of some of the world's most famous works of religious art, such as thirteen mosaic scenes of Michelangelo's Sistine Chapel (as well as kitschy original renditions: a 172-by-35-foot mosaic depicting twenty-six famous scenes from the earthly life of Jesus) to decorate the Forest Lawn chain. Eaton introduced a “pre-need” program that allowed people to see to their own funeral arrangements before they died. Soon, Eaton lured couples to marry in the chapels on the cemetery grounds. It was at Forest Lawn's Wee Kirk O' the Heather Church that Ronald Reagan married his first wife, actress Jane Wyman, on January 26, 1940.

On a warm winter morning, Harry's funeral mourners filed into the 120-seat church, a replica of St. George's Church in Fredericksburg, Virginia. The chapel was too small to accommodate the hundreds of mourners who had come to pay their last respects to Harry Snyder, and many stood outside. “He really touched a lot of folks,” said Russell Blewett, who attended. Numerous associates and community residents arrived. It seemed that everybody that he ever had contact with arrived to say good-bye. The Snyders' good friends Carl and Margaret Karcher, who had stayed close through the years since they first met and offered Harry advice on running a fast-food shop, paid their last respects, too. Three years later, the Snyders' foster son, Wilber Stites, was killed in a car accident. He was buried near Harry at Forest Lawn.

 

When Harry died, the question of what would happen next to the popular little burger hut with the red-striped awning had already been de
cided. At fifty-six, Esther Snyder was now a widow with few financial concerns. She might have easily jettisoned the chain and taken up a life of early retirement; instead, she agreed to carry on. In fact, Esther insisted upon doing so. She simply cared too much about the welfare of her associates to abandon In-N-Out. They had shown such loyalty to the Snyders that she couldn't imagine pulling the rug out from under them now. Besides, she was still devoted to Harry, and In-N-Out was his legacy. “I think she just didn't know what else to do,” remarked old family friend Valerie Althouse. “Esther never sold it because of Harry. It was a family business. Just about everyone working there had been there since the 1960s. They had become like family.”

For a short time, there was some thought of Rich possibly doing something else. This was, however, mostly fueled by a brief spasm of personal doubt. Although he had not attended college, Rich had learned the business by working there. In short, he feared that he might not have what it took to run In-N-Out Burger. On a few occasions, Rich delicately broached the idea of selling the company with his father before he died. But Harry dismissed his son's misgivings; he'd put his arm around his son and tell him, “You can do it, Rich.”

Seven months shy of his twenty-fifth birthday, Rich Snyder was named president of In-N-Out Burger, and whatever reservations he had, he had quickly pushed them aside. Esther was given the official title of secretary-treasurer (she also retained controlling interest in the company). Guy was named In-N-Out's executive vice president. But Rich was also named the trustee for his father's estate and trust instrument. For all intents and purposes, Rich was given the keys to the family's growing burger kingdom. Guy Snyder was passed over in favor of his brother.

Practically speaking, the decision to hand the company over to Rich was both sensible and prescient. In retrospect, it was the plot point that turned In-N-Out from a local eatery into one of the largest family-owned restaurant chains in the country, competing head-on with the fast-food giants. Of course, as with most plot points, the narrative doesn't turn without a certain dramatic tension—and that tension was derived in no small part from the relationship between
the Snyder brothers. The upending of primogeniture created a conflict between the two brothers whose relationship was already exacerbated by personality clashes. It had the emotional intensity of the biblical story of Jacob and Esau without, of course, the bloodlust or deceit. As his longtime friend explained, “Guy never said outright, ‘I really got screwed over by dad' or anything. Guy knew he had a problem with the drugs and I don't think he ever questioned why he was passed over. But to tell you the truth, he was hurt nonetheless.”

Outside In-N-Out's fortified walls, the wholesome image of the company remained intact; behind them, however, there was a small fissure, like a hairline crack in a crystal vase.

Harry's confidence in his youngest son was not misplaced. Whatever initial misgivings Rich may have had, they were nowhere in evidence when he seized the reins of the family business. In-N-Out's new president took up his position filled with the kind of determination and enthusiasm that characterized him both inside the fast-food industry and outside of it. Arriving early each morning at the chain's nondescript Baldwin Park offices (where Snyder Distributing was housed across from store Number One), Rich cut a commanding if not boyish figure, aided perhaps by his large girth. Not yet twenty-five years old, he was almost always dressed in a suit and tie, and just as often a broad smile. Rich possessed the kind of clean-shaven face that seemed to magnify his already youthful appearance.

It was not, however, an entirely smooth transition. Very quickly, Rich discovered that some of the associates that he had considered to be his friends did not always have his best interests at heart. And at twenty-four, he realized that he had a lot to learn. When describing this period of adversity and hard knocks he later said that “the bumps along way just help to develop character.” However, from that point forward, Rich never again considered selling In-N-Out. The very idea had become a taboo subject.

 

By the time that Rich took over In-N-Out Burger, the fast-food landscape was clearly different from the one that his parents had helped establish. For starters, there was a strong public perception that hamburgers were mostly junk food; the industry was now stuck with the negative reputation it had earned as a business of cheap, low-quality food prepared by disposable, underpaid workers. Still, despite its bad press, the fast-food world continued to prosper. In 1976, the United States was celebrating its bicentennial and the fast-food industry was ringing up $16.3 billion in sales. As it continued to grow at home, the business had gone global.

For Rich, a man who believed in the hamburger like he did the American flag, the public's gloomy perception of his business was particularly irksome. It was an opinion Rich didn't share in the least—he had nothing but respect for the hamburger business, especially In-N-Out.

 

Whether Harry expected Rich to follow in his cautious footsteps is unclear, but certainly his son had some ideas of his own. Unlike many heirs who seek to make their mark on the family firm by completely remaking it, when Rich took over In-N-Out Burger he saw the wisdom in maintaining his parents' 1948 formula. To his credit, Rich wasn't tempted to tinker with In-N-Out's limited set of offerings even as his competitors had, for some time, rapidly expanded their own. In the chain's history to date, it had only added one new product to its menu—and that was the soft drink 7-Up. “It's hard enough to sell burgers, fries, and drinks, right,” was how Rich explained his reasoning. “And when you start adding things it gets worse.”

In-N-Out's limited scope and narrow focus also meant that the chain didn't have to continuously spend money on new equipment needed to prepare and cook new menu items. By the same token, it wasn't necessary to repeatedly train its associates to learn how to ready those new offerings. And without shareholders peering over
their shoulders, the Snyders were free to spend their money where they wanted—and that was on maintaining high standards.

 

That's not to say that Rich Snyder did not have his own dream for the future of In-N-Out Burger; in fact, he had big plans for the chain. His vision mirrored his father's with one exception. If Harry was a man who was satisfied with his limits, his son was a man who saw greater potential. By the time Harry died, he was happy with the small clutch of stores that he had prudently rolled out across the Southland. Those who knew him said he was reluctant to push the chain much beyond that. The eighteen In-N-Out units ringing the San Gabriel and San Fernando valleys as well as Orange County were a sufficient measure of success, to his way of thinking.

His son, however, had his own measure of success. The chain that Rich had inherited was a cherished brand with a devoted following. In his mind, Rich firmly believed that he could maintain his parents' model of simplicity and quality while greatly expanding In-N-Out Burger. Initially, he decided to venture farther south of Los Angeles County, push farther into the fast-growing Orange County, and move into new territories, starting with Riverside and San Bernardino counties. “Rich was very unique,” explained his cousin Bob Meserve. “He had a lot of his dad's qualities. But Rich was shrewder as a businessperson. Harry was old school and Rich was new school. Rich had a vision. He knew what he what he wanted to accomplish.”

What Rich was not, however, was a college graduate. Despite his considerable natural talents, it was something that seemed to leave him slightly insecure. His dyslexia, diagnosed only when he was an adult, amplified the feeling. Close observers noted that Rich lacked the polish of many executives, but what he lacked in luster he more than made up for with his genuine ability to connect with people. When he gave a speech, more often than not, it came straight from his heart.

In any event, Rich strove to continually improve his management abilities, taking advantage of opportunities to expand his own education at every turn. He cobbled together his own kind of
degree, attending leadership seminars and classes and seeking out mentors. Rich became active in a number of business organizations and peer groups where he met and mingled with other Southern California business executives. He belonged to the networking group The Executive Committee (TEC), made up of twelve company presidents from various businesses and industries. He also joined the Young Presidents' Organization, a worldwide peer group exclusively for CEOs and presidents of companies who were under the age of forty-five.

The affiliations gave Rich the opportunity to mix with other self-starters as well as second-and third-generation businessmen who had also inherited their family businesses. They provided a kind of fraternity as well as forums in which he could candidly and safely discuss issues, solve problems, and exchange a range of ideas on everything from marketing to taxes to human resources. Within this circle, Rich was universally well regarded for his energy, enthusiasm, creativity, and his obvious gifts as a leader.

It was during this time that Rich met Jack Williams. Originally from Clovis, New Mexico, Williams and his wife, Linda, were longtime restaurant business veterans. The couple had come to California in 1954, when Williams was part of the U.S. Marine Corps and was stationed in San Diego. In 1957, the couple began working in the food business, and in 1969 they opened their first restaurant, a Sizzler Family Steakhouse. First established in 1958, Sizzler was a pioneer in the fast casual dining segment and became known for its reasonably priced steak dinners and all-you-can-eat salad bar. Williams went on to become one of its largest franchisees.

The two men had frequently run into each other in industry circles. But when Rich and Williams sat on the board of the California Restaurant Association together, they became fast friends. Williams's initial impression, he recalled, was that Rich “was blessed with a tremendous amount of common sense and a lot of business ability,” and he possessed a real determination to improve and learn.

Although Williams was eighteen years Rich's senior, the two men spent a lot of time together problem solving, attending training
seminars, and generally using each other as professional sounding boards. The pair served on each other's advisory boards; they shared an interest in the operational details at every level, frequently eating at each other's restaurants, reporting back any problems. “Many times I told him about little things,” remembered Williams. “They wouldn't be noticed by the public.”

Williams and his wife owned a ranch down in Temecula in Riverside County, a town known for its floating pageant of hot air balloon festivals, and Rich came down at least once a month, often arriving by helicopter. There they rode horses together. In fact, after Rich bought his own copper red Tennessee Walker (whom he named Ernie), he boarded him for a time at the Williamses' ranch. In Temecula, the two friends fell into a routine of packing a lunch of peanut butter and jelly sandwiches and riding the property out to the nearby campgrounds while talking about businesses matters. “We'd ride up there and go sit under the oak tree and work on our employee handbooks,” Williams recalled. “He had a real innate sense.”

Less than two years after he became In-N-Out's president, Rich's management skills were put to the test. At twenty-six, he faced the first major challenge to his abilities as a leader and the future of In-N-Out Burger.

 

At about 7:00 p.m. on August 16, 1978, a fire broke out at the chain's Baldwin Park headquarters. Sixty firefighters from eleven engine companies rushed to 13502 E. Virginia Avenue to battle the flames as they ripped through In-N-Out's warehouse, offices, and meat department. The blaze had caused the sky to turn black, filling it with giant plumes of smoke that could be seen as far away as the cities of Duarte, six miles to the north of Baldwin Park, and Hacienda Heights, eleven miles to the south.

When the smoke had cleared, the facility was completely gutted. The roof had collapsed, and only the burnt walls of the hollowed-out concrete warehouse remained. Fortunately, the facility was closed at the time and nobody was inside. The following day, the
San Gabriel
Valley Tribune
reported that the blaze had caused an estimated $750,000 in damages.

The fire was potentially devastating for In-N-Out Burger, and not just in monetary terms. The warehouse, built before sprinklers were required, was the heart of In-N-Out's operations. The fire didn't just pose a threat to Rich's immediate plans to expand; it jeopardized In-N-Out's ability to continue to operate, period. But Rich was determined to get In-N-Out back up and running immediately.

Resuming the chain's operations was a scramble of logistics and perseverance. Rich and Esther bravely and quickly organized a game plan. Carrying the Snyders through this rough period was the amazing show of support by the chain's associates.

While the associates did their part, even more important, Rich was able to rely on In-N-Out's close ties with its suppliers. Like his father before him, Rich continued to stick by the company's promises to pay full price for the highest quality ingredients. When prices plunged or spiked, or there were shortages due to weather or other events, In-N-Out always absorbed the cost. As long as the quality remained exceptional, he did not look for cheaper suppliers. It was part of the Snyders' business practice to take care of their purveyors as they did their customers and associates. After the fire, when In-N-Out was unable to deliver supplies to the chain, a group of In-N-Out's longtime suppliers delivered their goods to individual stores until the warehouse was rebuilt. In-N-Out Burger had always taken care of its suppliers, and, following the warehouse fire, this time the suppliers took care of the burger chain.

Esther took charge of the chain's administrative duties, converting a portion of the first floor of her San Dimas house into In-N-Out's temporary offices. With eighteen stores, In-N-Out Burger was still a relatively small operation, and Esther brought a handful of “the girls,” as she called them, from accounting to work with her in her home. Rich found a rental facility nearby that he turned into the chain's provisional warehouse and distribution center. And he worked out of the small warehouse building on the edge of store Number One that still housed Snyder Distributing.

While the Snyders made plans to rebuild their operational and administrative facilities on East Virginia Avenue, they ran the company in this manner for nearly two years. To Rich's considerable credit, each one of the chain's eighteen stores remained open and running with hardly a hiccup. In fact, while still operating the company out of temporary facilities, Rich demonstrated that the fire would not hamper his plans to move In-N-Out Burger forward. By 1979 he had added three new stores, including the first in San Bernardino Country.

It had become clear that as In-N-Out moved ahead with its expansion it needed to construct its newer stands to accommodate larger crowds. It had outgrown its signature format: a simple 250-square-foot open kitchen flanked by twin drive-through lanes, with a walk up window (and nearby five hundred-square-foot storage building) on a one-acre plot. While that prototype helped spawn a host of imitators, the Snyders were running up against two crucial issues: the growing cost and dearth of available one-acre plots and the chain's own unbridled popularity.

Bottlenecked drive-through lanes spilling into passing street traffic had become almost as synonymous with In-N-Out as its boomerang arrow. Increasingly, municipal zoning officials began to think twice about signing off on permits for In-N-Out's twin-lane format, causing numerous delays for new openings. Intent on expansion, Rich found an alternative solution to increase capacity and keep city officials placated: build a new store prototype with indoor dining and a single drive-through lane. The Ontario store was the first designed with the new prototype. As Rich later told
Nation's Restaurant News
, “I think double drive-throughs are great; we love to build them. But most cities [resist issuing permits to high-volume drive-through operators], at least if their name is In-N-Out.” In some ways, the shift marked the end of the Harry Snyder double drive-through era.

 

Meanwhile, Guy Snyder was pursuing a life mostly outside the family business. Officially, he was In-N-Out's executive vice president, but it had been obvious that it was Rich who was running the company. He
was earning a salary that was reported to be close to seven figures although he was not an active presence in the company. Guy's attentions were focused elsewhere.

Much of Guy's time was spent on the drag circuit. Although his motorcycle accident had left him with only about 50 percent mobility in his right arm, in frequent pain, and in need of subsequent back and arm surgeries, Guy continued to find a way to race. The devastating injury made it virtually impossible for Guy to shift his four-speed. Even a task as banal as zipping up his own fire suit at times proved difficult, and he could be seen struggling, his right arm limp at his side, as he closed up his jacket. The injury made it difficult for him to obtain his racing license, and so Guy had an automatic transmission built for his cars and raced sportsman class instead.