In-N-Out Burger (23 page)

 

Perhaps to everyone's great relief, Guy did not seek to remake In-N-Out Burger. For the most part, he was content to keep things running just as they had been. As a result of the infrastructure that Rich Snyder had put into place, the leadership transition—at least in terms of operations—was practically seamless. The company could still grow and expand and increase its sales volume by following the chain's philosophy of “Quality, Cleanliness, and Service” and the systems put in place to achieve it. During his tenure, Rich created human resources departments, the university, and the accounting departments, and he enlarged and modernized the warehouse and commissary as well as the departments that supported their operations. He created a management system that could ensure quality even as it added new stores each year. It was not lost on close observers that In-N-Out continued to prosper without its most dynamic leader. All Guy had to do was follow the system already in place.

Rich's own charismatic presence had created a very specific corporate culture. It seemed that his legacy was not the achievements of growth and profits but the simple fact that the company he built continued to succeed without him. Moreover, it was a company where people were happy to come to work every day.

In 1994, Guy Snyder celebrated the opening of In-N-Out's hundredth store in Gilroy, California. A town best known for its mushroom farms and its annual garlic festival, Gilroy was located in the Santa Clara Valley; by the time that In-N-Out unveiled its drive-through there, the chain was generating an estimated $133 million in sales. Store number one hundred had been an important cornerstone of Rich Snyder's expansion plans. But for Guy, the milestone was—much like his chairmanship of In-N-Out Burger—inherited from his late brother Rich.

Under different circumstances, the opening would have been an exuberant affair. Rich was always one to go all out when it came to big events and celebrations of any stripe. But given the circumstances, aside from a cake and festive decorations, the grand opening of the hundredth In-N-Out Burger was a rather subdued occasion.

Guy arrived at the store on 641 Leavesley Road off of the 101 Freeway in the custom-built In-N-Out bus. Something akin to a rock band's touring bus, the plush set of wheels was wired with telephone and computer hookups. It was one of Rich's initiatives. With the chain's expansion continuing full force, Rich thought it was a good idea to have a kind of rolling office that could allow his team to work as they traveled between stores.

Wearing a dark suit and tie and tinted sunglasses, Guy joined his mother, Esther, in the balloon-filled store. At seventy-four, she suf
fered from chronically bad knees and a heart condition, but Esther still loved to attend as many new store openings as she could. At the Gilroy opening, Esther and Guy cut a red ribbon that proclaimed “100th Store” with a pair of oversized prop scissors.

 

In-N-Out Burger entered the 1990s as if operating within an alternative fast-food universe. At least in terms of scale, the chain remained a small player in the vast $74.3 billion fast-food industrial complex dominated by a cabal of billion-dollar corporations. As Guy and Esther marked In-N-Out's triumphant march toward Northern California, McDonald's had swelled to thirteen thousand stores with a global push. As the Snyders cut the red ribbon in Gilroy, McDonald's opened new stores in Kuwait and Egypt. Four years later, Burger King, which had opened its first international franchise in the Bahamas in 1966, marked the opening of store number ten thousand in Sydney, Australia.

Harry and Esther Snyder's old friend Carl Karcher had also fueled his chain's growth through expansion. He had taken his Southern California chain public in 1981, and in 1984 opened its first franchise. Six years later, of the 561 Carl's Jr. restaurants, 133 of them were franchises, and the chain was earning $575 million annually. Having opened stores across the West, Karcher began his own global march, opening stores in Mexico and the Pacific Rim. “One of my favorite memories was going international,” he proudly exclaimed.

But Karcher took his company in another direction as well during the 1990s. He invested heavily in real estate in Anaheim and the Inland Empire, using his Carl Karcher Enterprises stock as collateral for his bank loans. It was a disastrous gamble. The investments left Karcher with $70 million of debt at the same time that the company's stock was falling. His attempt to bolster sales by acquiring the Mexican restaurant chain the Green Burrito in 1993 was rejected by the company's board, and the board in turn ejected Karcher from the company. Two months later, Karcher wangled his way back in, orchestrating a takeover through a series of intricate financial maneuvers. The turnaround was successful and in 1997, CKE acquired
Hardee's for $327 million, giving the onetime hot dog cart a national footprint. But in the process, Karcher nearly lost everything.

All the same, fast-food consumers had grown fickle. The industry found itself pulling new tricks out of an old hat on a constant basis. After Taco Bell introduced the concept of value pricing in 1988, every big chain followed suit. Each year saw some kind of price slashing battle. In 1996, Taco Bell launched its $1.99 Extreme Value Combos—a year later, McDonald's announced the fifty-five-cent Big Mac (when purchased with a drink and fries), sparking an all-out fast-food price war. As the leading chains cut prices, they also began increasing portion sizes, ushering in the era of super-sizing.

By 1997, the fast-food industry reached $109.5 billion in revenues, closing in on the $114.3 billion in sales generated by sit-down restaurants. The business pages of newspapers across the country were filled with stories about every move the colossal and highly influential industry was making. “McDonald's Still Finds There's Still Plenty of Room to Grow,” the
New York Times
reported on January 9, 1994. “Bigger Portions Being Thrown as Global Fast-Food Fight Heats Up,” proclaimed the
Press-Telegram
of Long Beach on March 8, 1996.

The chains sought myriad ways of capturing a capricious market. One of the most ambitious efforts was also one of the most disastrous; in an attempt to cater to the adult market, in 1996 McDonald's introduced the Arch Deluxe, a line of burgers and sandwiches with more sophisticated ingredients. The launch was accompanied with a staggering $100 million advertising campaign created by Peter McElligot and with the tagline “The Burger with the Grown-Up Taste.” The program was a grown-up debacle. The Arch Deluxe never caught on, and McDonald's soon abandoned the costly enterprise.

 

Subtle changes were taking place at In-N-Out Burger as well. Around 1995, a raucous discussion broke out over the decision to add a fourth beverage size at the stores. The managers seemed to go back and forth over whether to move forward or not before they ultimately green-lighted the addition. The following year, the chain began serving Dr
Pepper. And In-N-Out opened a new warehouse in Tracy, a kind of satellite distribution center for its fresh ingredients that allowed the chain to serve the growing number of drive-throughs in Northern California. By the end of 1996, there were 116 In-N-Out Burger drive-throughs generating about $159 million in sales.

Back in Baldwin Park, Guy was looking to make some further changes of his own. The friction between him and a handful of top managers had yet to dissipate. Guy seemed to lash out and then cool down—in the heat of the moment he often wanted to cut several team members loose before deciding on a different course of action. During this time, the chain's CFO Steve Tanner
^*
departed, later going on to hold similar positions at several restaurant chains including El Torito.

Like Harry, Guy was a zealot when it came to the chain's “Quality, Cleanliness, and Service” scheme. Moreover, he expected In-N-Out's associates and managers to aggressively handle workplace issues. In one episode when a longtime manager did not (in Guy's estimation) step up to the plate, Guy dressed the man down: “You don't have any balls,” he said.

Guy was said to be particularly unhappy with one of the chain's regional managers who had many decades of service to In-N-Out under his belt. Initially, Guy wanted to remove him, but rather than let him go and cause uneasiness within the ranks, Guy was convinced to appoint Mark Taylor (his stepson-in-law) as general manager to supervise the chain's two regional managers. In the organizational structure of In-N-Out Burger, regional managers were in charge of the divisional managers, who in turn supervised seven to eight stores each. It seemed a reasonable solution. Taylor was part of the family, so to speak, and his appointment gave Guy a way to manage the regional managers without making any drastic changes.

Taylor began working at In-N-Out Burger in 1984 when he was nineteen years old. A year later he married Traci Perkins, Guy's step-daughter. The pair met when they were both students at Bonita High
School (Guy and Rich Snyder's alma mater). Rich found him to be hardworking, and Taylor moved up through the ranks, becoming the store manager of In-N-Out units in Pomona and West Covina.

Guy wasn't sold on the idea at first. He was said to be uncertain about Taylor's skills. While he eventually signed on, he did so with some reservations. As Taylor stepped up to corporate management, it wasn't long before Guy began joking, “He wants my job.”

 

Despite his numerous efforts to stay clean, Guy's troubles soon re-surfaced. It was a topic that the Snyder family and In-N-Out Burger preferred not be examined publicly. Friends insisted that Guy's problems with drugs stemmed from the painkillers he continued to use in the constant search for relief from his back and arm injuries. After a while, however, the painkillers had been supplemented with a cornucopia of other substances.

By the mid-1990s, the impact of Guy's problems had become difficult to ignore. Guy had good periods and bad periods. He would get to a point where he could barely function and then enter rehab, but his numerous stays did little to curb his addictions. “The way he looked at rehab,” explained one of his friends, was “do those thirty days and get out. The whole time he was in there he was craving drugs, and when he'd get out, he couldn't wait to start all over again.” At one point, Guy was refused admittance to the Betty Ford Center because he was too high to talk to the admitting officer. It was a volatile situation that no doubt contributed to what close observers described as a turbulent marriage. Guy was often absent, racing, in rehab, or attending to some other interest of his, and the couple were said to argue frequently. In August 1995, Guy and Lynda Snyder legally separated. Their estrangement lasted two years.

Barely four months after the couple's formal separation, police officers in Claremont, thirty miles east of Los Angeles, found Guy Snyder's parked 1968 Dodge Charger. It was around 3:30 a.m. on Christmas Day. When the officers peered into the car, they found Guy hunched over and passed out; his face was buried in a briefcase
containing a small pharmacy of drugs, including marijuana, Valium, the sedative Klonopin, and the painkiller codeine. In addition, Guy was carrying a loaded 9 mm Glock semiautomatic handgun, an 8-inch switchblade, and $27,475 in cash. He was arrested and charged with several misdemeanors including public intoxication, possession of less than one ounce of marijuana, carrying a loaded firearm, and possession of a switchblade. Released on his own recognizance, six months later Guy pleaded “no contest” to the weapons charges at the Municipal Courthouse of Pomona. Los Angeles County prosecutors dismissed the drug charges and in turn Snyder paid a fine of $810. As part of his probation, Guy agreed not to own, use, or possess any dangerous or deadly weapons.

The incident did not go over too well back in Baldwin Park. For obvious reasons, news that the chairman of the beloved and wholesome In-N-Out Burger had been found unconscious by the side of the road and arrested for drug possession was not exactly a public relations windfall. Bracing for the worst, In-N-Out's executives convened a meeting about how to handle what they expected would be a deluge of media inquiries. However, the incident remained largely out of the press; not even the chain's local paper, the
San Gabriel Valley Tribune
, ran the story. The inner circle at In-N-Out seemed greatly surprised when the entire episode seemed to pass without comment. In fact, the story of Guy's arrest did not surface publicly until nearly three years later.

Guy was a loner surrounded by enablers; they helped to feed his addiction and then cleaned up his messes. His old racing injuries provided a pretext for the drugs. Few if any seemed willing to stand up to Guy and say no. He had a complicated web of relationships wherein his friends and business associates were one and the same, and nearly all were on his payroll in some fashion. They enjoyed his childlike generosity. Swept up in the kind of life that unlimited funds provided, it might have been easier to turn a blind eye than to say no.

Although clearly troubled and frustrated by her son's problems, Esther tried to remain hopeful that Guy would soon get well. After the Claremont episode, she was said to have been grateful that he
wasn't injured or killed. But Esther wasn't a woman known for putting her emotions and feelings on the table. Rather, she held quietly to her faith. Besides, not many were willing to confront Esther and risk upsetting In-N-Out's kindly grandmother. This was a woman who never uttered an unkind word about anybody, preferring to see only the good in people. When Esther did become distressed about something, she would say “oh, goodness,” get worked up, and then declare, “I hope the Lord forgives me—I've got my anger up.” That was usually the extent of it.

But Guy's drug problem was something that not even Esther could completely ignore. When Guy was in pain, Esther seemed to understand his need for painkillers. Her strategy was to think positive and hope for the best, but his downward spiral was difficult to comprehend. She often called his entourage to make sure that he was okay. More than anything, her approach smacked of unhealthy indulgence. This sweet old lady who knew the cost of a truckload of potatoes seemed determinedly unaware of the price of her son's drug habit.

During Guy's worst periods, he was increasingly absent from In-N-Out Burger. Lynda's nephew Tom Wright had become Guy's right hand man. Among those in the burger chief's retinue, Wright seemed to genuinely care about Guy as a friend. In addition to his responsibilities in asset protection, he had also been named to In-N-Out's board of directors. Wright often ended up acting as a go-between, telegraphing Guy's intentions to the vice presidents during the chairman's absences at corporate meetings. For years, Rick Plate had served a similar function, both supporting and propping up Guy. In 1994, Plate collapsed at In-N-Out's Irvine offices; he had suffered a brain aneurysm, and never regained consciousness.

Guy's absences didn't necessarily interrupt the day-to-day operations. When he was unavailable, the chain's executives usually met and worked out decisions as a group. After Guy returned, he could be prickly and at times paranoid toward the other In-N-Out Burger executives during meetings. Sometimes he seemed to think that some of the managers were acting to supersede him, and he countered by putting them in their place during a meeting. Regardless, it was due in
no small part to the talented and loyal executive team that In-N-Out Burger remained on a stable and successful course. It was Guy Snyder's life that was turning volatile, falling into an unpredictable pattern of good days and bad days, bright spots and periods of darkness.