S3 Ep3: How In N Out Burger Created a Cult Following
When you’ve got 14-hour-long queues out the door, you’re doing something right. But how does a small burger franchise create super fans?
Join The Wolf for this commentary episode where he deep dives into how a small fast food chain can create the kind of obsessive fan base larger brands can only dream of.
You’ll hear In N Out Burger’s back story, what stands them apart from other burger joints, and why the family owners value traditional values over rapid growth.
The Wolf of Franchises:
In and Out Burger has a cult following unmatched by any other brand new restaurant openings. Create over 14 hour lines that required cops to manage the overflowing traffic. Here’s their secret sauce to an obsessive customer base
Relative to other big burger chains and franchises. In and Out actually has far less locations. They only have 380 plus locations around the country. Meanwhile, big Burger brands like Five Guys, What A Burger and McDonald’s have anywhere from a thousand to 40,000 plus locations worldwide.
So yes, in and out’s a lot smaller than some other brands, but you wouldn’t know it by their fan base. And because of their passionate fan base, it shows up in the bottom line and because of their passionate fan base, it shows up via the revenue at each location.
In and out location on average will drive four and a half million. Compare that to other brands like Five Guys, which does 1.2 million. Wendy’s does about 2.1 What A Burger does, 3.1 million and then McDonald’s does about 2.9 million. In and Out is leading all of them. And other than brands like Chick-fil-A, which does on average 8 million plus per location, they’re one of the top three in the country on an average unit volume.
When a new in and out location opens, Chaos ensues to manage this chaos in and Out will fly out all Star employees to help manage that madness, and they’ll also hire off duty cops for traffic control. In 2020, the Aurora Police Department in Colorado tweeted out that there was a 12 hour wait for the new In and Out, which was the first one ever to open in Colorado. That’s 12 hours for burgers. T
heir tweet literally said, Please go to other burger restaurants. They won’t have any line, but yet people were backed up one and a half to two miles long and waited reportedly as long as 14 hours to get a taste of In and Out Burger. How did this all start though? The first In and Out opened in just a 10 foot space in 1948 in Baldwin, California. It was founded by Harry and Esser Snyder, and the couple would hand pick fresh ingredients each morning that went into their burger products.
They had a pretty simple approach to growth, and the overwhelming principle that is still present in in and Out to this day is to maintain quality at all costs. Today, In and Out is still ran by the Snyders now in their third generation of ownership. Lindsay Snyder is now at the helm and has been since 2010, and the in and Out story has been one of consistency all the way back since 1948. When you look at it, the restaurant has barely changed over the decades, and it’s evident in three key areas.
The first menu, Simplicity since their inception 70 plus years ago, there’s only been five items added in that time span. Those five items which now make the menu 15 items are just Lemonade, Dr. Pepper, milkshakes, hot chocolate, and the famous Double Double Burger, which is effectively just a double cheeseburger. Meanwhile, most big, fast food brands like McDonald’s, Burger King and more have over 50 plus menu items.
There’s no doubt that the simpler menu makes the operations a lot easier for in and out, and also helps them maintain the quality because every menu item is gonna be the best it can possibly be. Second is their commitment to quality to ensure the freshness that in and out customers have grown to love. They’ll never open a location more than a day’s drive from one of their six meat processing facilities.
Meat will get delivered daily from their facilities to every single store, none of which have a single heat lamp, microwave, or freezer on site. And again, if you’ve been inside any fast food joint, the heat lamps in particular are very common. Keeping fries, burgers, other sandwiches warm until a customer comes in and orders it in and out, does not do it that way. They only start cooking once you order it, and the vegetables from the lettuce is hand.
The buns are made with slow rising dough and the tomatoes and onions are sliced each morning. There was even a former employee who was quoted saying, I can say without a doubt that it’s the cleanest, freshest, fast food you can ever have. I’m not gonna lie, I trust the former employee. And speaking of employees, that’s the third area that In and Out does so well. It’s their commitment to employees. They provide far better benefits than your typical qsr. Every full and part-time employee at In and Out receives 401ks, dental and vision coverage and paid time off.
Now, while that may sound the norm to you, if you’re potentially working a white collar job, you know, like in a law firm or at a financial institution, but for a lot of these fast food chains and QSRs, right, they’re not receiving those kinds of benefits. So not only that, but entry level workers are now making well above minimum wage, and managers of in and outs can make over 250,000 for overseeing one location.
So if you think about it, what that does is it gives an entry level worker at in and out a career path where they can thrive and do very well for themselves if they rise up in the in and out system. And unsurprisingly, given this commitment to employees, that is miles above most of the competition. It’s resonated well. The manager’s average tenure at an in and out is 17 years, and CEO Lindsay Snyder had a 96% approval rating on Glassdoor and 2021, and that’s from over 26,000 employees.
That rating made her the highest employee rated female CEO in the country. So that’s no small feat. A lot of businesses, when you think about them, focus on adding more revenue streams, expanding locations aggressively, and whatever else they can do to make more money. But in and out is really the ultimate example of if it ain’t broke, don’t fix it.
It’s not a sexy formula. It’s just quality times consistency and it values sticking to their principles of high quality over following profits. To put that growth into perspective, remember, they only have 380 locations on average and in and Out is open just five restaurants per year since 1948. Meanwhile, you got brands like Subway where at their peak they were opening seven locations per day. The Snyder family says that they receive buyout offers all the time, or IPO offers as well.
But their answer has always been No. Rich Snyder, son of Harry, and Esther said in 1989, there’s money to be made doing those things, but I don’t want to lose with what I was raised with all my life. And heck, it doesn’t really matter. At least for the Snyder’s current ceo, Lindsay Snyder’s net worth is about 4.2 billion as she owns almost all of in and out after receiving equity on our 25th, 30th, and 35th birthday, perhaps the Snyders are really onto something when they say Doing things the old fashioned way is the freshest idea of all.
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