Page 51 - Forbes Magazine-October 31, 2018

FORBES LYNSI SNYDER IN-N-OUT BURGER

AMBURGER LANE IS A QUARTER- cause, as she later explained, “I was just really hungry, and I
mile, palm-lined stretch of Bald- wanted to have an In-N-Out burger.”
win Park, California, 30 minutes “They have a loyalty and an enthusiasm for the brand
east of Los Angeles. Halfway down that very, very few restaurants can ever obtain,” says Robert
the block, a low-slung building cov- Woolway, who handles restaurant deals for the L.A.-based
ered in gray siding sits behind a se- investment bank FocalPoint Partners.
curity fence. Knowing what’s inside That loyalty is lucrative. An In-N-Out store outsells a
the little structure helps explain the typical McDonald’s nearly twice over, bringing in an esti-
street’s unusual name. It’s the top- mated $4.5 million in gross annual sales versus McDon-
secret corporate test kitchen for In- ald’s $2.6 million. (In-N-Out, which is private, won’t com-
N-Out Burger, the iconic West Coast chain. ment on its financials.) In-N-Out’s profit margin (measured
Lynsi Snyder, the company’s billionaire president, hov- by earnings before interest, taxes, depreciation and amor-
ers over a set of double fryers and stove-top griddles. “To be tization) is an estimated 20%. That’s higher than In-N-
honest, I don’t come here a whole lot,” she says. Given the Out’s East Coast rival Shake Shack (16%) and other restau-
clean counters and neatly tucked-away cooking utensils, it rant chains that typically own their locations, like Chipotle
doesn’t look like anyone comes here often. (10.5%). Revenue should surpass $1 billion this year, rough-
Which is probably not far off the mark. While McDon- ly doubling in eight years, and the business is debt-free, ac-
ald’s and Burger King serve well over 80 different items, In- cording to the company. In-N-Out is conservatively worth
N-Out famously serves fewer than 15: burgers, cheeseburg- $3 billion, and Snyder now owns virtually all of it after re-
ers, fries, soda, milk shakes and the signature two-patty ceiving chunks on her 25th, 30th and 35th birthdays (she
Double-Double. Snyder has added just one thing: hot choc- got the last slice in 2017).
olate in 2018. The company will make tweaks from time to Snyder is an unlikely shepherd of her family’s business.
time, like switching to a premium Kona coffee and healthier By all rights, her uncle should be running In-N-Out, if not
sunflower oil for cooking fries. for his untimely death. She never graduated from college and
But Snyder, who at 36 debuts on this year’s Forbes 400 lost her father to drug abuse. As a young woman, she battled
as its youngest woman, with a net worth of $3 billion, through a period of alcohol and drug use and three di vorces.
fiercely embraces an imperviousness to change. “It’s not Snyder, a devout Christian who sports tattoos of Bible verses,
[about] adding new products. Or thinking of the next ba- came out of those experiences drawn to In-N-Out’s long-
con-wrapped this or that. We’re making the same burger, standing stability—determined to change the company as lit-
the same fry,” says Snyder, wearing black
lace-up combat boots and stacks of silver
bracelets on both arms. “We’re really picky
and strategic. We’re not going to compro-
mise.”
In-N-Out is a culinary anachronism. It
hasn’t evolved much since Snyder’s grand-
parents founded it in 1948. Buns are
baked with slow-rising dough each morn-
ing. Three central facilities grind all the
(never-frozen) meat, delivering daily to
the 333 restaurants. Nearly all its loca-
tions are in California, and all are compa-
ny owned. (In-N-Out does not franchise.)
Harry Snyder, the cofounder of In-N-Out; the original In-N-Out in Baldwin Park, California, had no
Heat lamps, microwaves and freezers are inside seating. On Day One, it sold 57 hamburgers.
banned from the premises. The recipes for
its burgers and fries have remained essentially the same for tle as possible, particularly the brand’s image of 1950s whole-
70 years. someness. After taking over in 2010, she embarked on a
Consistency has earned it a passionate following. In-N- slow, steady expansion across the West, opening more than
Out has become a fixture at Oscars after-parties. Its secret 80 stores in the same period that Five Guys, a close competi-
menu, like the option to order a burger “protein style”—let- tor, added more than 500 across America.
tuce leaves, no bun—is the least well-kept secret since the “I felt a deep call to make sure that I preserve those things
WikiLeaks cables. Top chefs like Gordon Ramsay, David that [my family] would want. That we didn’t ever look to the
Chang and Thomas Keller are all enthusiastic fans. The ac- left and the right to see what everyone else is doing, cut cor-
tor-cum-rapper Donald Glover has rhapsodized about In- ners or change things drastically or compromise,” says Sny-
N-Out in his lyrics. And in 2006 Paris Hilton got a DUI be- der, who has spoken with the media only a handful of times.

76 | FORBES OCTOBER 31, 2018