Page 54 - Forbes Magazine-October 31, 2018

BATTLE OF THE BURGERS
FORBESORBES
F
waves, No Freezers, No Heat Lamps.” time restaurant workers can
On its California home turf, In-N-Out must defend enroll in dental, vision and
against incursions. Shake Shack, the popular $359-million- life insurance plans through
in-sales burger chain founded by the New York restaura- the company, and full-tim-
teur Danny Meyer, has come west, opening nine locations ers get can get health insur-
in southern California during the last two years, with plans ance and paid vacation, ac-
SHAKE SHACK
to open three in the Bay Area starting this fall. Shake Shack cruing time off after two
burgers, made with meat from the famous high-end butch- weeks of employment. SmokeShack
er Pat LaFrieda and served on potato-bread buns from Mar- The average In-N-Out “All-natural applewood
tin’s, have their own loyal following. “We wanted to bring manager has been with the smoked bacon, chopped
cherry pepper, ShackSauce.”
our own spin to California,” says Andrew McCaughan, Shake company for 17 years and
Shack’s vice president of development. “It’s absolutely a key makes $163,000, more than INTRODUCED: 2012
$6.89 870 CALORIES
market for us, and we continue to really want to invest deep- the typical California den-
er and deeper in the market.” tist, accountant or finan- 2.25 million
cial advisor. Managers get
Number sold in 2017 around
profit-sharing, too. “They’re
“I REALLY WANTED TO MAKE the globe.
simulating an ownership
SURE THAT WE STAYED mentality at the restaurant,” The bacon comes from
says John Glass, a restau- Niman Ranch, which
TRUE TO WHAT WE STARTED raises pigs outdoors.
rant-industry equity analyst
WITH. THAT REQUIRED ME at Morgan Stanley. “That
manager now has skin in
TO BECOME A PROTECTOR.
the game.”
A GUARDIAN,” SAYS SNYDER.
ONE IDEA HAS BEEN FIRMLY HELD in the minds of the Sny-
At In-N-Out, Snyder’s “goals are not for us to be the big- ders. It might as well be the family motto: The company isn’t
gest,” says executive vice president Bob Lang, a 45-year In- for sale.
N-Out veteran. “Really, it’s about maintaining the legacy of Back when he was chairman, Rich Snyder summed up
her family and a family environment.” the thought of selling In-N-Out this way: “I would be pros-
Snyder is popular with her 26,000 employees. She has a tituting what my parents made by doing that,” he told Forbes
99% approval rating on Glassdoor.com, the job-reviews site, in 1989. “There is money to be made by doing those things,
and is ranked No. 4. but you lose something, and I don’t want to lose what I was
on a 2018 Glassdoor BATTLE OF THE BURGERS raised with all my life.”
list of top bosses at Over the course of a month, Lynsi Snyder routinely gets
large companies, offers to take In-N-Out public or sell. “We’ve had some pret-
ahead of CEOs like ty crazy offers,” says Snyder. “There’s been, like, princes and
LinkedIn’s Jeff Wein- different people throwing some big numbers at us where I’m
er, Salesforce’s Marc like, ‘Really?’ ” The plan never changes. “We will continue to
Benioff and Micro- politely say no to Wall Street or to the Saudi princes. Who-
soft’s Satya Nadella. ever will come,” says Arnie Wensinger, In-N-Out’s longtime
In-N-Out and WHATABURGER general counsel.
Snyder get high Patty Melt The idea of an In-N-Out IPO leaves bankers like Damon
marks for a reason: Chandik, the head of Piper Jaffray’s restaurant M&A team,
A new “take on a classic.”
good pay and career salivating. “I get calls all the time on In-N-Out. It would be
development. Res- INTRODUCED: 2008 the hottest IPO out there,” he says. “I admire her and the
$5.99 940 CALORIES
taurant workers, or whole company for not going down the path. You do have
“associates” in In- 21 that risk of ultimately changing the culture of the business.”
N-Out speak, make Given the investor appetite for Shake Shack, whose stock
Grams of saturated fat in one
$13 an hour, versus sandwich— the FDA suggests trades at almost 100 times earnings, a public offering would
the $9 to $10 or so no more than 20 a day. undoubtedly hand In-N-Out tens, if not hundreds, of mil-
that’s typical at most lions of dollars in working capital—and give Snyder a way to
The popular sandwich has
national competi- cash out part of her stake in the business.
its own Facebook page.
tors, including Mc- “It’s not about the money for us,” she says. “Unless God
Donald’s and Burger sends a lightning bolt down and changes my heart miracu-
King. Part- and full- lously, I would not ever sell.” F

82 | FORBES OCTOBER 31, 2018