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Saturday, Dec 3, 2022

Snyder’s Secret Sauce: Quality Food, Happy Employees

A more-of-the-same business strategy brought plenty of restaurants to their knees in 2020.

That wasn’t the case at In-N-Out Burger Inc., which at more than 70 years old has been operating with little variation to that philosophy—quality food, good service, happy workers, and affordable prices—from the start, and double-doubled down on that plan during the pandemic.

That strategy had already helped build the restaurant chain into one of Orange County’s most iconic brands, a West Coast institution equally at home when cited in one of rapper The Game’s songs or when catering high-profile events such as Oscars after-parties.

Lynsi Snyder, the Irvine company’s 38-year-old owner and president with an estimated net worth of nearly $3 billion, walks a delicate line between protecting the burger chain’s 72-year-old heritage that was started by her grandparents Harry and Esther Snyder and also keeping it relevant by pushing forward.

How to do that in one of the most challenging years for businesses globally, particularly the restaurant industry, just added to the large task at hand.

Snyder’s most challenging year since taking over the president’s role in 2010 turned out to be a largely successful one, and earned her a nod as the Business Journal’s Business Person of the Year, for the restaurant sector.

In-N-Out continued to open restaurants last year, ending 2020 with 361 locations and estimated revenue approaching $1 billion, all while avoiding furloughs and layoffs to its staff.

“We really just kind of banded together. We’ve had a great team from the get-go, but I believe that this year pulled us together to really take care of our associates and make sure we could serve our customers,” Snyder said in an interview with the Business Journal in late December.

“We, of course, do not compromise when it comes to quality and the service part was challenging obviously with the restrictions this year, but we tried to do the best and our priorities were the same. We just had a lot more hoops to jump through.”

New Markets

The business found ways to grow in 2020, pushing into its seventh state in Colorado, while announcing plans to next expand into Idaho. Notable new locations include a vintage-inspired restaurant that’s going up across from the Las Vegas Raiders’ recently built Allegiant Stadium.

And for as much as In-N-Out has focused on maintaining the loyalty of generations of customers, it’s also found its employees—keeping them happy and encouraging career development—just as important to its successes and future.

Last year In-N-Out ranked fourth among Glassdoor’s Best Places to Work, marking its fourth year in a row in the top 10. It trailed only HubSpot, Bain & Co. and DocuSign in the 2020 ranking, with Snyder nabbing a 96% approval rating from employees.

Even with all the strides and positives, that’s not to say the business wasn’t challenged in 2020, according to Snyder, who pointed out that while the drive-thru lines may have stayed consistently long throughout the pandemic, it didn’t mean sales last year weren’t negatively impacted by circumstances.

“We’ve stayed strong and, don’t get me wrong, we’ll be stronger because of this, but it’s tough,” Snyder said.

Industry reports pegged In-N-Out’s revenues at about $957 million in 2019; last year it ranked as OC’s No. 25th-largest private company by revenue, according to Business Journal estimates.

Not Following the Pack

Many restaurant operators found themselves accelerating plans to leverage digital and loyalty programs last year as a result of COVID. Big news was led by OC’s largest restaurant chains Irvine-based Taco Bell Corp. and Chipotle Mexican Grill Inc. (NYSE: CMG) of Newport Beach. Both announced plans last year to begin rolling out restaurant designs catering specifically to expediting mobile orders and third-party delivery.

While much of the herd was figuring out how to answer 2020’s challenges with digital, In-N-Out stayed on its own path.

“We haven’t made any long-lasting changes to the way that we’ve done business,” said In-N-Out Vice President of Operations Denny Warnick. “When we look at some of the options, we’ve always been measured and deliberate in making changes to In-N-Out and we want to make sure that we don’t change the experience that we offer the customer.”

It’s a lengthy way of saying In-N-Out isn’t planning on going high tech any time soon, although Warnick said the company plans to keep up-to-date with what technological advancements are in the market.

Instead, management took gains from what they could last year, picking off the lessons to be learned and applied in future situations, Warnick said.

Communication’s now stronger, and strategizing for the different outcomes the organization might encounter are some of those learnings.

“We’ve always prided ourselves on being thoughtful and deliberate, but this year we’ve had to definitely be flexible and responsive,” Warnick said.

But dramatic changes beyond that? It’s just not in the brand or the company’s DNA.

“It starts with a great burger and we’ve got a great burger and I’m a big believer in that, but it’s more than that,” Warnick said.

“It’s the way that the Snyder family has always led In-N-Out and Lynsi does it the same way. Even back when Harry and Esther started In-N-Out, they did things the simple way, but the right way. They didn’t take shortcuts. There are a lot easier ways to do business than we do at In-N-Out.”

Taking Care

Warnick and Snyder applauded the team for helping the company make its way through last year. Specifically on the restaurants side, associate and store manager meetings had to be done differently. Clearly, in-person corporate events couldn’t be had in 2020 and there’s little visibility on when those could resume.

“We definitely gather a lot more typically so the togetherness, the family environment, the events – and some of these events are kind of like family reunions for us,” Snyder said. “We get together. We enjoy seeing each other every year at some of these events and to not be able to have those or having them very restricted with fewer people, maybe not spouses, it’s been hard.”

While much of the customer base recognizes In-N-Out for its commitment to fresh, quality ingredients across its simple and secret menus, it’s also maintained loyalty among its worker base due to a general goal of what Snyder said is about making people feel “completely cared for and we use the word ‘love’ here at In-N-Out.”

“I don’t know how many years it’s been now, but we’ve definitely put a huge focus on servant leadership,” she said. “We’ve held a lot of workshops. We’ve done a lot of intentional training and a push to lift others up and being a great manager and being a great supervisor. Being a great leader is looking out for your people and caring for them and not being jealous when they start rising up and are growing because the key is to make them better than you, to lift them up.”

Giving Back

A similar focus on care extends to the communities the company does business in.

The In-N-Out Burger Foundation was started in 1984 by Esther Snyder and her son Rich Snyder with Lynsi’s mother, Lynda Lou Snyder, and has a focus on fighting child abuse. In 2020 alone, the company granted 408 organizations a total of $3.1 million across the states In-N-Out does business in.

There’s also the Slave 2 Nothing Foundation, which was started in 2016, and aimed at helping victims of human trafficking or addiction. The organization’s mission runs close to home for Snyder, whose father Guy Snyder passed away from an accidental drug overdose and had also battled addiction.

In 2020, Slave 2 Nothing granted $1.68 million to 84 organizations.

“We do not want to shy away or pull back in this time. Our [fundraising] events have clearly been crippled or stopped, but we plan to do whatever we can [in 2021],” she said.

The Outlook

In-N-Out will continue on with growth plans in 2021, albeit at a modified pace, with 15 stores projected to open this year.

“We’re being conservative,” Snyder said. “We had different plans.”

Those other plans would have been closer to around 20 new restaurants.

Perhaps one of the more exciting of those openings is the upcoming vintage-inspired In-N-Out near the Las Vegas Raiders’ new stadium.

The location, at over 2,000 square feet, would boast two drive-thru lanes, plenty of parking for in-car dining and a walk-up window.

“That location will be really special,” said Snyder, a fan of the football team.

“I’m excited about that because it’s going to go back to the nostalgic In-N-Out stores,” she said, adding it will be a landmark location complete with plaque and historical memorabilia.

In-N-Out has a restaurant across from the planned stadium site and it’s one of the company’s busiest stores. The new location will help relieve some of the traffic at the existing site, Snyder said.

Further out, In-N-Out has plans to expand into Idaho. Snyder said that could happen in four years.

Longer term, and at least while the company is under her watch, she said she has no desire to have the brand operating in every state.

“We are a family company and I think a lot of people that cover the whole nation have franchised,” she said. “I’m not going to say all of them, but we want to do what we can do without cutting any corners and compromising who we are. And, in my lifetime, I don’t see it as a goal to open in every state. For my vision and what I see, I don’t see us in every state.”

Instead, her vision is simple, and also nothing new for those who know the In-N-Out business strategy.

“The main thing is just keeping the main thing the main thing,” Snyder said. “We’re going to keep doing what we do here at In-N-Out: taking care of customers. The way we do that is taking care of our In-N-Out family.”

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