In-N-Out Burger

by Stacy Perman

  Actually, the suburban network of In-N-Outs that followed alongside the new highways also happened to dovetail nicely with Harry Snyder’s third criterion for placing his stores; he abhorred debt. The new shops (in addition to their general proximity to Baldwin Park) were all situated in peripheral, suburban areas. They were not (as many other early fast-food places began) located in downtown centers next to factories or offices. In-N-Outs sprung up in the growing rural, postwar bedroom communities of the San Gabriel Valley. The suburban sites were cheaper than urban ones, especially as Southern California real estate values soared. Harry insisted on using cash, not credit, to open each new restaurant. Harry followed the old rules. He built one store, saved money; he built a second store and saved more money. He didn’t open another until he could afford to and had the trained managers to run it—that was the Harry Snyder way. He didn’t take out a loan. He didn’t take on debt. He was beholden to no one.

  While Harry’s desire to own the land underneath his restaurants certainly limited the pace of In-N-Out’s rollout, it also proved a remarkably shrewd financial move. In the 1960s, when Harry had expanded the successful chain to seven units, a former colleague congratulated him on his achievement and Harry responded by saying, “By God, they’re all bought and paid for, too.”

  In-N-Out’s growth strategy—actually its entire strategic approach to business—offered an interesting counterpoint to the industry that was evolving around it. Over in San Bernardino, the McDonald brothers’ streamlined and automated drive-in at Fourteenth and E streets was generating a huge volume of customers and word spread quickly. After American Restaurant Magazine ran a cover story on McDonald’s phenomenal success in its July 1952 issue, the brothers were inundated with inquiries from restaurant owners asking to visit and eyeball the operation themselves. Almost immediately, offers poured in to copy or buy the McDonalds’ methods outright. Soon enough, the brothers began licensing their Speedee Service System. They took out a full-page ad in a trade magazine that declared: “This may be the most important 60 seconds of your life.”

  Would-be burger moguls descended upon San Bernardino from all over the country. Within two years the brothers had haphazardly sold fifteen franchises—the first to a gas station retailer in Phoenix. Unofficially, the McDonalds’ celebrated Speedee System was widely duplicated, and copycat versions began cropping up all over the country. The success of McDonald’s spurred another San Bernardino resident and former World War II marine named Glen W. Bell Jr. to turn his trio of Mexican food stands (called Taco Tia’s) into what eventually became Taco Bell. In 1952, duly impressed with McDonald’s operations after a visit, Matthew Burns insisted that his stepfather, Keith G. Cramer (the owner of Keith’s Drive-In Restaurant in Daytona Beach), fly out to see it for himself. The Insta Company’s automatic broiler and milkshake mixer cinched it for Cramer. The pair returned to Florida (with rights to both machines) and a year later opened up their own self-service drive-in called Insta-Burger-King in Jacksonville featuring flame-broiled burgers—and immediately began selling franchising rights. Five years later, the chain was renamed Burger King. It was the same year that David R. Edgerton Jr., a Dade County franchiser, and his partner James McLamore (who took Burger King national) introduced “The Whopper.”

  Then in 1954, a fifty-two-year-old former paper cup salesman from Oak Park, Illinois, named Ray Kroc decided to make a trip out to San Bernardino. Kroc, as the story goes, had been selling a five-spindled milkshake maker called the Multimixer to neighborhood drugstores. His curiosity was piqued when the McDonald brothers ordered eight Multimixers including replacement and spares. That meant the little burger shop was making something on the order of forty milkshakes at a time—this as Kroc’s bread-and-butter customers, the drugstores, were fast going out of business, having fallen victim to (among other factors) the growing success of the new fast-food drive-in. Upon Kroc’s visit to the Downey McDonald’s on the corner of Florence and Lakewood, he was transfixed. It was the third of the brothers’ newly franchised sites. There was no indoor dining area, and the restaurant was fronted by a large walk-up service window, studded with shiny red and white tiles, topped with a jutting raked roof, and of course framed by a giant set of thirty-foot parabolic golden arches.

  During the lunchtime rush, 150 cars crowded into the parking lot. When Kroc saw the speed of the operation and the volume of customers he declared, “Son of a bitch, these guys have got something. How about if I open some of these places?”

  To Kroc’s great good fortune, Dick and Mac McDonald were content with their business and not interested in taking on the kind of national business that Kroc envisioned. But that didn’t mean that someone else couldn’t expand the operation further. Kroc was a consummate salesman, and he soon convinced the McDonalds to make him their exclusive franchising agent to take the company national. On April 15, 1955, Ray Kroc opened his own McDonald’s drive-in in Des Plaines, Illinois, and officially established the McDonald’s Corporation. Over the next five years, Kroc built a chain of 228 McDonald’s that were grossing $56 million a year. However, the relationship between Kroc and the McDonalds was not nearly as successful. Kroc was only earning a paltry 1.9 percent of the gross of all those McDonald hamburgers that he sold and 25 percent of that went to Dick and Mac McDonald. Soon the paper cup salesman had become tense and uneasy with the McDonald brothers. Finally, he had had enough of the relationship. In 1961, Kroc asked the brothers to name their price and persuaded them to sell him the company outright. Their terms: $2.7 million for the company and the name. Soon, Kroc not only boasted that he would open one hundred McDonald’s each year, but he actually surpassed his initial bold claim.

  Actually, it is interesting to note that as a result of his purchase of McDonald’s national franchising rights, Ray Kroc was transformed into an American business icon largely credited with inventing a totally new form of dining almost overnight. However, according to a few industry pioneers, in fact it wasn’t so much that Kroc franchised McDonald’s but that the McDonald brothers were the first fast-food outfit to say yes to Ray Kroc.

  On April 11, 1947, Alan Gamble, a former golf pro from Chicago, and his wife, Ellen, opened a hamburger and pie restaurant based on generations of original family recipes on a spot of farmland on West Pico Boulevard in Los Angeles. The Apple Pan made its home in a little cottage-style house with a centerpiece grill surrounded by a U-shaped counter encircled by twenty-six red vinyl stools. Back then, the area was surrounded by orchards and bean fields and looked nothing like the pricey Westside real estate it eventually became. Like the Snyders, the Gambles were fanatics about quality and they declared it with a neon sign at the front door: “Quality Forever.” Soon enough, the Apple Pan earned a following for its savory hickory burgers, its tuna salad sandwiches wrapped in wax paper, and its brick-solid apple and pecan pies topped with thick whipped cream.

  But according to Alan and Ellen’s daughter, Martha Gamble, Ray Kroc had made a visit to their eatery in 1949—a good five years before his trip to McDonald’s—and made them an offer. “He liked our concept and wanted to incorporate our ideas into a national franchise,” she said. “My parents said no. They just wanted one place. They wanted to do something and do it well. They said you can’t keep your eye on things like you can at one place.” Gamble, who now runs the Los Angeles cult classic with her daughter Sunny Sherman (exactly as her parents had, right down to the original tartan wallpaper, paper cone soda pop cups, and staff who have been with the Apple Pan for over fifty years), recalled, “I do remember that mother and dad talked about it. But they never got into the business to get rich. The whole idea for them was to make the best hamburgers, sandwiches, and pies that they could make.”

  Even the Snyders’ old friend Carl Karcher said that at one point Kroc had extended a similar offer to take on his small clutch of hot dog stands and barbecues and turn them into a national franchise. “Ray Kroc became a good friend of mine,” Karcher laughed. “But I said no way.” App
arently, he misjudged In-N-Out’s potential. Around the time Kroc visited McDonald’s, he approached the Snyders, hoping to sell them one of his Multimixers.

  Certainly Kroc wasn’t alone. In 1952, an elementary school dropout, onetime farmhand, insurance agent, and railway fireman named Harlan Sanders opened his first Kentucky Fried Chicken restaurant near Salt Lake City, Utah. Within ten years, Sanders (now known as the Colonel) had become a national phenomenon and his restaurant, with six hundred franchises, was the largest chain in the country. In 1964, Sanders (who had begun opening outlets in Canada and England) sold his interest in Kentucky Fried Chicken for $2 million to a group of investors led by John Y. Brown Jr.—the future governor of Kentucky. Seven years later, in 1971, Heublein Inc. acquired the company for $285 million. At the time, there were over thirty-five hundred Kentucky Fried Chicken restaurants dotting the globe—but Sanders never saw a penny from the sale.

  That was the fast-food game in the 1950s—start, grow, franchise, sell. The decade is widely considered the industry’s boom time. The dominant chains of today began in the 1950s. While the original chains were wholly owned, franchising offered operators a way to grow with moderate financial risk. Owners could replicate a successful business and at the same time the franchisees had a stake in the continued success of the enterprise. Both sides could potentially profit by mitigating the risk; the franchisor through charging licensing and other fees and sharing in profits, and the franchisee by investing in a system that already had a proven track record. The numerous family-owned fast-food stands that had sprung up following the war were now in an arms race of their own. Any number of mom-and-pop outfits were cherry-picked and greatly enlarged through franchising into regional, national, and later global chains. Few holdouts remained in the game for long. Those who didn’t franchise or sell out were soon swallowed up by bigger organizations or simply disappeared. Some, like Harlan Sanders and Dick and Mac McDonald, sold out but realized only a small portion of the vast profits that the chains that they started eventually made.

  In-N-Out Burger could have easily been one of them if not for Harry and Esther Snyder’s steadfast philosophy. The couple was unmoved when Ray Kroc more than made good on his promise to open one hundred new McDonald’s stores a year. Actually, the Snyders remained remarkably unconcerned. Harry Snyder had an extraordinarily lucid vision for In-N-Out Burger, and Esther Snyder shared her husband’s view. If anything, the couple had demonstrated time and again that they were as practical as they were astute. They had no interest in selling or franchising In-N-Out Burger. If you did that, Harry insisted, you’d lose control and focus. And they weren’t interested in using their small and growing fortune to create an even bigger pot of gold if that meant taking in investors or selling to a larger company. Early on, Harry Snyder had added another tenet to his management stockpile. He saw no point in sacrificing quality for profits. In the words of one longtime friend, “It really never was about the money for them.”

  CHAPTER 6

  On February 22, 1951, Esther gave birth to the couple’s first child, a son they named Harry Guy Snyder. The following year, Richard Allen Snyder, who was born on July 13, 1952, joined his older brother (whom everybody called Guy). The Snyder brothers were just two of the millions of babies born following World War II. American maternity wards were filled with armies of swaddled newborns while baby carriages stood guard at the gates of family homes and parks across the country. On May 4, 1951, a New York Post columnist named Sylvia F. Porter coined the term for the phenomenon of infant births by which this generation would thereafter be known: baby boom. “Take the 3,548,000 babies born in 1950,” wrote Porter. “Bundle them into a batch, bounce them all over the bountiful land that is America. What do you get? Boom. The biggest, boomiest boom ever known in history.”

  America’s baby boom persisted in tandem with the flush economy of the fifties and the Snyders brothers’ young lives looked like something straight out of Life magazine at the time. Theirs was a relatively ordinary if not picture-perfect 1950s childhood: orderly, languid, and cushioned by material well-being. Growing up at their parents’ knees at the In-N-Out Burger, the pair not surprisingly adopted the American icons of hamburgers and cars as their own. The burger stand just across the street from their house was practically the brothers’ second home, and for a time, the drive-through was their playground.

  There is a photograph taken of the family in front of the Baldwin Park In-N-Out shop sometime in the 1950s. Harry is clearly the central figure, and he is standing straight with his back to a prized speedboat that is parked in the lot. He is looking dead ahead into the camera. Wearing a crisp, short-sleeved shirt, Harry has his pants creased sharply, and a handyman’s keychain is dangling from his belt. Esther stands slightly behind Harry and is gazing up adoringly at her husband. She’s wearing a simple, checked shirtwaist dress and her right hand is folded around a large thermos while her left hand is grasping a paper cup. The Snyders’ young sons are sitting in the boat and are dressed alike as miniature yachtsmen; each is wearing a captain’s cap. Guy is in the driver’s seat and his hands grip the steering wheel playfully. At the same time, Rich is sitting back, facing the camera directly like his father. His right arm is crossed over his chest and his hand is balled into a loose fist pressed against his mouth. His is a pensive expression well beyond his years. Above the family and slightly in the distance is an early In-N-Out Burger billboard. The photograph is the essence of the fifties’ middle-class American family, and its myopic calm could be mistaken as a still from one of the era’s best-known sitcoms—Leave It to Beaver.

  Guy and Rich were by turns both spirited and shy. Friends described Guy as something of a free spirit, while Rich, they said, always had a smile on his face. In the morning, Rich went outside, and if he saw sunshine, he came back and said, “Mom, it’s going to be a happy day.” The two shared an appetite for light-hearted fun; Rich in particular liked to play practical jokes. Once he took a tractor and shaved his name into a neighbor’s field. Just a year apart, the two boys fought constantly. Theirs was a dynamic of kinship and rancor, and they were highly competitive with each other. They seemed to like nothing more than playing to win—neither liked to lose. “They had a love/hate relationship,” was how their cousin Bob Meserve described the brothers. “They were always fighting, but if you stepped in between them they’d both turn on you.”

  Guy seemed to have inherited his father’s temper and irascibility, while Rich was straightlaced from the start. Early on, Rich displayed some of his father’s natural business acumen and his mother’s gentle and sociable nature. When it came to their parents’ attention, however, Rich overshadowed Guy. Rich was designated the good child who did what he was supposed to do, while mercurial Guy was given to whims, often chafing at the discipline and control that were required of him. Yet it was Rich who frequently stood up for his older brother to their hot-tempered father.

  Guy came to be considered something of a rebel. Rich was viewed by many as the favored son, perhaps because his temperament and outlook were more in line with his parents’ expectations. It was a perception that only grew deeper with time. As more than one family friend described the two, “Rich and Guy were like night and day.”

  In a relatively short period of time, Harry and Esther Snyder had something that neither of their parents had achieved in their own lifetimes: wealth and financial security. The new prosperity enabled the family to move to a larger house in San Dimas, which they did not long after the I–10 freeway was built practically at their Baldwin Park doorstep. Thirteen miles from Baldwin Park, San Dimas was situated closer to the foothills of the San Gabriel Mountains. It was a desirable suburb, and certainly a more affluent one than the blue-collar Baldwin Park. The Snyders’ new two-story house sat on an expansive ranch surrounded by avocado and fruit orchards on the corner of West Covina and West Badillo boulevards, but it was solidly middle class. There was nothing flashy about their house. As one of the brothers’ childhood fr
iends remarked, “They had tons of money but they sure didn’t flaunt it.”

  Despite their financial success, the Snyders remained a hardworking, down-to-earth couple with straightforward pursuits. Harry enjoyed boating, making home movies, and traveling with the family: car trips across the U.S. (stopping to photograph every roadside attraction) were one of his favorite things to do. The couple wanted to expose their sons to a variety of experiences, and so they took the boys overseas on trips to Europe, too. Esther considered herself a lifelong student and was a firm advocate of education; this was something she hoped to pass on to her children. During the family’s travels, she made sure that the boys learned about the different landmarks and places they visited. Extremely well-read, Esther was surrounded by piles of magazines and books, and she was always recommending something to others. When she was finished, Esther gave her reading materials away—usually to In-N-Out associates or the local library.

  Most of the time, the couple was on the same page—except when it came to the armed forces. Harry insisted that the army was the best branch, while Esther firmly corrected him. “No,” she said, “the navy was best.”

  Esther’s role at In-N-Out was largely behind the scenes. Although Harry often credited his wife’s ideas—as Esther’s sister Virginia Stannard put it, “He thought her advice was worthwhile”—she remained incredibly humble about her own contributions. Esther was in charge of accounting, taking care of the bills, and all of the paperwork. Esther was like June Cleaver with a small payroll department and two kids. “I doubt if she ever spent a lot of money on herself,” said one of the Snyder’s longtime friends.