In-N-Out Burger

by Stacy Perman

  For days, newspapers and television broadcasts parsed details of the tragic crash and spent a great deal of time speculating as to the fate of the privately held, family-owned chain. Rich’s death came at a crucial time in In-N-Out Burger’s forty-five-year history. He had transformed the small local burger joint into a growing empire that went head-to-head with the corporate giants in the fast-food industry. In fact, secretly, In-N-Out was the envy of the industry. The ninety-three-store chain was pulling in about $116 million annually and employed roughly three thousand associates.

  In the final stages of relocating its corporate headquarters to Orange County, the company decided to scale back the scope of the transfer and sent only about fifty executives and administrative employees to Irvine, keeping most of the corporate associates in Baldwin Park. Without warning, In-N-Out Burger now faced a host of challenges starting with its succession, transition, leadership—its future.

  But those questions were briefly put on hold. In an uncharacteristic display, a public memorial service was held for Rich Snyder, Phil West, and Jack Sims at the Calvary Chapel in Costa Mesa. The service was conducted on Thursday morning, December 23. Nearly three thousand people crowded into the church’s pews. In addition to family and friends, the mourners included countless In-N-Out Burger associates as well as business and community leaders, elected officials, and members of the Orange County Police Department, the California Highway Patrol, and police officers from nearly every community that In-N-Out Burger had touched. “There were more owners of restaurant chains then you can imagine,” recalled Jack Williams. “It was like a restaurant owner’s convention. They all wanted to pay tribute to Rich.” In fact Williams and his wife, Linda, did just that two years earlier when they opened up a new restaurant near their ranch. They called it Richie’s All-American Diner. Irvine mayor Sally Anne Sheridan arrived at the church early only to find that all of the seats were taken, and she ended up standing through the entire service. “It was incredible,” remembered Sheridan, “very religious and moving.”

  Wreaths of flowers filled the church’s lobby. One was fashioned out of red and yellow carnations forming the In-N-Out logo; another was in the shape of a cheeseburger. Enlarged photographs of the three men graced the pulpit on each side of the speaker’s podium. Numerous condolences were sent, including those from former presidents Ronald Reagan and Richard Nixon and California governor Pete Wilson. An In-N-Out cookout trailer was there to serve burgers to the guests following the service. Gracing the cover of the memorial service’s program was a photograph taken of the three men only eighteen months earlier at Rich’s wedding.

  Several years earlier, Rich was so upset after attending the funeral of a dear friend that he felt did not represent her in the least that he immediately outlined exactly the kind of memorial he wanted, down to the music to be played and Bible passages to be read; his memorial followed his instructions exactly. The service was punctuated with Scripture readings and tales of the three boyhood friends. A recording of country crooner Lee Greenwood’s anthem “I’m Proud to Be an American” was played. Longtime store manager Don Miller, who had come to regard Rich as a brother, described how he made Rich “cry like a baby” teaching him to slice onions while training him some twenty-five years earlier. “That man,” he said, holding back tears of his own, “was a legend in my mind.”

  Chuck Smith Jr., the pastor who had presided over the recent wedding of Rich and Christina, told the assembled crowd, “To miss them is certainly understandable. But to remember them without a smile would be a crime.”

  When Esther rose to speak, she was met with two standing ovations. Her face creased with sadness and her voice at times breaking, she described her last moments with her son before she left him at Brackett Field. “Richard said, ‘Mom, I’m so glad you got to go with us today.’ I kissed and hugged him. When I got off the plane, Phil was there with my jacket. I sat back and waved and thought, ‘Lord, I’m glad I got to know these men.’” Joe McCaron recalled Esther’s stoic display. “I never saw her get emotional,” he said. “Even at the funeral she kept herself together, and that’s pretty hard to do.” Despite her obvious pain, Esther did not want anyone to feel sorry for her, and she focused on how her daughter-in-law was coping.

  Rich’s widow, Christina Snyder, took to the podium along with the widows of Phil West and Jack Sims. Looking out into the crowd with incredible composure she said, “Right now, as our hearts are grieving, and we feel empty inside, the only hope is to know that Jesus is with us. He’s our strength right now.”

  Guy Snyder’s relationship with his younger brother had been complicated. By turns they were at odds and often on the outs. The two men lived almost entirely different lives. The brothers did, however, share a history, and that history included a strong pride in In-N-Out and what their parents had built.

  At the time of Rich’s death, the two brothers were barely on speaking terms—but when Guy received the news, he was absolutely stricken. He dissolved into tears. “I’ll never forget the night he called me and told me that Rich had died,” recalled a close friend. “He was just hysterical. He went down to Newport Beach and set things up in a hotel and took over. He stayed there until the funeral.”

  Facing the packed church, Guy shrugged off his shyness. In a rambling eulogy, he alluded to the accident and spoke of “God’s work.” Touching on their pronounced troubles, Guy confessed, “I thought I might be bitter.” Then, focusing on the positive, Guy praised his younger brother. “Richie and I sometimes couldn’t even sit down and talk about things,” he said. “Richie always stuck up for me. I always did everything first…. This one time, Richie went first. What happened has changed a lot of people’s lives.” He added, “If I can follow in his footsteps, I will be the happiest person in the world.”

  Under Rich, In-N-Out had solidified its position as a player in the industry, and it enjoyed an enviable cult status among its customers. It had come to personify the Los Angeles lifestyle with its humble blend of fast food and car culture. Rich imbued the family firm with his effusive personality and nimbly transformed the restaurants into a big business without damaging the integrity of the small burger chain that his parents had built. Seemingly gifted with both the Midas touch and the common touch, under his guidance, In-N-Out was in good hands. He was that rare family scion who was not only capable of running the business but was able to carry it to greater heights. His death left not a power vacuum but was a real blow. As Esther later confided, “When Richard was killed…my world had ended, almost. I had never had to worry about anything as long as he was here. He was a happy soul.”

  A ripple of uneasiness spread within the company. The sudden loss of such a charismatic and forceful leader left longtime associates concerned about what would happen next. At seventy-three years old, Esther Snyder did not appear a likely candidate to run In-N-Out despite her enthusiasm, energy, and love for the company that she had helped to build. She still worked in accounting five days a week and attended numerous company events and store openings, but at her advanced age she did not appear to be the first choice to take over.

  And the chain’s second choice, Guy Snyder, had a big question mark hovering over him. During the past seventeen years, as his younger brother ran In-N-Out Burger, Guy had been kept at arm’s length. The tension between the Snyder brothers was legendary, and in the years of major expansion and transition at In-N-Out, Guy was largely out of the picture. As the years passed, he had less and less to do with the operations of In-N-Out Burger. His efforts notwithstanding, Guy still suffered from his crippling addictions and bouts of depression. Without Rich in charge, many questioned whether the family would go ahead and sell off In-N-Out Burger.

  In the days and weeks following the memorial service, company officials indicated only that out of respect for the family, any decision about succession would be “delayed indefinitely.” For the moment, the company remained in a state of mourning. The considerable management vacuum created by
the catastrophic deaths of Rich Snyder and Phil West left a gaping hole. Since Baldwin Park maintained its silence, numerous outsiders stepped in, all too happy to speculate on what would happen next.

  A gaggle of business consultants and others with little to no inside knowledge offered their insights on whether Rich had a succession plan in place or not, and what that might mean for the future. The most popular theory was that In-N-Out Burger would be sold.

  In those days following Rich’s death, the phone at corporate headquarters in Baldwin Park rang incessantly with calls from prospective buyers who wanted nothing more than to pounce on what they perceived to be the vulnerable carcass of the Snyder family. A number of interested parties approached In-N-Out Burger, testing the waters. Reportedly, one of them was PepsiCo, which had for years been snapping up fast-food chains across the country.

  A cacophony of thinly informed speculation emanating from analysts, bankers, and lawyers proclaimed that an announcement was imminent. Whispers turned to loud rumors; In-N-Out was on the block. In truth, any company would have been happy to get its hands on In-N-Out. Well-run and flush with profits, In-N-Out had not only managed to grow and develop with its unblemished reputation intact; In-N-Out was an unassailable brand name.

  In reality, In-N-Out Burger was never on the market. There was never any suggestion that it would be sold—at least not inside the Baldwin Park headquarters. For all of the talk among industry watchers, the one thing they had no understanding of was the will of Esther Snyder. Those closest to her said that her devotion to the company and her loyalty to its associates trumped any possible consideration of a sale. She was primarily concerned with what would happen to them if In-N-Out were sold or made part of a larger company. Besides, Esther knew that Rich would never have sold the company. Despite the incessant murmurings on the outside, inside the lavishly appointed executive offices on the second floor of the Baldwin Park headquarters, the company never entertained any kind of serious offer.

  In early January 1994, In-N-Out Burger had come to a decision. At seventy-three, Esther Snyder stepped in as president, assuming a larger role in the chain’s day-to-day operations; Guy Snyder returned to the company as well. He was named chairman, a newly created title. Christina Snyder, Rich’s widow, joined the firm’s board of directors. Corporate conglomerates and investment bankers had once again been given the cold shoulder. The family chain stayed in family hands. In the minds of In-N-Out’s legion of fans, their Double-Doubles were safe from external meddling.

  Inside In-N-Out Burger’s Baldwin Park headquarters, the news had a slightly different flavor. Among immediate family, close associates, and the top management, Guy Snyder’s appointment was viewed with something less than exuberance or even relief and more along the lines of cautious trepidation. Quite simply, his return to Baldwin Park was not seen as that of a wunderkind in the mold of Rich Snyder, but rather as the triumph of the prodigal son after long years spent in the shadow of his younger brother.

  Rich had been actively negotiating over the course of the previous year to buy out his brother’s outstanding In-N-Out shares in order to assume full control of the family business. He had strongly urged Guy to retire from the company on his own. “He wanted him out of his hair,” was how one observer put it. Rich spent the year before he died pursuing a legal framework that would keep Guy permanently out of the company—but despite his own recurrent troubles, Guy was not one to be shunted aside so easily. As for Esther, she just wanted peace between her sons.

  During this time, Andrew Puzder was Esther’s attorney. The role put him in a position where he observed, as did many others, the complicated rhythms of the Snyder brothers’ relationship. A former trial lawyer, he recalled that in the year before the crash, Esther and Rich “were trying to work out an arrangement between Guy and Rich about how to go forward with the business.” Esther still owned the majority of the company, but Rich was looking to formalize his role in running In-N-Out Burger in a way that would leave Guy out. “I represented Esther’s interests and was trying to help her,” explained Puzder. “She didn’t want to alienate either son, and wanted the process to go smoothly.”

  The situation added another layer of strain to an already tense relationship. Although Guy had been on the outside, he still had an emotional as well as financial interest in the burger chain. Since childhood, the brothers had been fiercely competitive with each other. Whatever the circumstances, neither of them wanted to be shown up. “Both of them wanted to be treated fairly and honorably,” explained Puzder. “They were both concerned with protecting the company and protecting their interests. Both wanted to walk away without losing face”—although it seemed that the latter was more of a concern for Guy than his brother. As Puzder noted, In-N-Out Burger “had really become Rich’s brand.”

  CHAPTER 18

  As it turned out, on December 14, Rich had traveled up north along with his wife and Esther to see Lynsi perform in her school’s Christmas pageant. Rich was crazy about his eleven-year-old niece. Every year since she was two years old, he had made a special date for the two of them to spend a day at Disneyland. While in Shingletown, he had hoped to talk to his brother. It was an awkward visit that also happened to fall on the anniversary of Harry’s death. The relationship between the two brothers, already filled with resentment and jealousy, was at the breaking point over the buyout. The legal documents to buy out Guy’s shares of In-N-Out and remove him as a trustee from the family trusts were in the process of being finalized.

  Rich already had a much larger stake in the company than his brother, and in three years, the majority of In-N-Out shares would be transferred to Rich; Guy had little choice but to sign on the dotted line. Although the deal ensured his financial security for life, the sting of the situation left him feeling like the victim of a great injustice.

  The year-long buyout proceedings had left a bitter taste in Snyder mouths, and the aftermath promised more of the same. Family relations were already badly damaged, and the fear was that once Guy signed, those ties might be irrevocably severed. For that very reason, Esther had asked that the documents not be signed until after Christmas.

  During Lynsi’s pageant, Rich pulled Guy aside. “We might not see each other again,” he told him. “You’re my brother, and I love you.” Rich, Christina, and Esther Snyder flew back to Southern California. Less than twenty-four hours later, Rich was dead.

  Without a legal arrangement in place removing Guy Snyder or naming an alternate successor, the terms of the irrevocable Esther L. Snyder Trust remained in effect—and the terms were unambiguous. In the event that Rich died without any living descendants, the majority shares of the trust—in effect the majority of In-N-Out—were to be transferred to Guy Snyder. Rich and Christina did not have any children of their own, and Rich had not adopted his wife’s daughter, Siobhan.

  Among the many tragedies and pieces of unfinished business that resulted from the crash was the fact that Phil West was onboard the Westwind that day; that was the crucial event that turned control of the company over to Guy. The matrix of trusts and estate planning instruments created to protect In-N-Out and ensure its succession through Rich unraveled. West was named as the successor trustee of the Esther L. Snyder Trust after Rich, as well as a cotrustee of Rich’s own trust. Had he not died on the plane, West would have administered the majority of the company shares that comprised the core of that trust, set to roll over in three years. Regardless of the buyout, the move would have prevented Guy from gaining control over the company.

  With West gone, Guy’s place as trustee was secured. By an act of cruel fate, Guy, who had only recently been on the outside looking in, was now the man holding the keys to the kingdom.

  Legally, Guy Snyder was in control. On the surface, In-N-Out seemed destined to implode. Guy’s newly minted leadership remained a great unknown. Even apart from his long catalog of turbulent personal problems, Guy was viewed as something of an uncertain successor. In part, this was because Ri
ch had proved such an exceptional leader; a vibrant, charismatic president, Rich had led In-N-Out Burger to great success largely on the basis of his personality. He had quintupled the size of the chain, increasing profits handily. He managed do so without diluting the unique character that had turned the burger chain into a cult phenomenon. “When Rich took it on, it was a nice little place with a ’50s style,” was how Andrew Puzder described it. “He really marketed it and played it up.” During her younger son’s time at the top, Esther had played a largely supporting role, leaving the final operational decisions to Rich.

  While Guy stood at the company’s edge, he had done little to assert himself or insinuate himself into a greater role. Those who knew Guy Snyder uniformly commented on the fact that he always seemed happiest on his ranch or at the racetrack. He loved nothing more than to put on a pair of overalls and work the land in one of his tractors or old farm equipment. His ultimate dream was to live up on the five-thousand-acre company-owned ranch in Arroyo Grande near San Luis Obispo and raise cattle.

  Despite the anger and resentment that pricked under his skin, when Guy was named chairman, it was as much of a shock to him as to anyone else. “He’d been pushed out of everything, pushed out in Shingletown,” was how one of his friends described the situation. “He was a little pissed off, but after a while he wound up on the ranch with Lynda and Lynsi, and he had adjusted to that lifestyle.” Although he hadn’t signed away his rights to the company, Guy had been on the periphery for so long that he wasn’t too sure he wanted it, and certainly not under these circumstances. “When Guy came back, the company was drop-kicked into his lap,” said the friend. As Guy told the mourners at his brother’s memorial, “My life has changed quite a bit. I never thought things would go down like this.”