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  • Book Review: IN-N-OUT BURGER 0 comments
    Mar 17, 2010 1:55 PM | about stocks: BH
    A few friends asked me why I was reading about In-N-OUT burger? They reasoned that you can't "do anything" with the information because the company is not public. Thankfully, I don't subscribe the same educational philosophy as they do.

    As a shareholder in Steak n Shake (SNS) I keep tabs on competitors too. Given that IN-N-OUT has long been the envy of most fast food restaurants, I reasoned that its worth learning about. Reading the history of Harry Snyder's In-N-Out Burger was quick -- the ~300 page book can be read on a long flight.

    Author Stacy Perman, chronicles how a family-run California hamburger joint has developed a cult-like following. Perman also uncovers a lot of family details that I'm sure the publicity-shy Snyder's would rather have been left unearthed. Harry Snyder, co-founder with his wife, was a stickler for three things: (1) great food using only highly quality products cooked individually by the store manager; (2) treating employees very well; and (3) customers are king. That simple operating philosophy was the foundation for which the chain was built.

    A lot of companies say the right things, but when push comes to shove they do something else. In-N-Out relentlessly lived their values even at the expense of short-term profits. At a time when competitors were flash-freezing everything in an effort to lower costs, Snyder remained unwavering on his commitment to ensuring all products were fresh. For example, potatoes, to this day, are still peeled daily in the restaurant.

    The book falls short on operating details. Aside from learning that Managers at each In-N-Out operate the grill, Perman never goes behind-the-counter to discuss strategy and finances. If you're interested in the history of this cult chain, pick up a copy of the book. You'll even learn the secret menu.

    The future of this great company rests with Lynsi Synder, the 20-something descendent of Harry Snyder's son Guy, who has been described as "reckless, impetuous, and irresponsible" among other things. It will be interesting to watch if this brand can survive the third generation of family ownership.

    As for Steak n Shake, I think the executives there are well aware of what factors lead to the success of IN-N-Out.

    The book is published by Collins Business

    Disclosure: Long SNS
    Stocks: BH
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