In-N-Out has been a private, family owned business since its first restaurant opened in Baldwin Park, CA in 1948. Today, the burger chain operates in six states (CA, NV, UT, TX, OR, AZ) with over 300 restaurants and estimated revenues of $625M. It has amassed a cult following of fans who can be seen lining up outside a store to be the first customers, ordering off-the-menu items and proudly displaying In-N-Out’s logo on T-Shirts and bumper stickers. What is the secret to their success? Simplicity, quality and discipline has led In-N-Out Burger being consistently rated as one of the top burger chains in the US.
The business model is fairly straight forward: to provide consistent, high quality food using fresh ingredients at reasonable prices and wait times. The focus is on customer first, employees second and growth last.
In-N-Out’s focus is on controlling the quality at all levels of its business from restaurant to ketchup packet. At a corporate level the firm maintains control of its restaurants by foregoing franchising. They own every restaurant allowing them to maintain control over aesthetics, restaurant quality and cleanliness, operational procedures, quality of employees and restaurant location. Expansion is deliberate and controlled in order to maintain its high quality standards. All of these characteristics add to a cohesive In-N-Out experience whether you are in California or walking into a brand new store in Oregon.
Before opening a new location, management ensures that the location is located within a 500-600 mile radius of one of In-N-Outs three distribution centers to ensure that fresh meat, produce and other ingredients can be delivered by their arsenal of 18-wheeled refrigerated trucks either every day or every other. These distribution centers serve as a hub connecting the In-N-Out ingredients from the farms, which are locally sourced and close to the distribution centers, to the restaurant. These frequent deliveries help minimize inventory and maintain the high quality expected of the brand.
Products and Process:
Freshness, simple menus and quality ingredients is what makes In-N-Out excel. When you walk into an In-N-Out kitchen you won’t find microwaves, heat lamps or freezers as seen in typical fast food joints. Instead, you’ll walk into a meticulously clean environment with a large open kitchen where fresh ingredients are being prepared to fulfill customer orders. Starting with the very first burger, to ensure the highest quality beef was used, In-N-Out’s quality assurances inspect every piece of meat they use to make sure it complies with their lofty standards. In-N-Out has hired their own dedicated butchers and built their own patty-making facilities so that they could ensure the quality and consistency of the product that they serve their customers. Potatoes are hand cut and cooked in batches to make their famous fries. To top it off, each burger is cooked to order. This is only possible by maintaining a simple menu with essentially only four offerings (burgers, fries, shakes and soda) that have pretty much remained the same for over 60 years!
A great product is only half of the equation at In-N-Out. The workers at these restaurants are lovingly referred to as associates and are paid exceptionally well (associates earn approximately $2.00 over minimum wage and manager salaries are often in six figures). Managers undergo training programs at “In-N-Out University” which focuses on quality, customer service and cleanliness. Associates are rigorously trained and often cross-trained so that they can perform multiple responsibilities within the restaurant, reducing cycle times.
Additionally, the deliberately small menu allows associates to easily master the production process, leading to process efficiency and a reduction in overall throughput time. Many associates rise through the ranks and are promoted to managerial positions. Promoting within the company, high wages, and engaging work are tools that In-N-Out uses to reduce employee attrition. In-N-Out realizes that their employees are a huge part in the company’s and individual restaurant success.
The driving force behind In-N-Out’s success is its pursuit of product excellence. Their operating model has been crafted to align with their business model ensuring that the highest quality product is always delivered to their customers. Their focus and ability to execute on quality allows them to have low inventory storage costs, higher efficiency from their employees and customer satisfaction that has given In-N-Out tremendous brand awareness and customer loyalty.
With an outstanding product, robust logistics system, determined and focused growth and strong employees leading the way, In-N-Out will continue to be at the top of the burger mountain.