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  • This video is sponsored by Brilliant.

  • The first 200 to use the link in the description get 20% off the annual subscription.

  • Anyone whose ever been to In-N-Out knows to expect, no matter where you are, the same,

  • consistent burger, smiling cashier, and long lines.

  • Residents of Portland, Oregon were known to drive four hours each way to the nearest restaurant

  • in Grants Pass,

  • and before there were any in Phoenix, locals supposedly flew to Ontario, California, had

  • lunch, and promptly flew back.

  • And yet, despite seemingly unlimited demand, In-N-Out is one of the smallest major fast-food

  • chains in the world, with only 347 locations.

  • There are over twice as many Whataburgers, almost four times as many Five Guys, and forty

  • times as many McDonalds, just in the U.S.

  • Since it began in 1948, it's only opened an average of five restaurants a year - two

  • less than Subway opened in a single day, at its peak.

  • In other words, In-N-Out deliberately leaves money on the table, refusing to expand even

  • where huge profits are guaranteed.

  • Why?

  • Profitable, high-margin industries are often, kind-ofboring.

  • How do you make money selling toothbrushes?

  • Uh, well, you

  • sell them!

  • Plastic handles with bristles on the end, as it turns out, don't cost very much to

  • make, and therefore, have healthy margins.

  • Someone, of course, will try to turn them into a subscription, make them out of aluminum,

  • oooh, and call it the Youthbrush, but most of us don't have a passion for consumer

  • dental products, so the business model is simple: You hand me a couple of dollars, I'll

  • give you a rod with some bristles.

  • Things get interesting when companies have to get creative.

  • When competition is high, or consumer willingness to spend money low, they have to find some

  • other way to make a profit.

  • For restaurants, it's all about selling drinks.

  • With printers, the money's really in the ink.

  • And Costco's low prices?

  • Those are offset by annual membership fees.

  • Selling millions of french fries for a few cents each isn't a bad business for McDonald's,

  • but it's found something even better: real estate.

  • While the company only owns and operates 15% of its restaurants and the rest are franchised,

  • it owns almost all of their buildings and the land beneath them.

  • Franchisees pay about 8-15% of their revenue as rent to McDonald's, who makes money whether

  • they're profitable or not, and that's on top of the normal franchise royalty.

  • After going on a huge shopping spree during the 2008 recession, McDonald's now owns

  • more than $30 billion worth of real estate.

  • Not only is its business diversified but much of that income is tax-deductible.

  • In other words, McDonald's is actually more real estate investor than fast-food franchise.

  • Likewise, if you think of In-N-Out only as a burger chain, it doesn't make much sense.

  • Why not open more locations?

  • Why not change and perfect the recipes, or add new menu items?

  • But, if In-N-Out is really about serving a predictable, familiar experience more than

  • the food itself, opening new locations and trying new things are huge risks.

  • In-N-Out's secret ingredient, the thing it's really selling is: consistency.

  • Nearly every location has the same, familiar layout, drive-thru lane, and iconic crossed

  • palm-trees, a reference to the founder's favorite movie.

  • Unlike other fast-food restaurants, the interior is clean, well-lit, and easy on the eyes.

  • Most importantly, the menu is dead simple: hamburger, cheeseburger, french fries, three

  • flavors of shakes, and the two hamburger patty, two slices of cheese, double-double.

  • That's it.

  • To drink, there's milk, hot cocoa, coffee, classic and diet Coke, root beer, Dr. Pepper,

  • 7Up, lemonade, and iced tea.

  • Even with a few, secret variations, like grilled cheese, animal fries, and the Neapolitan milkshake,

  • there's nowhere near the selection of, say, a Dairy Queen or McDonald's, which have

  • about twice as many drinks alone as everything at In-N-Out.

  • Its menu changes not seasonally, or annually, but, maybe once a generation.

  • In 1958, bottled sodas became fountain drinks, Milkshakes were added in '75, Dr. Pepper,

  • 21-years later, Lemonade, in 2003, and hot chocolate fifteen years after that.

  • When a fourth beverage size was proposed, a fight reportedly broke out inside the company.

  • And, in 2018, it closed all 37 locations in Texas for a full 48-hours when it found buns

  • that didn't meet its quality standards.

  • The downside of this consistency is that it can't respond to changes in the industry.

  • In 2015, McDonald's was able to turn around declining sales with its all-day breakfast.

  • And, caught off guard by Chipotle's success, many chains have tried capturing that market

  • by introducing more healthy alternatives.

  • On the other hand, by keeping things simple, In-N-Out can carefully optimize every ingredient

  • in its business formula.

  • Inevitably, new items mean longer lines, confused employees, and added complexity.

  • The McCafé Coffee, for example, required each store buy a $15-20,000 espresso machine

  • and train employees on how to use it.

  • At In-N-Out, there are five levels of employees: Level 1, the janitor and counter handout,

  • 2, for the drive-thru, 3 and 4 who make french fries, 5, who is allowed to assemble burgers,

  • and 6, the only person authorized to man the grill, which requires at least 3-6 months

  • of training.

  • Not only does this ensure well-trained cooks, but it also turns fast-food into a proper,

  • well-paid profession.

  • Level one employees are generally paid more than minimum wage, and managers make an average

  • of $160,000 a year, with some making well over a quarter of a million dollars overseeing

  • a single location.

  • It's not hard to see why they stay with the company for an average of 14 years.

  • Almost all current and ex-In-N-Out employees say the same thing: it's a stressful, chaotic,

  • and, yet, highly desirable job.

  • Everyone, full and part-time, receives 401k plans, dental and vision coverage, and paid

  • vacation days.

  • Even more impressive, it does all that despite having some of the lowest prices in the industry.

  • A hamburger, fries, and milkshake costs just $6.85, about half the price of the same order

  • at Shake Shack.

  • Any other company would, without hesitation, export this formula of highly-skilled employees,

  • a simple menu, and consistent quality, across the country, and then, when that worked, across

  • the globe.

  • The fact that it hasn't is, more than anything else, a reflection of its values, set 70 years

  • ago in Baldwin Park, California by husband and wife founders Esther and Harry Snyder.

  • It was the first place ever to use a two-way speaker system, allowing drivers to place

  • orders while in line.

  • They would eventually open 18 more locations, but, strictly, only when they could afford

  • to buy the property outright, never on a loan.

  • Principled, thoughtful founders like the Snyders aren't all that hard to find, but rarely

  • does the second generation inherit those same values.

  • Only about a third of family businesses survive the second generation and another 50% don't

  • last until the third.

  • In-N-Out is one of the few chains that has stayed true to its beginnings, despite going

  • through several traumatic changes.

  • When Harry died in 1967, his son Rich took over, who then died in a plane crash in '93,

  • after which his brother Guy replaced him, only to die six years later.

  • Esther then returned to manage the company.

  • Finally, in the riskiest move of all, after she died in 2006, presidency was given to

  • someone outside the family, Mark Taylor, until Guy's daughter, Lynsi, reached the age of

  • 30, when she inherited 50% of the business, and then almost full control in 2017 at age

  • 35.

  • In-N-Out has seen six different leaders, been heavily pressured by outsiders to franchise

  • the business, and watched the industry it helped create change dramatically, and yet,

  • today, 70-years later, any of its very first customers would feel right at home in any

  • of its 300 locations.

  • It's current president is the highest-rated female CEO in the U.S. by employees.

  • And while the company continues growing - entering Texas in 2011, Oregon in 2015, and soon Colorado

  • - it does so very carefully.

  • Lynsi, still in her 30's, doesn't expect to expand east of Texas in her lifetime, and

  • never in every U.S. state.

  • With so few locations, every grand opening is a major event - with free, organic marketing

  • and much fanfare.

  • Lines are so long that the company hires off-duty police officers to manage traffic and flies-in

  • All-Staremployees - experienced workers who manage the chaos in long 10-hour shifts.

  • The biggest bottleneck is distribution.

  • Buns are baked daily, milkshakes 100% dairy, and there are no freezers or microwaves.

  • That means ingredients have to be prepared at distribution centers - currently in Baldwin

  • Park; Lathrop, California; Dallas; Phoenix, Draper, Utah; and Colorado Springs.

  • From there, they need to be delivered within a single days drive to each of their stores

  • - which limits new locations to a roughly 500-mile radius from each distribution center.

  • Whether you're a fan of Shake Shack, Whataburger, Five Guys, or McDonald's, you have to admit

  • there's something special about In-N-Out.

  • While McDonald's will always make more money, serve more customers, and be more widely known,

  • In-N-Out has arguably done something even harder: keep a legacy alive while staying

  • true to its original ideals over 70-years and through six generations of leadership.

  • The lesson is: whether in business, life, or learning, the hardest part is often just

  • keeping a good thing going.

  • Enrolling in a class is easy, but remembering to actually go and retaining the knowledge,

  • much harder - and that's exactly how Brilliant is designed to help you.

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  • Thanks to Brilliant and to you for watching this video.

This video is sponsored by Brilliant.

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なぜIn-N-Outはあなたの近くの都市に来ないのか (Why In-N-Out Isn't Coming to a City Near You)

  • 97 4
    王語萱 に公開 2021 年 01 月 14 日
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