Her family expanded In-N-Out from a single drive through hamburger stand in 1948 in Southern California into a fast-food empire worth $1.1 billion, according to a recent Bloomberg News feature on the low-profile Torres.
The restaurant chain has a rabid fan base, which one industry analyst calls a “kind of cu
lt following.” Because In-N-Out is a private company, any financial estimate is based on speculation. That being said, the closely held firm has 280 units in five states and probably has sales around $600 million a year. A Harvard Business Review article in 2005 estimates the company enjoys 20 percent profit margins.
Many companies would love to gobble up In-N-Out. That includes burger aficionado Warren Buffett, who according to the UCLA business school website, told a group of visiting students back in 2005 that he hungered to own the chain.
Torres came to control In-N-Out after a series of family deaths. She controls the firm that a trust gave her half ownership when she turned 30, and will give her full control when she turns 35. Whether Torres, a mother of twins, will want to maintain control in five years is the billion-dollar question.
How to Woo a Prospect
Think about the next deal you want to make. Your prospective deal CEO will have fears about your deal that are perhaps his or hers alone. An excellent way for you to alleviate those fears is giving him or her a chance to talk with a CEO who’s happy with your work. Here are some tips to make that work:
- Find Out About the Fear. Warren Buffett and others who are smacking their lips over In-N-Out are going to need to take fear off the table to make this deal. Quality matters to In-N-Out and Torres will most likely want to make sure that is assured moving forward. According to a 2003 Harvard Business School case study, In-N-Out has never franchised to outside operators in order to maintain quality control.
- Get Equals to Talk. Usually the best method of communication, CEO to CEO, is by phone. You’ll have to assess the willingness of both parties in using this approach. Some of your clients might want a list of subjects that can or cannot be discussed. And, of course, no CEO is going to want to give out any proprietary information to a competitor.
- What Subjects Are On the Table. That being said, there is still a wealth of information that one CEO can give to another. Here are some examples:
- What’s it like to work with your company?
- How does your company handle emergencies?
- Can your company be trusted to deliver what it promises?
- Does your company stay within schedules?
- Does your company go beyond the agreed-upon budget?
General or specific questions about your work style are appropriate for any CEO to ask or answer. Always remember that your intent is to eliminate your prospect’s fear of making a deal with you. The burger loving Buffett has purchased many companies, from jewelry chains to furniture super stores, at a price lower than other suitors because he uses tactics like these to convince the seller he would honor their legacy.