The case of In-N-Out Burger is quite unique indeed – McDonald’s, which was founded as a restaurant just eight years before the In-N-Out Burger, has quickly transformed into a franchise by 1955. The In-N-Out Burger company’s position has actually been formulated during its early years by the Snyders couple – the company’s expansion should be steady and carefully controlled (Reference for Business, n.d.). Such an approach was based on the company’s commitment to the quality over quantity principle – slower expansion ensured sufficient control over the relevant standards and procedures. This approach created a specific and favorable niche for the company that it has been exploiting to its advantage ever since. The next generations of managers have inherited the founders’ approach.
The mentioned philosophy of In-N-Out Burger company fits perfectly into the common understanding of the advantages and disadvantages of going public for any large company. The main advantages of an IPO include raising capital and increasing publicity. At the same time, the main disadvantages are the costs associated with such a process and the possibility that the company may start focusing on short-term gains rather than long-term goals. Both of the mentioned benefits of an IPO can be quite attractive for many companies, while such an issue as a cost should not significantly bother giants like In-N-Out Burger. However, considering the company’s philosophy, it becomes clear that In-N-Out Burger is not interested in expansion funded by investor money, and the it prefers supporting its already loyal customer base rather than broadening it quickly. Moreover, while the company is big enough to ignore the IP costs, it cannot allow any deviation from its current path of a high-quality niche product that an IPO can trigger.
References
Reference for Business. (n.d.). In-N-Out Burger – Company profile, information, business description, history, background information on In-N-Out Burger. Web.