California and fast food.  Fast food and California.  There seems to be no way to keep the two of them apart – at least in the news.  No sooner had last month’s column on the mess that the California legislature was making in the fast food delivery sector of the economy (Another California Mess) published than yet another fast food-related story bounds into the news.  And this one is making national headlines.

Simply put, the In-N-Out Burger chain is closing the only store they have ever closed and they say they are doing it not because of profit but because of crime while other voices say that crime is simply an excuse for not turning a profit.

(video clip taken from NBC news story For the first time ever, In-N-Out closes one of its stores authored by Mirna Alsharif)

The various reactions to this announcement say a lot about how business and the economy are regarded in today’s public sphere by both those outside the enterprise and those within.  But before getting to that analysis, let’s dive a bit deeper into the bare facts.

Alsharif provides some data to support the claim that this In-N-Out location saw way more than its share of criminal behavior.  She notes that there were “60 incidents of theft and armed robbery” in that region Oakland the week prior to the article’s publication.  She links these statistics to the proximity of the Oakland International Airport.  Alsharif also provides anecdotes from various business owners, including ‘Khalil’ who relates his standard greeting to the customers who visit his establishment:

The first thing we do when you first walk in – you know we welcome you and the first thing we ask you ‘Are you a traveler and do you have luggage in the car?  It’s better to take it to your hotel first.’

Other authors provide additional crime statistics which serve to set the context.

Amanda Bartlett, in her article Oakland's only In-N-Out to permanently close, cites the rental car companies serving the Oakland International Airport strongly cautioning their customers from using the nearby gas stations to fill up the rentals before returning them.  For example, the Oakland Police stated that a single Shell station, located within a mile of the airport, was the scene of 271 auto burglaries, 15 robberies, and 5 instances of vehicle theft in 2023.  Finally, she notes that security guards had taken more theft reports at that In-N-Out than they had at any other of the locations they patrol.

Jordan Valinsky, author of In-N-Out has never closed a location, until now. It cites crime as the problem, cites additional statistics noting that Oakland saw increases of 21%, 23%, and 44% in violent crime, burglaries, and motor vehicle thefts, respectively, in 2023.

Finally, the AP notes that car-related crime has particularly grown (In-N-Out to close first location in its 75-year history due to a wave of car break-ins and robberies) with police logging 1,174 car break-ins since 2019 and that In-N-Out makes a logical choice for the would-be perpetrator since the restaurant “attracts travelers headed to the airport and baseball fans who attend A’s games at the Coliseum.”

That the restaurant found itself in a high crime rate location seems well-established.  But what about the claim that this was the explanation for the restaurant’s closing on March 24 of this year.  Was this branch of In-N-Out popular and did it, as Valinsky put it, attract customers?

Bartlett provides some useful background on the company as a whole, writing that In-N-Out was

recently ranked among one of America’s best large companies to work at by job review site Glassdoor, and was the only fast food company in the top 10 list, beating out tech titans like Google and Apple.

She also noted that this particular location, which has been operating there for the past 18 years, had drive-thru lines during the dinner rush often stretched all the way out into neighboring parking lots.

In her article, Alsharif simply cites the In-N-Out statement that states:

This location remains a busy and profitable one for the company, but our top priority must be the safety and wellbeing of our customers and associates – we cannot ask them to visit or work in an unsafe environment.

But Alsharif notes that, nonetheless, there are contrary voices who challenge the “true reason major companies are choosing to shutdown stores... saying the decision has more to do with financial performance than safety concerns.”

It is this tension: between the noblesse oblige and laissez-faire currents and attitudes towards business, that makes this story so interesting and worth pondering.

On the noblesse oblige front, seemingly, In-N-Out anticipated that they would have to answer for what some may perceive as and assert to be an abandonment of their responsibility.  They end their statement by saying:

No doubt they are trying to be good corporate citizens but also trying to get ahead of the very complaint that Alsharif ends her report with.  Supporters of the noblesse oblige attitude want businesses to justify each and every closure beyond simply pursuing a profit, an attitude that harkens back to a well-known position of Michael Moore, who has famously said that a business should not allowed layoffs if it is making a profit.

Supporters of the laissez-faire attitude respond by asking why an owner can’t simply stop doing business whenever he pleases.  They would argue that the owner took/takes the risk of running a business, that his first and only obligation is to provide a return on investment to the stakeholders who risked their capital on the business.  They would ultimately argue that nobody owns or can demand the labor of another and that, therefore, any business can close based on ‘financial performance’ versus ‘safety concerns’.

At the risk of sounding Aristotelian, it seems that a middle-of-the-road balance between these two oppositely directed views of an enterprise’s relationship to the greater community, is the best course of action.

That said, it seems obvious that crime is out of control in and around the In-N-Out location in question.  Whether In-N-Out could financially endure it by staying open is not the question – even from the noblesse oblige perspective – since those in political power in Oakland also have an obligation.  The political arm should also operate under noblesse oblige by fulfilling their duty to keep their community safe while also looking to improve the economic and social opportunities for those most marginalized.  No clearer economic can be made that these political obligations are abrogated than the economic anecdote given by Valinsky who writes

A diner told CNN affiliate KPIX-TV that someone broke into their car recently while they were eating inside the In-N-Out location. “They were trying to steal my vehicle, but I had a kill switch on. So they couldn’t get my vehicle, but they took all my belongings out,” the diner said.

We may applaud the savvy diner for having the wisdom for putting a ‘kill switch’ on his vehicle while simultaneously lamenting the fact that he lives in a community that requires him to spend valuable resources doing so. And he is not alone is wasting valuable resources: consider how much was spent on the following sign that sits outside a local business

That is the real tragedy of the In-N-Out leaving Oakland: the laissez-faire attitude toward governments noblesse oblige.