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White Castle: A Cult Classic Searching For New Sizzle

This article is more than 9 years old.

This story appears in the August 17, 2014 issue of Forbes. Subscribe

At the Columbus, Ohio headquarters of America's oldest burger chain time seems as frozen as the beef patties. A dingy pub-style, stained-glass White Castle sign hangs in the lobby above a mannequin in a dress made out of the signature blue, white and yellow boxes. Down a flight of linoleum stairs and into a musty carpeted hallway, a hawk sculpture with a miniature slider in its claw sits on a coffee table near the office of the president, Lisa Ingram, 43, the fourth-generation Ingram to run the place.

"I remember the stairs to the cafeteria being dark blue and very steep," says Ingram, who has a mass of curly light brown hair and a quick smile. Today the steps lead to the "Cravers Hall of Fame"--plaques emblazoned with the names of impassioned fans who've broken decades of Lent fasts and enjoyed first dates at a White Castle, driven to every outlet in the nation and inked themselves with tattoos of the company logo.

But a business, even one that is 100% family-owned, can't live on nostalgia. Last year White Castle netted an estimated $12 million on revenue of $612 million--results that have essentially flatlined over the last eight years. Roughly half of its 401 outlets were built before 1960; the average manager has put in 21 years. The company has tried, and failed, at various expansion efforts over the past two decades. Lisa, who took over as president last year, is fresh blood, but hardly new blood at the 93-year-old chain.

"With the exception of our new senior vice president of operations we just hired from the outside, every single person who reports to me has at least 25 years of service," Lisa says with discernible pride. She is cautiously experimenting with new brands, slight variations in the menu (testing pretzel and cheddar buns, for example), even introducing a food truck or two. "You won't see us coming out with a big burger," says Lisa. "It has to fit our 2-by-2-inch buns."

That's why White Castle is stuck in limbo--or, perhaps, burgertory. Stray from the past and you risk losing cult followers. Fail to change and you risk getting left behind.

It was back in 1921 when Billy Ingram took out a $700 loan and, with friend Walt Anderson, opened a shack in Wichita, Kans. that sold tiny five-cent burgers, coffee, pie and Coca-Cola . Billy bought out Anderson in 1933 and moved the operation to Columbus a year later. By the time his son, Edgar, took over in 1966, White Castle had surpassed 1 billion burgers served and was a sizable manufacturer of paper hats and prefab steel-and-porcelain parts for food processing and food services. Its edible innovations were paltry: fish sandwiches, ice cream shakes, cheeseburgers, onion rings.

His son--Lisa's dad, Bill (E.W. Ingram III)--took over in 1992. Today, at 63, he sits at the same mahogany desk in the same office as his grandfather, an uncanny colorized version of the black-and-white photo of the cofounder on a nearby table. He speaks in a clipped baritone, as if on a ration of one-word answers, growing animated only when talking about fly-fishing. No longer active in day-to-day business, Bill acts as an advisor. "I still show up, and they pay me on Friday," he deadpans. After mandatory retirement at 65, he'll remain on the board of seven, three of them relatives.

"I've always learned more from my mistakes than my so-called successes," Bill confides. And there were a few whoppers under his reign. During the 1990s White Castle tried--and failed--to expand in Mexico, Malaysia, Japan and South Korea, running into an economic crisis here, a poorly capitalized partner there. "Our approach was less professional than what we would like to think we'd do today," says Russ Meyer, the chief financial officer. White Castle is still in only 12 states.

The recession cuffed the company so hard that it shuttered around two dozen outlets, many in low-income neighborhoods in already walloped cities like Detroit, Chicago and New York. Mini-tacos, introduced in 2012, flopped, since the shells were too small to accommodate much meat. After weak sales of salads, tested last year in Louisville, Ky., White Castle yanked the healthy alternative off the menu.

An unwritten rule: Don't mess with the formula. "We are a landmark," says Lisa. "People have us cater their weddings. We've been to funerals." The chain's Valentine's Day special attracts thousands of couples who make reservations, forking out under $10 for a white-tablecloth meal, including a couple of Hall of Famers who drove 26 hours from Montana, where they'd been relocated, to their favorite outlet in Illinois.

The White Castle cult is legendary. One "craver" arranged to have frozen sliders smuggled out from Detroit to Glasgow; another has taken them on trips to Singapore, Panama and Russia. An early inductee who moved to Georgia drove five hours to Nashville at least once a month to have lunch in the greasy fort; he had made the trip at least 290 times. One plucky romantic proposed to his wife in a White Castle, planting the engagement ring in a burger box.

The company has sold candles (all proceeds go to charity) that smell like grilled meat, with overtones of fried onion and a hint of pickle. White Castle has been referenced in five Beastie Boys songs. And, of course, it's the subject of the 2004 stoner classic, Harold & Kumar Go to White Castle , which produced a double-digit rise in burger sales during the months the film was in release. Alice Cooper is a recent Hall of Fame inductee.

The Ingrams "worship the past," says David Gerard Hogan, professor of history at Heidelberg University and author of Selling 'Em by the Sack: White Castle and the Creation of American Food (New York University Press, 1999). Once pioneers in the industry, they now "refer back to what great-grandfather Billy would do, forgetting the fact that it's 2014 and that's not really relevant anymore."

Lisa Ingram is trying to dig her way into the present, though slowly. Last year she imported 18 million waffles from Belgium for a new chicken sandwich. This year White Castle will roll out smoothies in two markets. And in the most radical experiment of all, she is dabbling in a handful of new brands: Laughing Noodle, a Chinese restaurant with three outlets in Ohio and Kentucky; Blaze Modern BBQ, a smoke joint with two locations in Indianapolis; and Deckers Grilled Sandwiches, a lunch food joint in Tennessee and Kentucky. The company has also invested nearly $100 million in replacing and re-modeling aging White Castles restaurants.

She is also expanding the frozen burger business, begun in 1950, retailing to chains like Wal-Mart and Family Dollar--19% of total revenue. A new $20 million plant in Vandalia, Ohio will help White Castle ship to Canada as well as to U.S. troops overseas. "That frozen foods business should grow 40% in the next three to four years," says CFO Meyer.

What about a typical route to rapid growth--franchising? White Castle never did and never will. "If you franchise, while you can expand faster, you're giving up control of the operation," says Lisa, who has an M.B.A. from Ohio State and has spent all but a half-dozen years of her career at the family business. "I'd be really worried what that would do to the whole brand."

But the brand can probably withstand a seismic jolt of innovation. Without it White Castle--its valuation stalled at an estimated $850 million--will remain little more than a historic curiosity.

This article was updated on July 31st, 2014, to remove a line that suggested White Castle has never fired a family member. The company has actually fired three family members in its history. 

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