If you are living in California or the Western United States or just passed by those regions, you probably saw a full In-N-Out Burger.
This fast-food restaurant chain that is extremely famous in the Western United States is one of the most profitable ones.
They have been operating as a family business for decades with their simple menu.
You might have thought whether it would be a good idea to own an In-N-Out Burger through franchising.
Since they are very profitable and popular, it would be easy to get a store running and make a profit.
However, this might not be the case. This article will explore In N Out Burger and its franchise opportunities.
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History Of In-N-Out Burger’s
In-N-Out Burger is a fast-food restaurant chain that is famous for its burgers, fries, and shakes.
The restaurant was founded in 1948 in Baldwin Park, California, as a drive-thru hamburger stand.
Since then, it has become a household name in the western part of the United States and has gained a cult-like following of fans who rave about its fresh ingredients and secret menu items.
In-N-Out Burger is known for its strict adherence to quality and consistency in its food.
The company has a simple menu, which includes burgers, fries, drinks, and shakes, and all its food is made to order with fresh ingredients.
In-N-Out Burger has a loyal customer base that keeps coming back for its delicious food, friendly service, and affordable prices.
The company has even been the subject of many articles and documentaries over the years.
Despite its grazing popularity, In-N-Out Burger has been hesitant to expand to the East Coast.
They voiced concerns about maintaining the quality of its food and the freshness of its ingredients.
Also Check Five Guys Burger Franchise, Whataburger franchise
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In-N-Out Burger History
In-N-Out Burger was founded by Harry and Esther Snyder as a simple drive-thru hamburger stand. At the time, In-N-Out was the first of its kind in California.
This helped its popularity as people were able to quickly get their food from their cars.
In-N-Out aims to give their customers the freshest, highest quality foods and provide friendly service in a clean environment.
Their instant fame led the Synder family to quickly expand their business by opening more locations in Southern California.
In the 1970s, In-N-Out Burger started to expand beyond California. They started to open restaurants in Nevada and Arizona.
Today, the chain has over 350 locations across California, Arizona, Nevada, Utah, Texas, and Oregon.
In-N-Out Burger is now run by the third generation, Lynsi Snyder. Even though it is now the third generation, the company has barely changed since its grandfather founded it.
The basic principles were and are the same. That is to keep the menu simple, maintain quality at all times, and be loyal to the employees.
Franchise Model Table
| Franchise | NO |
| Franchise-Fee | NO (Doesn’t Franchise) |
| Estimated Outlets | 387 |
How Much Does It Cost To Open An In-N-Out Burger Franchise?
In-N-Out Burger is currently not a franchise. Since they are not a franchise, there are also no costs associated with opening an In-N-Out Burger franchise.
Why Doesn’t In-N-Out Burger Offer Franchising?
Lynsi Snyder, now the third generation of Snyders, has made several explanations over the course of the years about the reason why they are not franchising.
There are several reasons behind this decision, and these reasons make us believe that they will never franchise. In addition to not franchising, they are also not thinking of going public.
They do not franchise because they do not want to lose the quality of their food to excessive rapid growth.
They believe that it’s not easy to maintain the same quality and service consistency across all locations once the company expands rapidly.
They have a highly loyal customer base, and several customer satisfaction surveys show them as one of the top fast food chains.
In addition to losing the quality of the food and the customer-centric approach, they will also have to give equity to the business.
The couple also does not want that and wants to keep the business family-owned. This is also the reason why they are not planning on going public as a company.
In-N-Out Burger Revenue & Profit
In-N-Out Burger is not a public company, which means that they are not obligated to share its financial information with the public.
That’s why there are no certain revenue or profit numbers from the company from official resources. However, there are some estimations that might be true or wrong.
A report from Wolf of Franchises suggests that In-N-Out Burger makes about $4.5 million a year, way higher than any other fast-food chain.
While this number is not confirmed or an official number, it could be true, considering their popularity.
What Are Some Alternatives to In-N-Out Burger Franchise?
Just because In-N-Out Burger doesn’t franchise doesn’t mean that you can’t have a fast-food chain restaurant’s franchise branch.
There are other companies franchising their business in the same industry. Here are two of those alternatives.
Five Guys
Five Guys is a fast-food restaurant chain that specializes in burgers, fries, and hot dogs.
They are by far one of the most popular fast-food chains in the United States and in other countries they operate.
They are headquartered in Arlington, Virginia, and this is also where they were founded.
Five Guys are known for its fresh, never frozen beef burgers, which customers can customize with a variety of toppings and fries cooked in peanut oil.
The company takes pride in its commitment to quality and customer service.
Each of their locations is designed to be clean, welcoming, and family-friendly, despite most of them being franchise branches.
If you’d like to open a Five Guys franchise, you need to be ready for the initial investment. In total, you can expect to spend somewhere between $306,200 to $716,250.
This calculation includes the one-time franchise fee, which is $25,000. In addition to the franchise fee and initial investment, franchisees must also pay a royalty fee of 6% of gross sales and a marketing fee of 2% of gross sales.
Costs associated with opening a Five Guys franchise include equipment, inventory, and leasehold improvements.
Five Guys’ history began with the Murrell family’s decision to start a burger joint in Arlington, Virginia, in 1986.
The family consists of four sons and parents, who are the original “Five Guys.” In 2003, Five Guys began franchising, and today, the company has over 1,500 locations in 10 countries.
Despite its rapid growth, Five Guys remain committed to its core values of quality, cleanliness, and customer service. They continue to be a popular destination for burger lovers around the world.
Smashburger
Smashburger is another fast-food restaurant chain similar to Five Guys specializing in burgers, chicken sandwiches, salads, and sides.
They are not as popular as Five Guys or other major brands, but they still have a customer base that loves their taste. Smashburger is known for its “smashing” technique.
They use never-frozen, fresh beef patties and smash them on a hot grill to create a caramelized crust. This makes a juicy burger different from most other chains’ burgers.
Just like Five Guys, you can also open a Smashburger franchise, but you need to have the resources for the initial investment.
The franchise fee is $40,000, and the total initial investment can range from $941,000 to $2 million.
This initial investment depends on factors such as the location and size of the restaurant. Once you get the franchise going, you also need to pay an ongoing royalty fee of 5.5% of gross sales.
Smashburger is somewhat a new restaurant chain founded in 2007. However, they experienced rapid growth, opening up about 20 stores each year since they were founded.
They now have over 220 stores in the US and in Canada. Their rapid growth in numbers came from their approach to burger making and the use of fresh ingredients at all times.
In-N-Out Burger Comparison
| Company | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| McDonald’s | $45,000 | 4% | $1.3 million-$2.3 million |
| Wendy’s | $50,000 | 4-6% | $329,500-$3.6 million |
| In-N-Out Burger | N/A | N/A | N/A |
Conclusion
Gaining popularity as a fast-food chain restaurant in the United States is a tough job among many big players.
In-N-Out managed to do this easily in the Western United States and gained popularity quickly. They now have over 300 outlets across several states, and they keep on expanding.
It is obviously an amazing business to own, but unfortunately, they do not franchise. This means that you can’t have a franchise branch of In-N-Out Burger if you wish to.
However, there are many other alternatives out there that you can consider grabbing a piece of the big fast-food industry, such as Five Guys or Wendy’s.
Frequently Asked Questions
Who is the CEO of In-N-Out Burger?
The current CEO of In-N-Out Burger is Doug Caviglia. Lynsi Snyder, the 3rd generation of the Snyder family who funded the restaurant, is the sitting president at the moment.
Is In-N-Out Burger thinking of franchising in the future?
As far as the announcements made by the company go, there are no plans. In-N-Out Burger is not planning on franchising at all.
How much should I expect to spend to start an In-N-Out Burger franchise?
Since In-N-Out Burger is not a franchise, there are no costs of opening their franchise.
Sources
https://www.in-n-out.com/history
https://en.wikipedia.org/wiki/In-N-Out_Burger
https://www.wendys.com/franchise-faqs
https://www.fiveguys.com/the-five-guys-story
https://en.wikipedia.org/wiki/Five_Guys
https://en.wikipedia.org/wiki/Smashburger
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.