If you ask people which fast food place makes the best burgers in America, you’ll get a lot different answers depending on where you live. If you grew up in California, odds are better than 50% you’d respond with In-n-Out Burger. Known to be California’s fast food pride and joy, In-n-Out is well-known for their simple menu, fair prices, fast service, and delicious burgers that many diners coming back for more.
How much does it cost to open In-n-out Burger? Unfortunately, you can’t franchise this burger chain. As much as you may want to open an In-n-Out franchise, the company is a privately-held family business. The president of the burger chain Lynsi Snyder, has made previous claims that she will never go public or franchise the business. That’s really isa shame for prospective franchisees who would love to take part in the success of this burger business.
But don’t quit on the idea of opening a successful hamburger chain just yet. Take our 7-minute franchise business quiz to find an opportunity that’s right for you. Inside this guide, I dig into In-n-out’s financial performance, startup costs, advantages, and challenges. Let’s investigate this burger business together.
Financial Requirements and Fees
Since In-n-Out does not franchise, there’s not much information on what the financial requirements or fees could be should they open their doors to franchising. But you can still have an idea of how much to expect by looking at the franchise fee requirements from one of In-n-Out’s close competitors.
One of them is Five Guys. Five Guys is deemed as a big burger chain in the United States and is right up there alongside In-n-Out according to some consumers. Five Guys requires an investment of $256,200 – $591,250 and has an initial franchise fee of $25,000. You can use Five Guys’ financial requirements as an estimate for a possible In-n-Out franchise would be. But do note there might be some changes depending on the size of the location, royalty fees, and advertising fees.
Another option to look at is Burger King with their famous Whopper. Many franchise owners invest $232,300 – $4,520,900 or more into this chain before opening a location. Opening a globally recognized burger joint isn’t cheap.
Average Sales / Revenue per Year
According to Restaurant Business Online, In-n-Out Burger exceeded more than a billion dollars in revenue for 2022 at $1.823 billion. This is considered a great feat since the pandemic has caused most businesses to suffer. But In-n-Out’s strong positioning in drive-thru service and speed has served the company well.
In-n-Out Burger Franchise Facts
| Total Units | 385 |
| Incorporated Name | In-N-Out Burger |
| Franchising Since | Does Not Allow Franchising |
| Industry | Quick Service Restaurant |
| Subsector | Food and Beverage |
In-n-Out has a long history of selling burgers that goes back more than half a century. Harry and Esther Snyder started the business in 1948 in Baldwin Park, California. Their setup was simple. A kitchen, a drive-thru window, and a two-way speaker box to take customers’ orders. But this was enough to serve a simple menu of burgers, beverages, and fries that the business grew to 18 branches by 1976.
The torch was passed on to brothers Rich and Guy Snyder who set out to expand the business. They established a commissary for all their ingredients, an In-N-Out University that trains their staff on customer service, and was able to grow their stores from 18 to 93 before Rich’s death in 1993. Guy then took over, expanding to 140 locations in 1999 just before passing away and leaving the business to his daughter and current president Lynsi Snyder.
In-n-Out’s menu is simple. They have the famous Double Double which is a burger with two cheese slices and two beef patties, a cheeseburger, a regular hamburger, their popular hand-cut fries fried in 100% sunflower oil, and beverages that includes sodas and milkshakes.
They’re also well-known for their not so secret menu where you can order burger combinations such as Triple Triple (3 beef patties), Quad Quad (4 beef patties), grilled cheese, protein style burger which swaps the bun for lettuce, and “Animal Style” which is some type of mystery thousand island sauce mixed with grilled onions cooked on burgers or fries.
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With such a simple menu and 70 years in the business, you may be wondering why In-n-Out doesn’t want to franchise. The answer is simple. It’s all about quality control. In-n-Out stands out by serving only the freshest ingredients.
They have 3 in-house patty-making facilities located in Lathrop, California, Baldwin Park, California, and Dallas, Texas. They deliver them directly to their stores ensuring customers that the patties they’re getting are fresh. There is not a single freezer or microwave in any of their stores either. So if they were to franchise in a location that’s far away from their patty-making facilities, they wouldn’t be able to deliver the same fresh taste. So it’s really all about quality in the end and ensuring the supply chain works right.
They’re also sticking to their vision statement which is to provide high quality and fresh food along with the best services and an environment where the customer is the “most important asset.” In-n-Out Burger ensures that the work environment is team-oriented by providing the best training. In addition, In-n-Out also assists communities within their marketplace to become a better, safer, and stronger place to live.
Another reason for them not offering to franchise or expanding to the East Coast and other states is because of the novelty of having visitors come and check out In-n-Out when they’re in the area. Even Lynsi Snyder admits that she doesn’t see In-n-Out all over the United States and likes that they’re unique and not found in “every corner” of the United States.
In-n-Out’s turf is in seven states namely California, Nevada, Texas, Utah, Arizona, Oregon, and recently, Colorado. California has the most number of In-n-Out locations with 272 stores. Future expansions could be seen in New Mexico since their newest supply center is close to that area but you won’t be able to see it just yet until 2027. In-n-Out is valued at more than $3 billion.
How Much Does In-n-Out Burger Make in Profit?
In-n-Out does not disclose their financial data so it’s difficult to find an exact number for the burger chain’s profit. However, in a report by Forbes in 2018, it is said that In-n-Out has an estimated gross annual sales of $4.5 million per store.
Using back of the back of the napkin math you could estimate a typical In-n-Out Burger location brought in $900,000 that year based on a strong 20% profit margin. This would be exceptional performance for a fast food unit.
Advantages of an In-n-Out Burger Franchise
We know it’s impossible to open an In-n-Out franchise for now. But one can still hope and dream of owning this franchise. Here are some of the key advantages I see with this concept.
Big Name
The In-n-Out name is very well-known in California and the surrounding states so you don’t need to worry about marketing your store if you ever own one. Customers will flock to you for some good old fashioned hamburgers and your not so secret menu. If you open a store in a new location, people will talk about it.
Fresh and Healthier Ingredients
I’ve mentioned In-n-Out has patty-making facilities so that they can control the process from start to finish. They also deliver them ensuring that every location has a fresh batch. In-n-Out may be a fast food place but the strict processes and logistics mean their fresher most of the competition too.
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In-n-Out is also known to hand-cut their fries and cook them in 100% sunflower oil which is healthier compared to other oils used in other fast food places. Sunflower oil is known to be lower in saturated fat. And though it’s still not considered super healthy to indulge in fried food, at least you know you’re getting your fries dunked in healthier oil alternative.
Timeless No-Frills Menu
Everything about In-n-Out is timeless. Their menu is simple and not overwhelming. The menu look and design is pleasantly classic. For a burger chain offering simple items and means they’re doing an excellent job in maintaining their standard of good food and good service.
Family Business
Reading through the facts above, you’ll know that In-n-Out has been run by family. With this in mind, you understand now how cherished this burger chain is and you’ll be in good hands because it’s like being a part of one big family as well.
Labor Advantage
Another advantage of In-n-Out Burger is the staff. In-n-Out Burger pays higher wages to their staff than other burger chains. As a result, they get to pick top quality employees in each region. It’s not uncommon to start at $14 – $15 as a cashier or associate with no experience. There is also a clear level system that allows employees to move up through the ranks and earn more.
Store managers make a lot more than other burger chains too. According to a report from USAToday, some make $160,000 per year. Other store managers at fast-food chains bring in under $100,000. Compensation allows In-n-Out Burger to hire the best and brightest.
Challenges of an In-n-Out Burger Franchise
When running a business will have you face all sorts of challenges. Most of these are to be expected in the fast food industry.
No Vegan Options
In-n-Out has been around for 70 years and there has been no move to have a vegan item on their menu. They may have a vegetarian option but it’s not even a meat substitute patty. Rather, it’s just grilled cheese or everything on their regular hamburger without the patty. Hopefully, In-n-Out can have a vegan option on their menu soon.
Simple Menu
Yes, we did mention how the simple menu was an advantage. But it’s also somewhat one of In-n-Out’s downside because there are many other customers they can cater to with an extensive menu such as those who would love chicken burgers. They could also add salads or hotdogs. Imagine how much their annual revenue would be if they added more stuff to their menu.
Of course let’s face it, have you seen the drive-thru lane at an In-n-Out Burger before? It would be tough to get as many customers through this line if you added complexity.
Locations
People love In-n-Out so it would be nice to branch out and reach more people. However, we do understand that keeping their burgers in the freshest quality is the main goal here. But maybe someday they can also put up patty-making facilities in other parts of the United States so they can reach more people that love them.
Aside from branching out, a careful inspection of the location can help. Recently, In-n-Out’s Oakland location announced that it was closing due to issues with the ongoing crime happening in the area.
No Global Presence
In-n-Out should consider going global. Their competitors Shake Shack and Five Guys have a global presence and are quite popular too. If it’s too big of a step, maybe they can branch out to Canada first.
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Government Restrictions
As mentioned earlier, many of In-n-Out Burgers locations are in California. California is known to be more aggressive with health and lock-down measures than other states. Recently, the company has garnered media attention for not enforcing mandates in San Francisco and a restaurant was temporarily closed.
The company views requests to enforce legal mandates as government overreach. Operating in a more restrictive state does come with challenges and potential shutdowns. In spite of this, the chain continues to perform well.
Is the In-n-Out Burger Right For You?
If In-n-Out ever decides to franchise their burger chain, it would be an incredible opportunity to jump on. So prepare for it now by getting your net worth up and saving for it because with their highest standards in burger making and the training and care they offer to their staff, it’s safe to say you’d need $1 – $2 million to invest.
What is an alternative In-n-Out franchise?
If it’s a top burger chain you’re after, check out Five Guys. They’ve been in the fast casual business for 35 years making burgers and are proudly from Virginia.
To franchise Five Guys, you’ll need to invest around $256,200 – $591,250.. Here’s our detailed guide about franchising this burger chain.
In-n-Out might not be franchising for a long time (or ever) but with this guide, I hope you’ve got a better understanding of the business operations. But until then, explore alternative franchises to get a business started.
