In n Out Burger is a popular name in the fast-food burger industry known for its crossed palm trees, fresh ingredients, and their very simple menu of four items. With 370 locations across California and the Southwest, the regional brand is consistently rated as one of the top fast-food chains in several customer surveys.
In n Out has a long history of being a family-owned business; its current CEO, Lynsi Snyder, is the only grandchild of founders Harry and Esther Synder, who founded the company in 1948 in Baldwin Park, California. The brand has consistently chosen to remain privately held and not to franchise its operations in the name of prioritizing quality and consistency over rapid growth.
Prospective franchisees who intend to explore franchising opportunities in the fast foods market should assess comparable businesses in the industry, such as In n Out Burger. In n Out does not disclose any financial information. We will estimate their revenues and expected franchise cost – if it were to be franchised – from comparable competitors in the fast-food industry. Most In n Out restaurants follow the same classic, 3800 square feet store layout.
|Minimum Standards for All Site|
|Traffic||50,000+ ADT at Site|
|Population||60,000+ (Trade Area)|
|Median Income||$45,000+ (Trade Area)|
|Lot Size||45,000+ sq. ft.|
|Building Area||Approximately 3,800 sq. ft.|
|Seating Capacity||75 Seats Inside, 20 Seats Outside|
|Minimum Parking Required||45 Spaces|
|Minimum Drive-Thru Stacking||12+ Cars|
|Preferred Sites||Dynamic, high activity areas near retail mass, freeway location, major intersections, and commercial shopping center pads.|
|Signane||Prominent pylon sign on major arterial|
|Zoning||Commercial with usage for fast food drive-thru, permitting hours of operation from 10:30am to 1:30am, 7 days a week.|
|Attributes||High visibility, easy ingress/egress, ability to use our “classic” image.|
|Deal Structure||1. Purchase 2. Lease (With option to purchase)|
Based on these requirements, a comparable company to look at would be Smashburger, another regional burger chain founded in 2007 in Denver. The estimated cost to open a Smashburger franchise is in the range of $604,260 to $1,962,100, of which a significant portion of it comes from leasehold improvements.
Of which a significant portion of it comes from leasehold improvements. However, the average Smashburger store is between 1,600 and 2,200 square feet and seats 40 to 70 customers, which means that In-n-Out stores are significantly larger and drive in more traffic than a Smashburger.
Which means that In n Out stores are significantly larger and drive in more traffic than a Smashburger. Thus, it can be estimated that an In n Out franchise would cost significantly more than a Smashburger.
|Type of Expenditure||Amount||Method Of Payment||When Due||To Whom Payment Is To Be Made|
|Initial Fees||$40,000||Lump Sum||On Execution||Us|
|Leasehold Improvements||$388,100 – $1,220,800||As Arranged||As Invoiced||Landlord/Suppliers|
|Furniture, Fixtures and Equipment||$43,400 – $176,900||As Arranged||As Invoiced||Suppliers|
|Signane||$5,500 – $34,700||As Arranged||As Invoiced||Suppliers|
|IT, POS System||$21,900 – $49,500||As Arranged||As Invoiced||Suppliers|
|Three Month’s Rent||$15,500 – $75,600||As Arranged||As Invoiced||Landlord|
|Security Deposit, Business Licenses||$1,560 – $50,000||As Arranged||As Incurred||Landlord/Suppliers, Professional SVC. Firms|
|Opening Inventory and Supplies||$15,000 – $20,000||As Arranged||As Invoiced||Suppliers|
|Grand Opening Advertising||$10,000||As Arranged||As Invoiced||Suppliers|
|Training Expenses||$34,000 – $181,700||As Arranged||As Invoiced||Suppliers and Employees|
|Grand Opening Assistance||$0 – $30,000||As Arranged||As Invoiced||Us|
|Miscellaneous Opening Costs||$500 – $5,000||As Arranged||As Invoiced||Suppliers, State Agencies and Employees|
|Professional Fees||$5,000 – $15,000||As Arranged||As Invoiced||Supplier Professionals|
|Insurance Premiums – 3 Months||$10,000 – $20,000||As Arranged||As Invoiced||Insurance Carrier|
|Liquor Licensing||$1,600 – $11,400||As Arranged||As Invoiced or On Filing For License||Suppliers and Government Agency|
|Lease Review Fee||$1,500||Lump Sum||Submission of Lease||Us or Our Affilites|
|Additional Funds – 3 Months||$10,000 – $20,000||As Arranged||As Incurred||Suppliers and Employees|
|Total Estimated Initial Investment||$604,260 – $1,962,100|
In conclusion, you cannot currently open an In-n-Out franchise, and In-n-Out ownership does not plan to make the stores franchised anytime soon. The company remains privately held and does not disclose financial information, making it difficult to estimate the costs associated with opening a franchise as well as revenues and costs associated with the daily operations of an individual In-n-Out store. Nevertheless, the company remains one of the highest-rated burger brands in the nation and has expanded its operations across the Southwest in recent years, indicating that In-n-Out is a stable, growing company.
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