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Can you open an In-n-Out Franchise in 2022?

Written by: Spencer B. Huang
Last Updated by Rocío Somoza: August 25, 2022
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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.

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Is In n Out Franchised?

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.

According to the Real Estate Development Department of In-n-Out, site selection is a carefully planned out process. All sites must meet minimum standards that include a surrounding population of at least 60,000 people, a lot size of 45,000+ square feet, a drive through that can stack at least 12 cars, and at least 75 indoor seats and 20 outdoor seats. 

in-n-out-burger
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)

SmashBurger as a Comparable Company

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.

Franchise Agreement

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

Conclusion

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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