In and out burger franchise cost comes to mind first for anyone considering starting an In-n-Out Burger franchise. If you ask people which fast-food restaurant serves the best burgers in America, you’ll get a variety of responses depending on where you live, but if you live in California, chances are your response will be In-n-Out Burger. In this piece, we will discuss the cost of starting an in-and-out burger franchise.
In-n-Out Burger Franchise Cost
Unfortunately, this burger chain cannot be franchised. Even if you want to open an In-n-Out Burger franchise, the company is a privately held family business.
Lynsi Snyder, the president of the burger chain, has previously stated that she will never go public or franchise the company. This is primarily for disappointed prospective franchisees.
Fee and Financial Requirements
Because In-n-Out does not franchise, there is
little information on what the financial requirements or charges might be if they did. However, you can get a sense of how much to expect by looking at the franchise cost of one of the in-and-out burger franchise competitors.
Five Guys is one of them. According to some customers, Five Guys is a major burger chain in the United States, right up there with In-n-Out. Five Guys require at least $5 million in capital and a $25,000 initial franchise fee.
You can use Five Guys’ financial requirements as a rough estimate for potential in-and-out burger franchise cost. However, keep in mind that prices may vary depending on the size of the area, royalties, and advertising.
Burger King, with its famous Whopper, is another option to consider. Before opening a location, many franchisors invest $2 million or more in this chain. It is not cheap to open a globally recognized burger restaurant.
Annual Sales / Revenue Average
In-n-Out Burger’s revenue for 2020 was expected to exceed a billion dollars at $1.073 billion, according to Restaurant Business Online.
This is regarded as a noteworthy accomplishment given that the pandemic did harm most businesses. However, In-n-Out’s strong position in drive-thru service and speed has benefited the company.
Facts About In-n-Out Burger Franchise Cost
|Industry||Quick Service Restaurant|
|Subsector||Food and Beverage|
|Incorporated Name||In-N-Out Burger|
In-n-out burger franchise has a rich history of selling burgers that dates back over 50 years. In 1948, Harry and Esther Snyder founded the company in Baldwin Park, California.
Their setup was concise, a kitchen, a drive-thru window, and a two-way speaker box are available to take orders from customers. However, with this simple menu of burgers, beverages, and fries, the company grew to 18 locations by 1976.
Rich and Guy Snyder, brothers, took up the torch and set out to grow the company. They founded a commissary for all of their ingredients, an In-N-Out University to train their employees on customer service, and were able to grow their store count from 18 to 93 before Rich died in 1993.
Guy then took over, expanding to 140 locations just before his death in 1999, leaving the business to his daughter and president Lynsi Snyder.
The menu at In-n-Out is basic. They serve the famous Double burger, which comprises two cheese slices and two beef patties, as well as a regular hamburger, a cheeseburger, their famous hand-cut fries fried in 100% sunflower oil, and beverages such as sodas and milkshakes.
Why In-n-Out Burger Franchises are not Franchised
Given its simple menu and 70 years in business, you might wonder why In-n-Out refuses to franchise.
The solution is straightforward. It all comes down to quality control. In-n-Out Burger distinguishes itself by using only the freshest ingredients.
They have three patty-making plants in California, Baldwin Park, California, Lathrop, and Dallas, Texas. They deliver them straight to their stores, ensuring that customers receive fresh patties.
There is also no freezer or microwave in all their stores. As a result, if they franchised in a location far from their patty-making facilities, they would not be able to deliver the same fresh taste. So it’s all about quality and making sure the supply chain works properly.
They are also adhering to its vision statement, which states that it will provide high-quality, fresh food, as well as the best services and an environment in which the customer is the “most important asset.”
In-n-Out Burger ensures a team-oriented work environment by providing the best training. Furthermore, In-n-Out Burger helps communities in their market become better, safer, and stronger places to live.
Another reason they don’t franchise offer or expand to the East Coast or other states is to have visitors visit and check out In-n-Out when they’re in the neighborhood.
Even Lynsi Snyder admits that she doesn’t see In-n-Out all over the country and appreciates the fact that they’re unique and not found in “every corner” of the country.
In-n-Out burger operates in seven states: California, Nevada, Texas, Utah, Arizona, Oregon, and, most recently, Colorado. California has more In-n-Out Burger locations, with 257.
Future expansions may be seen in New Mexico, where their newest supply center is located. In-n-Out Burger is worth more than $3 billion.
In-N-Out Burger Profit
Because In-n-Out does not disclose financial information, it is difficult to calculate the burger chain’s profit. According to a Forbes report from 2018, In-n-Out has a projected gross annual sales of $4.5 million per store.
Using back-of-the-napkin math, a traditional In-n-Out Burger location brought in $900,000 that year relying on a healthy 20% profit margin. This would be an outstanding performance for a fast-food restaurant.
The Benefits of In-N-Out Burger Franchise
We understand that opening an In-n-Out franchise is currently impossible. However, one can still wish to own this franchise. Here are some of the primary benefits I see with this concept.
1. Fresh and Healthy Ingredients
I mentioned that In-n-Out has patty-making facilities, allowing them to control the process from beginning to end. They also deliver them to each location, ensuring that each location has a fresh batch.
Although In-n-Out is a fast-food restaurant, the strict processes and logistics ensure that their food is fresher than most of the competition.
In-n-Out is also known for hand-cutting their fries and cooking them in 100% sunflower oil, which is healthier than other fast food oils.
Sunflower oil is known to have a lower saturated fat content. And, while eating fried food is still not considered particularly healthy, at least you know your fries are being dipped in a healthier oil alternative.
2. Established Name
If you ever own an In-n-Out Burger, you won’t have to worry about marketing it because the In-n-Out brand is well-known throughout California and the surrounding states.
Customers will flock to you for traditional hamburgers and your not-so-secret menu. People will talk about it if you open a new store in a new location.
3. Menu with No-Frills
Almost everything about In-n-Out Burger is classic. Their menu is straightforward and uncomplicated. The menu’s appearance and design are pleasantly traditional.
For a burger chain to offer simple items indicates they are doing an awesome job of keeping their standard of good food and outstanding service.
4. Family Owned
After reading the facts above, you’ll realize that the in-and-out burger franchise has always been a family business. Bearing this in mind, you can see how beloved this burger chain is, and you’ll be in safe hands because it’s also like being a part of a big family.
5. Labor Advantage
The staff is another advantage of In-n-Out Burger. In-n-Out Burger pays its employees more than other burger chains. As a result, they can select top-tier employees in each region.
It’s not uncommon for a cashier or associate with no experience to start at $14 – $15 per hour. There is also a clear-level system in place, which allows employees to advance through the ranks and earn more money.
Store managers earn significantly more than those at other chain restaurants. According to USAToday, some people earn $160,000 per year. Other fast-food store managers make less than $100,000. In-n-Out Burger can hire the best and brightest because of compensation.
The Difficulties of Running an In-N-Out Burger Franchise
Running a business will expose you to a variety of challenges. Most of these are expected in the fast food industry.
1. Simple Menu
We mentioned how the simple menu was beneficial. However, it is also one of In and out burger franchise’s disadvantages because there are many other customers who would benefit from an extensive menu, such as those who enjoy chicken burgers.
Salads and hotdogs could also be included. Consider how much their annual revenue would increase if they expanded their menu. Of course, have you ever seen the drive-thru lane at an In-n-Out Burger? If you added complexity, it would be difficult to get as many customers through this line.
2. No Vegetarian Options
In-n-Out has been in business for 70 years and there has been no movement to include a vegan option on their menu.
There is a vegetarian option, but it is not a meat substitute patty. Instead, they serve grilled cheese or everything on their usual hamburger without the patty. In-n-Out should add a vegan option to their menu soon.
People love In-n-Out Burger, so it would be great to expand and reach a wider audience. However, we understand that preserving their burgers in the best possible condition is the primary goal here.
However, perhaps someday they will set up patty-making facilities in other parts of America, allowing them to reach even more people who enjoy them.
4. No Global Reach
In-n-out burger franchises should think about going global. Shake Shack and Five Guys have a global reach and are also very popular. If it’s too big a leap, perhaps they should start with Canada.
5. Restrictions by the Government
The majority of In-n-Out Burgers locations are in California. California is known for being more aggressive in terms of health and security measures than other states.
Recently, the company received media attention for failing to enforce mandates in San Francisco, and it temporarily shut its restaurant down.
If In-n-out burger franchise franchises its restaurant chain, it would be a fantastic opportunity to seize.
So get your net worth up and start saving for it now, because with their rigorous quality in burger making and the training and care they provide to their employees, it’s safe to say you’d need $1 – $2 million to invest.