Franchises

California Man Accused of Making More Than $4 Million by Selling Fake In-N-Out Franchises

2 min read

Want to open an In-N-Out franchise? Sorry – it's still not happening, something these investors realized the hard way.

California resident Craig Stevens has been accused of making more than $4 million by selling fake In-N-Out Burger franchises in the Middle East, reports the LA Times.

Prosecutors say that, starting in January 2014, Stevens emailed potential investors to offer them the chance to buy bogus In-N-Out locations for about $150,000 per location, with royalties adding an additional $250,000 per year. Last June, Stevens reportedly even managed to pass off a faux In-N-Out licensing agreement via email.

Related: Olive Garden Will Soon Serve Up Breadstick Sandwiches

For a fake franchise fee, $150,000 is pretty pricey, with McDonald's franchises typically costing about $45,000 (though total investment is likely to range between $1 million and $2.3 million). Of course, if these potential investors had done a bit more research on In-N-Out, they would have realized the California chain has staunchly refused to franchise.

While hopefully most potential franchisees put a bit more time into researching concepts before investing, Craig Stevens provides a cautionary tale of what can happen when you pay up before you educate yourself on a franchise concept. And remember, if you see any Chipotle or Tesla locations on the market, be sure to steer clear – those two companies don't franchise, either. 

Related: McDonald's Secret Plans to Boost Sales Include Faster Drive-Thru, Frozen Lemonade and All-Day Breakfast

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

These Roommates Changed Their Lives for a Sandwich -- and Built a Franchise Empire