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Franchises

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

2 min read
Opinions expressed by Entrepreneur contributors are their own.

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.

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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

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