California Man Accused of Making More Than $4 Million by Selling Fake In-N-Out FranchisesSorry, duped investors; the burger restaurant doesn't franchise.
ByKate Taylor•
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 theLA 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 franchisestypically 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 anyChipotleorTeslalocations on the market, be sure to steer clear – those two companies don't franchise, either.
