Promoter Allegedly Selling Fake In-N-Out Franchises Pleads Not Guilty

In-N-Out (Bill Selak / Flickr / CC)
Bill Selak / Flickr / CC
Newport Beach, CA

Craig Stevens of Newport Beach pleaded not guilty to wire fraud Monday in federal court in Santa Ana in connection with charges of selling $4.27 million of fake In-N-Out Burger franchises, according to a report by the Los Angeles Times.

The company is wildly popular, with about 65 percent of the over 2,000 reviewers on website rating ‘In-N-Out Burger’ as “excellent,” and another 25 percent as “very good.” The business was founded in 1948, is headquartered in Irvine, CA, and remains a private company. There are no franchise agreements or partnerships with third parties, as Stevens allegedly claimed.

All the over 300 stores are West of the Mississippi and only offer a menu of hamburgers, shakes, French fries and beverages. Employees love working for In-N-Out, and the company was rated eighth on Glassdoor’s list of best companies to work for in America with 1,000 or more employees.

In-N-Out has a reputation as the “unchain,” because there are no freezers, microwaves or heat lamps at the storesb. None of their food is ever frozen and no meal is prepared until the customer orders it. The fries are cut by hand in the store, rather than being machine-cut, fried, flash-frozen, vacuum-sealed and shipped hundreds of miles from a processing plant. The shakes are actually made from ice cream.

According to the Orange County District Attorney’s prosecutors, the company’s incredible reputation and supposed extraordinary offering of franchise agreements allegedly allowed Craig Stevens to use social media to attract about $4.27 million from investors with bogus offerings of In-N-Out franchises at a cost of $150,000 per location and royalty fees of $250,000 per year. In late June 2014, prosecutors allege he committed wire fraud by email transmission of a fake In-N-Out licensing agreement to an undisclosed Lebanese investor, according to court documents filed at arraignment.

The ability to run a hoax on In-N-Out is extraordinary, because the company founded by Harry and Esther Snyder in Baldwin Park, CA is managed today by their grand-daughter. According to the company’s website, “In-N-Out remains privately owned and the Snyder family has no plans to take the company public or franchise any units.”

The Snyders are a religious family, and their continued control of the company means they can put what they want on their product packaging. They’ve chosen to include pointers to particular Bible verses that seem to hold special meaning for them.

The soda cup bears the notation John 3:16; the milkshake cup list Proverbs 3:5; the water cup bears John 14:6; and the hamburger and cheeseburger wrappers point to Revelation 3:20. The “Double-Double” lists Nahum 1:7; and the French fry holder list Proverbs 24:16. (The text of the passages themselves is not spelled out.)

Berkeley residents were also duped last year into thinking an In-N-Out was opening on Telegraph Avenue after someone hung a sign on a store front, in an unrelated hoax.

The Los Angeles Times reported that Stevens was released on $10,000 bail and that his trial is scheduled for July.