In-N-Out announces Eastern Expansion: Tennessee opens in 2026

[ClownLoach]

In a very unexpected move In-N-Out announced on their Instagram that they are going to expand east to Tennessee, with their first restaurants there opening in 2026. This is a significant change from past company stated strategy of always remaining west of the Mississippi River. By putting a distribution center and plant into Tennessee In-N-Out can reach many other major cities. Past articles on Insider and Eater have interviewed company officials who would state that the maximum distance from a plant would be 300 miles, another said 500 miles. At the time of the 2011 article where they were quoted at 500 miles it was noted they servicing a Utah location 685 miles out. So in theory they can cover a good portion of the East Coast from Tennessee.

[buckguy]

This seems like it would enable westward movement from Texas to perhaps St Louis, Atlanta, into Florida and up into the Ohio Valley and maybe up to Indianapolis. The Appalachian mountain chain would be a barrier to serious movement toward the East Coast---even in the North Georgia mountains, you can encounter ice and snow and there are only a few interstate standard highways through the mountains.

[Brian Lutz]

A distribution center in the Nashville area would put them within range of quite a few major metro areas in the Eastern US including some major cities in North and South Carolina (Charlotte, Greensboro/Winston-Salem, possibly Raleigh-Durham), Atlanta, Louisville, St. Louis, Cincinnati, Columbus, Pittsburgh and if they stretched their limits they could possibly even expand to markets like Richmond, Washington DC, Detroit, Kansas City, Cleveland and Chicago.

One thing to note is that for some reason, the Southeastern US seems to have its fair share of large regional chains that seem to have a lot of locations and do surprisingly well. For example, in North Carolina Bojangles has nearly as many locations as McDonald's throughout the state, and it seems like when you get into the more rural parts of NC and SC you see lot of little towns that have a Food Lion and a Bojangles, but not a McDonald's. In the case of In-N-Out the most likely regional competitior they would run into would be Cook Out, which is one hardly anyone outside the region has ever heard of but which seems to have a loyal following.

[ClownLoach]

I think this is also an interesting shot at Carl's Jr.

They have never been the same since they merged with Hardee's and moved their headquarters to Tennessee. I think the prolonged decline of Carl's Jr. Has benefited In-N-Out more than any other chain. In-N-Out does their homework; I can't name a single location that has failed. The big national fast food chains are all distracted trying to find new ways to cut costs through robotics and removing dining rooms. I would imagine that the volume of the average In-N-Out is up to ten times that of a Carl's Jr. And that volume enables them to maintain a high staffing level, pay more than the competition, and keep prices low.

[jamcool]

It also helps that In-N-Out has a limited menu…Burgers, fries, shakes, drinks.

[storewanderer]

I think this is also an interesting shot at Carl's Jr.

They have never been the same since they merged with Hardee's and moved their headquarters to Tennessee. I think the prolonged decline of Carl's Jr. Has benefited In-N-Out more than any other chain. In-N-Out does their homework; I can't name a single location that has failed. The big national fast food chains are all distracted trying to find new ways to cut costs through robotics and removing dining rooms. I would imagine that the volume of the average In-N-Out is up to ten times that of a Carl's Jr. And that volume enables them to maintain a high staffing level, pay more than the competition, and keep prices low.

I was thinking why Nashville of all places.

In N Out and Carl's have a completely different product. One charbroils, one grills. Yet you do see them fire shots at each other like Carl's with that California Classic knockoff thing of the Double Double.

The problem with the national fast food chains is the franchise model. Pricing varies too widely from location to location and so does execution. It is not an acceptable situation and these franchise based chains are going to become less and less relevant unless they can get better control over their franchisees, how they operate the units, and how they price.

You never saw an In N Out that was "drive through only" except in some very limited weeks when everything was in chaos in the spring of 2020. They got those to go counters reopened rapidly and started to offer indoor seating again at the first moment they were legally allowed to. Meanwhile these franchise based chains were screwing around. Some smart franchisees never closed inside, others went drive through only as directed by most of the franchisors (probably still applied for PPP loans based on their employee count when they were fully open inside too) and saw how much money they were saving and fell in love with drive through only and are still drive through only to this day, then the franchisors start talking up how customers don't want to come inside anymore and drive through is the way of the future so they come up with these new "low cost" building prototypes in hopes of attracting more franchisees to a lower cost build out and lower operating costs. That will be all good and well until the customers grow tired of these places that are drive through only.

[Brian Lutz]

I think this is also an interesting shot at Carl's Jr.

They have never been the same since they merged with Hardee's and moved their headquarters to Tennessee. I think the prolonged decline of Carl's Jr. Has benefited In-N-Out more than any other chain. In-N-Out does their homework; I can't name a single location that has failed. The big national fast food chains are all distracted trying to find new ways to cut costs through robotics and removing dining rooms. I would imagine that the volume of the average In-N-Out is up to ten times that of a Carl's Jr. And that volume enables them to maintain a high staffing level, pay more than the competition, and keep prices low.

They definitely seem to do a good volume at the ones I've been to. In our temporary home I am near the one in Draper UT, and that place is pretty much always busy when I go there, to the point that finding a table in the dining room can be tricky some times. I don't know what the drive thru lines are typically like there, but they definitely have a lot of eat-in traffic. My experience with various California locations I've been to is pretty similar, although they may not do quite as much volume there.

[pseudo3d]

...then the franchisors start talking up how customers don't want to come inside anymore and drive through is the way of the future so they come up with these new "low cost" building prototypes in hopes of attracting more franchisees to a lower cost build out and lower operating costs. That will be all good and well until the customers grow tired of these places that are drive through only.

It is strange how drive-through only comes and goes (and in some cities going completely opposite and banning new construction of drive-through chains). McDonald's Express was born back in the 1990s in Baton Rouge, when Checkers and a local outfit called Fast Track were cutting into their business, and both of those chains had used their light footprint to cut costs and compete with McDonald's.

I can't imagine any of these modern drive-through prototypes will pass the savings on to the consumer.

[storewanderer]

It is strange how drive-through only comes and goes (and in some cities going completely opposite and banning new construction of drive-through chains). McDonald's Express was born back in the 1990s in Baton Rouge, when Checkers and a local outfit called Fast Track were cutting into their business, and both of those chains had used their light footprint to cut costs and compete with McDonald's.

I can't imagine any of these modern drive-through prototypes will pass the savings on to the consumer.

I expect these modern drive through prototypes will end up costing the consumer more. Since they will do significantly less sales volume, they will have fewer consumers to make money from. So they will have to charge higher prices to the few customers who go there. Steak & Shake cut out dine in and their prices have shot up under their new self serve model and unit volumes look to have dropped significantly. Further, by being drive through only, completely discouraging things like families who are out and want to stop somewhere and eat ($35+ ticket) inside, and even maintenance/delivery workers with large vehicles (they tend to be big eaters since they are often doing a lot of physical work; easy $12-$15 ticket for one person and many times these vehicles have more than one person inside too). But none of that matters, right, because, the drive through will do a great job serving the single customer who comes for the $8 combo meal.

Not every chain is Jack in the Box who was already doing 80%+ of its sales via drive through before COVID was even a thing. Most chains were more of a 67/33 or a 50/50.

[veteran+]

This fast food chain is the paradigm that justifies NOT using the awful franchise model.

They are all corporate stores, tightly managed and consistent high quality.