CaliBurger Copies In-N-Out and Wins

By Constantine Mittendorf

CaliBurger is an in international burger chain, and it seems to be winning after copying the In-N-Out formula.  When CaliBurger opened in Shanghai in 2011, it openly copied the In-N-Out formula.  It sold Double-Doubles (In-N-Out’s signature burger), Animal-Style fries (In-N-Out’s signature fries), and sodas with palm-trees printed on the cups (In-N-Out’s signature decoration).

Coincidence?  No chance.  CaliBurger’s owners are Americans with offices in California.  In fact, one of CaliBurger’s co-founders, Jonathan Wong, used to be an In-N-Out manager.  He is even quoted in the LA Times stating “The model was In-N-Out.”  Further, several of the founders are attorneys who have specialized in intellectual property law.  It’s pretty clear that CaliBurger wanted to fill the niche that In-N-Out has failed to fill, so it basically copied In-N-Out to give people California style fast food burgers outside of California.  It looks like CaliBurger is poised to use the In-N-Out branding as a springboard into new territory.  Give the people what they want, right?

“The model was In-N-Out.” – CaliBurger’s co-founder.

In-N-Out is a California burger chain with hundreds of locations primarily in the Southwestern United States and Texas.  In-N-Out has zero locations in China and zero international locations.  Founded in 1948, it was almost exclusively a California-only chain up until the year 2000.  As a family run business, it grew its brand slowly for years and famously resisted calls for expansion.  Its popular menu and loyal customers seemed to be a recipe for success, yet it declined to expand despite cult-like popularity outside its home base.

However, when CaliBurger opened its doors, In-N-Out quickly took notice and filed a lawsuit for trademark infringement in the Northern District of California.  CaliBurger changed some of its menu and décor, and the parties quickly settled.

In-N-Out boasts over 300 locations in 6 states, while CaliBurger has over 40 restaurants in over a dozen countries.  If CaliBurger continues to grow, its success will be in large part due to nearly 70 years of branding fostered by In-N-Out.

CaliBurger’s aggressive strategy highlights the both the importance of protecting valuable intellectual property, including brand recognition, and meeting market demands before it’s too late.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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