In-N-Out Burger, a brand that averaged nearly 700,000 visits per store in 2022, reportedly plans to ban employees from wearing masks in five of the seven states it has restaurants in. An internal memo leaked on social media Friday said the company was introducing “new mask guidelines that emphasize the importance of customer service and the ability to show our Associates’ smiles and other facial features while considering the health and well-being of all individuals.”

In-N-Out added it expected the policy to also help promote “clear and effective communication both with our Customers and among our Associates.” In other words, removing masks would make it easier for both parties to understand one another. 

“Our goal,” In-N-Out added, “is to continue to provide safe and customer-centric Store and Support environments that balance two things In-N-Out is known for—expectational customer service and unmatched standards for health, safety, and quality.”

The guidelines require no masks are worn in the restaurant or support facility unless the employee has a valid medical note excepting them to their manager or HR. “Without disclosing the medical diagnosis or confidential medial informational, the medical note should clearly state the reason for the exception and include the estimated duration, if applicable,” In-N-Out’s memo read, adding it would treat the note would “strict confidentially.” Those who do need to wear a mask for medical reasons must wear a company provided N-95. That, too, can be altered with a medical note.

The policy applies to Arizona, Colorado, Nevada, Texas, and Utah (except employees required to wear masks or other protective gear as part of their job duties, like a lab technician or painter).

All employees, mask or not, are expected to maintain In-N-Out’s “grooming standards, proper personal hygiene, and cleanliness to ensure a safe working environment for all.”

Failure to comply with the new mask policy could result in “appropriate disciplinary action,” the company said, which might include termination, “based on the severity and frequency of the violation.”

In-N-Out added the policy would be subject to local health authority guidelines and regulations and in the case of “conflicts or inconsistencies,” prevailing health guidelines would take precedence. And the company plans to continue to evaluate and approved “reasonable accommodations for medical, religious, and other protected reasons of our grooming guidelines.”

In-N-Out has stirred pandemic-related headlines before. In October 2021, a San Francisco location was forced to close temporarily after the restaurant, the only In-N-Out in San Francisco, reportedly did not turn away customers who couldn’t produce proof of vaccination and ignored multiple warnings, according to the San Francisco Department of Health. Officials said October 14 was the final notice of violation. The health department visited the restaurant on September 24 after a complaint, and after following up on October 6, inspectors found the restaurant was still violating the mandate. A couple of weeks later, a Pleasant Hill, California, venue was also shut down for similar reasons.

In-N-Out took a hard-line stance. Arnie Wensinger, the brand’s chief legal and business officer, said at the time the store posted signage to communicate local vaccination requirements, but health officials told the restaurant employees must “actively intervene by demanding proof of vaccination and photo identification” and “act as enforcement personnel by barring entry for any Customers without the proper documentation.”

“We refuse to become the vaccination police for any government,” Wensinger said in a statement in 2021. “We fiercely disagree with any government dictate that forces a private company to discriminate against customers who choose to patronize their business.”

The brand continues to be one of the sector’s top performers, and it’s on the growth path. It unveiled plans in January to build a $125.5 million corporate office in Tennessee and open locations in Nashville by 2026. The new locations will be the chain’s first stores east of Texas. According to mobile analytics platform, recent expansion into new markets has turned in robust traffic. Looking at Texas, for instance, traffic has lagged behind legacy markets in California but remains well ahead of national averages. The chain entered Dallas in 2011, followed by Austin in 2013 and San Antonio in 2014. Visits per location in those markets averaged between 300,000 and 400,000 in 2022, compared to the 106,500 nationwide average for quick-service chains. The foot traffic trends are more encouraging in the chain’s most nascent markets. In-N-Out entered Houston in 2019 and averaged more than 600,000 visits per store in that market last year, on par with legacy locations in the Golden State. In Denver, which it entered in 2020, average visits per store approached 990,000. 

In-N-Out has also consistently scored high marks with employees. It’s topped William Blair’s breakdown of Glassdoor data seven straight years for the percentage of workers who would recommend their job to a friend. In-N-Out is the only brand to maintain a top-10 ranking every calendar since 2016. It was also first in hourly wages among quick-serves ($17) and GM annual pay ($56,600).

The experience battle

To see a brand of In-N-Out’s stature create this kind of mandate around consumer-employee engagement speaks to a broader story. In a recent HungerRush survey, consumers suggested the restaurant labor shortage was still affecting their dining experience. The top three pain points they believed owed to a lack of staff: longer wait times to receive food (33 percent), diminished customer experience due to overstressed employees (32 percent), and longer wait times to place an order (17 percent). Craveworthy Brands CEO Gregg Majewski echoed that middle point in a recent conversation with QSR, noting the rise of AI, robotics, and other tech solutions to ease the labor shortage aren’t going to get in the way of a hospitality pillar: “We sell an experience,” he said.

“And that experience requires human interaction,” Majewski continued. “That’s what’s made restaurants special. That’s why you can charge more than what you can cook for at home, because you’re giving people an experience.”

Revenue Management Solutions’ Q2 report showed net sales positive in quick service at 4.8 percent, year-over-year. But it continues to be fueled by average check increases (6.7 percent) and, subsequently, price (10.6 percent higher in the category). Inflation does appear to be easing: The 10.6 percent increase was a drop from last quarter’s 13.8 percent. And food-away-from home prices rose 7.7 percent year over year in June, per the BLS, including 7.8 percent at limited-service restaurants and 6.2 percent at full-serves. Yet, more generally, customers are still paying far more for an experience today than they did in 2019, with fewer staff to deliver it, which is where some the pressure has pulsed.

Economic conditions factor in as well. Despite a slowing in pricing activity, quantity per transaction decreased by 3.5 percent, year-over-year, according to RMS, indicating consumers are ordering fewer items to spend less. This was consistent with RMS’ consumer survey, in which three in four respondents said they believed they were paying higher restaurant prices, while 31 percent of U.S. respondents noted they spent less of their disposable income on restaurants.

As food at-home prices (4.7 percent last month) start to dip lower than food-away-from-home, consumers could start to forego restaurant meals—the number of respondents who said they plan to eat at restaurants more in the future was less than 20 percent for all channels (dine-in, drive-thru, takeout and delivery), according to RMS.

To frame it simply, the “experience” being sold at restaurants is being counted to the number by consumers.

Employee Management, Fast Food, Story, In-N-Out Burger