In-N-Out CEO Announces Departure from California: A Sign of the Times?

In a striking development that has reverberated across the business landscape, Lynsi Snyder, the president and CEO of In-N-Out Burger, has announced her decision to relocate from California to Tennessee. This move coincides with the iconic fast-food chain’s plans to establish its new headquarters in Franklin, Tennessee, signaling a pivotal shift for a company that has long been a cornerstone of California’s cultural and economic identity.

Snyder’s departure is not merely a personal decision but a potent symbol of the mounting challenges businesses face in the Golden State—namely, high taxes, escalating crime, and burdensome regulations. These persistent issues have fueled a historic exodus of residents and companies from California and New York to states like Texas, Florida, and Tennessee, a trend that has intensified since the COVID-19 pandemic.

The Announcement and Its Weight

Lynsi Snyder, granddaughter of In-N-Out founders Harry and Esther Snyder, has led the company since 2010, preserving its legacy of quality and customer loyalty while expanding its reach across the Southwest. However, during a recent appearance on the podcast "Relatable with Allie Beth Stuckey," Snyder revealed her plans to leave California, citing the difficulties of raising a family and running a business there. “There’s a lot of great things about California, but raising a family is not easy here,” she remarked. “Doing business is not easy here.”

This announcement carries profound significance because In-N-Out is more than a fast-food chain—it’s a California institution. Established in 1948 in Baldwin Park, it embodies the state’s car culture and relaxed ethos. The decision to shift its headquarters to Tennessee, even while maintaining California operations, highlights a growing frustration among business leaders with the state’s economic and regulatory climate.

Why Leave California?

High Taxes: A Heavy Burden

A key driver behind Snyder’s move—and a common grievance among California businesses—is the state’s steep tax rates. California imposes the nation’s highest top marginal income tax rate at 13.3% and a corporate tax rate of 8.84%. By contrast, states like Tennessee and Texas levy no state income tax, offering a starkly more affordable environment for both individuals and companies. For businesses, California’s tax structure means higher operational costs, which can hinder expansion and innovation.

This tax burden doesn’t spare small businesses or entrepreneurs either. Navigating California’s intricate tax code demands significant time and resources, discouraging new ventures and prompting established firms to seek relief elsewhere. The disparity in tax policy is a major factor luring companies to states with lighter fiscal loads.

Crime: A Growing Threat

Rising crime rates further compound California’s challenges. Urban centers like San Francisco and Los Angeles have seen spikes in property crimes, theft, and violence, directly impacting businesses. In-N-Out itself faced this reality head-on when it closed its Oakland location in 2024—the first closure in its 75-year history—due to safety concerns. Snyder recounted, “There was actually—gunshots went through the store, there was a stabbing, there was a lot.”

Crime doesn’t just jeopardize employee and customer safety; it inflates costs through elevated insurance premiums and security investments. For retail and hospitality businesses like In-N-Out, these expenses erode already slim profit margins, making relocation an increasingly attractive option.

Stringent Regulations: A Stifling Environment

California’s extensive regulatory framework is another hurdle. From environmental mandates to labor laws, these rules, while often well-meaning, create a complex and costly landscape for businesses. The recent fast-food minimum wage increase to $20 per hour exemplifies this pressure. Snyder has noted her efforts to keep prices affordable despite such hikes, a struggle shared by many in the industry.

Laws like AB5, which limits independent contractor use, further restrict flexibility, hampering industries reliant on adaptable staffing. These regulations can choke innovation and adaptability, pushing companies toward states with leaner regulatory regimes.

Ripple Effects on Businesses and Restaurants

Snyder’s exit and In-N-Out’s headquarters shift reflect broader strains on California’s business ecosystem. The state’s high cost of living—fueled by exorbitant housing and utility costs—exacerbates the impact of taxes, crime, and regulation. Workers, unable to afford homes in major cities, demand higher wages, driving up labor costs for employers. This cycle raises prices for consumers, challenging businesses’ competitiveness.

Restaurants, operating on razor-thin margins, are especially vulnerable. The fast-food wage hike has forced some to raise menu prices or cut staff. In Los Angeles, chains have adjusted pricing, while others, like MOD Pizza and Fosters Freeze, have shuttered locations to stem losses. These pressures threaten the viability of an industry central to California’s economy.

Beyond economics, regulations like stringent zoning and environmental rules worsen the housing crisis, shrinking the labor pool and stifling growth. This interconnected web of challenges disproportionately burdens small and medium-sized enterprises, the lifeblood of the state’s commercial fabric.

A Long-Standing Struggle

These issues are not new; they’ve been eroding California’s appeal for decades. High taxes have long deterred investment, while crime has steadily climbed in urban hubs. Regulatory creep, intended to protect workers and the environment, has instead accumulated into a barrier to business agility. Over time, these factors have chipped away at California’s economic dominance, a decline laid bare by recent migration patterns.

The Record-Breaking Exodus

California and New York, both grappling with similar woes—high taxes, crime, and regulation—have seen unprecedented outflows of people and businesses. The pandemic turbocharged this shift, as remote work untethered workers and firms from traditional hubs. Between 2018 and 2021, over 350 companies, including 11 Fortune 1000 firms, moved their headquarters out of California, per the Hoover Institution.

Destinations like Texas, Florida, and Tennessee beckon with lower taxes, fewer rules, and cheaper living. Tennessee, soon home to In-N-Out’s headquarters, offers no state income tax and a welcoming business climate. This migration isn’t a fleeting blip—it signals deep, structural flaws in California and New York, with lasting economic consequences like lost jobs and revenue.

Looking Ahead

Lynsi Snyder’s departure from California is a microcosm of a larger crisis. It’s a personal choice rooted in systemic problems—high taxes, crime, and regulation—that have long plagued the state. For businesses, especially restaurants, these conditions threaten survival. As California hemorrhages talent and commerce to states like Texas, Florida, and Tennessee, the post-pandemic era underscores the urgency of reform.

Snyder’s move could jolt California into action, prompting policies to reclaim its edge. Without change, the Golden State risks further decline, its future hinging on decisions made now. Her exit isn’t just a headline—it’s a question: Can California adapt, or will it watch its legacy slip away?