Dive Brief:

• An In-N-Out location at San Francisco's Fisherman's Wharf was temporarily shuttered on Thursday by The Department of Public Health for failing to comply with the city's vaccine mandate, according to The San Francisco Chronicle. The location has since reopened, but is no longer offering indoor dining. 
• While the restaurant had signs instructing customers of the city's policy, In-N-Out allowed customers to enter the restaurant without verifying their vaccine status and continued to do so despite warnings from the DPH. 
• In-N-Out claims that San Francisco's vaccine mandate is government overreach, and refuses to comply with the policy. The burger chain is the first major restaurant company to openly push back against a vaccine mandate. 

Dive Insight:

This dustup comes about two months after San Francisco issued its vaccine mandate requiring customers and employees to show proof of vaccination to dine indoors. Several cities, including New York City, Los Angeles and New Orleans have passed similar mandates. 

While restaurants big and small have defied vaccine mandates in other cities — a group sued New York City over its mandate — it's surprising to see a brand with this level of financial power and cultural cache speak out against COVID-19 safety policies when rival chains have been supportive or subdued.

"We refuse to become the vaccine police for any government," Arnie Wensinger, In-N-Out’s chief legal and business officer, said in a statement to the San Francisco Chronicle. "It is unreasonable, invasive, and unsafe to force our restaurant associates to segregate customers into those who may be served and those who may not, whether based on documentation they carry, or any other reason."

In-N-Out has seen outbreaks of COVID-19 in its locations, with more than 140 cases reported from two Colorado locations in early January. 

San Francisco restaurants reported significant losses in the days following the vaccine mandate's implementation, with some restaurants losing thousands of dollars a night due to reservation cancellations. Others have had to shift operations and move employees around to ensure that there was a staff member at the door to check status, a task that is particularly challenging given the ongoing labor shortage.

During much of the pandemic, parts of San Francisco saw an 87% drop in visitors, which led to some restaurants in Fisherman's Wharf to simply board up their windows with no clear sign if they would reopen. But heading into tourist season, there were signs of recovery. In spring, Fisherman's Wharf had a 202% increase in visitors compared to the year-ago period. 

Despite In-N-Out's robust drive-thru network — though its Fisherman's Wharf location doesn't offer this channel — the chain was not immune to COVID-19 business disruption. The company sued its insurer, Zurich American Insurance Company, over its denial for business interruption losses related to the pandemic last year.

Still, In-N-Out has continued to expand, opening at least five locations and hiring new employees across its 363 locations in 2020, according to Forbes. The company's sales also grew an estimated 9.5% last year with sales exceeding $1 billion, according to Technomic data reported by Restaurant Business.