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Steak n Shake woos real estate pros

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At the retail real estate industry's biggest deal-making event, restaurant and retail chains jockey for attention from the brokers and developers who hold the keys to their expansion at the best possible sites.

Attendees of the International Council of Shopping Centers convention in Las Vegas have a handful of free sub-sandwich options, including Jimmy John's, Quiznos and Jersey Mike's. They can pick up a smoothie sample from McDonald's or an Auntie Anne's pretzel.

But this year there was a new champion for the longest line and most buzz: Steak n Shake milkshakes.

The Indianapolis-based chain debuted a new booth—one of the largest for a restaurant chain at the show—that's modeled after its new Signature store concept, the first of which opened in January in New York's Times Square next door to the Ed Sullivan Theater. The booth included a milkshake station serving full-size shakes and a large deal-making room in the back.

Steak n Shake has pinned its growth plans on franchising, and if its sales pitch at the booth is any indication, it sees good site selection as a vital part of that formula: A glossy brochure about the Signature concept shows a rendering of a Steak n Shake next door to an Apple electronics store.

The line for shakes snaked by several other booths, and it took about 15 minutes to reach the gaggle of Steak n Shake employees making each shake from scratch. An employes said they were on track to serve more than 5,000 milkshakes during the three-day show.

"It's probably the best thing here," observed Brian Weber, who brokers retail deals in Dallas but knows Steak n Shake from growing up in St. Louis.

He was waiting in line Tuesday to get a chocolate shake after trying the strawberry version on Monday. He vowed to research possible sites for the chain upon his return.

"I'll try to help them," he said.

Steak n Shake, a subsidiary of San Antonio-based Biglari Holdings Inc., is betting the smaller-format, counter-service prototype—designed for spaces within strip centers rather than outlot spaces—will help it grow faster, in more markets, though it still is offering franchisees a more capital-intensive "Classic" store format designed for standalone sites.

The sleek and modern "Signature" prototype also touts a USDA organic Steakburger and hand-cut fries, and a grill and shake station within view of customers.

Biglari discussed the franchising strategy in his letter to shareholders in December. He said the chain has reached deals with franchisees committed to opening 110 restaurants.

“For years I have said that Steak n Shake’s future lies in franchising,” Biglari wrote. “Well, the future is now.”

The chain's aggressive growth plan is no sure thing. The burger-and-shake market is competitive, and Steak n Shake is not a household name in many of the markets targeted for expansion. And as Steak n Shake tries to sell new franchisees on the concept, it continues to feud in court with the original Steak n Shake franchisee.

At issue: A move by Steak n Shake to force franchisees to adopt uniform pricing. The policy coincided with Sardar Biglari’s arrival as Steak n Shake CEO.

He began buying company shares in 2007 and took over just a year later. He slammed the brakes on new store construction, arguing the chain’s restaurant prototype cost too much to build and that the expansion was hurting shareholder value.

He also revamped store operations and the menu, halting a 14-quarter streak of declining same-store sales. Since then, the chain has posted 17 straight quarterly increases in same-store sales.

Biglari Holdings reported fiscal second-quarter earnings on May 18 and posted a smaller profit of $4.5 million for the quarter ended April 13, compared with $5.6 million in the year-ago period. Quarterly revenue grew 5 percent, to $221.7 million.

Steak n Shake’s same-store sales increased 4.8 percent on higher customer traffic. Profit for the Biglari subsidiary increased to $13 million, from $9.5 million during the same period a year ago, while revenue grew 5.2 percent, to $217.9 million.

Steak n Shake operates 493 restaurants, including 79 that are franchised.

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  1. I think the poster was being sarcastic and only posting or making fun of what is usually posted on here about anything being built in BR or d'town for that matter.

  2. Great news IRL fans: TURBO the IMS sanctioned movie about slugs running the Indy 500 has caught the Securities and Exchange Commission because Dreamworks had to take a $132MILLION write down...because the movie was such a flop. See, the Indy/IMS magic soiled another pair of drawers. Bwahahahahahaha! How's CARTOWN doing? HAHAHAHA...Indy is for losers.

  3. So disappointed in WIBC. This is the last straw to lose a good local morning program. I used to be able to rely on WIBC to give me good local information, news, weather and traffic on my 45 minute commute.Two incidents when I needed local, accurate information regarding severe weather were the first signs I could not now rely on WIBC. I work weekend 12 hour nights for a downtown hospital. This past winter when we had the worst snowfall in my 50 years of life, I came home on a Sunday morning, went to sleep (because I was to go back in Sunday night for another 12 hour shift), and woke up around 1 p.m. to a house with no electricity. I keep an old battery powered radio around and turned on WIBC to see what was going on with the winter storm and the roads and the power outage. Sigh. Only policital stuff. Not even a break in to update on the winter storm warning. The second weather incident occurred when I was driving home during a severe thunderstorm a few months ago. I had already gotten a call from my husband that a tornado warning was just southwest of where I had been. I turned to WIBC to find out what direction the storm was headed so I could figure out a route home, only to find Rush on the air, and again, no breaking away from this stupidity to give me information. Thank God for my phone, which gave me the warning that I was driving in an area where a tornado was seen. Thanks for nothing WIBC. Good luck to you, Steve! We need more of you and not the politics of hatred that WIBC wants to shove at us. Good thing I have Satellite radio.

  4. I read the retail roundup article and tried Burritos and Beers tonight. I'm glad I did, for the food was great. Fresh authentic Mexican food. Great seasoning on the carne asada. A must try!!! Thanks for sharing.

  5. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...

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