Steak n Shake classified 103 of this year’s closures as “temporary,” and said it plans to reopen the stores under its new franchise partnership program.
Steak n Shake makes $8M legal settlement, suffers downgraded credit rating
Indianapolis-based Steak n Shake Inc. is facing more setbacks in its already-suffering financial situation due to a new legal settlement regarding overtime pay and a downgrade in its credit rating.Read More
Steak n Shake is already on the hook for $7.7 million judgment after a jury found the burger chain improperly failed to pay overtime to 286 restaurant managers. Meanwhile, plaintiffs in an even larger second lawsuit are taking aim at CEO Sardar Biglari.
The outlook is that bad for Steak n Shake, which in the first quarter racked up an $18.9 million operating loss. That’s on top of a $10.7 million loss for all of 2018.
The new model fits right in with Steak n Shake’s growing strategy to escape its roots as a sit-down diner and become more of a chain known for fast food.
Steak n Shake has closed dozens of company-owned restaurants since the beginning of the year, but says those closures are temporary while it looks for franchisees to take over their operations.
What's wrong with Steak n Shake? Sardar Biglari says a key problem is a failure to upgrade kitchen equipment and design, leaving the chain with “high-cost, labor intensive, slow service.”
The value of Biglari Holdings shares have slid since the company at Sardar Biglari's behest adopted a dual-class stock structure in May.
Indianapolis-based Steak n Shake announced a plan Monday to dramatically change its franchising model by letting “franchise partners” take over operations at company-owned restaurants.
The Indianapolis-based restaurant chain saw declining customer traffic and sales in the first quarter.
The parent of Steak n Shake will create two classes of stock, allowing Sardar Biglari to make acquisitions without diluting his voting control.
A franchisee has filed suit against Indianapolis-based Steak n Shake in an effort to raise its menu prices because it says all of its restaurants are losing money.
A franchisee says Sardar Biglari's devotion to low prices is taking a toll on the customer experience at Steak n Shake.
Sardar Biglari might talk a good game about being a champion of shareholders, but his biggest critics view him as a hypocrite—thanks to a series of moves that furthered his control over the business, the latest of which has spurred one lawsuit and seems sure to spark others.
Third-quarter revenue and customer traffic also declined for the Indianapolis-based restaurant chain.
Sardar Biglari racked up 29 quarters of consecutive same-store sales gains before the current cold streak hit.
Sales at established Steak n Shake restaurants rose slightly in the latest quarter following disappointing results last period that snapped a streak of 29 consecutive quarterly increases dating to 2009.
A former employee alleges that Sardar Biglari insisted Maxim devote 50 pages of the December/January issue to Monaco, where he spends significant time, and include features on his favorite cigar shop and on David Letterman, part-owner of the race team Steak n Shake sponsors.
"In a world filled with hyper-orthodoxy, Biglari Holdings represents an oasis of unconventionality," Sardar Biglari said in his latest letter to shareholders. "We follow our own individualistic ideas and ideals rather than find refuge in the superficial conventions and conformity.”