Steak ‘n Shake, willing to shift more of its restaurants to franchise ownership, is currently selling partnerships in all of its greater than 400 company-owned restaurants for an initial investment of $10,000. That’s a small fraction of the typical investment for a Steak ‘n Shake restaurant. Initial investment on a “classic format” Steak ‘n Shake ranges from $1.6 million to $2.6 million, based on the company’s franchise disclosure documents.
Qualified operators would have to complete an extensive six-month training program and would pay the $10,000 to get in to the partnership. They might then be single-unit owner-operators. A spokesperson for https://www.storeholidayhours.org/steak-and-shake-menu-prices/ claimed that the master plan is always to convert each of the company’s corporate locations in to these franchise partnerships.
The franchise partner would get 50% of the restaurant’s profits. The company failed to respond to questions concerning would you be responsible for the costs associated with building and site improvements. “I started my company with $15,000 and built a thriving enterprise,” Sardar Biglari, CEO of Steak ‘n Shake owner Biglari Holdings, said in a statement. “I desire to provide the opportunity to other entrepreneurs who are highly motivated to excel but do not have the financial means.”
“What is going to be important to become a franchisee will not be great capital but great ability,” he added. “We are searching for to harness the strength of entrepreneurs and to make a company of owners.” Biglari has wanted to shift the largely company-run Steak ‘n Shake into more of a franchise business for years. The company owns and operates roughly two-thirds of the company’s greater than 600 locations.
“Our prospects in franchise operations-domestic and international-look bright,” Biglari wrote earlier this season in the annual letter to shareholders. But franchisees will be buying in to a brand which has struggled as of late. The chain’s same-store sales declined 3.4% within the quarter ended June 30, together with a 6.4% decline in traffic. That came following a tough 2017 that Biglari called “not an excellent year” and “lugubrious” within his letter.
A number of restaurant brands sell partnerships to owner-operators who then share in the earnings. The most known example is Atlanta-based chicken chain Chick-fil-A. “I started my company with $15,000 and built a thriving enterprise,” said Sardar Biglari, CEO of Biglari Holdings, owner of Steak ‘n Shake, in a statement. “I desire to provide the opportunity to other entrepreneurs that are highly motivated to excel but do not have the financial means. What will make a difference to become a franchisee is not great capital but great ability. We have been seeking to harness the effectiveness of entrepreneurs and to produce a company of owners.”
Steak ‘n’ Shake added that the offering to purchase to the company as being a franchise partner requires operators to successfully complete a six-month training course. The franchise partner would then get 50 percent in the restaurant’s profits. It is a partnership, shared-profit deal just like the system Chick-fil-A deploys.
Steak ‘n’ Shake looks to quickly shift its business model from a heavy corporate-owned structure to your system run mostly by single-unit franchisees. The company said this could “achieve operational tpjpgz by marshaling the efforts and strengths of entrepreneurs.” Founded in 1934 in Normal, Illinois, Steak ‘n Shake had 173 franchised domestic units and 412 company-run stores in 2017, which had been an overall total increase of 17 from the previous year. The business posted average-unit volumes of $1,839.51 (in thousands) and had total systemwide sales of $939.99 (in millions). The season before, is Steak and Shake open today had 568 total domestic units (415 company-run) after adding 17 restaurants from your previous year. It had higher AUV ($1.9M) and increased systemwide sales of $1,027 (in millions).