Steak ‘n Shake Closes More Locations as Evolution Continues

Steak ‘n Shake’s footprint continues to slim as the company transforms across multiple fronts. The brand closed 11 franchised stores and two company-run (it also transitioned three corporate units to franchise-partner models) as it exited the first quarter of 2023 with 493 restaurants. Steak ‘n Shake had 626 locations at the end of 2018.

Company operated:

December 31, 2021: 199
March 31, 2022: 184
December 31, 2022: 177
March 31, 2023: 172

Franchise partner

December 31, 2021: 159
March 31, 2022: 171
December 31, 2022: 175
March 31, 2023: 178

Traditional franchise

December 31, 2021: 178
March 31, 2022: 179
December 31, 2022: 154
March 31, 2023: 143

Yearly total:

Current: 493
2022: 506
2021: 536
2020: 556
2019: 610
2018: 626
2017: 615
2016: 590
2015: 561
2014: 540
2013: 519
2012: 497
2011: 489
2010: 483
2009: 485
2008: 498

Parent company Biglari Holdings also noted, as of March 31, 36 of its 172 company-operated stores were closed. Steak ‘n Shake has contracted to sell seven of the 36. An additional 17 are listed with brokers for lease or sale, and Steak ‘n Shake plans to refranchise the remaining closed company-operated units.

In Q1, the brand reopened two stores and sold one property. All were closed as of December 31, 2022.

The “franchise partner” transition is part of the company’s 2018-launched plan to sell corporate units to single-unit operators for $10,000 upfront. Steak ‘n Shake constructs the site, pays for equipment, and assesses a fee of up to 15 percent of sales as well as 50 percent of profits. The overarching goal, the company said previously, being “to harness the power of entrepreneurs and to create a company of owners.” Or, as Steak ‘n Shake explained, “achieve operational uniformity by marshaling the efforts and strengths of entrepreneurs.”

The brand also flipped over to a kiosk-driven counter-service model coming out of the pandemic. It took about $50 million in capital outlay to do so, everything from interior remodels to a new point-of-sale to self-order kiosks.

Q1 net sales for Biglari Holdings’ restaurant division, which includes 36-unit Western Sizzlin, were $36,894, a decrease of $1,322 or 3.5 percent compared to 2022. The decrease in revenue of company-owned restaurants was primarily due to the shift of company units to franchise partner units.