Not included on that chart is Steak ‘n Shake’s traffic trends, which declined 11.2 percent in 2019, year-over-year. That after the number of customers dropped from 116 million to 111 million to 103 million (the lowest in eight years), respectively, in the previous three calendar turns.
Steak ‘n Shake’s operating loss also widened to $18.6 million from $10.7 million in 2018, when it turned negative for the first time since 2008.
Average-unit volumes have been on the decline as well.
2018: $1.739 million
2017: $1.839 million
2016: $1.9 million
Net sales in 2019 were $578,164, representing a $162,758 decrease compared to the year-ago period. This was primarily due, the company said, to a $35,250 drop in same-store sales, with the balance fueled by store closures.
As of December 31, 2016, Steak ‘n Shake operated 417 company stores and 173 franchises, as well as 67 Wester Sizzlin restaurants.
At the end of this past fiscal year, there were 368 corporate locations, 23 traditional franchises, and 29 “franchise partners,” or people who have reopened restaurants under the $10,000 upfront investment franchise program mentioned earlier. Sixteen net locations closed in 2019.
And as previously noted, 107 of those 368 corporate units are temporarily closed today.
Biglari offered some updates to the refranchising process, which has been kept pretty close to Steak ‘n Shake’s vest. Operators who sign up for the $10,000 program, where the company pays the construction and equipment costs, agree to a fee of up to 15 percent of sales as well as 50 percent of profits. “Under our arrangement, a franchise partner is able to earn considerable sums, which is the way we want it,” Biglari said.’
“In the end, nothing is as important as the way our customers are treated,” he added. It takes the right leadership in a unit for customers to be served in a warm, caring, and hospitable manner. To achieve our goal, we are building a culture of ownership at the unit level. For operators to think and act like owners, we believe they must be owners. We are on our way to becoming a company of owners, changing the culture of the organization in our quest for service excellence.”
Thus far, Steak ‘n Shake has converted 29 company-operated restaurants into single-unit “franchise partnership.”