Steak 'n Shake

Steak 'n Shake Operations, Inc.
Subsidiary
Industry Food
Predecessor Shell's Chicken[1]
Founded Normal, Illinois (February 1934 (1934-02))
Founder Gus Belt[1]
Headquarters Indianapolis, Indiana, U.S.
Key people
Phillip Cooley
Products Steakburgers, milk shakes
Services Restaurants
Number of employees
 20,000
Parent Biglari Holdings
Website www.steaknshake.com
Steak 'n Shake in Raleigh, North Carolina, 2011

Steak 'n Shake Operations, Inc., or simply Steak 'n Shake, is a casual restaurant chain located primarily in the Midwestern and Southern United States with locations also in the Northeastern and Southwestern United States, and Europe. The company is headquartered in Indianapolis, Indiana. There are 544 locations, of which 417 are company-operated and 127 are franchised.[2] Typical restaurant locations have sit-down, drive-thru and front-window service, resulting in a hybrid of fast-food to-go service and diner-style sit-down service. Many Steak 'n Shake restaurants are open 24 hours a day, seven days per week. True to its name, the menu features primarily steakburgers and hand-dipped milkshakes, though other entrees, side items, and drinks are also available. There is no steak on the menu.

The corporation's slogan "Famous for Steakburgers" refers to its most prominent food item, the "Steakburger", so called because it was originally made from a mixture that included T-bone, sirloin, and round steaks.

Steak 'n Shake restaurants are operated by Steak 'n Shake Operations, Inc., a wholly owned subsidiary of Biglari Holdings, located in San Antonio, Texas. As of now, the company operates over 500 restaurants in 29 states, including about 100 franchised locations.[3] The company has announced plans to increase the number of locations both in the United States and elsewhere.

History

Gus Belt (born in Morrisonville, Illinois) founded Steak 'n Shake in Normal, Illinois in February 1934, after serving four years in the United States Marine Corps. He converted the combination gas station and chicken restaurant that he owned (Shell's Chicken) into a hamburger stand.[1] The original building at the intersection of Main Street and West Virginia Avenue was damaged by a fire in the early 1960s, but it was repaired and its dining room expanded. In the late 1990s, Steak 'n Shake sold this building to the Monical's Pizza company. Steak 'n Shake's slogan "In Sight It Must Be Right" originally referred to Belt's practice of wheeling a barrel of T-bone, sirloin, and round steaks into the public area of his restaurant, then grinding them into burgers in front of his customers.[1] This practice was intended to reassure customers of the wholesomeness of the product; at that time, ground beef was still viewed with some skepticism by the general public, based on the likelihood of its having deliberate impurities introduced into it. This practice of grinding the beef in public also helped assure his customers of the veracity of Belt's "Steakburger" claim because they could see for themselves that he was grinding steaks into the hamburger meat. Later, patrons were assured that Steakburgers were still made from these ingredients "at our own commissary" for shipment to the restaurants, where the open grill line remains "in sight" to customers.

Following the success of the original restaurant, Belt purchased a chain of "Goal Post" restaurants throughout Central Illinois, converting them into Steak 'n Shake restaurants. He also added curb service at this point.[1]

After Gus Belt

Steak 'n Shake continued to expand throughout Illinois following the death of its creator in 1954, with ownership passing through many hands, including Gus's wife Edith (who ran the chain until 1969); Longchamps, Inc. (an east coast steakhouse company that owned the chain from 1969[4] to 1971[5]); and the Indianapolis-based Franklin Corporation, led by Robert Cronin, author of Selling Steakburgers: The Growth of a Corporate Culture. After the acquisition, Franklin moved Steak 'n Shake's headquarters from Normal, Illinois to Indianapolis.

In 1981, Steak 'n Shake and its parent company Franklin were acquired by E. W. Kelley and Associates,[6] whose chairman, E. W. "Ed" Kelley was considered largely responsible for the growth of the restaurant until his death on July 4, 2003.[1] The brand had been declining during the late 1970s and in 1984, it was in the red. Kelley hired the former head of Circle K to turn the business around. Steak 'n Shake rapidly improved and expanded throughout the 1990s and into 2000. In early-November 2004, The Steak 'n Shake Company entered into an agreement to buy out its largest franchisee, Kelley Restaurants, Inc. (owned by Kelley's family).

Biglari

Graham Rahal's 2015 Indianapolis 500 IndyCar was sponsored by Steak 'n Shake

In 2008, there was a shake-up in the company's Board of Directors. Value investors Sardar Biglari and Phillip Cooley were elected to the Board with well over 70% of the votes cast. As a result, Biglari was selected Chairman of the company.

Franchise pricing lawsuits

Between 2010 and 2015, Steak 'n Shake became involved in lawsuits with several of its franchisees concerning mandatory menu prices and mandatory food sourcing. As of August 2013, five lawsuits had been filed. The first lawsuit began in 2010 and is by Stuller, Inc., the Illinois franchisee that is the oldest franchisee in Steak 'n Shake's history. Stuller won a preliminary injunction that went to the 7th Circuit Court of Appeals in August 2012.[7] Three more franchisees filed suit in April 2013 — Druco Restaurants based in St. Louis, People Sales & Profit Co. based in Georgia, and Scott's S&S Inc. in Pennsylvania.[8] A settlement was reached with these franchisees in 2014, but terms of the settlement were not made public.[9]

Steak 'n Shake filed suit against Denver franchisees Larry and Christopher Baerns in July 2013 over the same issues, with a counterclaim soon after.[10] Steak 'n Shakes won their lawsuit in U.S. District Court against the Baerns when judge ruled that the Baerns intentionally overcharged customers.[11] The complaints by the franchisees also question whether Steak 'n Shake promised franchise results that could never actually be achieved under its policies.[12]

Locations

Opening on Broadway

As of now, Steak 'n Shake restaurants are located in Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and West Virginia.

After briefly operating a few restaurants in south Texas during the 1970s, Steak 'n Shake returned to Texas by opening locations in the Dallas marketing area beginning in 2001,[13] in the Houston marketing area beginning in 2012,[14] and in San Antonio beginning in 2011.[15]

The company entered Oklahoma for the first time by opening a franchise location in Edmond, Oklahoma in 2004.[16]

Steak 'n Shake entered Louisiana for the first time[17] by opening a location near Baton Rouge in Covington, Louisiana in 2011.[18] In January 2012, they opened their first location in New York City,[19] adjacent to the Ed Sullivan Theatre.

The company first entered Colorado via a franchise in Denver in November 2011[20] before the parent took over the Colorado locations after a lengthy lawsuit between the franchisee and the parent company.

First location in Maryland was opened in June 2015 in Millersville, Maryland.[21]

Steak 'n Shake opened their first location in Nevada inside the South Point Casino in Las Vegas, Nevada in July 2010[22] and second Nevada location in Reno in July 2013.[23][24]

Steak 'n Shake expanded to California in July 2014 by opening a location in Victorville.[25][26] A Los Angeles County location was opened in Santa Monica in late October[27][28] and another in Burbank in December.[29] After a lack of activity for over a year in the highly competitive Californian marketplace, the company announced in April 2016 of the expected opening of their first Orange County location, their fourth in California, in Aliso Viejo in mid-May followed by the expected opening in Riverside in summer 2016.[30]

In 2015, the company had planned to open a restaurant in Northern California in Campbell, California, but local residents has been so far successful in blocking this move.[31]

In September 2015, a Seattle location was announced,[32] planned to include alcohol sales. It opens in May 2016.[33]

International expansion

In October 2012, Steak 'n Shake announced its first international expansion agreement with plans to open forty locations in the United Arab Emirates. The first of these locations opened in Dubai in 2013,[34] but closed in a little more than a year. The brand also announced in December 2013 a 50-unit franchise agreement in Saudi Arabia with AB Holdings. The first location in Riyadh was expected to open in the first half of 2014.[35] Steak 'n Shake also opened a corporate office in Monte Carlo, Monaco, to support its expansion in the Middle East and Europe.[36]

The first two European locations were opened in Cannes in France in May 2014[37] and on the island of Ibiza in Spain in June 2014.[38]

The second location in Spain was opened in the capital Madrid in September 2015.[39]

The first location in the Persian Gulf country of Kuwait was opened in December 2014.[40]

All two locations in the United Arab Emirates were closed in January 2015.[41]

References

  1. 1 2 3 4 5 6 "History". The Steak 'n Shake Company. Archived from the original on 2008-08-01. Retrieved 2009-01-19.
  2. ↑ "Biglari Holdings 2014 Annual Report" (PDF). Biglari Holdings. 2014-11-21. Retrieved 2015-12-22.
  3. ↑ "Biglari Holdings Q1 Profit Up - Update". RTTNews. 2011-01-28. Archived from the original on 2012-05-03.
  4. ↑ "Longchamps to Buy 53% Of Restaurant Concern". Wall Street Journal. 1968-11-27. p. 15. (subscription required (help)). Alternate Link via ProQuest.
  5. ↑ "Longchamps Will Sell Steak 'n Shake Interest". Wall Street Journal. 1971-09-07. p. 7. (subscription required (help)). Alternate Link via ProQuest.
  6. ↑ "Kelley & Partners Acquires Control of Franklin Corp.". Wall Street Journal. 1981-06-30. p. 41. (subscription required (help)). Alternate Link via ProQuest.
  7. ↑ Stuller, Inc. v. Steak N Shake Enterprises, Inc, et al, 695 F.3d 676 (7th Cir. August 24, 2012). Docket No. 11-2656.
  8. ↑ Olson, Scott (May 1, 2013). "More franchisees join revolt over Steak n Shake menu pricing". Indianapolis Business Journal. Retrieved May 8, 2013.
  9. ↑ Andrews, Greg (November 22, 2014). "Settlement reached in Steak n Shake franchisee suit". Indianapolis Business Journal.
  10. ↑ Migoya, David (September 4, 2013). "Judge rules Steak 'n Shakes in metro Denver must close, but they don't". Denver Post.
  11. ↑ Migoya, David (July 31, 2015). "Judge: Steak 'n Shake franchise owners violated agreement, must pay up: Federal case ends with ruling that former owners of Centennial, Sheridan stores overcharged customers". Denver Post.
  12. ↑ Olson, Scott (August 5, 2013). "Steak n Shake dispute with franchisees reaches to Denver". Indianapolis Business Journal. Retrieved August 27, 2013.
  13. ↑ McLinden, Steve (2001-01-18). "Steak n Shake plans area push". Fort Worth Star-Telegram. (subscription required (help)).
  14. ↑ Rutledge, Tanya (2012-08-12). "Steak 'n Shake fired up about expanding brand". Houston Chronicle.
  15. ↑ Danner, Patrick (2013-05-10). "Steak 'n Shake coming to S.A". San Antonio Express-News.
  16. ↑ Pemberton, Tricia (2004-07-10). "Steak n Shake coming to state". The Oklahoman.
  17. ↑ "Steak 'n Shake eyes 7 B.R., N.O. locations". Greater Baton Rouge Business Report. 2011-04-26.
  18. ↑ Calder, Chad (2011-08-30). "Steak ‘n Shake plans BR, Denham Springs locations". Baton Rouge Advocate.
  19. ↑ Kludt, Amanda (2011-07-13). "NYC's First Steak 'n Shake to Open Next to Ed Sullivan Theater". Eater.
  20. ↑ Midson, Lori (2011-11-18). "Behold...Denver's first Steak 'n Shake!". Westword.
  21. ↑ Weathers, Ben (2005-06-22). "Millersville Steak 'n Shake opens". Capital Gazette.
  22. ↑ Stutz, Howard (2010-07-12). "South Point opens casino expansion, adds a Steak 'n Shake". Las Vegas Review-Journal.
  23. ↑ "Steak 'n Shake Opens Golden Valley Location". KTVN. 2013-07-31.
  24. ↑ Conway, Annie (2015-10-19). "Shaking up northern Nevada". Nortern Nevada Business Weekly.
  25. ↑ Valdez, Hugo C (2014-06-12). "Steak 'N Shake Coming Soon To Victorville". Victor Valley News.
  26. ↑ "Steak ’n Shake’s First California Restaurant Opens Today". QSR Magazine. 2014-07-28.
  27. ↑ Kang, Matthew (2014-10-28). "Steak 'n Shake, Pride of the Midwest, Starts Slinging Burgers in LA Today". Eater LA.
  28. ↑ "Steak 'n Shake Debuts in Santa Monica: The Original Steakburger arrives on Third Street Promenade". PR Newswire (Press release). 2014-10-24.
  29. ↑ Garland, Chad (2016-02-24). "Wave of new restaurants in downtown Burbank represent a change in commerce". Burbank Leader.
  30. ↑ Luna, Nancy (2016-04-21). "Iconic steakburger chain Steak 'n Shake to open first O.C. restaurant next month". Orange County Register.
  31. ↑ Leyva, Jasmine (2015-10-22). "Campbell will be home to the Bay Area's first Steak 'n Shake". San Jose Mercury News.
  32. ↑ Vermillion, Allecia (2015-09-30). "Steak 'n Shake Is Coming to Seattle". Seattle Metropolitan. Retrieved 2015-11-13.
  33. ↑ Vermillion, Allecia (2016-03-23). "And Now for an Update on Steak ’N Shake Seattle". Seattle Metropolitan. SagaCity Media.
  34. ↑ Spadavecchia, Olivia (2013-08-18). "Steak 'N Shake's First Restaurant in The Dubai Mall". Ahlan!.
  35. ↑ "Steak 'n Shake Announces Major International Expansion Agreement". PR Newswire (Press release). 2013-12-18. Retrieved 2014-02-21.
  36. ↑ Danner, Patrick (2013-12-09). "Steak 'n Shake sacrifices earnings for growth". San Antonio Express-News. Retrieved 2014-02-21. (subscription required (help)).
  37. ↑ Kenigsberg, Ben (2014-05-14). "As Cannes opens, so does a Steak 'n Shake". RogerEbert.Com.
  38. ↑ "The Steak ‘N Shake Restaurant officially opens on the 26th June 2014!". My Ibiza. 2014-06-26.
  39. ↑ "Steak n’ Shake: llega el fast food de calidad a Madrid" [Steak n 'Shake: Fast food of quality arrives in Madrid]. Me gusta mi bario (blog) (in Spanish). 2015-09-02.
  40. ↑ "Steak n Shake Kuwait opens with a glitzy fanfare". Chill Nite. 2014-12-18.
  41. ↑ Swiatek, Jeff (2015-01-07). "No more steakburgers in Dubai: Steak 'n Shake closes in UAE". Indianapolis Star.

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