Steak ‘n Shake, eager to shift more of its restaurants to franchise ownership, is now selling partnerships in all of its a lot more than 400 company-owned restaurants for an initial investment of $10,000. That’s a 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 a thorough six-month training curriculum and would pay for the $ten thousand to get to the partnership. They might then be single-unit owner-operators. A spokesperson for Steak and Shake menu 2019 claimed that the plan is to convert all of the company’s corporate locations into these franchise partnerships.
The franchise partner would get 50% in the restaurant’s profits. The company failed to answer questions regarding who would be accountable 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 wish to provide a chance to other entrepreneurs who are highly motivated to excel but lack the financial means.”
“What will likely be important to turn into a franchisee is not really great capital but great ability,” he added. “We are searching for to harness the strength of entrepreneurs and to create a company of owners.” Biglari has desired to shift the largely company-run Steak ‘n Shake into much more of a franchise business for years. The company owns and operates roughly two-thirds of the company’s more than 600 locations.
“Our prospects in franchise operations-domestic and international-look bright,” Biglari wrote earlier this coming year within his annual letter to shareholders. But franchisees could be buying into a brand which includes struggled as of late. The chain’s same-store sales declined 3.4% within the quarter ended June 30, such as a 6.4% decline in traffic. That came following a tough 2017 that Biglari called “not an excellent year” and “lugubrious” in the letter.
Numerous restaurant brands sell partnerships to owner-operators who then be part of the earnings. The most notable 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 want to provide a chance to other entrepreneurs that are highly motivated to excel but do not have the financial means. What will be important to turn into a franchisee is not really great capital but great ability. Our company is wanting to harness the strength of entrepreneurs and to produce a company of owners.”
Steak ‘n’ Shake added that this offering to get to the company as a franchise partner requires operators to ensure that you complete a six-month training program. The franchise partner would then get fifty percent of the restaurant’s profits. This is a partnership, shared-profit deal similar to the system Chick-fil-A deploys.
Steak ‘n’ Shake looks to quickly shift its business structure coming from a heavy corporate-owned structure to your system run mostly by single-unit franchisees. The business said this would “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, that was an overall increase of 17 from your previous year. The company posted average-unit volumes of $1,839.51 (in thousands) and had total systemwide sales of $939.99 (in millions). The year before, what time does Steak and Shake open had 568 total domestic units (415 company-run) after adding 17 restaurants from the previous year. It had higher AUV ($1.9M) and increased systemwide sales of $1,027 (in millions).