Steak ‘n Shake, keen 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 $ten thousand. 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, according to the company’s franchise disclosure documents.
Qualified operators would have to complete a comprehensive six-month training curriculum and would pay the $ten thousand to buy to the partnership. They could then be single-unit owner-operators. A spokesperson for https://www.storeholidayhours.org/steak-and-shake-menu-prices stated that the plan would be 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 organization did not respond to questions concerning 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 want 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 turn into a franchisee will not be great capital but great ability,” he added. “We are seeking to harness the strength of entrepreneurs and to produce a company of owners.” Biglari has wanted to shift the largely company-run Steak ‘n Shake into much more of a franchise business for a long time. The business 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 year in his annual letter to shareholders. But franchisees will be buying right into a brand which includes struggled as of late. The chain’s same-store sales declined 3.4% in the quarter ended June 30, such as a 6.4% decline in traffic. That came after having a tough 2017 that Biglari called “not an excellent year” and “lugubrious” within his letter.
Numerous restaurant brands sell partnerships to owner-operators who then be part of the profits. 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 desire to provide an opportunity to other entrepreneurs who are highly motivated to excel but do not have the financial means. What is going to make a difference to turn into a franchisee is not great capital but great ability. We have been seeking to harness the power of entrepreneurs and to make a company of owners.”
Steak ‘n’ Shake added that this offering to get into the company as being a franchise partner requires operators to ensure that you complete a six-month training program. The franchise partner would then get 50 % in the restaurant’s profits. This can be a partnership, shared-profit deal just like the system Chick-fil-A deploys.
Steak ‘n’ Shake looks to quickly shift its business structure from a heavy corporate-owned structure to some system run mostly by single-unit franchisees. The company 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, which had been a total increase of 17 from the 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 season before, what time does Steak and Shake open had 568 total domestic units (415 company-run) after adding 17 restaurants through the previous year. It had higher AUV ($1.9M) and increased systemwide sales of $1,027 (in millions).