Steak ‘n Shake, eager to shift more of its restaurants to franchise ownership, is currently selling partnerships in all of its 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, in accordance with the company’s franchise disclosure documents.
Qualified operators would need to complete a thorough six-month training program and would pay for the $ten thousand to buy into the partnership. They might then be single-unit owner-operators. A spokesperson for Steak and Shake Menu claimed that the program is to convert all of the company’s corporate locations in to these franchise partnerships.
The franchise partner would get 50% in the restaurant’s profits. The organization did not respond to questions concerning would you be responsible 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 desire to provide an opportunity to other entrepreneurs who are highly motivated to excel but do not have the financial means.”
“What will be important to become franchisee is not really great capital but great ability,” he added. “We are seeking to harness the effectiveness of entrepreneurs and to produce a company of owners.” Biglari has wished to shift the largely company-run Steak ‘n Shake into much more of a franchise business for a long time. The organization 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 the annual letter to shareholders. But franchisees will be buying in to a brand that has struggled lately. 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 following a tough 2017 that Biglari called “not an excellent year” and “lugubrious” in the letter.
Several restaurant brands sell partnerships to owner-operators who then be part of the profits. The most known 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 definitely are highly motivated to excel but lack the financial means. What will make a difference to become a franchisee will not be great capital but great ability. We have been wanting to harness the power of entrepreneurs and to make a company of owners.”
Steak ‘n’ Shake added the offering to get into the company as a franchise partner requires operators to ensure that you finish a six-month training curriculum. The franchise partner would then get fifty percent in the restaurant’s profits. It is a partnership, shared-profit deal just like the system Chick-fil-A deploys.
Steak ‘n’ Shake looks to quickly shift its business structure from the heavy corporate-owned structure to some system run mostly by single-unit franchisees. The organization 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 an overall total increase of 17 from the previous year. The organization posted average-unit volumes of $1,839.51 (in thousands) along with total systemwide sales of $939.99 (in millions). The entire year before, is Steak and Shake open today had 568 total domestic units (415 company-run) after adding 17 restaurants from your previous year. It had higher AUV ($1.9M) and increased systemwide sales of $1,027 (in millions).