Steak 'n Shake

Steak 'n Shake Operations, Inc.

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

Steak 'n Shake, is an American casual restaurant chain located primarily in the Midwestern and Southern United States with locations also in the Mid-Atlantic and Western United States, and Europe. Steak 'n Shake Operations, Inc., 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. The menu features primarily hamburgers 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slogan "Famous for Steakburgers" refers to its most prominent food item, the "Steakburger", so called because it was originally made from a mixture that included T-bone, sirloin, and round steaks.

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.

Cincinnati-style chili "five-way" served over spaghetti at a Steak 'n Shake restaurant

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^[3] to 1971^[4]); 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,^[5] 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.^[6] 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.^[7] A settlement was reached with these franchisees in 2014, but terms of the settlement were not made public.^[8]

Steak 'n Shake filed suit against Denver franchisees Larry and Christopher Baerns in July 2013 over the same issues, with a counterclaim soon after.^[9] Steak 'n Shakes won their lawsuit in U.S. District Court against the Baerns when judge ruled that the Baerns intentionally overcharged customers.^[10] The complaints by the franchisees also question whether Steak 'n Shake promised franchise results that could never actually be achieved under its policies.^[11]

Locations

Opening on Broadway

Today, 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, Washington, 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,^[12] in the Houston marketing area beginning in 2012,^[13] and in San Antonio beginning in 2011.^[14]

The company entered Oklahoma for the first time by opening a franchise location in Edmond, Oklahoma in 2004.^[15]

Steak 'n Shake entered Louisiana for the first time^[16] by opening a location near Baton Rouge in Covington, Louisiana in 2011.^[17] In January 2012, they opened their first location in New York City,^[18] adjacent to the Ed Sullivan Theater, then home to the Late Show with David Letterman. Indiana native David Letterman, an avid Steak 'n Shake fan, would frequent the location and mention it often on his show.^[19]

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.

The first location in New Jersey was opened by a franchise holder in September 2012 in Paramus, New Jersey.^[21] In June 2015, the first location in Maryland was opened in Millersville, Maryland.^[22]

Opening of first store in Seattle

Steak 'n Shake opened their first location in Nevada inside the South Point Casino in Las Vegas, Nevada in July 2010^[23] and second Nevada location in Reno in July 2013.^[24][25]

Steak 'n Shake expanded to California in July 2014 by opening a location in Victorville.^[26][27] A Los Angeles County location was opened in Santa Monica in late October^[28][29] and another in Burbank in December.^[30] 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.^[31] After a short delay, a fifth California location was opened behind schedule in Riverside in August 2016.^[32] Two regional locations are planned to open in early 2017 in Compton & Yucca Valley.

In 2015, the company had planned to open a restaurant in Northern California in Campbell, California, but local residents have been successful so far in blocking this move.^[33] Because of that delay, the first location in Northern California is expected to open in Daly City in November 2016^[34][35][36] followed by an expected opening in Fresno in late 2016 or early 2017.^[37]

The Northwest saw its first location open in Seattle, WA in May 2016.

International expansion

In December 2013, Steak 'n Shake opened a corporate office in Monte Carlo, Monaco, to support its expansion in the Middle East and Europe.^[38]

Middle East

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,^[39] but closed in a little more than a year. Ultimately, only two out of the original planned 40 locations were opened in the United Arab Emirates with both being closed in January 2015.^[40]

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.^[41]

The first location in the Persian Gulf country of Kuwait was opened in December 2014.^[42]

Europe

The first two European locations were opened in Cannes in France in May 2014^[43][44] and on the island of Ibiza in Spain in June 2014.^[45]

The second location in France was opened in Marseille in December 2014.^[46]

The second location in Spain was opened in the capital Madrid in September 2015^[47] followed by a third location in Churra, Murcia in October 2015.^[48]

The first location in Italy was opened in Milan in December 2015.^[49] A second location was opened in Peschiera del Garda in May 2016.^[50]

In July 2016, the first location in Portugal was opened in Montijo, near Lisbon.^[51]

References

External links

Wikimedia Commons has media related to Steak 'n Shake.

• Official website