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Insiders worry Steak 'n Shake is in deep trouble, CEO is patenting new milkeshake machines and wants to eliminate milkshake cherries as part of the fix

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https://www.ibj.com/articles/73722-a-hard-to-digest-reality-steak-n-shake-might-not-make-it

 

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The outlook is that bad for Steak n Shake, which in the first quarter racked up an $18.9 million operating loss. That’s on top of a $10.7 million loss for all of 2018.

 

Worse yet, customer traffic counts are in a tailspin, sliding 13 percent over the last three years and 7.7 percent in the first quarter.

 

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He acknowledged that he has a finite window to get things figured out—given that Steak n Shake has a $184 million loan scheduled to be paid off in March 2021. 

 

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Investors at the meeting were highly skeptical of both pillars of Biglari’s Steak n Shake turnaround strategy—the transfer of the company’s approximately 400 company-owned restaurants to single-store franchisees, which he hopes to accomplish over three years, and investing some $40 million to install new milkshake machines.

 

“He is literally inventing a new milkshake making process—he said at the meeting that this was going to be a patented process—and that is going to speed up service,” said a shareholder who attended the meeting but spoke without the approval of his employer.

 

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“Sardar Biglari said at one point that Steak n Shake spends $1 million per year on cherries for milkshakes and that he would love to get rid of that $1 million,” according to the post, a comment verified by another shareholder in attendance.

 

A little more on why it's in this mess and the pain being felt by other restaurants:

 

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 A restaurant recession has gripped the industry in recent years, spurring a spate of bankruptcies.

 

But industry observers say Steak n Shake ultimately hurt itself by scrimping on restaurant upgrades when times were good and by its unflinching devotion to low costs, which franchisees say left them so pinched that the dining experience suffered.

 

A lawsuit filed in April 2018 by a Virginia Beach, Virginia, franchisee charges that Steak n Shake forced it to adhere to such low menu prices that all nine of its restaurants were losing money.

 

Biglari remains a devotee to low prices. As he wrote in his annual letter to shareholders in February 2018, “We are subscribing to Henry Ford’s motto: ‘To make money, make quantity.’”

 

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Some good memories at steak n shake with my grandparents.

 

But I haven't been there in ages though. I love their fries with the hot vinegar on it, or whatever the hell that stuff is.

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My closest Steak n Shake is temporarily closed because corporate ran it poorly and is now looking for a franchisee

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11 minutes ago, SilentWorld said:

I’ve never heard of steak n shake. Is it like shake and bake but with steaks? Seems kinda interesting.

Its a super heavy protein meal with a super heavy dairy drink.  I don't know how anyone could eat those two things at the same time.  In an industry where people finally want to eat lighter, I'm not surprised this place will fail.

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16 minutes ago, Captain Pickle said:

Its a super heavy protein meal with a super heavy dairy drink.  I don't know how anyone could eat those two things at the same time.  In an industry where people finally want to eat lighter, I'm not surprised this place will fail.

 

I'd go to the place if my friends wanted to go, but it wouldn't be a restaurant I actively recommended to others or as a hangout idea.

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The one they built close to me about three years ago seems to have closed. It does appear as though people are desiring...less unhealthy options at fast food joints.

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25 minutes ago, Captain Pickle said:

Its a super heavy protein meal with a super heavy dairy drink.  I don't know how anyone could eat those two things at the same time.  In an industry where people finally want to eat lighter, I'm not surprised this place will fail.

 

That has 0 to do with this. Look at Shake Shack.

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1 minute ago, Jose said:

 

That has 0 to do with this. Look at Shake Shack.

I really like the Shake Shack mushroom burger. They have a Shake Shack in the Astros ballpark, so that’s usually where I get my fix.

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There is a Steak and Shake about 15 mins from my place. I rarely ever go there. However I rarely ever go for fast food and even hamburgers. I think I only really think about it when I go out of my way to visit a Used Game Store in Round Rock.

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3 minutes ago, SFLUFAN said:

I totally agree that insides should worry about Steak 'n Shake.

 

Oh shit this is actually a great typo :lol: 

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There’s one right by my work. I’m trying to cut down on my fast food consumption, but I’ll go there about once a month or so. If it went away, I wouldn’t be too upset. 

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8 minutes ago, sblfilms said:

The one they built close to me about three years ago seems to have closed. It does appear as though people are desiring...less unhealthy options at fast food joints.

 

now come on. You're here in Houston, aren't you? So you know damn well that 'it does appear as though people are desiring less unhealthy options' is a load of crap :p you can't throw a stone in this city without it hitting 3 or 4 different fast food joints.  ;)  

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Ive never been to a steak and shake.  The closest one near me is about 20 minutes away and is only part of a rest stop along the PA Turnpike, so I'm not exactly in dire need to go there.

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11 minutes ago, EternallDarkness said:

 

now come on. You're here in Houston, aren't you? So you know damn well that 'it does appear as though people are desiring less unhealthy options' is a load of crap :p you can't throw a stone in this city without it hitting 3 or 4 different fast food joints.  ;)  

Read it again, they are desiring less unhealthy options AT fast food restaurants. Even things like kid’s meals that offer fruit as a side instead of fries, or grilled chicken instead of friend chicken.

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14 minutes ago, EternallDarkness said:

 

now come on. You're here in Houston, aren't you? So you know damn well that 'it does appear as though people are desiring less unhealthy options' is a load of crap :p you can't throw a stone in this city without it hitting 3 or 4 different fast food joints.  ;)  

of course it differs from region to fat ass region but pop (sorry soda) sales are down and I'm sure in most civilized areas fast food is down.  Well, not necessarily down but changed.  For example, places like Freshii and even Mexican fast food that do the bowls are big these days.  Sushi too.

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23 minutes ago, sblfilms said:

I really like the Shake Shack mushroom burger. They have a Shake Shack in the Astros ballpark, so that’s usually where I get my fix.

 

I would try it if I could. Looks solid. But they do have gf buns. The ShackBurger is amazing.

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We don't eat there that often, but man, if Steak n' Shake went away, I would be pretty upset... not so much because of the food, but because I have so many memories of that place. This was where we went all the time when we were teens and in my early 20s. We knew people who worked there and we would go late at night and just hang out there all night eating free or heavily discounted food.

 

It's kinda the worst of all worlds though. It's like fast food quality food at restaurant speeds and prices and you have to tip. They also have notoriously bad service and are typically shockingly slow. And they have the worst drive-thru service imaginable. Like, don't even bother, it's a farce.

 

It's really not that great of a place to eat... but I would miss it. My kids love it too. Meh.

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1 hour ago, Captain Pickle said:

Its a super heavy protein meal with a super heavy dairy drink.  I don't know how anyone could eat those two things at the same time.  In an industry where people finally want to eat lighter, I'm not surprised this place will fail.

 

There is a chain here in the Vegas area called Skinny Fats - half of their menu is "healthy" and the other have is ...not. Seems like a pretty good business model, honestly.  

 

I'm still waiting on someone to capitalize on a true low carb/high fat restaurant model.  Yeah, I can get a cauliflower crust pizza or a bunless burger at existing restaurants, but it's not a standard menu item. 

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27 minutes ago, sblfilms said:

Read it again, they are desiring less unhealthy options AT fast food restaurants. Even things like kid’s meals that offer fruit as a side instead of fries, or grilled chicken instead of friend chicken.

 

If people don't want it, maybe it should be called enemy chicken instead of friend chicken.

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54 minutes ago, sblfilms said:

Read it again, they are desiring less unhealthy options AT fast food restaurants. Even things like kid’s meals that offer fruit as a side instead of fries, or grilled chicken instead of friend chicken.

 

know how you can tell which kids at a fast food place are getting apple slices or grapes instead of fries? They're the ones crying :p 

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54 minutes ago, Captain Pickle said:

of course it differs from region to fat ass region but pop (sorry soda) sales are down and I'm sure in most civilized areas fast food is down.  Well, not necessarily down but changed.  For example, places like Freshii and even Mexican fast food that do the bowls are big these days.  Sushi too.

 

Don't know if that is true here in Houston. sales per place might be down, but in Houston that's more than likely simply due to the fact that they keep opening more and more fast food places and thins out the spending per place. Though it's funny you mention bowls/sushi. My youngest nephew will generally take a burrito from chipotle or some sushi over most fast food...other than Chick fil a, he loves that place. 

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I wouldn’t be upset if they went away.  Every time I’ve gone there it has taken 10+ minutes to get a shake and a burger.  I don’t know what their processes are back there, but they’re worse than every other restaurant of their level.

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We have around 5 of them here throughout my city.  The one down the street from me seems to stay consistently busy throughout the day and night.  I used to hang out at it when I was a teenager, but I seldom eat there today. 

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Also, I hate that there isn't a Shake Shack near where I live.  I visited one last year when temporary staying at my one cousin's house, and that place was goooooood.

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5 hours ago, sblfilms said:

Read it again, they are desiring less unhealthy options AT fast food restaurants. Even things like kid’s meals that offer fruit as a side instead of fries, or grilled chicken instead of friend chicken.

 

WHY WOULD YOU EAT FRIEND CHICKEN??

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I actually haven't been to one in a few years, even though there's one like 3 minutes away. Its a weird thing,, its close enough to fast food that they have a drive-thru, but they also have waiters/waitresses that take your order/deliver food inside. I personally really like the food, but I don't know how you can justify having wait staff and stuff for it.

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This thread made me realize Shake Shack and Steak & Shake are different things. The more you know. 

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