How To Franchise A Steak N Shake

What You Get As A Steak N Shake Franchisee

Every prospective franchisee is first interested in what they can get. In other words, a good franchise opportunity should be able to offer opportunities for its investors.

At Steak n Shake, you get to become its franchisee with a minimum investment of $10,000.

As part of its effort to make its business model attractive, Steak n Shake allows franchisees to earn about 50% of restaurant profits. This includes an unlimited earning potential for investors seeking to put in the work necessary.

What Is A Steak And Shake Franchise

Steak And Shake franchise is a classic American brand serving premium burgers and milkshakes.

The mission at Steak n Shake is to serve customers the highest quality burgers and shakes along with extending them great service at the lowest possible prices.

In 1939, Steak n Shake began offering a limited number of franchises for Steak n Shake® restaurants, but it did not make a general offering to sell franchises until 1991. As of December 30, 2020 there were 159 franchise locations and 272 company-operated Steak n Shake® restaurants within the U.S. Steak n Shake offers franchises for restaurants with various operating formats: Freestanding Quick Service Format, In-line Quick Service, Non-traditional, and roadside.

The Steak n Shake Company is a wholly-owned subsidiary of Biglari Holdings Inc. , an Indiana corporation founded by Sardar Biglari. Biglari Holdings common stock is quoted under the symbols BH.A and BH on the New York Stock Exchange. Sardar Biglari is the Founder, Chairman and Chief Executive Officer of Biglari Holdings.

How Much Profit Do Steak N Shake Make Per Year

This is one of the important parts to look at when youre deciding to buy a franchise. Although not all franchise stores are equal and the same as they differ in location, size, etc., it is safe to gauge how much profit a Steak n Shake franchise can make in a year and see if its a number you can accept.

An interview with Maxim revealed that in 2020, the average Steak n Shake franchisee partner earned $161,079 in 2020. Some of the top performers were on track to earn $300,000 in their first year.

Press McDowell, a St. Louis, Missouri franchisee shared that he earned in 2 months what he made in 1 year in his previous job and that the $10,000 payment to join the franchise program is the best investment he ever made. McDowell made close to 20 times the amount of his previous job the first year of franchising the store.

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Remember that this is just one Steak n Shake franchisee and it doesnt mean that all franchise partners are smiling from ear to ear like with the example reported here.

If possible, interview 4 to 5 more franchisees and ask them the right questions about their experience. Find out what these operators struggle with. What makes them happy? Take the time to understand the pros and the cons of the business model from a variety of perspectives.

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Are You A Good Fit For The Steak N Shake Franchise

You must first determine whether or not you are competent and experienced enough to develop and run a franchise. Opening a business is no easy task, but Steak n Shake might be the perfect way to get your feet wet as a business owner.

To determine if this is the correct business opportunity for you, ask yourself the following questions:

Are you able to liquidate your assets? This franchise, fortunately, just requires $10,000 in liquid money to get started. However, keep in mind that when you include in royalties and advertising fees, as well as construction and building maintenance costs, your investment will reach several hundred thousand dollars.

Are you qualified to lead this company? This position is for you if you have no other business ventures, restaurant management expertise, a dedication to excellent performance, and a love for customer care.

Another thing to think about is the place where youll be running. Ideally, youll be taking over an existing lucrative location. There will be additional risk involved with the site if you are requested to restart a business with no previous client base.

Make sure to do your own research and consider whether the place youre being given is worthwhile.

Finally, are you open to owning a franchise in part? Only franchise partners are allowed in Steak n Shake locations, which means youll get 50% of the revenues. This may appear to be unfair, yet it is actually a significant benefit for you.

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While some would provide franchise information from business operations and support, management training services to marketing and promotion of the product, there is an actual fee / cost of opening up a franchise which range from Php 535,000 + Php 30,000 to probably 1M investment capital per store or outlet.

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How Much Profit Does A Steak N Shake Franchise Make Per Year

As a whole, the company makes an average of $939,990,000 sales per year. In terms of per unit, systemwide sales are an average of $1,027,000. Remember you are only a franchise partner and do not retain 100% of the profits. Depending on which type of franchise you open, you will receive a portion of the profits. Most often than not, youll obtain 50% of the profits.

How Much Does A Shake Shack Franchise Make

In previous reports, Shake Shake generated an average gross revenue of $4 per unit. There should be no more than 8 million in each location. The average revenue for each unit would have to be more than $100,000. Ticket sales for a food franchise are a major revenue generator, often reaching $2 million or even more per year.

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Whats Going On With Steak N Shake

Earlier this year, Steak n Shake was on the verge of bankruptcy, but thanks to its parent company, Biglari Holdings, the chain has managed to pay off its $153 million debt and report a profit of $4 million. In the first quarter of 2021, a million people will be displaced. Steak n Shake is no longer a favorite among customers for the following reasons.

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Steak And Shake Franchise

Since its inception in 1934 in Normal, Illinois, Steak n Shake has acquired significant brand strength and a devoted fanbase. Today, this 77-year-old iconic American brand, which pioneered the concept of quality Steak Burgers and hand-dipped milkshakes, has relaunched its franchising program.

And it is looking for single and multi-unit operators to help it develop its network of almost 500 QSR sites throughout 22 states.

Steak n Shake offers potential franchisees a wide range of investment and best-in-class aesthetic design options, including Steak n Shake Signature, a new smaller-footprint format well-suited for shopping centers, building on its current best-in-class string of 10 consecutive quarters of positive same-store sales growth despite the Great Recession.

Steak n Shake Signature is a low-cost variant with a more straightforward operation.

Are you want to start and run a franchise without breaking the bank?

According to Steak n Shake, anyone can own a restaurant for as little as $10,000. At first appearance, this appears to be a method to enter the franchise business without getting into debt or having half a million dollars in cash on hand.

But, as with any claim, you have to ask what the catch is.

Inside this franchise evaluation, I delved into all of the finer points and terms of this opportunity, so be sure to read all of the specifics and analysis below.

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Franchise Fraud By Steak N Shake

Steak n Shake Franchisor Fraud: Franchisor Shakes Down New Franchisee by Fraudulently Hiding Costs

Cornerstone Investment Partners, LLC v. Steak N Shake Enterprises, Inc., 2015 WL 4094630, United States District Court, D. New Jersey

Franchise fraud again. Not surprisingly, another franchisee carcass was spotted lying outside the federal district court in New Jersey last week. The franchisee plaintiff, Cornerstone Investment Partners I, LLC , sued its franchisor, Steak n Shake Enterprises, Inc., the defendant. The franchisor moved to dismiss the franchisees case, and the Court granted the motion. In deciding the motion, the Court, as required, relied exclusively upon the allegations of the franchisee in its Complaint a summary of these facts is set forth below as part of the analysis.

Defendant Steak n Shake operates and grants franchises for restaurants offering burgers and milkshakes. Cornerstone initially sought information about one of Steak n Shakes traditional Classic restaurants, which notably operate twenty-four hours a day for seven days a week, feature a full menu, contain typically between 3000 and 4000 square feet of space, and offer dine-in, drive-thru, and carry-out service. Beginning January 2011, defendant began to also offer franchises for Signature restaurants, which, in contrast to the Classic restaurant, are smaller and offer a more limited menu.

We seek out people who:

Financial Requirements And Fees

As mentioned, you technically do not own the Steak n Shake franchise unit outright, but rather a portion of it. The benefit to this structure, however, is that you only need to invest invest $10,000 into the opening of your outlet. These numbers only give you a general idea of what you need to start the franchise and may not include the all additional costs needed.

Here is a base overview of what the essential finance requirements are for a Steak n Shake franchise. It is also important to remember that although you are opening a franchise, you are considered a franchise partner and will receive 50% of the store profits.

It is important to note that these are just the initial costs youll need to get your business started. There may also be additional fees that are not accounted for in these numbers that depend on the location or type of store you want to open. Also, take into consideration that the franchise model you open will influence the amount of money youll spend.

Here is a breakdown of fees required of a Steak n Shake franchise. Unfortunately, the costs of developing the franchise and maintaining it are not available to the public.

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About Steak And Shake Franchise

In February of 1934, Steak n Shake opened its doors in Normal, Illinois. Gus Belt, the founder of Steak n Shake, was the first to introduce the notion of premium burgers and milkshakes.

The companys name has been a symbol of its history for over 75 years. Steakburger was the meaning of the term steak. Hand-dipped milkshakes were referred known as shakes.

Gus was adamant about serving the best burgers and shakes in town to his clients. To demonstrate the quality of his burgers, he would bring in a barrel of steaks and ground the meat into burgers right in front of the customers. As a result, their iconic motto was born.

In Sight, It Must Be Right.

In spite of this ownership distinction, Steak n Shake still claims youll make $100,000 in your first year operating the business meaning you can expect a fast return on the initial investment.

Based on my research, the income claim is legitimate. This is low-risk, high reward offer is compelling to anyone evaluating franchise opportunities, wants to be actively involved in the business, and looking for a solid income.

With $10,000, a dream, and a strong work ethic, you can in fact partner with Steak n Shake to operate a restaurant. But make sure you understand all the little details of this arrangement before joining the team.

I explain the pros and cons of this uniquely structured restaurant opportunity in the franchise review below.

How Much Profit Does A Steak N Shake Make

How Much Profit Does a Steak n Shake Franchise Make Per Year? As a whole, the company makes an average of $939,990,000 sales per year. In terms of per unit, systemwide sales are an average of $1,027,000. Remember you are only a franchise partner and do not retain 100% of the profits.

Similarly, Why did Steak and Shake go out of business?

Steak n Shake permanently closed at least 82 locations in 2020, some cited for poor performance, with some funds from sold stores going to the implementation of the new service model. Fifty-seven locations remain temporarily closed, but the company said it intends to reopen most of them.

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Steak N Shake Swot Analysis

Aside from the numbers, a potential franchisee must take into consideration the strengths and weaknesses of a business because getting into the franchise industry is a longterm commitment.

So before you sign a franchise agreement, make sure you familiarize yourself with the good and bad of a franchise. You want to be prepared for whatever this restaurant concept throws your way.

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What Happened To All The Steak And Shakes

Steak n Shake will eliminate table service and transform to a quick-service restaurant model. Most of the chains 556 dining rooms have been closed throughout the COVID-19 pandemic, and Biglari wrote the company will spend $100,000-$200,000 to remodel and equip each restaurant with self-service kiosks.

Where Steak N Shake Lost Its Way

Steak n Shake

Steak n Shake emerged out of the Great Recession as one of the industrys steadiest performers. After same-store sales plummeted 7.1 percent in 2008, the brand put together seven straight years of positive gains, including a 7.5 percent run in 2010 that stacked on a 4.1 percent increase the year before.

If you track back to when present management took over on August 5, 2008, Steak n Shake was losing $100,000 per day. By the end of 2009, it was generating $100,000 per day, the company said. Over the next nine years, its aggregate pre-tax earnings were about $185 million and those earnings translated into an even greater sum of distributable cash.

Accelerate to the present, and the comeback story has lost its rosy undertone. Sardar Biglari, CEO of Biglari Holdings, wrote in a letter to shareholders, signed February 22: The decade of control under current management ended much like it startedwith heavy losses.

Steak n Shakes average-unit volumes have been on the decline, too. The company posted AUVs of $1,839.51 in 2017 and had total systemwide sales of $939.99 . The year before it reported AUVs of $1.9 million and systemwide sales of $1,027 .

Ever since we took control of Steak n Shake, we have been steadfast in our formula for success: providing the highest quality burgers and shakes at the lowest possible profit per customer from an ever-increasing number of customers, Biglari wrote.

We failed customers by not being fast and friendly, he said.

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Can Owning A Franchise Make You Rich

The bottom line is that while a franchise can make you independently wealthy, it isnt a guarantee. Choosing the right business in the right industry, and going in with preexisting entrepreneurial experience and/or existing wealth can help, but your income-generating potential may still be somewhat limited.

Steak ‘n Shake Is Franchising Company

We are honoring our heritage as a classic American brand by providing a path to achieving the American Dream. Do you have a successful track record in business leadership with proven positive results? Steak n Shake is seeking entrepreneurial Franchise Partners with vision, passion and an unwavering desire to take hold of the American Dream.

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History Of Steak N Shake

Steak n Shake opened its doors in Illinois in February 1934. Steak n Shake creator Gus Belt was the first to develop the concept of premium burgers and milkshakes.

For almost 85 years, the companys name has served as a symbol of its history. The meaning of the word steak was STEAKBURGER. MILKSHAKES that were hand-dipped refers to as shakes. Gus was adamant about delivering his customers the tastiest burgers and shook in town.

History Of Steak N’ Shake

In 1934, Steak ‘n Shake pioneered the concept of a “better burger” by hand-crafting its famed Steakburger made with 100% beef and prized cuts like sirloin, strip, ribeye, and T-bone. Steak ‘n Shake opened its first restaurant in Normal, Illinois and developed over half of its first twenty locations near Illinois universities. Since Steak ‘n Shake began offering its on-campus format, several universities have surveyed student preference for restaurant brand candidates. In every single case reported, Steak ‘n Shake has performed at the top of students’ choice in restaurant brands.

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