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Steak N Shake Franchise Disclosure Document

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Purchasing A Steak ‘n Shake Franchise

Steak ‘n Shake Franchise only $10,000 – What’s the Catch?

Total Investment: $10,000. Liquid Capital Required: $10,500.Franchise Partners must complete an extensive, multi-week training program before taking ownership of an existing Steak ‘n Shake. With robust franchise support available, Steak ‘n Shake Franchise Partners are equipped to handle decisions and reap the rewards of achieving the American Dream.

Steak ‘n Shake Classic Franchise

The new Steak ‘n Shake design entertains guests by providing the theater to showcase the production of our famed made-to-order Steakburgers⢠and tasty hand-dipped milkshakes. Conversion opportunities exist to develop a Classic restaurant franchise location.

Square Footage:

  • Building â 3,315 – 3,800 square feet with drive-thru
  • Land â .7 acres – 1 acre

Dining Area & Menu:

  • Dining area of 99 seats plus a quick serving drive-thru
  • Open 24 hours, seven days a week, with full menu

Steak N Shake Wants To Sell 400 Corporate Stores For Cheap

flickr: George Thomas

Steak n Shake isnt fooling around with its refranchising plans. The company announced August 13 its looking to deal its 400-plus company units , to would-be entrepreneurs who want to be hands-on, single-unit owner-operators for a paltry initial investment of $10,000. For comparison, the initial franchise fee for a Taco Bell operator is $45,000. Its $30,000 at Blaze Pizza. Per franchise disclosure documents, the initial investment for a classic Steak ‘n’ Shake runs between $1.6$2.6 million.

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 want to provide an opportunity to other entrepreneurs who are highly motivated to excel but lack the financial means. What will be important to become a franchisee is not great capital but great ability. We are seeking to harness the power of entrepreneurs and to create a company of owners.

Steak n Shake added that the offering to buy into the company as a franchise partner requires operators to successfully complete a six-month training program. The franchise partner would then get 50 percent of the restaurant’s profits. This is a partnership, shared-profit deal similar to the system Chick-fil-A deploys.

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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.

Considering A Steak N Shake Franchise Dont Overlook These 37 Important Franchise Fees

Steak n Shake Franchise Costs Examined on Top Franchise ...

May 29, 2021in Franchise Fees, Hamburger Franchise

If you are considering a Steak n Shake franchise, dont get blindsided by these 37 important franchise fees .

1. Franchise Fee: $25,000

  • For each Franchise Agreement you sign, you must pay Steak n Shake an upfront fee upon execution of the Franchise Agreement . The Franchise Fee is $25,000 however, Steak n Shake reserves the right to charge a different fee for Restaurants operating from Captive Facilities.

2. Area Development Agreement Fee: the sum of: the amount of the Initial Franchise Fee for the first Restaurant you will open plus a non-refundable deposit for each additional Restaurant that you are obligated to open under the ADA

  • ADAs are granted at Steak n Shakes sole discretion. To secure development rights pursuant to an ADA, you must pay Steak n Shake an ADA deposit equal to the sum of: the amount of the Initial Franchise Fee for the first Restaurant you will open plus a non-refundable deposit for each additional Restaurant that you are obligated to open under the ADA.
  • The amount of the Per Unit Deposit Steak n Shake requires will vary depending on the number of Restaurants you are granted the right to develop within your Development Area, your restaurant management experience, your creditworthiness, and such other factors as the market for Steak n Shake By Biglari Restaurants within your Development Area.

3. Computer Equipment and Proprietary System Fees: varies

  • Due Date: Weekly on Friday.

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Steak N Shake Consolidated Statements Of Earnings

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Steak n Shake Income Statement Key Insights

Overall, Steak n Shake is not a profitableWhen the earnings in a given period of time is more than the expenses in a business. business, with a net earnings loss of $24.6 million in 2020. This has been a trend in both 2019 and 2018 as in these respective years there were recording losses of $ 6.6 million and $46.9.

Revenues also have seen a decline YoY. In 2018 revenues were $760 million but in 2019 revenues declined 21% to $594 million and further declined another 42% to $343 million in 2020.

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.

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New Jersey Franchise Practices Act

Plaintiffs assert that the Agreement was fraudulently induced however, as set forth above, those claims cannot be maintained. Plaintiffs also contend that due to Defendant’s uniform pricing strategy and unproven business format, Defendant imposed unreasonable standards in violation of the New Jersey Franchise Practices Act .

Pursuant to the NJFPA, a franchisor may not impose “unreasonable standards of performance.” N.J.S.A. 56:10-7 Pai v. DRX Urgent Care, LLC, 2014 U.S. Dist. LEXIS 27071, *37 see also Carlo C. Gelardi Corp v. Miller Brewing, 502 F. Supp. 637 . Here, Plaintiffs have not set forth facts to support claims that Defendant imposed “unreasonable” standards in violation of the Act, but rather, that they had difficulty meeting these standards given their higher occupancy costs.

The Items Contained In A Franchise Disclosure Document

Abandoned Steak âN Shake – West Chester, OH

Item 1: The franchisor and any parents, predecessors and affiliates. This section provides a description of the company and its history.

Item 2: Business experience. This section provides biographical and professional information about the franchisors and its officers, directors, and executives.

Item 3: Litigation. This section provides relevant current and past criminal and civil litigation for the franchisor and its management.

Item 4: Bankruptcy. This section provides information about the franchisor and any management who have gone through a bankruptcy.

Item 5: Initial fees. This section provides information about the initial fees and the range and factors that determine the amount of the fees.

Item 6: Other fees. This item provides a description of all other recurring fees or payments that must be made.

Item 7: Initial investment. This item is presented in table format and includes all the expenditures required by the franchisee to make to establish the franchise.

Item 8: Restriction on sources of products and services. This section includes the restrictions that franchisor has established regarding the source of products or services.

Item 9: Franchisee’s obligations. This item provides a reference table that indicates where in the franchise agreement franchisees can find the obligations they have agreed to.

Item 10: Financing. This item describes the terms and conditions of any financing arrangements offered by the franchisor.

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Steak N Shake Fdd Summary

Type of BusinessAs a franchisee, you will own and operate a Steak n Shake By Biglari Restaurant.

Corporate InformationSteak n Shake Enterprises, Inc was incorporated in Indiana on December 9, 2005 and is a wholly-owned subsidiary of Steak n Shake Inc., previously known as Steak n Shake Operations, Inc. prior to a name change effective October 28, 2015. Until December 2005, Steak n Shake sold Steak n Shake franchises but in connection with a reorganization, Steak n Shake transferred the franchise business to SNS Enterprises, which is the only entity that franchises Steak n Shake By Biglari Restaurants. Their principal business address is 107 South Pennsylvania St., Suite 400, Indianapolis, Indiana 46204.

InvestmentThe total investment necessary to begin operation ranges from $244,000 to $2,328,000 for a Steak n Shake by Biglari Restaurant. These totals include approximately $30,000 to $81,000 that must be paid to the franchisor or its affiliates.

Steak N Shake By Biglari Franchise Disclosure Document

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This Steak n Shake By Biglari Franchise Disclosure Document , published in 2016, contains 23 items of information disclosed following the completion of the franchisor’s fiscal year.Key elements of the FDD report include the full franchise agreement as well as extensive discussion of franchise fees, capital requirements, ongoing royalty and marketing expenses, financing options, litigation, site selection requirements, site build-out costs, training programs and costs, current and projected franchisor and franchisee-owned units, franchisee listings and contact information, franchisor historical financial performance, earnings performance , outstanding lawsuits, franchisor bankruptcy filings, and key executive biographies. The FDDs for a chosen franchise and its competitiors are a must-buy for anyone considering investing in a franchise business.

Item 1. The Franchisor and Any Parents, Predecessors, and Affiliates
Item 2. Business Experience

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Steak N Shake Wants To Sell All Of Its Company Stores

    Steak n Shake, eager to shift more of its restaurants to franchise ownership, is now selling partnerships in all of its more than 400 company-owned restaurants for an initial investment of $10,000.

    Thats a 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 companys franchise disclosure documents.

    Qualified operators would have to complete an extensive six-month training program and would pay the $10,000 to buy into the partnership. They would then be single-unit owner-operators.

    A spokesperson for Steak n Shake said that the plan is to convert all of the companys corporate locations into these franchise partnerships.

    The franchise partner would get 50% of the restaurants profits. The company did not answer questions as to who would 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 want to provide an opportunity to other entrepreneurs who are highly motivated to excel but lack the financial means.

    What will be important to become a franchisee is not great capital but great ability, he added. We are seeking to harness the power of entrepreneurs and to create a company of owners.

    Steak N Shake Restaurants Close In Hampton Roads As Local Franchisee Sues Company Over Pricing Dispute

    QSR

    Steak n Shake is no more in Hampton Roads following an ongoing pricing dispute between a franchisee and the company.

    Virginia Beach-based franchisee Steaks of Virginia, which owned and operated nine Steak n Shake restaurants across Virginia at one time, seems to have quietly closed its Hampton Roads restaurants in the midst of its breach-of-contract lawsuit with the Indianapolis-based company.

    Three restaurants appeared to have closed recently across the region in Virginia Beach, Norfolk and Hampton. The restaurants were removed from Steak n Shakes listed locations on its website and were marked as permanently closed on Google and Yelp. Calls to phone numbers listed for the restaurants went unanswered.

    The franchisee has also closed locations in Richmond, Lynchburg and Waynesboro, according to filings under the Southern District of Indiana federal court.

    According to a complaint filed in April 2018, Steaks of Virginia partners — Tassos Paphites, Christakis Achilleos and William Dragas — claimed that Steak n Shake, a subsidiary of San Antonio-based Biglari Holdings Inc., agreed to let the franchisee set its own prices for menu items in its franchise disclosure documents. But when it came to a request to increase prices, the company did not allow it, breaking those franchising and development agreements, according to the complaint.

    Steaks of Virginia spokesman Yianni Achilleos declined to discuss the lawsuit because of ongoing litigation.

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    Steak N Shake Fdd Franchise Information Costs And Fees

    Type of BusinessAs a franchisee, you will own and operate a Steak n Shake By Biglari Restaurant.

    Corporate InformationSteak n Shake Enterprises, Inc was incorporated in Indiana on December 9, 2005 and is a wholly-owned subsidiary of Steak n Shake Inc., previously known as Steak n Shake Operations, Inc. prior to a name change effective October 28, 2015. Until December 2005, Steak n Shake sold Steak n Shake franchises but in connection with a reorganization, Steak n Shake transferred the franchise business to SNS Enterprises, which is the only entity that franchises Steak n Shake By Biglari Restaurants. Their principal business address is 107 South Pennsylvania St., Suite 400, Indianapolis, Indiana 46204.

    InvestmentThe total investment necessary to begin operation ranges from $316,000 to $2,441,000 for a Steak n Shake by Biglari Restaurant. These totals include approximately $30,000 to $81,000 that must be paid to the franchisor or its affiliates.

    Steak N Shake Is Franchising 400 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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    What Is A Steak N Shake Franchisea Franchise Is When A Business Allows A Party To Acquire Its Know

    Steak n 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.

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    Owning Your Own Restaurant For $10,000? Is It Too Good To Be True? Buy Steak ân Shake Make $100,000

    A franchisee has filed suit against Indianapolis-based Steak n Shake in an effort to raise its menu prices because it says all nine of its restaurants are losing money.

    In a suit filed in federal court Thursday, Steaks of Virginia LLC said Steak n Shake is breaking its franchise and development agreements by not allowing it to set its own menu prices.

    The profitability of Steaks of Virginias restaurants is suffering, the Virginia Beach-based franchisee said in the lawsuit. As of the end of 2017, all of Steaks of Virginias restaurants are losing money.Steaks of Virginia said it entered into a franchise agreement as well as an area development agreement, or ADA, with Steak n Shake in 2009.

    The ADA gave the franchisee the rights to develop 15 restaurants in certain areas of Virginia over a 10-year period.The franchisee said it decided to enter into both agreements based on information provided in Steak n Shakes franchise disclosure document, also called a uniform franchise offering circular.

    Steaks of Virginia said the document clearly states that Franchisees are free to set consumer prices different from prices on -owned restaurant menus and several do so.

    Steak n Shake put a heavy emphasis on inexpensive food, including $4 meals, after entrepreneur Sardar Biglari gained control of the chain and folded it into his San Antonio-based holding company, Biglari Holdings, in 2008.

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    Steak N Shake Franchise Cost

    The estimated total investment necessary to begin operation of a traditional Steak n Shake free-standing Quick Service restaurant ranges from $1,208,000 $1,687,000.

    Steak n Shake also offers various operating formats and their costs are different from the traditional free standing restaurant.

    In-Line Quick Service Format: $454,000 $1,371,000

    Non-Traditional: $316,000 $715,000

    Roadside Format: $705,000 $1,199,497

    New York Franchise Sales Act

    The New York Franchise Sales Act , Section 687 requires the disclosure of necessary information for a franchise agreement. Defendant contends that it was not required to register in New York pursuant to an exemption based on its net worth. SeeN.Y. Gen. Bus. § 684. The exemption applies “if the department finds that such action is not inconsistent with the public interest or the protection of prospective franchisees.” Id. Notably, Plaintiffs’ claims regarding the NYFSA rely on the same allegations of misleading oral statements that are vaguely pled within the Complaint and contradicted by the language of the Agreement. As such, this count will also be dismissed.

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