Franchise Program
Steak n Shake offers casual dining restaurants known for their burgers, milkshakes, and American cuisine. As part of the Biglari Holdings family, it provides franchise opportunities in the quick-service restaurant sector.
Franchise Program franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation ranges from $316,000 to $2,656,425 for a Steak n Shake by Biglari Restaurant [p.1]. This includes approximately $25,000 to $35,000 that must be paid to the company or its affiliates [p.1], along with other costs such as leasehold improvements and equipment [p.27-29].
What is the initial franchise fee?
The initial franchise fee varies depending on the type of restaurant. For Developer's first Quick-Service Restaurant, it is $25,000 [p.236]. This fee is nonrefundable except under specific conditions related to location approval [p.303].
What are the ongoing royalty and advertising fees?
The ongoing royalty and system fee is 4% of Net Sales [p.69], while there is also a Digital and Production Fund Fee of 1% of Gross Receipts for marketing and promotional activities [p.281, p.304].
How long is the initial franchise agreement, and can I renew it?
The term of the franchise is not specified in the provided excerpts. Additionally, whether you can renew the franchise and under what conditions is also not detailed in these excerpts. Therefore, based on the given information, this isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
You can sell or transfer your franchise, but it requires the franchisor's written consent. The franchisor may refuse a transfer for good cause, which includes protecting their marks, quality, reputation, and image [p.5]. Additionally, any permitted assignment must be approved by Franchisor after reviewing relevant documents and financial data of the transferee [p.239].
On what grounds can the franchisor terminate the agreement?
According to [p.191], the franchisor can terminate the franchise agreement prior to its expiration only for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and curing such failure after being given written notice and a reasonable opportunity not exceeding 30 days to do so.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
This isn't specified in the excerpts. The FDD mentions that a Protected Area and Development Area may be granted under certain conditions, but it also states that you are not being granted any Protected Area, and Franchisor retains the right to develop and operate Steak n Shake Restaurants in close proximity to your location. [p.55, p.420(b)]
What training and ongoing support does the franchisor provide?
The franchisor provides management training at Certified Training Restaurants, requiring a minimum of two years of experience in the field and one year with Steak 'n Shake. General Managers must also complete six weeks of training and certify their store and staff to perform at a Gold Standard level. Ongoing support includes additional training for owners and multiunit supervisors by Franchise Directors [p.52]. For subsequent openings, qualified staff from existing units may be required to provide training, with the amount discussed between the franchisor and franchisee if more than four units are operated [p.53].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor is permitted to provide actual records of an existing outlet you are considering buying. Additionally, they can supplement the information provided in Item 19 by offering information about possible performance at a particular location or under specific circumstances [p.75]. However, except as disclosed in the FDD, the franchisor does not make any financial performance representations and does not authorize its employees or representatives to do so either orally or in writing [p.80], p.[419].
What am I restricted to selling, and where must I buy supplies?
You are required to sell all products and services determined appropriate by the franchisor [p.64], which may include certain vending machines and retail items such as trademarked packaged food items and apparel [p.64]. You also have to purchase certain goods and services exclusively from the franchisor, including required point-of-sale software, custom integration services, and proprietary retail products like canned chili, beef tallow cooking oil, seasoning, and pepper sauce [p.32]. Other than these specified items, you may need to buy additional supplies from approved vendors or the franchisor at their designated rates [p.32].