Another one hits the dust as the coronavirus pandemic raddles through, taking out businesses in its wake. Biglari Holdings Inc., which also owns 9% of Cracker Barrel, said in a SEC filing, "the COVID-19 pandemic had an adverse effect on our restaurant operations, thereby resulting in the evaluation of company-operated restaurants for recoverability." Because of this, Steak 'n Shake permanently closed 51 company-owned Steak 'n Shake restaurants in the first quarter, and sales and traffic are still declining.
Steak 'n Shake Closes 51 Locations
While the burger chain has been struggling since 2019, the outbreak of Covid-19 was the final nail in the coffin for this restaurant chain. According to Business Insider, the first-quarter report showed the chain was down $60.9 million this year. Biglari Holdings CEO Sardar Biglari has been trying hard to turn the chain around by hemorrhaging money and temporarily closing 111 locations in 2019.
Back in 2018, the chain changed its business model to move towards a franchise partner system, letting single-unit operators take control for only $10,000, however, partners would need to give 50% of profits to the parent company.
The first location was opened in Normal, Illinois in 1934 by A. H. "Gus" Belt after he served four years in the United States Marine Corps. He would wheelbarrow in cuts of T-bone, sirloin, and round steaks in front of his customers to show the cuts of steak in his fresh burgers, hence the restaurants claim on their famous steakburgers. Today the restaurant shows how fresh its burgers are by grilling on an open line in sight to customers.
Due to Cornavirus shut-downs, the company shut all dining rooms in March leaving takeout and the drive-thru as options. After the closings, Steak 'n Shake has 553 locations across the US, compared to 624 during the beginning of 2019.
Even with states slowly reopening restaurants, it'll still be interesting to see whether the burger and milkshake chain looks to close more locations. If one location closed near you, its still possible to recreate your favorite Steak 'n Shake eats at home.