Biglari Holdings Inc., parent of Steak n Shake restaurants, said third-quarter profit was flat as revenue inched up.
For the quarter ended July 6, the San Antonio-based company reported earnings of $8.7 million, or $6.49 a share, compared with similar profit in the previous-year period when earnings were $6.23 a share.
Revenue rose 6.2 percent to $170.9 million in the third quarter compared with $160.9 million a year ago.
Biglari reported same-store sales for units open more than 18 months increased 4.9 percent compared with the same quarter last year, and customer traffic rose 4.8 percent.
Biglari has 582 restaurants comprising 488 Steak n Shake and 94 Western Sizzlin locations. Of those, 413 Steak n Shakes are company-owned and 75 franchised. Five of the Western Sizzlins are company-owned and 89 are franchised.
Sardar Biglari, the company’s chairman and chief executive, said in a December letter to shareholders the company would emphasize Steak n Shake franchising this year.
“Over the last 71 years, the company has produced an average of one franchised unit per year,” Biglari said. “That is not the kind of pace to which I am accustomed. This segment of the business requires a truly entrepreneurial approach because, though 71 years in existence, it now resembles a start-up.”
Steak n Shake has introduced a scaled down format that it calls Steak n Shake “Signature,” which is smaller than the 3,400-square-foot, 94-seat traditional store and available for inline and nontraditional food-court locations. The company said it is “a more simplified operation centered on signature menu items.”
The Signature unit, according to Steak n Shake’s website, can be from 2,000 square feet to 2,500 square feet with 50 seats, or 500 square feet to 800 square feet for locations with common seating. Investment ranges for the traditional freestanding units are $892,176 to $1.1 million while the Signature units are $299,815 to $569,176, the website said.
The Steak ‘n Shake franchise system has been restive.
In January, a group of Steak n Shake franchisees contested a policy change that required franchise operators to adhere to prices and a promotion schedule. Also, a five-unit franchisee, Stuller Inc., filed a lawsuit against Steak n Shake Operations Inc., arguing that the pricing policy violates the chain’s uniform franchise offering circular.
In its quarterly filing with the Securities and Exchange Commission, Biglari Holdings did not mention the $100 million investment in Cracker Barrel Old Country Store Inc. of Lebanon, Tenn. The June purchase acquired a 9.7 percent stake in Cracker Barrel.
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