This Adored Burger Chain Is Closing 13 More Locations
If you've wondered why Steak 'n Shake has disappeared from your neighborhood, here's why—the Indianapolis-based chain has been on a closing spree. The popular burger joint had 610 restaurants nationwide at the beginning of the year, but sales have suffered amid the ongoing COVID-19 pandemic. Steak 'n Shake permanently closed nearly 70 locations as of June, and recent securities filings revealed that 13 locations have shut down since the summer.
Steak 'n Shake currently operates more than 500 locations, according to Restaurant Business. Half of those stores are owned by parent company Biglari Holdings, while the other half are operated by franchisees and "franchise partners." Spread across 28 states, the chain is a hybrid of a sit-down casual dining restaurant and a fast-food drive-thru operation that's best-known for juicy burgers and hand-dipped milkshakes. (Related: 9 Restaurant Chains That Closed Hundreds of Locations This Summer.)
But Steak 'n Shake's struggles long predate the pandemic, with a push to rebrand itself as a quick-service chain announced as early as 2018. Biglari Holdings closed down more than 100 locations in 2019 as it shifted to a counter-based service model that would cater to customers on the go and phase out wait staff—a strategic move given customer service had been a pain point for the company for years. The chain said its plan hit a roadblock this year as a result of funding issues. "The funds needed for the transition are limited under its current debt agreement," it said in its recent filings.
It appears as though the chain may be running out of options to turn things around against the pandemic, which could ultimately prompt a bankruptcy filing. "Absent a resolution with the lenders, Steak 'n Shake may need to seek refinancing options, which may not be available," the company added.
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