Founded in 1934, they're famous for shakes and steakburgers; but in 2019 it seemed like Steak 'n Shake's everywhere were starting to disappear long before the covid pandemic began shuttering dining establishments.
Steak 'n Shake at the Waterfront in Munhall was one restaurant of many that Bilgari Holdings, the parent company of Steak 'n Shake, had temporarily closed due to financial woes. Bilgari Holdings had temporarily closed up its corporate-owned restaurants until many of them were transitioned to franchisees.
The move was announced to Steak 'n Shake's parent company shareholders in a February 22, 2019 letter from Sardar Biglari, its chairman. "We must be ardent not only about the quality of the product, [but] also in the quality of the people who operate Steak 'n Shake restaurants. To achieve our goal, we are building a culture of ownership at the unit level," Biglari wrote. "For operators to think and act like owners, we believe they must be owners." Steak 'n Shake's franchise fees are $10,000, according to Biglari, and the company assesses a fee of up to 15% of sales and 50% of profits.
This decision was an attempt to recover from declining profits, which included a $10.6 million loss in 2018 despite a net profit of more than $760 million that year. At the end of December 2019, 107 Steak 'n Shakes were closed amid a broad re-franchising initiative intended to transform the company into an entrepreneurial-driven, single-unit system, which included the Munhall location.
That being said, the Covid-19 pandemic certainly threw a wrench into those re-franchising plans. Steak 'n Shake's total restaurant count has declined by 69 restaurants over the first half of 2020, the company revealed. Fifty-six of those are corporate locations. Since then, Steak 'n Shake permanently closed at least 82 locations, some cited for poor performance, and with the funds from some of the sold stores going to implement the new service model in re-franchised stores. 57 sites remain temporarily closed, but the company said it intends to reopen most of them, similar to how the eatery at the Waterfront is being reopened.
The restaurant chain lost $4.6 million in 2020. However, its earnings improved for the first time since 2015 due to decreased labor costs from not operating dining rooms for most of 2020. And if all that financial information doesn't tickle your tastebuds, don't worry; you can always stop by Steak 'n Shake in Munhall to see how the new franchise owner, Amanda Bailey, is running things.
On Wednesday, January 5, 2022, Steak n' Shake at the Waterfront had its grand reopening. Its franchise owner, Bailey, is a resident of the North Hills. "I have been going to the Waterfront since it opened in 1999," said Bailey, who has worked in the restaurant industry for over half her life. Her first job was at the Blue Flame on route 51, and she has since worked all over the country, including Alice Cooper's restaurant, 'Alice Cooperstown,' in Phoenix, AZ. "This has been a dream of mine for so long, as I love the industry so much," she said.
Bailey had been going to Steak n' Shake on route 51 since she was in high school, and it was one of her favorite places to dine. "I was so sad when they were closing down," said Bailey, who later learned about the franchising opportunity in August of 2021. "I love the restaurant industry and saw an opportunity to finally be the owner I knew I could always be, but with the backing of a brand everyone in the area loves and misses."
Franchising Steak 'n Shake, as well as getting it ready for opening day, has not been without its challenges. "If it can go wrong, it will," says Bailey, "so many things went wrong. We are opening up almost over five weeks behind schedule." The restaurant was slated to open in December of 2021 but was closed due to issues with Covid. "We have a lot of protocols in place for Covid, and I am hoping that we all stay healthy through this surge," said Bailey.
Regardless of the increasing news coverage of what is being referred to as 'The Great Resignation' and labor shortages all over the country, Bailey says that one thing she was surprised by was how many applicants she had for positions within the restaurant, which was well over 500 individuals applying to work at her Steak 'n Shake location. "We have some amazing people ready to work, and [they] have been working their butts off getting this place ready."
Despite being a decades-old brand that diners know and love, customers will certainly see some changes in newly franchised and remodeled locations that they haven't dealt with from the brand before. Steak 'n Shake is undergoing a change in the service model, away from traditional table service to a new model with self-service kiosks in dining rooms and focusing more on counter service than on table-side service.
Biglari said in a recent report that the majority of Steak 'n Shake's earnings would not be available to the holding company this year as these funds will primarily go into remodeling restaurants with a new point-of-service system and kiosks. "The dining room with table service was undoubtedly a revenue center, but it was not a profit center," Biglari wrote. The Waterfront location will be no different.
One of the main differences Bailey says customers will see in the franchised version of Steak 'n Shake is faster service. "We are able to cook everything fresh and made to order in a timely fashion that makes everyone happy. When we first open, it will be drive-thru and delivery only," says Bailey. This will be until the dining room is remodeled to the self-service counter model mentioned previously. Bailey says that since the dining room is still temporarily closed, their ticket and drive-thru times will have drastically improved. "Our menu is also a lot smaller from before Covid, but the quality is and always will be our top priority," said Bailey.
Bailey says that she has received an overwhelmingly positive response from the local community regarding the reopening of Steak 'n Shake in Munhall. "I am in the restaurant almost every day cleaning, organizing, and interviewing. Everyone that walks in hoping we're already open has been so warm and welcoming; and so happy it's coming back," said Bailey, who looks forward to getting to know the locals and surrounding communities. "When out in the community in my Steak 'n Shake jacket, everyone asks when it's opening and cannot wait to come visit. It has been so great."
