New Steak'n Shake Prototype Store

[Parsad]

Steak'n Shake's new prototype store will be opening in Rome, Georgia.  It looks like Sardar will be on site to open the store.  From the article, the design looks quite striking...I like it.  Would like to see pictures of the interior though.  Cheers!

 

http://romenews-tribune.com/view/full_story/9527963/article-Steak-%E2%80%98n-Shake-official-coming-for-Rome-store%E2%80%99s-grand-opening-on-Sept--22?instance=home_Most_popular

[farnamstreet]

Lot more pictures available here

http://romenewswire.com/2010/09/22/steak-n-shake-opens-for-business/

[farnamstreet]

Video interview with Sardar here.

http://romenews-tribune.com/view/full_story/9618760/article-Steak--n-Shake--Open-for-business?instance=home_news_lead

 

[Parsad]

Looks terrific! Excellent blend of style and nostalgia.  Cheers!

[OracleofCarolina]

NYC store looks clean and modern.

http://m.ny.eater.com/archives/2012/01/inside_nycs_first_ever_steak_n_shake_opening_thursday.php

 

[ragnarisapirate]

NYC store looks clean and modern.

http://m.ny.eater.com/archives/2012/01/inside_nycs_first_ever_steak_n_shake_opening_thursday.php

 

Putting it next to the ed sullivan theater, where Dave Letterman (an indianapolis native) is, is absolute brilliance.

[Parsad]

Yup, that is a brilliant move!  He's going to get a ton of free advertising too, because Letterman always talks about the restaurant next to the theatre and he'll probably do the occasional skit using the restaurant. 

 

I remember him talking fondly of Steak'n Shake burgers a couple of years ago on his show, and I asked Sardar if he sent him one of those "Gold" cards that Burger King, etc send to celebrity fans who mention their restaurant.  He said it was already in the mail, so Letterman got one.  Nice looking store, and it looks like it's catching the attention of the people walking by. 

 

I guess Rupert G's restaurant was closed...or maybe he's the new franchisee!  ;D  Cheers! 

[ragnarisapirate]

Yup, that is a brilliant move!  He's going to get a ton of free advertising too, because Letterman always talks about the restaurant next to the theatre and he'll probably do the occasional skit using the restaurant. 

 

I remember him talking fondly of Steak'n Shake burgers a couple of years ago on his show, and I asked Sardar if he sent him one of those "Gold" cards that Burger King, etc send to celebrity fans who mention their restaurant.  He said it was already in the mail, so Letterman got one.  Nice looking store, and it looks like it's catching the attention of the people walking by. 

 

I guess Rupert G's restaurant was closed...or maybe he's the new franchisee!  ;D  Cheers!

 

That's exactly what I was getting at... Rupert's store is around the corner, and I am guessing is still in business.

 

Anyway, how do you know it's catching attention of people walking by? Do you have spies or a stream? ;)

[ragnarisapirate]

I guess that you can kind of see it here...

 

http://nyctmc.org/google_popup.php?cid=421

 

It is really freaky that you can do stuff like that... If they ever go HD, it's just a matter of time til we are all employed as online traffic counters. ;)

[link01]

looks pretty nifty, & at a low cost too, as i recall when i was watching more closely.

sardar, imo, is a much better operator of business than an investor. basically because  he's shown himself to be tone-deaf to the long range implications of that elitist compensation scheme he put in place that pays himself like a hege fund manager vs a common ceo. in the long run this is going to cost him & his shareholders....his shareholders even more so.

[DCG]

Is the a life-size wax statue of Sardar outside?

[Parsad]

Is the a life-size wax statue of Sardar outside?

 

No, but Steak'n Shake got a huge bit of advertising by Letterman in tonight's show.  They did about a 8-10 minute segment on Steak'n Shake with Letterman telling a story about Steak'n Shake and his youth, how the new owners bought Friendly's then sold it, and now he thinks Tony Danza owns it!  Very, very funny!  The cameras then went into the restaurant and Letterman chatted with the staff, and ordered his burger exactly how he wanted it.  It will probably become one of the busiest restaurants in the entire chain.  Cheers! 

[Frozen Tundra]

I can only hope this is the beginning of Steak n Shakes popping up across the country in metropolitan areas.  I can already envision one in downtown Chicago!

[onyx1]

 

Wow, that was funny.  Priceless exposure.  Congrats to Sardar on your marketing coup!

[ragnarisapirate]

I wonder if Steak 'n Shake is going to get a cult fund manager type of following. Kind of like how a lot of people on this board wear Fairfax hats, or bought jewelry at Borsheim's/Helzberg

[Parsad]

I wonder if Steak 'n Shake is going to get a cult fund manager type of following. Kind of like how a lot of people on this board wear Fairfax hats, or bought jewelry at Borsheim's/Helzberg

 

I did for quite a while...I wore a Western Sizzlin hat...then a Friendly's hat...finally a Steak'n Shake hat.  I stopped at wearing a Biglari Holdings hat, once the CEO took 25% of the long-term intrinsic value away from me.  As such, the only hats I continue to wear are Fairfax and Berkshire, and the CEO's would never dare dream, let alone actually do, the same thing.  Cheers! 

[ragnarisapirate]

I wonder if Steak 'n Shake is going to get a cult fund manager type of following. Kind of like how a lot of people on this board wear Fairfax hats, or bought jewelry at Borsheim's/Helzberg

 

I did for quite a while...I wore a Western Sizzlin hat...then a Friendly's hat...finally a Steak'n Shake hat.  I stopped at wearing a Biglari Holdings hat, once the CEO took 25% of the long-term intrinsic value away from me.  As such, the only hats I continue to wear are Fairfax and Berkshire, and the CEO's would never dare dream, let alone actually do, the same thing.  Cheers!

 

It is good to know that we both valued the compensation package at about the same amount of an impairment to IV. I feel in good company. :)

 

I need a new hat. If any fund managers out there want to send me one, I will likely advertise for you.

[ExpectedValue]

really positive review of the new Steak N Shake in NYC:

 

http://aht.seriouseats.com/archives/2012/01/new-yorks-first-steak-n-shake-opens-tomorrow.html

 

If this is true, they might be onto something -- basically leveraging the brand to come out with a Shack Shack competitor, seems like a good idea.

[OracleofCarolina]

http://nrn.com/article/steak-n-shake-hopeful-signature-will-drive-franchise-growth?ad=news

 

More press on the NYC store...seems to be doing very well.. lines are out the door

[EdWatchesBoxing]

http://nrn.com/article/steak-n-shake-hopeful-signature-will-drive-franchise-growth?ad=news

 

More press on the NYC store...seems to be doing very well.. lines are out the door

 

In the fifth picture, I'm guessing that's a picture of the young Muhammad Ali/Cassius Clay in the back. The place looks really cool.

[eclecticvalue]

So far there are many positive reviews from the foodie crowd which is very good thing in NYC. http://www.yelp.com/biz/steak-n-shake-new-york

[ragu]

 

It is good to know that we both valued the compensation package at about the same amount of an impairment to IV.

 

ragnarisapirate,

 

Firstly, apologies for the really late response to this. I'd meant to respond earlier.

 

Re. the impairment to IV as a result of Sardar's compensation arrangement, reason dictates that the most fundamental assumption in your (and all the detractors') valuation, albeit implicit, is incorrect. The future will show it.

 

Best,

Ragu

[rkbabang]

Re. the impairment to IV as a result of Sardar's compensation arrangement, reason dictates that the most fundamental assumption in your (and all the detractors') valuation, albeit implicit, is incorrect. The future will show it.

 

Hi Ragu,

 

Do you care to elaborate on your reasoning a little?  Saying simply "reason dictates" is not really a strong argument without sharing the reasoning. 

 

I was a BH shareholder (as well as a WEST shareholder and I invested alongside Biglari a number of times).  I sold all of my BH as a result of the compensation package and its effect on IV.  I'd love to understand why I'm wrong.

 

Thanks,

 

--Eric

 

[Parsad]

 

It is good to know that we both valued the compensation package at about the same amount of an impairment to IV.

 

ragnarisapirate,

 

Firstly, apologies for the really late response to this. I'd meant to respond earlier.

 

Re. the impairment to IV as a result of Sardar's compensation arrangement, reason dictates that the most fundamental assumption in your (and all the detractors') valuation, albeit implicit, is incorrect. The future will show it.

 

Best,

Ragu

 

I think you'll find in hindsight ten, twenty years from now that you are incorrect here.  How much do you want to bet that at some point in the future, he's going to lift that $10M cap once he can get enough votes and has done enough to pass it.  Cheers!

[ragu]

Saying simply "reason dictates" is not really a strong argument without sharing the reasoning. 

 

Hi Eric,

 

Since you ask so nicely :), here goes:

 

Sardar sold something of value to BH - The Lion Fund. He took something of value from BH and, by extension, BH’s shareholders – the new incentive compensation. However, in taking something of value from BH, he also agreed to buy shares of BH with half those proceeds, thereby increasing his stake in the entity that would be paying him. In effect, Sardar was both a buyer and a seller in the Lion Fund transaction. 

 

As far as the transaction goes, there are three possible outcomes:

 

a. It is fair on both parties.

b. It is favourable to the buyer i.e. BH shareholders, Sardar being an increasingly large one of those, at the expense of the seller Sardar, erstwhile owner of the Lion Fund.

c. It is favourable to the seller i.e. Sardar, erstwhile owner of the Lion Fund, at the expense of BH shareholders, Sardar being an increasingly large one of those.

 

If you’d like to make the assessment of what outcome is most probable, the question worth asking is: what outcome would Sardar most prefer? Alternatively, to channel Charlie (or Jacobi if you’d like to give credit where it’s due), we could “Invert, always invert” and ask: what outcome would Sardar least desire?

 

If your subjective assessment of Sardar leads you to conclude that he is on the side of BH shareholders, the answer is obvious. It’s © .

 

If you make the argument (and I don’t) that Sardar works completely in his self-interest, what's the answer?

That’s right. It’s © again. And it’s because of the reinvestment requirement which virtually guarantees that the value of BH’s stock will have the greatest impact on Sardar’s net worth over time.   

 

So, irrespective of which side of the subjective fence you are on, the argument that Sardar, as a result of this transaction, willfully engineered a long-term impairment to IV doesn’t hold, let alone one that’s as high as 25%.

 

And if there wasn’t a material impairment to IV, I can see only one scenario that causes it to be so. And that scenario implies that a fundamental, albeit implicit, assumption that the detractors make about the incentive agreement is invalid.

 

Best,

Ragu