Value Creation Initiatives (Episode 1): Retail with the Steak & Shake Case Study.

How to Successfully Execute a Turnaround Strategy.

Retail is certainly one of the sectors most affected by mass bankruptcies, with the downfall or slimming down of brands like André, Courtepaille, Tati, Naf Naf, Catimini, Mim, Cop Copine, Habitat, Minelli, Burton, etc.

Today, we’ll study a lesser-known but striking example of a successful turnaround, that of the Steak & Shake chain by Biglari Holding. Sardar Biglari, founder of Biglari Holding, acquired the fast-food chain in 2008 and managed to turn it around in just a few years by applying some strategies we’ll delve into later. This success seems to have strengthened between 2020 and 2023.

Two key drivers of its success:

  1. Participative Franchise Model:

Steak & Shake undertook a profound transformation of its operational management model, shifting from direct restaurant management to a franchise partnership model.

Franchise partners initially invest $10,000 to take control of a unit, directly involving them in the management and financial performance of the restaurant.

By 2023, the chain had 181 franchised partners, demonstrating a significant net increase compared to the 2 units in 2018.

This strategy not only energized franchisee engagement but also strengthened their accountability for the success of their operations, aligning operator interests with those of the parent company.

Restaurants are 50% owned by franchisees, and they pay an annual royalty equal to 15% of revenue to the brand.

  1. Reduction of Break-Even Point for Outlets:

Steak & Shake drastically reduced the cost structure, with immediate actions: (i) shifting from full-service to self-service model reduced operational expenses, especially labor costs, while increasing productivity, (ii) implementation of self-service ordering kiosks, (iii) reducing opening hours also contributed to nearly a 40% reduction in the break-even point.

These actions reduced the restaurants’ reliance on high sales volumes to turn a profit. By 2023, this approach led to a 51% increase in sales per opening hour, despite a 29% reduction in the number of employees per hour.

Impact on Group Valuation:

Between March 2019 and April 2024, the stock price increased by +57%, rising from $127 to $199.

In a nutshell:

At OutMatch, we support retail groups during their turnaround phase, particularly in the financial implementation of (i) participative franchise models and (ii) point-of-sale break-even reduction programs – through our valuation & strategy offering.

For further details, feel free to contact:


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