In 2018, the classic Midwestern chain famous for steakburgers and milkshakes made a startling decision: franchise company-owned Steak ‘n Shake restaurants for a total investment of only $10,000. To borrow a phrase from QSR magazine, this owner-operator opportunity can be dubbed a "Burger Gold Rush".
How much money are franchise partners making?
In 2020, the average franchise partner earned $161,079 with some on track to make more than $300,000 in their first year alone. We spoke with Press McDowell, a St. Louis, Missouri franchise partner, who shared, “I earned in two months what I made in a year at my previous job.”
When asked about the $10,000 one-time cost to join the program, he stated, “It is the best investment I have made in my life… [I made] close to 20 times that amount in the first year.”
Says Steak ‘n Shake CEO Sardar Biglari, "Doubtless, a good number of our partners will become millionaires. But make no mistake: We are not minting millionaires but are merely providing the means—they are earning every penny."
It’s the lowest-cost restaurant franchise in America
In traditional restaurant franchises like McDonald’s or Wendy’s, the upfront costs can be upwards of $2 million, not including the time required to find land, build a restaurant and hire and train staff.
Steak ‘n Shake’s franchise partner program, in contrast, costs only $10,000. “Other franchises have such a big barrier with high investment costs,” McDowell points out. “Steak ‘n Shake has a small upfront investment; and within the first month, I made that money back. I consider this investment a blessing.”
It is important to understand that the program is different than most traditional franchise arrangements. “A franchise partnership is a passport that cannot be purchased but only earned. It takes talent along with the passion to serve others, a rare combination that is woven into the character of each individual we accept,” added Biglari.
Upon acceptance into the program, you go through a multi-week training program and must have your restaurant meet the gold standard in service.
It's tough to get in
Since the program began in 2018, Steak ‘n Shake has received over 35,000 applications, with only 86 being accepted. With an approval rate of under 1%, the program has a lower acceptance rate than Harvard Business School. Ironically, Harvard MBA’s earn about the same $160,000 in first-year pay as Steak ‘n Shake franchise partners.
So, what does it take? According to the company, franchise partners are self-starters, have a passion for excellence, and are fanatical about pleasing customers. Restaurant management experience is not a requirement.
No absentee ownership
Steak ‘n Shake franchise partners cannot have additional business ventures; they run the day-to-day business. No absentee ownership here and 60-hour work weeks are initially the norm.
“This is your restaurant. So a lot of times you think you’re going to have to be here 24 hours a day…. Which is true at the beginning,” says Alok Shivpuri, a Dallas franchise partner.
“But if you’re a smart operator, you build your restaurant and put systems in place, it gives you more time to spend with your family, not less.” He adds, “If you really think about the hours you are putting in... you’re already putting those hours in within the restaurant business, but this time you’re doing it for yourself, so you get the full benefit and rewards of the work you’re putting in—and the money is endless.”
Too good to be true?
Simply put, Steak n shake is looking to create the world’s greatest culture in the hospitality industry. “In the end, nothing is as important as the way our customers are treated. It takes the right leadership in a unit for customers to be served in a warm, caring, and hospitable manner, said Biglari.
"To achieve our goal, we are building a culture of ownership at the unit level. For operators to think and act like owners, we believe they must be owners. We are becoming a company of owners, changing the culture of the organization in our quest for service excellence.”
Of course it helps that the company is on solid financial footing. Steak ‘n Shake recently announced on twitter that it is one of the few debt-free restaurant chains in America.
If you have what it takes to live the American dream, apply here: www.steaknshakefranchise.com
This article is supported and sponsored by Steak ‘n Shake. Steak ‘n Shake and Maxim are wholly-owned subsidiaries of Biglari Holdings. Past performance is no guarantee of future results.