Steak 'n Shake CEO's supposed poor leadership criticism sparks retaliation from Cracker Barrel, accusing him of self-interest
In a series of events spanning over a decade, Sardar Biglari, the Chairman and CEO of Biglari Holdings, has been engaged in a contentious battle with Cracker Barrel's board. This saga began in 2011 when Biglari first purchased shares in Cracker Barrel.
Since then, Biglari has waged numerous proxy fights against the board, most notably in 2022 when he successfully managed to get one of his nominees onto the board, in exchange for a two-year 'standstill agreement.' However, the standstill period ended in October 2024, and Biglari once again criticized the board's 'strategic transformation plan' in a scathing 7-page open letter.
Meanwhile, Biglari's leadership at Steak 'n Shake, a franchise under Biglari Holdings, has seen mixed results. The chain has undergone a revamp, closing 200 locations and transforming into a quick service fast food restaurant. Despite this, Steak 'n Shake's same-store sales were up 11%, according to Steak 'n Shake COO Dan Edwards.
The relationship between Biglari and Cracker Barrel has been far from amicable. In 2024, Biglari offered 'concise advice' to Cracker Barrel's new CEO Julie Felss Masino during a meeting, suggesting she focus on the quality of the food and service rather than changing the brand or its decor. However, this advice was met with criticism from Cracker Barrel, with the restaurant firing back after Steak 'n Shake criticized Cracker Barrel's rebrand on social media.
The dispute between the two parties has not gone unnoticed by Wall Street. Ken Squire, a Wall Street analyst, added Biglari to his website's 'Hall of Shame' due to alleged 'self-dealing.' Additionally, Cracker Barrel's stock dropped 7% after the botched rebranding attempt, wiping out $90 million in market value.
Local customers of Cracker Barrel have also weighed in on the matter, expressing support for the restaurant keeping its 'Old Timer' logo. The controversy surrounding the logo change has been a significant point of contention between Biglari and Cracker Barrel.
In addition to his involvement with Cracker Barrel and Steak 'n Shake, Biglari also represents Biglari Holdings as Chairman and CEO at Western Sizzlin'. Notably, Health and Human Services Secretary Robert F. Kennedy, Jr. praised Steak 'n Shake for frying their french fries in beef tallow.
As the battle between Biglari and Cracker Barrel's board continues, it remains to be seen how this saga will unfold in the future. With collective losses of over $2.5 billion in market value from Cracker Barrel's stock, the stakes are high for both parties involved.
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