Steak and Shake closing 57 locations

[storewanderer]

More franchises closing sites.

Some Kansas City suburb (I heard these were basically having the real estate sold and would close once the real estate was sold, I'm not sure how many locations are impacted)...
https://www.kansascity.com/news/busines ... 01164.html
https://theaugustapress.com/shrinking-m ... -co-owner/

Augusta, GA

Really too bad. The franchisees had all the newer/modern locations. The corporate/"operator" model locations seem to all be those old 90's like units which are far less attractive than the newer units that franchisees keep closing.

[ClownLoach]

Sounds like another case of a chain forgetting who they are, then being puzzled about customers forgetting about them. The odd model of full service dine-in coupled with a drive thru somehow worked for enough people that the chain stayed in business. Then they changed it, changed the menu, changed the food quality, obviously quit supervising the franchisees so consistency disappeared, expanded into territory where nobody's ever heard of them like Aliso Viejo, CA, and by the time they were done it was an amateur hour quality fast food place with poor quality, poor service, and sky high pricing.

[storewanderer]

Sounds like another case of a chain forgetting who they are, then being puzzled about customers forgetting about them. The odd model of full service dine-in coupled with a drive thru somehow worked for enough people that the chain stayed in business. Then they changed it, changed the menu, changed the food quality, obviously quit supervising the franchisees so consistency disappeared, expanded into territory where nobody's ever heard of them like Aliso Viejo, CA, and by the time they were done it was an amateur hour quality fast food place with poor quality, poor service, and sky high pricing.

I think the problem is the chain did that 3.99 menu from basically 2009-2016 and drove a ton of volume. Many of the states they operate in have the low server wage so the servers were being paid basically nothing+tips so in essence even though the meal was 3.99 the customer leaving a tip was basically paying the server wages.

Their model worked because it was actually a very sound concept for lower middle class type of locations with a lot of young families and retiree types. It was like a poor person's Dennys. But the food was great. Portions weren't big, but prices were low, and there is a segment of customers looking for that type of a restaurant in a lot of their markets.

The expansion into CA I do not understand. The first Las Vegas unit in South Point Casino was opened because the casino owner liked the concept and got one put into his casino. He did not have any other chain food in his casino at that time (has a Starbucks now), just that, and every other restaurant was an in house concept, so clearly that casino owner really liked the concept. Then a freestanding one opened in Reno in 2013 under a franchisee in an underserved/growing/lower middle class type of area and it did exceptionally well. Victorville opened around the same time again under some franchisee. These initial 3 units were the typical format with table service but had higher pricing than the midwest units.

Then something changed in CA and they started to open units with a counter serve format instead of table service. I suspect their labor model didn't work in CA. However the second Reno unit that opened in 2018 did open with table service and only ended it during/after COVID.

Now more recently they have made one dumb decision after another. The push to kiosk ordering given their customer model is stupid. Retiree customers do not want to use a kiosk, period. A young family juggling 2-3 young kids also does not want to mess around using a kiosk. I think they could have eliminated table service and shifted to self serve drinks and many customers would have accepted it but the push to kiosk ordering was a push one step too far.

Then eliminating various menu items is another issue. The Reno units quit selling coffee, for instance. Again when you customer base is made up of retirees and young families you need to serve coffee. Many of the unique burgers like the egg topped burger, mushroom burger, jalapeno burger, etc. were taken from the menu (unless you go to South Point- all still there). On the milkshake side they quit serving a milkshake with actual chunks of strawberry in it (unless you go to South Point- still served there) but kept the one that used strawberry syrup.

The other problem I see with their push to kiosk ordering is it seems they do not allocate labor to do anything in the dining area anymore; so cleanliness is not what it should be and good luck getting help on the kiosk. Their kiosks work pretty well generally speaking (like the Wendys kiosk - way better than McDonalds kiosk). The kiosks for some reason do not accept Steak N Shake gift cards (which sell at a 25% discount at Sam's Club) but the old registers had no problem at all accepting them- cashier selected pinpad tender and you swiped it in the pinpad and it processed immediately. I think it is fine to have order kiosks but you need a staffed counter as an ordering option/someone tending to the dining area to ensure cleanliness.

There are still various franchise units that operate under the table service model. However the company doesn't seem to want that going on. They get a little black and white one sided laminated page menu and the same small variety as other units. They also used to have different menu inside vs. drive through (inside served entree/fries plate; drink was separate- now inside uses same menu as drive through with typical fast food model of single burger alone, fries alone, or combo burger/fry/drink).

There have also been various lawsuits from franchisees regarding pricing. Steak N Shake forces franchise units to follow mandated pricing from corporate office. Some franchisees have sued and been allowed to do their own pricing, others were sued and lost their units entirely.

I'm not sure what happened with Aliso Viejo, it appeared to have traffic. That franchisee had a second unit elsewhere; possibly Compton. Victorville has opened and closed multiple times, so there is some issue there but multiple someones keep trying. Yucca Valley (different franchisee) recently got the ordering kiosk upgrade so whoever owns that unit must be pretty solid with it otherwise I don't think they would have paid for the upgrade.

[ClownLoach]

Sounds like another case of a chain forgetting who they are, then being puzzled about customers forgetting about them. The odd model of full service dine-in coupled with a drive thru somehow worked for enough people that the chain stayed in business. Then they changed it, changed the menu, changed the food quality, obviously quit supervising the franchisees so consistency disappeared, expanded into territory where nobody's ever heard of them like Aliso Viejo, CA, and by the time they were done it was an amateur hour quality fast food place with poor quality, poor service, and sky high pricing.

I think the problem is the chain did that 3.99 menu from basically 2009-2016 and drove a ton of volume. Many of the states they operate in have the low server wage so the servers were being paid basically nothing+tips so in essence even though the meal was 3.99 the customer leaving a tip was basically paying the server wages.

Their model worked because it was actually a very sound concept for lower middle class type of locations with a lot of young families and retiree types. It was like a poor person's Dennys. But the food was great. Portions weren't big, but prices were low, and there is a segment of customers looking for that type of a restaurant in a lot of their markets.

The expansion into CA I do not understand. The first Las Vegas unit in South Point Casino was opened because the casino owner liked the concept and got one put into his casino. He did not have any other chain food in his casino at that time (has a Starbucks now), just that, and every other restaurant was an in house concept, so clearly that casino owner really liked the concept. Then a freestanding one opened in Reno in 2013 under a franchisee in an underserved/growing/lower middle class type of area and it did exceptionally well. Victorville opened around the same time again under some franchisee. These initial 3 units were the typical format with table service but had higher pricing than the midwest units.

Then something changed in CA and they started to open units with a counter serve format instead of table service. I suspect their labor model didn't work in CA. However the second Reno unit that opened in 2018 did open with table service and only ended it during/after COVID.

Now more recently they have made one dumb decision after another. The push to kiosk ordering given their customer model is stupid. Retiree customers do not want to use a kiosk, period. A young family juggling 2-3 young kids also does not want to mess around using a kiosk. I think they could have eliminated table service and shifted to self serve drinks and many customers would have accepted it but the push to kiosk ordering was a push one step too far.

Then eliminating various menu items is another issue. The Reno units quit selling coffee, for instance. Again when you customer base is made up of retirees and young families you need to serve coffee. Many of the unique burgers like the egg topped burger, mushroom burger, jalapeno burger, etc. were taken from the menu (unless you go to South Point- all still there). On the milkshake side they quit serving a milkshake with actual chunks of strawberry in it (unless you go to South Point- still served there) but kept the one that used strawberry syrup.

The other problem I see with their push to kiosk ordering is it seems they do not allocate labor to do anything in the dining area anymore; so cleanliness is not what it should be and good luck getting help on the kiosk. Their kiosks work pretty well generally speaking (like the Wendys kiosk - way better than McDonalds kiosk). The kiosks for some reason do not accept Steak N Shake gift cards (which sell at a 25% discount at Sam's Club) but the old registers had no problem at all accepting them- cashier selected pinpad tender and you swiped it in the pinpad and it processed immediately. I think it is fine to have order kiosks but you need a staffed counter as an ordering option/someone tending to the dining area to ensure cleanliness.

There are still various franchise units that operate under the table service model. However the company doesn't seem to want that going on. They get a little black and white one sided laminated page menu and the same small variety as other units. They also used to have different menu inside vs. drive through (inside served entree/fries plate; drink was separate- now inside uses same menu as drive through with typical fast food model of single burger alone, fries alone, or combo burger/fry/drink).

There have also been various lawsuits from franchisees regarding pricing. Steak N Shake forces franchise units to follow mandated pricing from corporate office. Some franchisees have sued and been allowed to do their own pricing, others were sued and lost their units entirely.

I'm not sure what happened with Aliso Viejo, it appeared to have traffic. That franchisee had a second unit elsewhere; possibly Compton. Victorville has opened and closed multiple times, so there is some issue there but multiple someones keep trying. Yucca Valley (different franchisee) recently got the ordering kiosk upgrade so whoever owns that unit must be pretty solid with it otherwise I don't think they would have paid for the upgrade.

Aliso Viejo didn't have traffic, it was a dud from day one. The previous Burger King there would get decent traffic from the employees from the various stores there like Target and Stater Bros, but the table service model didn't work for them. The immediate surrounding neighborhood isn't what you'd expect in that area, there is a very large mostly Section 8 low income housing apartment complex across from Target. It became a Wendy's. Their other location was in ritzy Santa Monica... Bad fit.

[storewanderer]

Aliso Viejo didn't have traffic, it was a dud from day one. The previous Burger King there would get decent traffic from the employees from the various stores there like Target and Stater Bros, but the table service model didn't work for them. The immediate surrounding neighborhood isn't what you'd expect in that area, there is a very large mostly Section 8 low income housing apartment complex across from Target. It became a Wendy's. Their other location was in ritzy Santa Monica... Bad fit.

Did Aliso Viejo open with table service? It was counter ordering for most of its time through closure.

There were two locations trying to be trendy/appeal to a different crowd in Santa Monica and Burbank. One of these was a franchise site and one was corporate. They tried another site like that in Tempe, AZ also (corporate site). All of these 3 sites closed in 2020. These sites were never table service, served beer, and pushed different/higher cost "prime" steakburgers and "fresh cut fries." Pricing was radically higher and people who were used to the chain elsewhere did not even recognize these locations. They were trying to be something they weren't. They were trying to present more like Shake Shack (a chain I find to be a poor value and highly overrated). They were going down the wrong path. However if you look at Steak N Shake's operations in France/Italy that is how those units are positioned. They tried to position the same way in a couple new markets in the US and failed.

I think Fresno (which was open less than a year) had table service also, as did the two NorCal ones that were barely open (Daly City and Campbell). I forgot about those.

Temecula, Compton, Moreno Valley were counter serve at all times. Temecula was run by Pechanga so it didn't do corporate promotions etc. All of the others did run corporate promotions.

[ClownLoach]

Aliso Viejo didn't have traffic, it was a dud from day one. The previous Burger King there would get decent traffic from the employees from the various stores there like Target and Stater Bros, but the table service model didn't work for them. The immediate surrounding neighborhood isn't what you'd expect in that area, there is a very large mostly Section 8 low income housing apartment complex across from Target. It became a Wendy's. Their other location was in ritzy Santa Monica... Bad fit.

Did Aliso Viejo open with table service? It was counter ordering for most of its time through closure.

There were two locations trying to be trendy/appeal to a different crowd in Santa Monica and Burbank. One of these was a franchise site and one was corporate. They tried another site like that in Tempe, AZ also (corporate site). All of these 3 sites closed in 2020. These sites were never table service, served beer, and pushed different/higher cost "prime" steakburgers and "fresh cut fries." Pricing was radically higher and people who were used to the chain elsewhere did not even recognize these locations. They were trying to be something they weren't. They were trying to present more like Shake Shack (a chain I find to be a poor value and highly overrated). They were going down the wrong path. However if you look at Steak N Shake's operations in France/Italy that is how those units are positioned. They tried to position the same way in a couple new markets in the US and failed.

I think Fresno (which was open less than a year) had table service also, as did the two NorCal ones that were barely open (Daly City and Campbell). I forgot about those.

Temecula, Compton, Moreno Valley were counter serve at all times. Temecula was run by Pechanga so it didn't do corporate promotions etc. All of the others did run corporate promotions.

Yes, Aliso opened with table service. It wasn't impressive and took forever.

[storewanderer]

Yes, Aliso opened with table service. It wasn't impressive and took forever.

That is not unlike the midwest. Service is not impressive when tips are based on a $3.99 menu. Then again Aliso had no $3.99 menu. Maybe a 5.99 menu.

The other problem this concept has is it seems to take them longer to make shakes than to make burgers. The burger cooks and is prepared in something just over 2 minutes, and the fries have a short fry time due to being so skinny. So food can come out fast if they are efficient. But when the timings get screwed up, extra trips out to tables to deliver burgers then communicate the shake is coming then eventually deliver the shake things get screwed up pretty fast.

So I do think the corporate made the correct decision to eliminate the table service chainwide.

[veteran+]

Aliso Viejo didn't have traffic, it was a dud from day one. The previous Burger King there would get decent traffic from the employees from the various stores there like Target and Stater Bros, but the table service model didn't work for them. The immediate surrounding neighborhood isn't what you'd expect in that area, there is a very large mostly Section 8 low income housing apartment complex across from Target. It became a Wendy's. Their other location was in ritzy Santa Monica... Bad fit.

Did Aliso Viejo open with table service? It was counter ordering for most of its time through closure.

There were two locations trying to be trendy/appeal to a different crowd in Santa Monica and Burbank. One of these was a franchise site and one was corporate. They tried another site like that in Tempe, AZ also (corporate site). All of these 3 sites closed in 2020. These sites were never table service, served beer, and pushed different/higher cost "prime" steakburgers and "fresh cut fries." Pricing was radically higher and people who were used to the chain elsewhere did not even recognize these locations. They were trying to be something they weren't. They were trying to present more like Shake Shack (a chain I find to be a poor value and highly overrated). They were going down the wrong path. However if you look at Steak N Shake's operations in France/Italy that is how those units are positioned. They tried to position the same way in a couple new markets in the US and failed.

I think Fresno (which was open less than a year) had table service also, as did the two NorCal ones that were barely open (Daly City and Campbell). I forgot about those.

Temecula, Compton, Moreno Valley were counter serve at all times. Temecula was run by Pechanga so it didn't do corporate promotions etc. All of the others did run corporate promotions.

Interesting.

I find the Shake Shack in West Hollywood to be consistently the opposite of your experience.

[storewanderer]

Interesting.

I find the Shake Shack in West Hollywood to be consistently the opposite of your experience.

What experience? They are ridiculously overpriced for the quality of the product they sell. This is based on my visits to standard units in multiple states; CA, NV, MN. I didn't say anything about the experience. Strictly the price and quality equation doesn't match up. If they cut their prices by about 30% it would be about right and a fair value.

But they should take a hard look at some of their airport locations, especially Las Vegas. Terrible experience- terrible service, cold food, food that didn't taste right, really awful place there. But I never judge a chain by airport locations. However I'm not sure all customers are like that.

[veteran+]

Interesting.

I find the Shake Shack in West Hollywood to be consistently the opposite of your experience.

What experience? They are ridiculously overpriced for the quality of the product they sell. This is based on my visits to standard units in multiple states; CA, NV, MN. I didn't say anything about the experience. Strictly the price and quality equation doesn't match up. If they cut their prices by about 30% it would be about right and a fair value.

But they should take a hard look at some of their airport locations, especially Las Vegas. Terrible experience- terrible service, cold food, food that didn't taste right, really awful place there. But I never judge a chain by airport locations. However I'm not sure all customers are like that.

I can only speak of the West Hollywood location.

Quality? Excellent
Service? Excellent
Cleanliness/Santitation? Inside & Out, Excellent
Ambience? Excellent (and NOT a carnival)
Price? With all the above checked, I have NO problem with the price
Parking? Excellent, though ingress and egress are not ideal