Steak ’n Shake NNN Property Lease: Pros, Cons, and History

Steak ’n Shake

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Number of locations

As of 2024–2025, Steak ’n Shake operates approximately 390–400 locations across 23 U.S. states. The brand has significantly reduced its footprint from its 2018 peak as part of a strategic restructuring, with the largest concentration of restaurants in Florida, Illinois, Indiana, and Texas.

Revenue and income

Steak ’n Shake is privately owned under Biglari Holdings Inc. In 2022, the brand reported pre-tax operating earnings of approximately $11.5 million after several years of losses, reflecting early success from its operational overhaul and franchise-partner strategy. Company-wide revenue figures are not publicly broken out, as financials are reported at the parent-company level.

Future plans

Steak ’n Shake is focused on a low-cost, single-unit franchise-partner model, converting company-owned restaurants into operator-led locations. The brand has eliminated table service, adopted self-order kiosks, expanded drive-thru and takeout, and is selectively reopening and converting locations rather than pursuing aggressive new-store growth. Recent initiatives also include technology upgrades and partnerships, such as EV charging installations at select locations.

Corporate vs. franchise

Steak ’n Shake is transitioning from a predominantly corporate-owned model to a franchise-partner system. Many locations are offered to operators for a $10,000 franchise fee when taking over an existing restaurant. Franchise partners typically pay royalties ranging from 5%–6.5% of gross sales, along with advertising fees. The company’s long-term goal is to place most locations under single-unit, owner-operator control.

Additional information – Steak ’n Shake Properties

Founded in 1934, Steak ’n Shake originated in Normal, Illinois.
The brand is best known for its Steakburgers and hand-dipped milkshakes, emphasizing affordability and made-to-order food.
Steak ’n Shake is privately held and owned by Biglari Holdings Inc., headquartered in San Antonio, Texas.
In recent years, the chain modernized operations by removing table service, implementing kiosks, and reintroducing beef tallow frying to enhance flavor authenticity.

Steak ’n Shake History

Steak ’n Shake was founded in 1934 by Gus Belt in Normal, Illinois, with a focus on serving high-quality food at affordable prices. The brand earned its name from its original promise to serve steakburgers made from real steak cuts and hand-dipped milkshakes, a concept that helped it stand out during the Great Depression. Over the decades, Steak ’n Shake expanded across the Midwest and Southern United States, becoming a recognizable name in classic American diner-style dining. In 2008, the company was acquired by Biglari Holdings Inc., which later led major operational changes, including menu simplification, technology-driven ordering, and a shift toward a franchise-partner model. Today, Steak ’n Shake continues to evolve by focusing on efficiency, value pricing, and modernized service while preserving its iconic burgers and shakes.

Why Invest in Ground Lease and NNN Lease of Steak ’n Shake?

Investing in Steak ’n Shake ground lease and triple net (NNN) lease properties can be attractive for investors seeking yield, though the risk profile differs from convenience-store tenants like Wawa. Key reasons include:

1) Steak ’n Shake NNN Property Investment: Stable income

Steak ’n Shake NNN and ground leases typically provide fixed, contractual rent over long terms, offering predictable cash flow when backed by a strong site and a performing operator.

2) Steak ’n Shake NNN Property Investment: Recognized national brand

Founded in 1934, Steak ’n Shake is a well-known American diner brand with decades of operating history, which helps support tenant demand and brand-driven traffic at established locations.

3) Steak ’n Shake NNN Property Investment: Low management responsibility

Under ground lease and NNN structures, the tenant is responsible for taxes, insurance, and maintenance, allowing investors to benefit from passive ownership with minimal day-to-day involvement.

4) Steak ’n Shake NNN Property Investment: Long-term lease structure

Many Steak ’n Shake leases feature long initial terms with extension options and scheduled rent increases, supporting income visibility over the hold period.

5) Steak ’n Shake NNN Property Investment: Real estate fundamentals

Steak ’n Shake locations are often positioned along high-traffic corridors with strong visibility and drive-thru access, making the underlying real estate valuable and adaptable for future users if needed.

Pros and Cons of Steak ’n Shake Ground Lease and NNN Lease Investment

Pros:

Predictable income from long-term ground or NNN lease structures.
Nationally recognized restaurant brand with decades of operating history.
Minimal landlord responsibilities, as the tenant typically covers taxes, insurance, and maintenance.
Drive-thru–oriented sites in high-traffic corridors support strong real estate fundamentals.

Cons:

Higher tenant-credit risk compared to top-tier convenience store operators.
Brand restructuring and unit closures in recent years increase performance variability by location.
Lease renewal and re-tenanting risk at expiration, especially for older prototype buildings.
Heavy dependence on the individual operator’s performance under the franchise-partner model.
Limited landlord control over operations, redevelopment timing, or branding decisions.

Thorough due diligence—focused on lease guarantees, unit-level sales, operator strength, and real estate adaptability—is essential. Investors should evaluate location quality, lease terms, and exit strategies and consult real estate and financial professionals to ensure alignment with investment objectives and risk tolerance.

MarketWatch: Steak ’n Shake