8/27/2025
After Cracker Barrel Uproar, Activist Investor Seizes the Moment
Wall Street Journal (08/27/25) Haddon, Heather
For activist investor Sardar Biglari, Cracker Barrel’s (CRB) about-face on its logo change isn’t enough. Biglari, CEO of Steak ’n Shake and owner of an investment firm that is a shareholder in Cracker Barrel, has spent years swiping at the country-themed restaurant chain, waging unsuccessful proxy fights over more than a decade. The removal of the “old timer,” the man on the restaurant’s logo since 1977, proved an irresistible opening to agitate against the Tennessee chain. When President Trump weighed in Tuesday, writing that Cracker Barrel should return to the old logo and take advantage of the free publicity, Steak ’n Shake piled on. “The CEO needs to hear “You’re Fired” from her board,” it posted on X. Biglari’s salvo was the latest from his perch at the burger chain he has controlled since 2008. He has helped fuel social-media outrage against Cracker Barrel and its chief executive, Julie Felss Masino, on a range of issues, including the chain’s restaurant remodels. After the logo reversal, Steak ’n Shake posted that Cracker Barrel should use the money spent on renovations to keep prices down for customers. “It pays to be authentic,” Dan Edwards, Steak ’n Shake’s operating chief, said on Wednesday. The Cracker Barrel uproar has provided Biglari an opportunity to insert himself into the company’s affairs. And with more social-media attention on criticism of Cracker Barrel, it could indirectly help his cause. Biglari has pursued his proxy solicitations “for what we believe are purely self-interested reasons,” Cracker Barrel said in a statement. “Thankfully, our shareholders have consistently rejected his proposals and nominees by overwhelming margins each time.” Activists rarely run multiple proxy contests at a company, let alone the seven Biglari has waged at Cracker Barrel, said Lawrence Elbaum, co-head of the shareholder activism defense practice at Sullivan & Cromwell. He said Cracker Barrel has been successful at maintaining the support of its shareholder base over all these years. Cracker Barrel, which has spent millions of dollars to defend itself from the proxy campaigns, has since armored itself against Biglari’s meddling. It instituted new rules for shareholders weighing in on board nominees, executives’ pay and governance matters, including provisions that’d prevent Biglari from quickly mounting a proxy fight. Biglari, 47 years old, has a long history in restaurants. A young devotee of investor Warren Buffett, the Iranian immigrant started a small hedge fund while in college and acquired shares in family-dining chain Friendly’s Ice Cream and steak purveyor Western Sizzlin’. He took over as chairman of the brands in 2006, cashing out after a private-equity firm bought Friendly’s. He held on to Western, using it to help fuel more investments. Biglari took control of Steak ’n Shake after a proxy fight, aiming to shore up a vintage brand struggling with declining sales. In 2010, he formed Biglari Holdings (BH) to buy other businesses. The San Antonio-based company has gone on to buy insurance and oil companies, along with men’s magazine Maxim. Biglari Holdings disclosed in 2011 that it held more than 9% of Cracker Barrel’s shares. Biglari demanded a seat on the board, which the company rebuffed. He ran a proxy fight but lost. Determined, Biglari continued to agitate and buy up shares through his Lion Fund. Biglari repeatedly voted against the chain’s executive compensation at annual shareholder meetings, and he waged five proxy contests with the company over 10 years. The sixth, in 2022, yielded a partial victory. He got one of his nominees on the board and agreed to not publicly disparage the company for about two years. Cracker Barrel made its own executive moves in 2023, bringing in a new CEO for the first time in more than a decade. The company recruited Masino from Taco Bell, and she began forging a new brand strategy. Biglari’s settlement with Cracker Barrel expired in February 2024. The company’s leadership reached out to Biglari to hear his perspectives, and during an in-person meeting in March 2024, he spoke about strategy, its menu and the potential for reducing costs, according to a securities filing. He said the chain’s turnaround shouldn’t require a lot of capital, including the remodeling of restaurants. Cracker Barrel moved forward with its strategy. In an investor presentation in May, Masino said she planned to cut the company’s dividend to put hundreds of millions of dollars into the remodels and other brand updates. That prompted Biglari to launch a seventh proxy battle, citing Cracker Barrel’s “poor capital allocation record” and saying that the transformation plan hadn’t boosted investor confidence. Shareholders rejected the proposed nominations of Biglari and another of his candidates for board seats. Cracker Barrel’s fiscal year ended earlier this month and the company is due to provide a business update in the coming weeks. Steak ’n Shake has long struggled with waning visitor traffic, but lately it has gotten buzz on changes it has made. One change included shifting its frying oil to beef tallow from refined cooking oil. Trump’s top health official, Robert F. Kennedy Jr., has criticized seed oils, and threw his support behind the chain’s action. Following the change, Biglari Holdings said earlier this month that the burger brand’s quarterly same-store sales rose 10.7%. In social-media posts, Steak ’n Shake said its tallow fries symbolized its back-to-basics approach, something its rival Cracker Barrel could learn from. It also posted an image of a red hat that read “Biglari Was Right About Cracker Barrel.” For Cracker Barrel, the chain’s stock is now trading higher than before the controversy, and inquiries about the brand have surged on Google. Attention doesn’t always translate into more visits, but it could help the brand’s business, Wall Street firm Citi wrote in an investor note on Wednesday. It “could spark curiosity, visits near-term as consumers determine what all the ballyhoo was all about,” Citi wrote.
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