Author Topic: BH - Biglari Holdings  (Read 961023 times)

vinod1

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Re: BH - Biglari Holdings
« Reply #1550 on: March 25, 2015, 07:32:13 AM »
Since the normal franchise units currently opening cost around $1.5 million to $2 million

NBL,

Could you please let me know where you got this number from? Is it your estimate? Could you give a little more color on this?

Thanks

Vinod

Sure - the number is not really an estimate, but more like my best inference from many different sources, of what a franchisee must spent to construct and open a new Steak n Shake franchise unit.  That number is drawn from the franchise disclosure documents and other places.  That may seem like a lot, but it is actually less than many comparable type restaurants (though there are some chains that have a lower cost than that too).  This is also significantly less than what a Steak n Shake unit used to cost, pre-Biglari, apparently, when it was over $2.5 million to open a new unit.

Vinod, NBL

In the 2010 Chairmen's letter, the following is mentioned re franchise unit costs:

Quote
The new layout provides the theater in which we can showcase the production of made-to-order steakburgers and hand- dipped milkshakes to entertain guests. Now, a franchisee can open an efficient, beautiful unit for about $1.5 million. My projection is that revenues emanating from each unit will doubtless surpass the $1.5 million mark, which combined with our current operating margin would yield an attractive return on investment for the franchisee. We shrank the former box size from about 4,200 square feet to nearly 3,200 square feet but kept the same number of seats in the dining area. The former model was simply inefficiently designed. The new prototype is a display of our uncompromising dedication to the pursuit of excellence.

Inflation will have increased that number since 2010 but $1.5m seems to be in the right ball park.

Good find! Thank you.

Vinod
The fundamental algorithm of life: repeat what works. –Charlie Munger


Tim Eriksen

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Re: BH - Biglari Holdings
« Reply #1551 on: March 25, 2015, 08:08:26 AM »
Here is what I have.

Tim

giofranchi

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Re: BH - Biglari Holdings
« Reply #1552 on: March 25, 2015, 08:25:41 AM »
Here is what I have.

Great! Thank you very much, Tim! :)

Gio
Portfolio: AMZN, BRK.B, DIS, FB, FFH, FWONA, GOOG, IBB, JNJ, JPM, LBRDA, MKL, NKE, PCLN, QQQ, SBUX, SMH, V, VHT, XBI

globalfinancepartners

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Re: BH - Biglari Holdings
« Reply #1553 on: March 25, 2015, 08:48:18 AM »
Go to the source - they give the costs and requirement for the various concepts -

http://www.steaknshakefranchise.com/costs-and-qualifications-requirement-information.php

Since the normal franchise units currently opening cost around $1.5 million to $2 million

NBL,

Could you please let me know where you got this number from? Is it your estimate? Could you give a little more color on this?

Thanks

Vinod

Sure - the number is not really an estimate, but more like my best inference from many different sources, of what a franchisee must spent to construct and open a new Steak n Shake franchise unit.  That number is drawn from the franchise disclosure documents and other places.  That may seem like a lot, but it is actually less than many comparable type restaurants (though there are some chains that have a lower cost than that too).  This is also significantly less than what a Steak n Shake unit used to cost, pre-Biglari, apparently, when it was over $2.5 million to open a new unit.

Vinod, NBL

In the 2010 Chairmen's letter, the following is mentioned re franchise unit costs:

Quote
The new layout provides the theater in which we can showcase the production of made-to-order steakburgers and hand- dipped milkshakes to entertain guests. Now, a franchisee can open an efficient, beautiful unit for about $1.5 million. My projection is that revenues emanating from each unit will doubtless surpass the $1.5 million mark, which combined with our current operating margin would yield an attractive return on investment for the franchisee. We shrank the former box size from about 4,200 square feet to nearly 3,200 square feet but kept the same number of seats in the dining area. The former model was simply inefficiently designed. The new prototype is a display of our uncompromising dedication to the pursuit of excellence.

Inflation will have increased that number since 2010 but $1.5m seems to be in the right ball park.

Good find! Thank you.

Vinod

globalfinancepartners

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Re: BH - Biglari Holdings
« Reply #1554 on: March 25, 2015, 09:35:25 AM »
I'm as tired as anyone of BH posts filling up this whole board - but I want to post one last thing on the subject.  This series of articles may have already been posted, but it represents the most thorough and complete history of this guy and this company I have seen anywhere.  And, amazingly, it is a joy to read and the author is a very good writer.  It contains links to original source documents and starts in Part I with Sardar's birth in Tehran.

http://seekingalpha.com/author/dana-kuhn/articles

giofranchi

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Re: BH - Biglari Holdings
« Reply #1555 on: March 25, 2015, 09:43:33 AM »
I'm as tired as anyone of BH posts filling up this whole board - but I want to post one last thing on the subject.  This series of articles may have already been posted, but it represents the most thorough and complete history of this guy and this company I have seen anywhere.  And, amazingly, it is a joy to read and the author is a very good writer.  It contains links to original source documents and starts in Part I with Sardar's birth in Tehran.

http://seekingalpha.com/author/dana-kuhn/articles

I agree, but I think they are a bit dated… at least as far as the author’s judgement about Biglari is concerned… If I remember well, the author posted his recent thoughts about Biglari on this thread, saying he no longer think Biglari could be trusted as a good steward of shareholders’ capital.

Cheers,

Gio
Portfolio: AMZN, BRK.B, DIS, FB, FFH, FWONA, GOOG, IBB, JNJ, JPM, LBRDA, MKL, NKE, PCLN, QQQ, SBUX, SMH, V, VHT, XBI

vinod1

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Re: BH - Biglari Holdings
« Reply #1556 on: March 25, 2015, 10:13:17 AM »
The fundamental algorithm of life: repeat what works. –Charlie Munger

AZ_Value

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Re: BH - Biglari Holdings
« Reply #1557 on: March 25, 2015, 10:23:47 AM »
Go to the source - they give the costs and requirement for the various concepts -

http://www.steaknshakefranchise.com/costs-and-qualifications-requirement-information.php


Thank you!

Yeah, I also have circled a cost of about a million to two million bucks in my BH files depending on the concept one wants. From SNS themselves per the link above and you can confirm from various other sources:

http://www.entrepreneur.com/franchises/steaknshakeenterprisesinc/317804-0.html


I'm reading through the thread, interesting discussions going on that I missed. I don't come on COBF that often anymore. I'll share thoughts when I'm done reading through it all.

Jurgis

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Re: BH - Biglari Holdings
« Reply #1558 on: March 26, 2015, 03:07:36 PM »

A piece of advice: anyone who has a strong and very well-reasoned criticism towards Biglari is very welcomed, but should stop calling him “Big Liar”…


Due to the very reasonable request, Biglari henceforth will be called "Maxim Liar".  8)

Jurgis

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Re: BH - Biglari Holdings
« Reply #1559 on: March 26, 2015, 03:11:24 PM »
yes, generally I think it is legal theft. I don't believe any manager, no matter how talented, should be paid many tens of millions, let alone billions, to invest money that is not theirs. Scalable jobs (artists, football (European) stars, investment managers, top CEO's with outsized bonusses, ....) take the  idea of capitalism too far and are generally very unfair for society as a whole. That is my personal opinion and I know many will disagree.

Of course I realize that this is how the system works and that change is very unlikely as you will always find people willing to pay up.


I agree with tombgrt. I vote against CEO compensation in most proxy votes. There are few exceptions: BRK, Fairfax, maybe couple more. But most CEOs are ridiculously overpaid. Same has to be said about most investment managers.