Steak 'n Shake forced to pay millions, financial concerns have many wondering if the chain could fold

By  | 

NORMAL, Ill. (KWQC) - The future of Illinois based Steak n Shake is up in the air after a judge ruled last week that the company pay more than $6 million in fines and attorney fees.

According to Restaurant Business Online the judge ordered the restaurant to pay its managers $6 million in unpaid overtime and an additional $1.7 million in attorney’s fees. The managers claimed they were improperly classified as exempt and then required them to work more than 40 hours per week and perform non-managerial tasks.

The judge’s ruling is the latest blow to the company. The Restaurant Business Online reported that since March, the company has closed 44 restaurants “to prepare them for franchise partners”. The Indianapolis Business Journal published an article diving into the problems plaguing the struggling chain. In the first quarter, Steak 'n Shake reported an $18.9 million operating loss — after reporting a $10.7 million loss for all of 2018.

Filings with the Securities and Exchange Commission show "same-store sales" have also reportedly fallen for 10 straight quarters, resulting in millions of dollars in losses. That resulted in the CEO saying the company may eliminate cherries from the menu in an effort to save around $1-million.