Sardar Biglari’s 14-year warfare with Cracker Barrel has earned him $1 billion

As a substitute, the redesign detonated a tradition warfare. It drew outrage from longtime diners. President Trump mentioned “Cracker Barrel ought to return to the previous brand, admit a mistake primarily based on buyer response.” The conservative activist Robby Starbuck, writing in a submit on X, mentioned “Good morning @CrackerBarrel! You’re about to study that wokeness actually doesn’t pay.”

Oddly, it additionally attracted the fury of fellow eating chain Steak ‘n Shake.

In a sequence of posts on X, Steak ‘n Shake’s official account issued requires Cracker Barrel CEO Julie Felss Masino to be fired. It mocked the rebrand, and posted pictures of crimson MAGA-style hats that learn “Fireplace Cracker Barrel CEO” and “Biglari was proper about every thing.”

“Biglari” is a reference to activist investor (and Steak ‘n Shake proprietor) Sardar Biglari, who owns a $54.5 million stake in Cracker Barrel. He made a 120-page presentation to Cracker Barrel shareholders in 2024. His manifesto decried the Southern eating chain’s expensive rebranding as “apparent folly.” He pushed for board seats—he wished to be chairman—and lampooned administration’s “company myopia.” (Regardless of Biglari’s warnings, the board sided with Masino’s resolution to modernize the model.)

Photograph Illustration by Avishek Das/SOPA Photographs/LightRocket by way of Getty Photographs

Inside days of Cracker Barrel’s resolution to ditch Uncle Herschel, the corporate’s market cap had shed $143 million, 15% of its worth, forcing it to reinstate its previous branding and pause plans to rework Cracker Barrel places. However for Biglari, one of many chain’s largest buyers, the rollback merely stoked the flames of his 14-year insurgency towards the corporate.

Actually, Bigalri has launched no less than seven proxy battles on the firm, most of which had been unsuccessful. Cracker Barrel has beforehand dismissed Biglari’s motives as self-interested, accusing him of being an “activist shareholder” with a disruptive agenda, a fame Biglari himself has cultivated all through his storied profession.

A style for battle

Biglari was born in Tehran in 1977. His father, a former army officer, was imprisoned following the Iranian revolution till his mom was in a position to negotiate his launch with jail guards, in response to reporting by the New York Instances. The Biglari household then emigrated to america, settling in Texas in 1984, the place they opened and operated a rug retailer. Biglari now resides in San Antonio, Texas.

In 1996, as a freshman at Trinity College in Hartford, Connecticut, Biglari obtained his first style of working a enterprise when—within the early days of the dot-com increase—he and a good friend began a dial-up web service supplier referred to as INTX Networking, after elevating $15,000. The duo bought the enterprise in 1999 for an undisclosed quantity to Web America, reportedly because of issues in regards to the tech bubble and the emergence of broadband applied sciences like cable and digital subscriber strains.

By this time, Biglari had turn out to be a fan of Warren Buffett, with whom he shares a birthday (August 30). Like Buffett, lots of Biglari’s pursuits revolve round basic American manufacturers that had been uncared for by their earlier homeowners. “We view Biglari Holdings as a museum of companies,” he wrote in a 2023 letter to shareholders. “The artwork we follow is that of accumulating and constructing companies.”

Photograph by Paul Weaver/SOPA Photographs/LightRocket by way of Getty Photographs

After commencement, Biglari used the proceeds of the INTX sale to start out a hedge fund, the Lion Fund, which might turn out to be his entry level into company warfare. It’s not clear how large a warchest Lioin wields, however by 2005 the fund purchased a stake in a small steakhouse chain primarily based in Roanoke, Virginia, referred to as “Western Sizzlin.” As Biglari gathered extra shares, he started arguing the enterprise was mismanaged and undervalued, and ultimately turned chairman of the board, in 2006. On the time, Western Sizzlin had lengthy been in a interval of decline, having filed for chapter in 1992. The chain, nonetheless, was displaying some indicators of restoration underneath then-CEO James Verney.

Biglari went on to accumulate and restructure Western Sizzlin by taking a web page out of Warren Buffett’s guide and making a holding firm that divided the chain into particular person subsidiaries, every of which was handled as a separate enterprise. Money from every subsidiary was then redirected to essentially the most helpful funding inside the holding firm. The reorganization obtained clear outcomes, with earnings rising from underneath $1 million yearly, pre-acquisition, to roughly $2.4 million by 2011. Rising earnings occurred regardless of the variety of open Western Sizzlin places declining, going from 144 in 2005 to 94 in 2011.

“He’s whip good. He’s superb at articulating his issues with company governance,” Jim Gillies, an analyst and advisor on the Motley Idiot and longtime follower of Biglari, instructed Fortune. This skill to establish and deal with key operational points, he mentioned, has contributed to Biglari’s enterprise wins. 

Having seen success in his funding technique, Biglari turned his consideration in direction of ice-cream chain Pleasant’s, the place he accused the corporate’s management of losing cash and selling a “self-interested tradition.” He argued that Pleasant’s money move had usually been destructive since its public providing in 1997, which he attributed to the corporate’s “huge” debt, totalling $131 million. Biglari additionally targeted on alleged mismanagement by Pleasant’s then-CEO and board, whom he accused of neglecting their fiduciary obligations to shareholders to line their very own pockets and ignoring conflicts of pursuits associated to the CEO’s exterior enterprise ventures, specifically his vital stake in one other restaurant firm. To up the strain in his pursuit of two Pleasant’s board seats, he rented billboards close to the chain’s headquarters directing passersby to an internet site, “Improve Pleasant’s,” that detailed his plans for the enterprise.

Though Biglari was unsuccessful in his campaign for management of Pleasant’s, he cashed out his 15% possession of the chain when it was acquired by a non-public fairness agency in 2007 for $337 million, equal to $15.50 per share, a 30% premium over its prior value.

Biglari’s unconventional ways led to one of many ice-cream chain’s founders, Curtis Blake, calling him a “company raider.” This characterization has since prompted comparisons to famed interventionist Carl Icahn.

“He’s not a man who’s afraid of selecting a struggle,” Zeke Ashton, managing associate of Centaur Capital Companions, which owns shares in Biglari Holdings, as soon as instructed DealBook.

Regardless of his confrontational fame, Biglari notably avoids media protection and has not in recent times participated in interviews. He declined to remark when reached by Fortune. As a substitute, the Iranian investor’s public relations modus operandi consists of strongly worded letters to shareholders, SEC filings, provocative on-line campaigns, and, most lately, memes.

Essentially the most profitable deployment of those strategies was his takeover of Steak ‘n Shake,  in 2008. On the time, the chain was close to insolvency, shedding roughly $100,000 per day with solely $1.6 million in money towards $27 million in debt. Biglari, who had bought a 7% stake within the chain in 2007, turned the corporate’s third-largest shareholder, proudly owning extra shares than all of Steak ‘n Shake’s then govt officers and administrators mixed.

Then, he replicated his Pleasant’s technique, shopping for “Improve Steak ‘n Shake” billboards across the chain’s Indianapolis headquarters and railing towards the chain’s years of monetary decline to advocate for 2 board seats. Throughout the 2008 monetary disaster, Biglari seized on shareholder anger and financial uncertainty. He received a proxy contest with greater than 70% of shareholder votes for 2 board seats, ousting then chairman Alan Gilman and former CEO James Williamson Jr. By August of that yr, following a quick interval of board infighting, Biglari was made CEO.

Biglari’s imaginative and prescient for Steak ‘n Shake was to revitalize the ailing model by implementing tighter price controls, improved service, and a extra entrepreneurial mindset. He sought to enhance buyer expertise within the firm’s 500 eating places in 19 states by including background music and eradicating harsh fluorescent lighting that he felt made friends really feel uncomfortable.

Beneath Biglari’s management, Steak ‘n Shake’s financial efficiency rebounded, with the inventory value rising from round $5 when he turned CEO to almost $15 the next yr. In 2010, that quantity reached roughly $50, and Steak ‘n Shake Firm formally modified its identify to Biglari Holding. In simply three years, the chain went from shedding round $30.8 million (as of 2009) to a achieve of $41.2 million in working earnings by 2011. Sturdy monetary efficiency continued for Steak ‘n Shake into 2016 because the model turned Biglari’s money cow, producing greater than $250 million in complete operational earnings and funding Biglari Holdings’ enlargement into different enterprise ventures. 

Biglari’s Steak ‘n Shake victory led to the start of Biglari Holdings. He pitched the rebranded Steak ‘n Shake Firm to buyers as the following Berkshire Hathaway. He even modified the corporate’s ticker to “BH” to echo Buffett’s agency. Biglari has 70% voting management over BH.

The stomach of Biglari Holdings

Whereas Biglari Holdings’ roots are in basic American eating manufacturers, its investments are actually diversified. In 2014, as Steak ‘n Shake was thriving, Biglari purchased the lads’s journal Maxim for an estimated $12 million. His plan for the publication was to “construct the enterprise on a number of dimensions, thereby energizing our readership and viewership.” He formally took over because the journal’s editor-in-chief in 2016 and has since reportedly exercised full editorial management over the publication, together with the choice to endorse President Donald Trump within the 2024 presidential election and the inclusion of Biglari’s signature on each journal version. Maxim, underneath Biglari, has reported regular losses of roughly $37 million over the previous decade. He acknowledged in Biglari Holdings’ 2024 annual report that 2025 could be a “pivotal” yr for the journal as each subsidiary have to be a “long-term provider of money.”

Biglari expanded aggressively from there. He acquired First Guard Insurance coverage Firm, a business trucking underwriter, in 2014. In 2020, he added Southern Pioneer Property & Casualty Insurance coverage Co. Then he went into oil and pure fuel, buying Southern Oil of Louisiana Inc. for $51.5 million in 2019 and 90% management of San Antonio-based Abraxas Petroleum for $80 million in 2022. He additionally, as of 2023, owns 402,000 shares of Ferrari with a market worth of $135 million.

However underperforming restaurant manufacturers stay a particular supply of fascination for Biglari. By July 2025 he had a 9.98% stake within the Jack within the Field burger chain. (The corporate adopted a “poison capsule” protection to ward him off.) And he’s at present the most important shareholder of the El Pollo Loco rooster chain, proudly owning 15.5%.

The investments made Biglari a rich man. However that wealth was generated by self-serving conflicts of curiosity, his critics say, and—mockingly—it has hobbled his skill to maneuver towards Cracker Barrel.

When governance meets Goliath 

For greater than a decade, Biglari Holdings and Biglari himself have been plagued by accusations of mismanagement because of ballooning govt pay, inventory volatility, and a licensing deal that probably benefits Biglari personally.

Between 2009 and 2015, Biglari took residence almost $76 million in compensation and bonuses, representing as a lot as 38% of Biglari Holdings’ working revenue in that interval. Till 2019, the pay bundle carried a cap of $10 million. That was quietly eliminated, permitting for a lot increased compensation relying on efficiency and acquisitions. His future web price is secured by a 2013 licensing deal by which Biglari licensed the “Biglari” identify to Steak ‘n Shake and Biglari Holdings for 20 years. If faraway from his roles for something aside from malfeasance, or if the corporate had been bought, he could be entitled to 2.5% of gross sales for 5 years—a payout probably topping $100 million.

This deal obtained Biglari listed within the “Company Governance Corridor of Disgrace” by the investor publication 13D Monitor, in response to a replica seen by Fortune.

“Arising within the first few years when he was gaining recognition, he very a lot sang from that hymnal of we’re all going to generate income collectively. After which as soon as he was ready to place his thumb on the dimensions, he did,” Gillies mentioned. 

These elements have sparked a number of proxy fights and repeated calls for reform from activist corporations like Groveland Capital. They’ve additionally derailed Biglari’s try to achieve management of Cracker Barrel. 

“The kind of activism he conducts doesn’t actually enrich company governance. It ingratiates himself extra with shareholders and was simpler to get away with years in the past,” Ken Squire, founder and president of 13D Monitor, instructed Fortune. “Now that activists have turn out to be far more accountable and far more mainstream, those who haven’t advanced are discovering it more durable to get something accomplished.”

All through Biglari’s quite a few makes an attempt to safe board seats on the chain, executives at Cracker Barrel have cited his govt compensation as proof of his unwell intentions for the model. Others have pointed to Biglari’s follow of hanging his portrait in each Steak ‘n Shake location and the chain’s personal monetary struggles.

Steak ‘n Shake’s efficiency has been risky over the previous 5 years. It was particularly affected by the COVID-19 pandemic, with durations of serious losses adopted by a notable restoration in profitability pushed by cost-cutting and a transition to franchising. The chain has shrunk to 426 Steak ‘n Shake places as of 2024, from its peak of over 600.

Biglari—who as soon as referred to as himself “supremely insensitive to criticism”—is undeterred.

The case towards Cracker Barrel

Biglari’s assault on Cracker Barrel started within the early 2010s when his fame was bolstered by Steak ‘n Shake’s turnaround. Between Might 2011 and December 2012, Biglari bought 4,737,794 shares of Cracker Barrel for $241.1 million. By 2012, he held almost 20% of Cracker Barrel’s excellent inventory. As with Steak ‘n Shake and Pleasant’s, Biglari’s launched “EnhanceCrackerBarrel.com” as an investor-focused web site. He started publishing press releases and shareholder letters criticizing administration, and demanded board illustration and strategic adjustments. 

Photograph by Paul Weaver/SOPA Photographs/LightRocket by way of Getty Photographs

Biglari’s core calls for had been to cease opening new shops fully, remove the event staff to economize, and focus solely on enhancing current retailer operations quite than enlargement. In his 2012 letter to shareholders, he criticized what he noticed as Cracker Barrel’s basic failures, arguing that regardless of having “one of many biggest restaurant ideas ever created,” the corporate suffered from poor execution and misguided enlargement methods.

Biglari was notably essential of the corporate’s store-level deterioration. In a single evaluation, he in contrast Cracker Barrel’s working revenue of $164.9 million with 357 shops in fiscal 1998 ($462,000 per retailer) to 2012’s working revenue of $181.3 million with 616 shops (solely $294,000 per retailer). This declining per-unit profitability turned a central theme in his critiques and proxy battles. 

His first proxy battle for board illustration occurred in 2011. Regardless of receiving endorsement from Glass Lewis (one of many main proxy advisory corporations), Biglari acquired solely 6.5 million shareholder votes in comparison with 12 million for the incumbent director. This defeat was the closest he ever got here to victory over Cracker Barrel. Though it did reach triggering the substitute of then CEO Michael Woodhouse with Sandra Cochran, the next yr he launched one other marketing campaign, nominating himself and an ally, solely to obtain almost 1 million fewer votes. 

In 2013, Biglari launched a brand new technique: demanding a particular $20 per share dividend that might have been price roughly $94.8 million to his holdings. To show the feasibility of this proposal, Biglari obtained a “extremely assured letter” from Jefferies LLC confirming their skill to rearrange as much as $800 million in debt financing to fund such a dividend. Nonetheless, this proposal, board nominations, acquired solely 5.9 million votes, with simply 1.2 million coming from sources aside from Biglari himself.

Biglari continued and failed to safe seats on the Cracker Barrel board by means of 2017 when he started quietly promoting off shares. This strategic shift coincided with Cracker Barrel’s inventory efficiency enhancing considerably, heading towards its eventual peak. Cracker Barrel’s inventory reached its all-time excessive of $183.29 on November 27, 2018—a exceptional 234% return from Biglari’s preliminary funding value. 

In 2020, nonetheless, Biglari’s criticism of Cracker Barrel was reignited after the corporate’s $133 million funding in Punch Bowl Social, a bar and leisure idea, in 2019, failed in the course of the pandemic. Cracker Barrel was compelled to put in writing off the complete funding.

In a 2020 letter to shareholders, Biglari predicted the Punch Bowl funding would “go down as one of many worst enterprise blunders within the annals of restaurant historical past.” The choice worn out 50% of the corporate’s pre-tax earnings from 2019, he claimed. Visitor visitors had additionally fallen 18.6% from 2005 to 2019. (Declining visitor visitors stays a constant development at Cracker Barrel.)

Utilizing this to gasoline an aggressive push for reform at Cracker Barrel, Biglari nominated his personal board candidate, arguing that “shedding $137 million of shareholders’ cash in eight months” was adequate motive so as to add “one board member with restaurant expertise.” He additional argued that ought to Cracker Barrel deal with enhancing its core operations, it might unlock over $600 million in added annual income. 

CEO Cochran’s response was equally forceful. She characterised Biglari’s observe file as having a “lagging efficiency and problematic governance practices at his personal firm.” She particularly cited Steak ‘n Shake’s same-store gross sales decline of 6.9% and foot-traffic lower of 11.2% in 2019.

After greater than a decade of proxy battles, 2022 introduced a shocking truce when Cracker Barrel and Biglari entered right into a Nomination and Cooperation Settlement. Beneath the settlement, Cracker Barrel expanded its board from 10 to 11 members and appointed Jody Bilney, certainly one of Biglari’s most popular nominees, as an unbiased director. Bilney held vital credentials, having served as chief advertising and marketing officer for Humana and chief model officer for Bloomin’ Manufacturers. 

Photograph by GREGORY WALTON/AFP by way of Getty Photographs

When the cooperation settlement expired, nonetheless, Biglari instantly returned to his previous methods, asserting his intention to appoint 5 candidates to Cracker Barrel’s board. The 2024 battle centered on Cracker Barrel’s strategic transformation plan underneath new CEO Julie Masino, who had changed Sandra Cochran in 2023.

In his October 2024 shareholder letter, Biglari wrote: “Since 2019, the shareholders of Cracker Barrel have collectively misplaced over $2.9 billion in market worth … Neither the appointment of Julie Felss Masino because the Firm’s CEO nor her new transformation plan has restored shareholder worth.”

The chain’s market worth fell by roughly $287 million, and the inventory value decreased by almost 20%, within the 14 months following Masino’s appointment. However aales efficiency on the firm confirmed gradual restoration. All of the whereas, Cracker Barrel’s CEO and board compensation rose sharply. CEO pay elevated from round $1 million in 2011 to greater than $7 million in 2025.

Biglari echoed his preliminary warning that November, saying that “If you happen to had $100 in Cracker Barrel inventory in January 2019, 5 years later it’s price about $30. Subsequently, there’s simply $30 to go earlier than the complete funding is misplaced.” He warned of “a major danger of a 50% loss or extra if we aren’t elected to the Board.”

Cracker Barrel shareholders as soon as once more rejected Biglari’s nominees. However the firm agreed so as to add Biglari’s decide of Michael Goodwin, former PetSmart CTO, to the board as a compromise.

A Cracker Barrel spokesperson defended the chain’s resolution to lift its govt compensation packages, telling Fortune, “For the final a number of years the corporate has immediately engaged with lots of its largest shareholders to debate quite a lot of matters, together with govt compensation, and no shareholder ever expressed any disagreement or concern with the corporate’s govt compensation plans or practices. Extra broadly, Cracker Barrel’s shareholders have evidenced their help for the corporate’s govt compensation plans and practices by voting in favor of the corporate’s say-on-pay proposals annually by vital margins.”

Cracker Barrel’s monetary outlook stays unsavory. Chain visitors has declined, down 2.7% in Q2 of 2025. Its inventory is down 9.6% year-to-date in 2025 in a market the place shares have risen 12% yr to this point by means of mid September. The chain’s struggles, in response to Gillies, are a “spectacular” failure on the a part of Cracker Barrel administration.

Cracker Barrel, nonetheless, pointed to enhancing income development in 2025 in an interview with Fortune. The corporate has reported 4 consecutive quarters of constructive restaurant gross sales development. Its income is up 1.5% yr to this point and 2.84% year-over-year. (In 2024, the corporate’s income elevated by solely 0.8%) This development stays considerably beneath business averages. Cracker Barrel competitor IHOP reported an 11.9% improve in income in Q2 2025 from the identical interval in 2024. 

“By means of his campaigns, Mr. Biglari has made quite a few false and deceptive claims about Cracker Barrel, its Board and administration,” a Cracker Barrel spokesperson instructed Fortune. “We consider that Mr. Biglari’s unprecedented seven proxy solicitations towards the Firm prior to now 14 years have been for purely self-interested causes, and that his personal actions and poor efficiency at Steak ‘n’ Shake and Western Sizzlin’ stay cautionary tales. We admire the help from our shareholders as they’ve constantly rejected his proposals and nominees by overwhelming margins every time.”

Biglari’s proxy battles stand as one of many longest and most contentious activist campaigns in restaurant business historical past. Regardless of the defeats, his funding in Cracker Barrel has been terribly worthwhile.

Biglari bought off a lot of his stake, starting in 2020, and now controls lower than 5% of Cracker Barrel. But his funding has generated almost $1 billion in complete features by means of dividends, inventory gross sales, and remaining holdings for Biglari.

“Cracker Barrel is portray Biglari as this short-term profiteer. It’s been 14 years. He’s nonetheless there,” Gillies mentioned.