Shake Shack

Shake Shack Inc.
Public
Traded as
Industry Restaurants
Genre Fast casual restaurant
Founded July 2004 (2004-07), in New York City, New York, United States
Founder Danny Meyer
Headquarters New York City, New York, United States
Number of locations
  • 113 (domestic)
  • 69 (international)
Area served
 North America, Europe, Middle East, Oceania, Asia
Key people
  • Daniel Meyer
  • (Chairman of the Board)
  • Randy Garutti
  • (CEO)
Products Hamburgers, hot dogs, french fries, milkshakes, custards, beer, wine
Revenue Increase US$ 358.81 million (2017)
Increase US$ 33.81 million (2017)
Decrease US$ 8.88 million (2017)
Total assets Decrease US$ 470.61 million (2017)
Total equity Increase US$ 224.48 million (2017)
Number of employees
 4,440 (2017)
Website ShakeShack.com
Footnotes / references
[1][2]

Shake Shack (NYSE: SHAK) is an American fast casual restaurant chain based in New York City. It started out as a hot dog cart inside Madison Square Park in 2001, and its popularity steadily grew. In 2004 it moved to a stand within the park, expanding its menu from New York-style hotdogs to one with hamburgers, hotdogs, fries and its namesake milkshakes. The company advertises it uses natural Angus beef and claims that its meat has neither hormones nor antibiotics.[3]

Since its founding it has been one of the fastest-growing food chains eventually becoming a public company filing for an initial public offering of stock in late 2014. The offering priced on January 29, 2015; the initial price of its shares was at $21 immediately rising by 123% to $47 on their first day of trading.[4][5][6][7]

Shake Shack operates 136 locations internationally as of October 2017, typically located in stand-alone restaurants and shopping malls. Shake Shack also operates in stadiums, including Citi Field in New York City, Nationals Park in Washington, D.C., Minute Maid Park in Houston, and the T-Mobile Arena in Las Vegas. It also operates 3 airport locations in New York, Los Angeles, and Dubai. There is also an outlet at the Saratoga Race Course in Saratoga Springs, NY.

History

Early Beginnings and Concept

The original Shake Shack located in Madison Square Park

In 2000, New York City began the rebuilding of Madison Square Park, which had fallen into a state of disrepair and misuse. As part of the redevelopment, restaurateur Danny Meyer helped spearhead the creation of the Madison Square Park Conservancy to help redevelop it. One of the first things the Conservancy did in its goal to improve the park was to host an art exhibit called "I <3 Taxi" inside of the park to raise awareness of the renewal effort.[8] Meyer's Director of operations, Randy Garutti, established a hot dog cart which was run out of the kitchen of Eleven Madison, one of Meyer's Union Square Hospitality Group (USHG) operations. Over time the cart became extremely successful, and remained in operation for nearly three years.[9]

In 2004, the city began taking bids to operate a new kiosk-style restaurant within the park; Meyer outlined his idea for the space, and opened the first Shake Shack in July 2004. From its beginning the restaurant was not designed to be a chain; it was intended to be a single shop location designed specifically for New York City. However, as the original location's sales continued to grow, the group realized that there was a market for expansion.[9]

Since its opening, Shake Shack has grown to be the largest part of the USHG's portfolio. Its average store revenue of US$4 million is more than twice that of McDonald's average store revenue within the United States.[10] Its popularity is such that in the summer at its original location, the wait in line for service can stretch to over an hour, especially on weekends when the weather is pleasant. A webcam on the restaurant's web page shows the current line in real time.[10][11]

Expansion

In June 2010, Shake Shack opened its first restaurant outside of New York City at the Lincoln Road Mall in Miami Beach's South Beach neighborhood.[12][13][14] In April 2017 the location completed a month-long renovation that added 586 square feet of space, bringing its seating capacity to 106.[15]

On July 12, 2010, Shake Shack restaurants were opened in the Theater District[16] and the Upper East Side.[17][18] The Upper East Side location's opening was significant because it "lifted" East 86th Street, an urban shopping district which had fallen on hard times; the location had been vacant, and even when occupied it was described by a neighbor as "never anything good there...dingy and dilapidated...almost an eyesore."[17]

In July 2011 it was announced that Shake Shack had reached a deal with the MTA to open a location in the lower level of Grand Central Terminal.[19] This project was delayed because the tenant occupying the space Shake Shack was to take over, Mexican eatery Zócalo, refused to vacate after the expiration of their lease and filed suit, arguing that the "bidding process (for retail space in Grand Central) is corrupted."[20] The suit was dismissed and Zócalo appealed. In October 2012 Zócalo filed for Chapter 11 bankruptcy protection.[21] In early May 2013, Zócalo vacated the space, and the new outlet opened for business on October 5, 2013.[22]

Shake Shack opened its first airport location in May 2013 in JFK's newly expanded Terminal 4.[23]

IPO and Continued Expansion

By August 2014, Shake Shack outlets had begun operating in California, Connecticut, Delaware, Washington, DC, Florida, Georgia, Illinois, Maryland, Massachusetts, New Jersey, Nevada, Pennsylvania and Texas.[24] That month, reports surfaced that the company was preparing to go public with an IPO and was discussing an underwriting with a number of investment banks, including J.P. Morgan, Morgan Stanley and Goldman Sachs.[24][25]

On January 29, 2015, Shake Shack priced its IPO at $21 per share. On the morning of January 30, 2015, it began trading on the NYSE at $47 per share under the ticker symbol SHAK. In April 2015, shares hit prices of $72, and hit a high of about $90 in May 2015.[26] In its IPO filing, the company stated that it planned to expand its domestic footprint to 450 company-operated stores. While no end date was given for that expansion, the company indicated its intention to open at least 10 restaurants each fiscal year, though it later amended that target to 12 a year and then again later in 2016 to 14 stores a year, a goal that would result in a total of 450 stores in approximately 25 years.[27] Later that May, Shake Shack filed for a trademark for the term "chicken shack" leading to speculation that the company would serve chicken sandwiches.[28] The company temporarily introduced chicken sandwiches to its Brooklyn on July 7, 2015.[29] In January 2016, Shake Shack introduced chicken sandwiches across locations in the United States, having previously started serving them at all Brooklyn Shake Shack locations.[30]

On August 31, 2016, Shake Shack announced it would begin room service at the Chicago Athletic Association Hotel, the first hotel in America to offer in-room Shake Shack.[31]

In November 2016 the first Houston, Texas, location opened inside the Galleria; by March 2017 another opened inside Minute Maid Park in Downtown Houston; the 3rd opened at Rice Village in March 2018. By December the city's 4th will open in the Montrose district. By mid-December 2016 Delaware opened its very first in New Castle. In February 2017, the first Michigan location was opened in downtown Detroit.[32] A second Michigan location in Troy opened on October 25, 2017. On May 10, 2017, Shake Shack opened their first Kentucky location, located at The Summit at Fritz Farm in Lexington.[33] That June, the company announced a location would open in Charlotte, North Carolina, in late 2017, becoming the first Shake Shack in the Carolinas.[34] California's 5 locations were all in L.A. County, until the 6th had opened in San Diego in 20 October 2017 at Westfield UTC. The other San Diego location opened in Mission Valley in late 2017,[35] as did a South Bay location in El Segundo in October.[36]

In November 2017 St. Louis native, Danny Meyer, founder of the original Shake Shack in New York, opened the St. Louis location in the cosmopolitan urban district or the Central West End of the city.

On July 17, 2018, Shake Shack announced on their Facebook page that it will officially start operations in the Philippines in 2019.

On October 10, 2018, Shake Shack announced that it will officially start operations in Singapore in 2019.[37]

International

Shake Shack has outlets in a number of international cities including Seoul, Tokyo, London, Hong Kong, Cardiff, Istanbul, Moscow, Muscat, Beirut, Dubai, Abu Dhabi, Doha, Kuwait City, Riyadh, Manama, and Jeddah.[24][38][39]

Locations

As of April 4, 2018, there were 168 Shake Shacks throughout the world.[40]

A "Shack Burger" and crinkle-cut French fries

Shake Shack's eponymous products are its milkshakes, which have been reviewed as some of the best in the industry.[10] It also sells burgers and chicken burgers, fries, hot dogs, frozen custards, and beer and wine (provided the customer is at least 21 and shows ID).[41] In each new location the beverage menu is customized to the local flavors of the city in which it operates.[42]

New York Times reviewer Pete Wells stated in his 2012 review of the establishment that the burgers were sometimes insufficiently salted and cooked to an unappealing gray.[43]

Merchandising

The company has collaborated with Staple Design to create Shake Shack T-shirts, sunglasses, and other accessories, called Shack Swag.[44][45]

Controversies

Shark fin

In April 2018 shark fin protesters gatecrashed the opening of Shake Shack at the IFC in Hong Kong. This was due to Shake Shack partnering with Maxim's Caterers being Shake Shack's Hong Kong licensee.[46]

See also

References

  1. ↑ "US SEC: Form 10-K Shake Shack Inc". U.S. Securities and Exchange Commission. Retrieved June 27, 2018.
  2. ↑ McCann, K.; Tanzilo, R. (2016). Milwaukee Frozen Custard. American Palate. Arcadia Publishing Incorporated. p. 121. ISBN 978-1-62585-717-0. Retrieved November 14, 2017.
  3. ↑ "Food and drink". Shake Shack. Retrieved 2015-11-01.
  4. ↑ "Burgerzwerg erobert die Börse". Handelsblatt. 2015-01-30. Retrieved 2015-11-01.
  5. ↑ Ro, Sam (2015-01-30). "Shake Shack Opens For Trading". Business Insider. Retrieved 2015-11-01.
  6. ↑ "Burger mania: Shake Shack stock up 120%". CNN Money. 2015-01-30. Retrieved 2015-11-01.
  7. ↑ Driebusch, Corrie (2015-01-30). "Shake Shack Shares Surge in Market Debut". The Wall Street Journal. Retrieved 2015-11-01.
  8. ↑ "Shake Shack S-1". Shake Shack. Retrieved 30 July 2016.
  9. 1 2 Wolfe, Josh (27 January 2014). "The Secret Sauce of Shake Shack's Success". Forbes. Retrieved 27 May 2014.
  10. 1 2 3 Kramer, Katie (15 October 2010). "Shake Shack Founder Expands His Empire". CNBC. Retrieved 27 May 2014.
  11. ↑ "Shake Shack S-1". Shake Shack. Retrieved 13 July 2015.
  12. ↑ Powers, Jacquelynn D. (June 15, 2010). "The First Burger & Fries at Shake Shack South Beach". Miami New Times.
  13. ↑ "Shake Shack on Lincoln Road". Lincoln Road Mall. June 2010. Retrieved July 9, 2017.
  14. ↑ Victoria Pesce Elliott (August 18, 2010). "3 Stars for Shake Shack". Miami.com.
  15. ↑ Reiser, Emon (April 10, 2017). "Shake Shack in Miami Beach undergoes renovation". South Florida Business Journal.
  16. ↑ Levin, Sam (July 12, 2010). "Burger lovers rejoice! Minichain Shake Shack opens in Times Square". Daily News. New York. Retrieved July 12, 2010.
  17. 1 2 Gregor, Alison (January 19, 2010). "Square Feet: New Tenant Lifts a Manhattan Street". The New York Times. Retrieved August 3, 2011.
  18. ↑ Fabricant, Florence (August 4, 2010). "Diners Journal: Upper East Side Shake Shack Is Open". The New York Times. Retrieved August 3, 2011.
  19. ↑ Haughney, Christine (July 25, 2011). "More Crowded Crowds: Grand Central to Welcome Apple and Shake Shack". The New York Times. Retrieved July 30, 2011.
  20. ↑ Pasquarelli, Adrianne (2012-07-20). "Shake Shack gets sidetracked at Grand Central | Crain's New York Business". Crainsnewyork.com. Retrieved 2014-02-08.
  21. ↑ Pasquarelli, Adrianne (2012-10-26). "Grand Central tenant Zócalo files for bankruptcy | Crain's New York Business". Crainsnewyork.com. Retrieved 2014-02-08.
  22. ↑ "Danny Meyer's Shake Shack finally takes over Grand Central space | Crain's New York Business". Crain's New York. 2013-05-08. Retrieved 2014-02-08.
  23. ↑ "JFK Terminal 4 To Get Shake Shack, Blue Smoke, Marcus Samuelsson Concept And More (PHOTOS)". Huffington Post. 2013-03-06. Retrieved 2017-10-21.
  24. 1 2 3 "Burger chain Shake Shack preparing for an IPO - sources". Reuters. 15 August 2014. Retrieved 15 August 2014.
  25. ↑ Lorenzetti, Laura (29 December 2015). "Fast food chain Shake Shack files for an IPO". Fortune. Retrieved 11 January 2016.
  26. ↑ Galarza, Daniela (27 April 2015). "Shake Shack Shares Jump to Over $70 Per Share". Eater. Retrieved 11 January 2016.
  27. ↑ Fahey, Mark (March 7, 2016). "Shake Shack's expansion by the numbers". CNBC.
  28. ↑ Shah, Khushbu (21 May 2015). "Is Shake Shack Adding Chicken Sandwiches to Its Menu?". Eater. Retrieved 16 January 2016.
  29. ↑ Morabito, Greg (7 July 2015). "Danny Meyer Enters Top-Secret Launch Codes for Nuclear Chicken Sandwich A-Bomb at Shake Shack". Eater. Retrieved 16 January 2016.
  30. ↑ Galarza, Daniela (14 January 2016). "Shake Shack Releases Chick'n Shack Sandwiches Nationwide". Eater. Retrieved 15 January 2016.
  31. ↑ Selvam, Ashok (August 31, 2016). "Shake Shack & Chicago Athletic Association Reach Deal To Offer Room Service". Eater Chicago.
  32. ↑ Selasky, Susan (February 23, 3017). "Detroiters celebrate Shake Shack's downtown opening". Detroit Free Press.
  33. ↑ Bertram, Charles (May 11, 2017). "Shake Shack opens at Lexington’s The Summit at Fritz Farm". Lexington Herald Leader.
  34. ↑ Peralta, Katherine (June 12, 2017)."Shake Shack is coming to Park Road Shopping Center". Charlotte Observer.
  35. ↑ "Second San Diego Shake Shack Location To Open In Mission Valley". www.sandiegoville.com. Retrieved 2017-10-21.
  36. ↑ "Shake Shack 'can't wait' to open first South Bay eatery this fall in El Segundo". Daily Breeze. 2017-06-20. Retrieved 2017-10-21.
  37. ↑ "Burger chain Shake Shack to open first Singapore outlet at Jewel Changi Airport". Channel NewsAsia Lifestyle. 2018-10-10. Retrieved 2018-10-10.
  38. ↑ "Shake Shack is a modern day 'roadside' burger stand serving the most delicious burgers, fries, hot dogs, frozen custard and more!". Shake Shake. Shake Shack.
  39. ↑ Galarza, Daniela (21 December 2015). "Shake Shack Expands to South Korea in 2016". Eater. Retrieved 11 January 2016.
  40. ↑ "Beyond the Plate: Shake Shack's Chef Mark Rosati (S2/Ep.005)". beyondtheplate.libsyn.com. Retrieved 2018-09-12.
  41. ↑ "Food and Drink". Shake Shack. Retrieved 27 June 2018.
  42. ↑ Bartiromo, Michael (13 February 2013). "The Man Behind Shake Shack's Menu". Mox news. Retrieved 27 May 2014.
  43. ↑ Levine, Ed (12 February 2012). "NY Times Shake Shack Review: Takedown or a Rare Bit of Fair-minded Burger Candor?". Serious Eats. Retrieved 27 May 2014.
  44. ↑ https://shop.shakeshack.com/category/All. Missing or empty |title= (help)
  45. ↑ Shack, Shake (12 September 2014). "Shake Shack x Staple Design LTD Collaboration". Shake Shack. Retrieved 11 January 2016.
  46. ↑ "In Pictures: Shark fin protesters gatecrash Hong Kong’s Shake Shack burger joint pop-up" Tom Grundy, Hong Kong Free Press, 16 April 2018
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