0001628280-26-012987
SEC filingNet loss widened to $(37.5)M due to investment losses, while restaurant revenue grew 14.2%.
Biglari Holdings Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance and reinsurance, licensing and media, restaurants, and oil and gas. The Company is founded and led by Sardar Biglari, Chairman and Chief Executive Officer.
The Company’s restaurant operations are conducted through Steak n Shake and Western Sizzlin, with a combined 435 units. Steak n Shake operates 131 company-operated restaurants, 179 franchise partner units, and 94 traditional franchise units. Western Sizzlin operates 3 company-operated restaurants and 28 franchise units, and also runs Great American Steak & Buffet and Wood Grill Buffet. The property and casualty insurance and reinsurance segment includes First Guard Insurance Company (commercial truck insurance), Southern Pioneer (garage liability, commercial property, homeowners, dwelling fire), and Biglari Reinsurance Ltd. (Bermuda-based). Oil and gas operations are conducted through Southern Oil (offshore Louisiana) and Abraxas Petroleum (Permian Basin). Brand licensing is handled by Maxim.
Key products include Steak n Shake’s Steakburgers, beef tallow fries, and milkshakes, and Western Sizzlin’s steak and buffet concept with its two other concepts: Great American Steak & Buffet and Wood Grill Buffet. Maxim is a brand licensing business. In insurance, First Guard offers physical damage and nontrucking liability insurance for truckers, while Southern Pioneer underwrites garage liability, commercial property, homeowners, and dwelling fire insurance.
Restaurants are operated through company-operated units, franchise partner program (owner-operators with upfront $10,000 investment and profit-sharing), traditional franchise, and international franchise with a corporate office in Monaco. First Guard uses cost-efficient direct response marketing via Internet or telephone, while Southern Pioneer markets through insurance agents. Oil and gas operations sell in a commodity market. No key customer concentration is disclosed.
The restaurant business is described as one of the most intensely competitive industries with virtually no barriers to entry, competing on price, convenience, service, experience, menu variety, and product quality. Insurance competition is vigorous from large well-capitalized companies and small regional insurers. Oil and gas competes with fully integrated major global petroleum companies, independents, and national petroleum companies. Maxim competes with other licensing companies.
The Company’s management system combines decentralized operations (operating decisions made by business unit managers) with centralized financial decision-making (all major investment and capital allocation decisions by Mr. Biglari). For restaurants, Steak n Shake offers a franchise partner program to transition company-operated restaurants to single-unit owner-operators who meet a gold standard in service. Traditional franchise expansion seeks franchisees with financial resources and experience. First Guard leverages direct response marketing to maintain a low-cost position. International expansion includes a corporate office in Monaco and personnel to support international franchise development.
As of December 31, 2025, Biglari Holdings employed 2,359 persons.
Biglari Holdings reported a net loss attributable to shareholders of $(37.5) million for 2025, a significant deterioration from a loss of $(3.8) million in 2024. The primary driver was investment partnership losses of $(52.0) million (net of tax), compared to $(28.1) million in the prior year, which management notes causes significant volatility and is generally meaningless for analytical purposes. Excluding investment partnership activities, pre-tax income was $19.3 million, down from $32.9 million in 2024. Restaurant net sales grew 14.2% to $181.9 million, driven by 10.5% same-store sales growth at company-operated Steak n Shake units. Total restaurant revenue, including franchise fees and other, rose 11.7% to $280.9 million. However, restaurant operating income (pre-tax) increased only modestly to $23.1 million from $21.6 million, weighed by higher food costs, increased marketing spend, and impairments. The effective tax rate excluding partnerships was 24.9% versus 26.0% in 2024.
Restaurant: Same-store sales momentum was strong, but cost of food as a percentage of net sales rose to 30.9% from 30.1% due to inflation and product quality improvements. Labor costs improved to 30.9% of net sales from 31.7%, benefiting from sales leverage. General and administrative expenses increased to 17.4% of total revenue on higher salaries, and marketing rose to 6.4% from 5.0% to support new products. The segment added 7 franchise partner units and closed 8 company-operated stores, ending with 435 total units. Insurance: Underwriting results improved, with First Guard's underwriting gain up 49% to $6.0 million and Southern Pioneer swinging to a gain of $1.2 million from $0.4 million. Premiums earned grew 6.6% overall, driven by a 19.0% increase at Southern Pioneer from higher average premiums. Investment income fell to $3.3 million from $3.9 million. Oil and Gas: Revenue declined 18.2% to $30.2 million due to lower crude oil prices, though production costs decreased 24.6%. The segment recorded a $11.9 million gain on sale of properties, down from $16.7 million in 2024. Abraxas Petroleum revenue fell 24.8%, while Southern Oil revenue dropped 8.0%. Brand Licensing: Revenue surged to $7.7 million from $1.0 million due to a new digital contest business, but this venture produced an operating loss of $(1.9) million, widening from $(1.2) million. Corporate and other expenses increased to $(16.0) million from $(12.5) million, primarily due to higher professional fees. Interest expense surged to $(6.2) million from $(0.6) million, reflecting a new $225 million note payable at Steak n Shake with an 8.8% interest rate.
Management emphasizes that investment gains/losses will continue to cause volatility and are not indicative of operating performance. The restaurant business, particularly Steak n Shake's franchise partnership model, focuses on same-store sales growth and cost control. The new Steak n Shake note payable increases financial leverage but provides liquidity for corporate purposes. Oil and gas results remain sensitive to commodity price fluctuations. No explicit guidance is provided, but the company's liquidity position remains strong with $492.1 million in cash and investments (carrying value) and a $35 million line of credit. Management does not provide specific forward-looking metrics.
Biglari Holdings' risk factors prominently highlight dependence on Chairman and CEO Sardar Biglari, who beneficially owns over 50% of outstanding shares. His unavailability could materially harm operations. This control position also enables him to dictate shareholder outcomes, potentially conflicting with passive shareholders' interests. The company qualifies as a 'controlled company' under NYSE rules, exempting it from certain governance requirements (no governance/nominating committee).
A material weakness in internal control over financial reporting remains from 2024, after remediating four of five. Management cannot assure successful remediation, increasing risk of financial misstatement. Access to capital is restricted: the holding company relies on dividends from subsidiaries, which are limited by insurance regulations and Steak n Shake's credit facility. Additionally, investments in The Lion Fund partnerships are subject to five-year lock-ups, limiting liquidity. Future stock sales under an at-the-market offering could depress market prices.
Restaurant businesses face intense competition, commodity price fluctuations (beef, dairy), and sensitivity to economic cycles. Adverse weather conditions (Midwest winters, Southeast hurricanes) can disrupt operations. Labor shortages and rising wages pose challenges. Compliance with extensive government regulations (nutrition labeling, franchise laws, minimum wage) could increase costs or limit growth.
The majority of investments are channeled through outside partnerships controlled by Mr. Biglari, with a 25% incentive allocation above a 6% hurdle rate. These partnerships hold concentrated equity positions, exposing the company to significant value swings. The company risks inadvertently becoming an investment company under the Investment Company Act of 1940, which would impose restrictive regulations and potentially void contracts.
Insurance subsidiaries must accurately underwrite risks and price policies; catastrophic events could cause volatility. The Maxim brand licensing business depends on maintaining licensing agreements. Oil and gas operations are exposed to volatile commodity prices, operational disruptions, and regulatory changes.