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Bethany Clough

Fresno couldn't wait for a Steak 'n Shake. A year later it's closed. What happened?

 

When Steak 'n Shake announced it planned to open its first restaurant in Fresno, people couldn't wait.

They buzzed about it on social media, stopped by the restaurant daily asking when it would open and formed long lines for opening day March 6, 2017.

A little over a year later and the Kings Canyon Road Steak 'n Shake – and the Del Taco built next to it – are closed.

What happened?

"We had to close down. We could not get the area to turn out for those brands," said Eric LeVaughn, vice president of San Dimas-based Sater Oil, the company that owns the restaurants, and owns and developed the land they're on in front of the Walmart Supercenter on Kings Canyon Road near Peach Avenue.

The company was losing $60,000 a month by keeping the restaurants open, he said. Both businesses closed May 31st.

Steak 'n Shake's sales were 75 percent below the sales of the next-lowest performing Steak 'n Shake in the state.

"That Del Taco ended up being the slowest Del Taco … in the country," LeVaughn said.

When Steak 'n Shake opened, many people wondered on social media why the owners chose the location they did. The developers likely thought the property on busy Kings Canyon Road and the nearby Walmart would be enough of a draw.

Some people argued that point on Facebook posts, saying that the restaurant would do better if it were in north Fresno.

LeVaughn said something different was at play. "We really believe that California is not familiar enough with Steak 'n Shake and the corporate roll-out is insufficient," he said.

Although people who have been to Steak 'n Shake in other states were quick to sing its praises, that word of mouth wasn't enough. Its fans came, but others unfamiliar with the brand didn't.

Of the 10 Steak 'n Shakes opened in California, four have closed, LeVaughn said.

It's not clear how much the decision to locate in southeast Fresno played a role.

Two of the other Steak 'n Shakes that closed were in densely populated areas like Campbell and Daly City.

And that doesn't explain Del Taco's closure. The area has several other Del Tacos that appear successful. That includes a Clovis Del Taco owned by the same franchisee, Sater Oil, is doing well, he said.

The company still owns the property on Kings Canyon Road and the restaurants, and is looking to either lease the restaurants or sell them.

Steak 'n Shake has more than 500 locations nationwide, most of which are company operated.

Bethany Clough: 559-441-6431, @BethanyClough
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