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Cracker Barrel investor Biglari Capital Group makes another attempt to add board ally in latest potential proxy battleCracker Barrel investor Biglari Capital Group makes another attempt to add board ally in latest potential proxy battle

Sadar Biglari nominates Briad Group CEO Raymond Barbrick; Cracker Barrel declined to endorse the nomination

Joanna Fantozzi, Senior Editor

September 16, 2020

2 Min Read
Cracker Barrel earnings
Biglari Capital Group has caused friction with Cracker Barrel in the past.Cracker Barrel

Joanna Fantozzi

In a stinging letter to Cracker Barrel shareholders condemning management decisions that “defy sound reason,” activist investor Sadar Biglari of Biglari Capital Group on Tuesday nominated a new director in a fourth attempt to gain a seat on the casual-dining chain’s board.

Biglari — whose holdings represent Cracker Barrel’s largest shareholder group and also owns the struggling Steak ‘N Shake chain, along with Maxim Magazine and other wide-varied properties — has long been critical of the chain’s management strategy of diversifying investments, including a $140 million non-controlling investment in restaurant/entertainment hybrid Punch Bowl Social in July 2019, and divestment from the company eight months later in the middle of the pandemic.

According to Biglari’s complaint, the experience cost the casual-dining company 50% of its 2019 earnings, a decision which the letter called “questionable” and “egregious.”

“Cracker Barrel is one of the best concepts ever created in the restaurant industry,” the letter signed by Biglari and his affiliated companies, which collectively own more than 2 million shares in the company, said. “We believe Ms. Cochran and the current board do not fully appreciate its potential. If they did, all energies would be dedicated to this great American brand, rather than diverted into money-losing ventures like a bar concept.”

Biglari Capital Group then went on to nominate its own ally to the board, Raymond Barbrick, president and co-CEO of The Briad Group, and pointed to the shareholders’ website, Enhance Cracker Barrel, which details the long history of complaints in letters filed about the performance of the casual-dining company.

In a follow-up filing with the Securities and Exchange Commission, Cracker Barrel declined to endorse the nomination of Barbrick to the board, citing the fact that this is the fourth proxy takeover attempt by Biglari, a “historically dissident shareholder.”  

According to Cracker Barrel’s proxy response, the company received notice from Biglari-owned  fund, The Lion Fund II LP, of its decision to nominate Barbrick to the board. The issues between both parties go back as far as 2011, when Biglari first attempted to gain a board seat.

Most recently, Cracker Barrel declined to recommend Biglari’s most recent nomination of Barbrick to the board in September 2020, instead naming its own pick to the board of directors, Gisel Ruiz, a former chief operating officer of Walmart-owned Sam’s Club. Ruiz’s appointment to the board was announced on Monday, the day before the company released its fourth-quarter earnings, which showed improvement despite strong headwinds against casual-dining chains during the pandemic.

Cracker Barrel declined to comment further on the record.

Shareholders will formally vote for new board directors in November.

Cracker Barrel’s total quarterly revenues decreased 37.1% to $495.1 million for the fourth quarter, and the company reported net loss of $25.1 million or $1.06 per share.

As of July 30, Cracker Barrel Old Country Store Inc. owned 654 Cracker Barrel units and 35 Maple Street Biscuit Company units.

Contact Joanna Fantozzi at [email protected]

Follow her on Twitter: @JoannaFantozzi

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Steak ‘n Shake

About the Author

Joanna Fantozzi

Senior Editor

Joanna Fantozzi is a Senior Editor for Nation’s Restaurant News and Restaurant Hospitality. She has more than seven years of experience writing about the restaurant and hospitality industry. Her editorial coverage ranges from profiles of independent restaurants around the country to breaking news and insights into some of the biggest brands in food and beverage, including Starbucks, Domino’s, and Papa John’s.  

Joanna holds a bachelor’s degree in English literature and creative writing from The College of New Jersey and a master’s degree in arts and culture journalism from the Craig Newmark Graduate School of Journalism at CUNY. Prior to joining Informa’s Restaurants and Food Group in 2018, she was a freelance food, culture, and lifestyle writer, and has previously held editorial positions at Insider (formerly known as Business Insider) and The Daily Meal. Joanna’s work can also be found in The New York Times, Forbes, Vice, The New York Daily News, and Parents Magazine. 

Her areas of expertise include restaurant industry news, restaurant operator solutions and innovations, and political/cultural issues.

Joanna Fantozzi has been a moderator and event facilitator at both Informa’s MUFSO and Restaurants Rise industry events. 

Joanna Fantozzi’s experience:

Senior Editor, Informa Restaurant & Food Group (August 2021-present)

Associate Editor, Informa Restaurant & Food Group (July 2019-August 2021)

Assistant Editor, Informa Restaurant & Food Group (Oct. 2018-July 2019)

Freelance Food & Lifestyle Reporter (Feb. 2018-Oct. 2018)

Food & Lifestyle Reporter, Insider (June 2017-Feb. 2018)

News Editor, The Daily Meal (Jan. 2014- June 2017)

Staff Reporter, Straus News (Jan. 2013-Dec. 2013)

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