Activist investor Sardar Biglari launched his eighth proxy battle at Cracker Barrel after the eating chain reported disappointing fourth-quarter earnings on Wednesday. In a submitting on Thursday, Biglari, who can also be the CEO of Steak n’ Shake, urged shareholders to vote towards the re-election of Cracker Barrel CEO Julie Masino and railed towards the chain’s administration, which he deemed “worse than mediocre.”
Biglari’s newest marketing campaign is a part of a 14-year entanglement with Cracker Barrel through which he has repeatedly did not get himself elected as a director. He has, nevertheless, managed to elect two candidates of his selecting (in 2022 and 2024), whereas preventing towards his proxy battles has price Cracker Barrel hundreds of thousands. Even this was trigger for criticism from Biglari: “The Board has spent $31 million of shareholders’ money to prevent one of its largest shareholders [Biglari] from having a minority voice. Now the Company has become a laughingstock.”
For a few years, Biglari was one of many firm’s largest shareholders, at one level proudly owning practically 20% of Cracker Barrel’s shares. He has since offered off a lot of his stake, and disclosed possession of a 2.9% stake within the proxy submitting.
The restaurant chain’s fourth quarter earnings disclosed a miss on earnings per share, falling brief on earnings per share whereas beating on income and projecting weaker buyer site visitors within the yr forward.
Cracker Barrel’s inventory fell roughly 10% in after hours buying and selling and was down greater than 8% at time of publication.
Biglari, who can also be the CEO of Biglari Holdings, which additionally controls Maxim journal, isn’t going away. On Thursday, he urged shareholders to vote towards the board’s administrators, whom he accused of “severe destruction of shareholder value,” an incapacity to know Cracker Barrel’s model, and a failure to pick an acceptable CEO.
“Instead of demonstrating the discipline and stewardship required to protect and enhance a storied brand, management has relied on ill-conceived strategies that have worsened existing challenges rather than solved them, culminating in the disastrous “brand refresh” that has ranked amongst this century’s worst model blunders alongside Bud Mild and Jaguar,” he wrote. “CEO Julie Masino’s tenure has been marked by repeated and highly publicized missteps, from misguided rebranding efforts to ill-fated “transformation” initiatives, that mirror the Firm’s troubling sample of tone-deafness and disrespect for shareholder capital.”
Biglari additionally took goal on the Cracker Barrel board’s advertising and marketing professional, Gilbert Dávila, whom he accused of being liable for the chain’s struggles, and “eroding shareholder value” by approving “outsized pay packages” for Cracker Barrel executives.
“Shareholders can send a message that merit and performance, the foundation that built America, rank above DEI,” he continued.
Cracker Barrel has dismissed Biglari’s antics, beforehand telling Fortune that the activist investor has made “numerous false and misleading claims about Cracker Barrel, its Board and management.” Shareholders have rejected practically all of his proposals.
In June, The Wall Avenue Journal reported that many Cracker Barrel prospects had been mourning the “loss of that old-timey feeling,” and the uproar escalated in August after a specific tweet by Donald Trump Jr., highlighting allegations that the rebrand was “woke.” The market response alone worn out roughly $100 million from the chain’s worth. At concern was, partly, the brand new brand that did away with the standard “Uncle Herschel” mascot—a denim-clad outdated man perched on a chair beside a barrel.
The redesign, which was a key a part of Cracker Barrel’s $700 million modernization marketing campaign—and was supposed to reverse an outflow of consumers from the chain, efficiency that Biglari has criticized for years—instantly ignited controversy, drawing outrage from longtime diners, Biglari, and even President Trump. Biglari used his restaurant’s social media accounts to troll Cracker Barrel over the blunder.
Cracker Barrel shortly reversed course, ditching the rebranding and suspending its deliberate restaurant renovations. The corporate’s inventory is down roughly 17% year-to-date.
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