Dive Brief:
- Cracker Barrel will add an 11th seat to its board and fill it with a Sardar Biglari nominee as part of a set of agreements indicating the company and the activist investor — who has pushed the brand to change for years — have reached a detente.
- Cracker Barrel and Biglari will sign a non-disparagement agreement that bars Biglari from criticizing the strategic direction of the company until Feb. 29, 2024.
- Biglari Holdings will also enter a standstill agreement barring it from acquiring Cracker Barrel shares that would give it more than 14.9% voting power.
Dive Insight:
Sardar Biglari, whose eponymous holding company owns Steak ‘n Shake, has pursued influence over Cracker Barrel’s board for more than a decade. Biglari himself tried to get on the chain’s board several times, but was consistently defeated in shareholder elections, according to Restaurant Business. Biglari and Cracker Barrel have traded harsh words over the years, with Biglari criticizing the company for its attempt to take over Punch Bowl Social. Most recently, the Federal Trade Commission sued Biglari for $1.4 million in connection with March 2020 stock purchases the FTC said violated waiting periods for voting stock acquisition.
The nominee, Jody Bilney, served as the chief marketing officer for Humana, the chief brand officer for Bloomin' Brands, and is currently a board member at Chuy’s, according to a Cracker Barrel press release. The company will include Bilney on its slate of directors to be voted on at annual shareholder meetings in 2022 and 2023.
According to the 8-K, Biglari will refrain from any public statement “that opposes, criticizes or challenges the Company’s, the Board’s or the Company’s management’s strategies, practices, policies or operations or (ii) constitutes an ad hominem attack on, or that otherwise disparages, defames, slanders, impugns or is reasonably likely to damage the reputation of the Company.” Cracker Barrel will reciprocate as part of the agreement. It also will reimburse Biglari up to $500,000 in expenses related to pursuing its director nominations, according to the press release.
Cracker Barrel has spent the last year pursuing off-premise growth and a more general turnaround program. Biglari, for his part, has faced trouble with his restaurant concept Steak ‘n Shake, which was sued in early 2021 over unpaid interest.
