Cracker Barrel Faces Aggressive Proxy Battle From Steak ’n Shake Owner

Cracker Barrel is facing an aggressive proxy contest led by activist investor Sardar Biglari, owner of Steak ’n Shake, who is seeking to unseat Cracker Barrel’s chief executive Julie Felss Masino and director Gilbert Davila. Biglari has launched what he describes as his eighth attempt to win a seat on Cracker Barrel’s board. He owns nearly 3% of Cracker Barrel’s stock, according to a securities filing on Thursday.

In a Securities and Exchange Commission filing by Biglari Capital Corp., the investor criticized the Cracker Barrel board for what he called a lack of accountability and stewardship, and urged shareholders to send a message. He said Felss Masino and Davila—the latter who runs DMI Consulting, a DEI-focused marketing firm and chair of Cracker Barrel’s compensation committee—have steered the company onto a “mistaken path” that has left Cracker Barrel a “laughingstock.” He has openly criticized the leadership in recent months, including a public dig in August when he mocked Cracker Barrel by posting photos of red MAGA-style hats bearing the message “Fire Cracker Barrel CEO.”

Cracker Barrel’s latest challenge comes as the company grapples with a branding crisis that its executives linked to weaker traffic and public relations fallout. The company said in an earnings call that the rebranding drive contributed to an 8% decline in customer traffic across its roughly 650 restaurants and that the decline could extend into the next year, with a forecast of a 4% to 7% traffic drop. Management also noted that restoring momentum would take time as the public relations impact lingers and consumer recall of the brand evolves.

The branding episode began with Cracker Barrel’s attempt to move away from its long-standing identity, including its familiar “old timer” logo. The company briefly scrapped the image of a man leaning on a barrel, then reversed course after pushback from customers and investors. Even with the reversal, the brand’s visibility and appeal were affected as foot traffic lagged expectations during the autumn season and into early fall.

Cracker Barrel has sought to deter activist campaigns through bylaw protections. The company notes that shareholders who nominate directors at more than one annual meeting within five years and fail to win support must reimburse Cracker Barrel for proxy-related expenses, up to $5 million. The company reiterated that Biglari has pursued his proxy contests for what it characterized as “purely self-interested” reasons, and highlighted that shareholders have consistently rejected his proposals by wide margins in past campaigns. A Cracker Barrel spokesperson did not respond to requests for comment.

Biglari first invested in Cracker Barrel in 2011 and has since mounted eight proxy campaigns seeking a board seat, though he has remained a minority holder. The current effort underscores the ongoing tension between the chain’s leadership and a high-profile activist investor who has made the governance of the company a focal point amid a difficult period for Cracker Barrel’s brand management.