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OC Insider: Food Fights

Shake Shack Inc. counts over 400 global locations, and at the start of 2023 it reported 287 spots in the U.S., but somehow the nearly $3 billion valued high-end burger chain (NYSE: SHAK) had forgotten OC during its worldwide expansion; none of its 37 locations in the state were here as of year-end.

That’s about to change: a spot at the Irvine Spectrum Center is expected to open in the next week, followed by spots in Costa Mesa and Huntington Beach.

Perhaps Engaged Capital LLC can encourage the chain to take a closer look at one of the country’s biggest burger hubs: OC’s home to Irvine’s In-n-Out and Habit Burger, among others. See page 20 for the Business Journal’s annual listing of the biggest restaurant chains based in OC.

The Newport Beach-based activist investor, which reports indicate had a roughly 4% stake in Shake Shack, last week backed down from a potential proxy fight after the chain agreed to some additions to its board.

Jeffrey Lawrence, the former finance chief at Domino’s Pizza, is being added as an independent director, and Shake Shack said it had agreed with Engaged Capital to add another director with restaurant operations experience.

“Jeff and an additional director with expertise successfully scaling profitable restaurant concepts will be tremendous additions to the board,” Engaged founder Glenn Welling said.

Shares for the chain, which isn’t related to the PCH fave near Crystal Cove State Park, are up nearly 20% this month.

Habit Burger CEO Russ Bendel joined the then Santa Barbara-based chain in 2007 when it had about 15 locations; today it has over 350 spots across the globe, with plenty in and around its home base of Irvine.

Taco Bell parent Yum Brands (NYSE: YUM) paid $375 million for the Habit in 2020.

For a look at the soon-to-be retiring exec’s journey building the burger brand, see Bendel’s back-page Leader Board, written for the Business Journal.

Taco Bell’s lawyers got some publicity for OC’s largest restaurant chain last week by taking action against smaller competitor Taco John’s, regarding trademark restrictions.

Taco John’s has held the copyright to the “Taco Tuesday” trademark for over 30 years, and, according to the Irvine-based chain, used a heavy hand to enforce that trademark.

Taco Bell “simply seeks common sense for usage of a common term,” it said. “How can anyone Live Más if they’re not allowed to freely say ‘Taco Tuesday?’ It’s pure chaos.”

Pam Waitt, president of the OC Restaurant Association, concurs. “Taco John’s claim to be lovers and not fighters, yet they bully countless small businesses for simply offering Taco Tuesday,” she told the Business Journal.

Waitt knows the day well: she’s also owner of the TacoTuesday.com website, “a free resource for all restaurants so taco lovers (aka the planet) can find tacos any time.”

Taco Tuesdays increase participating restaurant’s revenue anywhere from 22% to 36%, according to Waitt. “This helps keep the local economy and payroll thriving.”

Waitt said she has not found herself in the legal crosshairs of Taco John’s because of the website, which she bought a few years ago.

“Having a trademark like this is the equivalent to holding hostage the trademark for Sunday Brunch,” she said.­­

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.
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