The Union Square Hospitality Group is the majority owner of Shake Shack. They have been conducting interviews with various banks, in order to find one the run an initial public offering for the fast-food-chain, a source disclosed on Friday, August 15th.
The famed burger joint would not be the first restaurant company this year to go public. Zoe’s Kitchen, a purveyor of a Mediterranean-Southern fusion food, and El Pollo Loco, a chain of Mexican chicken restaurants, have both debut on the stock market in the past year and have since seen their stock’s soar by the double digits.
Shake Shack was founded by Danny Meyer, who is an entrepreneur that also opened the high-end restaurants Union Square Café, Gramercy Tavern and Maialino. The new craze for gourmet burgers is credited to Meyer’s influence. At Shake Shack’s New York locations, it is normal to see a line of tourists and natives down the block, with a hankering for Shack Burgers and soft-serve ice cream.
The great success of Shake Shack has turned it into the largest piece of Meyer’s restaurant empire. Unfortunately, it still didn’t generate enough to compensate for rent raises that forced his Union Square Café to move from its original location.
The Shake Shack’s origins lie in Manhattan’s Madison Square Park, where there once stood a simple hot dog cart. Run out of Eleven Madison, a nearby restaurant, which was then a part of Union Square Hospitality; the stand was meant to help revive what was then a park in shambles.
The little stand was very successful, and was forced to expand to meet customer demands. It first became a permanent kiosk in Madison Square Park, next to multiple Manhattan locations, and then beyond the confines of New York City. Now the once dog cart has locations around the world, including now London, Moscow and Abu Dhabi; currently the company has approximately 50 locations.
A large portion of the funds for Shake Shack’s global expansion came in 2012, when the investment firm Leonard Green & Partners bought 39.5 percent of Union Square Hospitality.
On Friday, August 15th, a representative for Shake Shack said, “Shake Shack refrains from commenting on speculations or rumors.”
The discussions with the banks were originally reported by Reuters.