What changed in this filing

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Item 1. Business

2022-02-28 compared with 2021-03-01 · 27 added, 34 removed, 105 unchanged (37% of the section changed)

Biglari Holdings Inc.

is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, media and licensing, restaurants, and oil and gas.

is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, licensing and media, restaurants, and oil and gas.

The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants.

Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company.

The Company’s long-term objective is to maximize per-share intrinsic value.

Biglari Holdings’ management system combines decentralized operations with centralized finance decision-making.

Operating decisions for the various business units are made by their respective managers.

All major investment and capital allocation decisions are made for the Company and its subsidiaries by Mr.

As of December 31, 2021, Mr.

Biglari’s beneficial ownership was approximately 67.2% of the Company’s outstanding Class A common stock and 60.6% of the Company’s outstanding Class B common stock.

Biglari beneficially owns shares of the Company that represent approximately 66.2% of the economic interest and approximately 70.4% of the voting interest.

Overview of the Impact of COVID-19

6 unchanged sentences

Steak n Shake Inc.

(“Steak n Shake”) and Western Sizzlin Corporation (“Western Sizzlin”).

(“Steak n Shake”) and Western Sizzlin Corporation (“Western Sizzlin”) for a combined 577 units.

As of December 31, 2021, Steak n Shake had 199 company-operated restaurants, 159 franchise partner units, and 178 traditional franchise units.

Of the 276 company-operated units, 57 are currently closed but Steak n Shake intends to reopen most of them.

Of the 199 company-operated units, 42 are currently closed but Steak n Shake intends to refranchise a majority of them.

Western Sizzlin had 3 company-operated restaurants and 38 franchise units.

Steak n Shake franchises and operates its restaurants.

Founded in 1934 in Normal, Illinois, on Route 66, Steak n Shake is a classic American brand serving premium burgers and milkshakes.

Steak n Shake is headquartered in Indianapolis, Indiana.

Western Sizzlin primarily franchises its restaurants.

Founded in 1962 in Augusta, Georgia, Western Sizzlin offers signature steak dishes as well as other classic American menu items.

Founded in 1962 in Augusta, Georgia, Western Sizzlin is a steak and buffet concept serving signature steak dishes as well as other classic American menu items.

Western Sizzlin also operates two other concepts:

1 unchanged sentence

Western Sizzlin is headquartered in Roanoke, Virginia.

In response to COVID-19, our restaurants were required to close their dining rooms during the first quarter of 2020, and the majority of those dining rooms remained closed for the remainder of the year.

We follow the guidance of health officials in determining the appropriate restrictions to put in place for each restaurant.

We intend to reopen dining rooms after converting Steak n Shake’s full-service model into a self-service one.

We are unable to fully predict the impact that COVID-19 will continue to have on our and our franchisees’ operations going forward.

In response to COVID-19, our restaurants were required to close their dining rooms in the first quarter of 2020, and the majority of those dining rooms remained closed during 2020.

Steak n Shake reopened the majority of dining rooms during 2021, and in doing so has implemented a self-service model.

Our restaurant operations followed the guidance of health officials in determining the appropriate restrictions to put in place for each restaurant.

Company-Operated Restaurants

A typical company-operated restaurant management team consists of a general manager, a restaurant manager and other managers depending on the operating complexity and sales volume of the restaurant.

A typical company-operated restaurant management team consists of a general manager, a restaurant manager, and other managers, depending on the sales volume of the restaurant.

Each restaurant’s general manager has primary responsibility for the day-to-day operations of his or her unit.

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Restaurant operations’ traditional franchising program extends the brands to areas in which there are no current development plans for company stores.

The expansion plans include seeking qualified new franchisees and expanding relationships with current franchisees.

The expansion plans include seeking qualified new franchisees and expanding relationships with

current franchisees.

Restaurant operations typically seek franchisees with both the financial resources necessary to fund successful development and significant experience in the restaurant/retail business.

Both restaurant chains assist franchisees

with the development and ongoing operation of their restaurants.

Both restaurant chains assist franchisees with the development and ongoing operation of their restaurants.

In addition, personnel assist franchisees with site selection, approve restaurant sites, and provide prototype plans, construction support, and specifications.

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Similar to our traditional domestic franchise agreements, a typical international franchise development agreement includes development and franchise fees in addition to subsequent royalty fees based on the gross sales of each restaurant.

As of December 31, 2020, there were a total of 39 franchise units in Europe and the Middle East.

As of December 31, 2021, there were a total of 35 franchise units in Europe.

The restaurant business is one of the most intensely competitive industries.

4 unchanged sentences

Because of government actions to contain the spread of COVID-19, our restaurants were required to close their dining rooms during the first quarter of 2020.

Many of our competitors reopened their dining rooms in 2020, whereas the majority of our dining rooms remained closed as of December 31, 2020.

Many of our competitors reopened their dining rooms in 2020, whereas the majority of our dining rooms reopened by December 31, 2021.

Government Regulations

6 unchanged sentences

Insurance Business

Biglari Holdings’ insurance activities are conducted through two insurance entities.

Our insurance businesses provide insurance of property and casualty.

On March 9, 2020, Biglari Holdings acquired the stock of Southern Pioneer Property & Casualty Insurance Company, and its agency, Southern Pioneer Insurance Agency, Inc.

Biglari Holdings’ insurance activities are conducted through two insurance entities, First Guard Insurance Company and its affiliated agency, 1st Guard Corporation (collectively “First Guard”), and Southern Pioneer Property & Casualty Insurance Company and its affiliated agency, Southern Pioneer Insurance Agency, Inc.

(collectively “Southern Pioneer”).

Our insurance business is composed of First Guard Insurance Company and its agency, 1st Guard Corporation (collectively “First Guard”), and Southern Pioneer.

Our insurance businesses provide insurance of property and casualty.

The insurance business is stringently regulated by state insurance departments.

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First Guard is a direct underwriter of commercial truck insurance, selling physical damage and nontrucking liability insurance to truckers.

First Guard competes for truck insurance with other companies.

The commercial truck insurance business is highly competitive in the areas of price and service.

2 unchanged sentences

First Guard’s cost-efficient direct response marketing methods enable it to be a low-cost insurer.

Guard uses its own claim staff to manage claims.

Seasonal variations in First Guard’s insurance business are not significant.

First Guard uses its own claim staff to manage claims.

variations in First Guard’s insurance business are not significant.

However, extraordinary weather conditions or other factors may have a significant effect upon the frequency or severity of claims.

4 unchanged sentences

Southern Pioneer is headquartered in Jonesboro, Arkansas.

Biglari Holdings’ insurance operations may be affected by extraordinary weather conditions or other factors may have a significant effect upon the frequency or severity of claims.

Biglari Holdings’ insurance operations may be affected by extraordinary weather conditions or other factors, any of which may have a significant effect upon the frequency or severity of claims.

Oil and Gas Business

On September 9, 2019, a wholly-owned subsidiary of the Company, Southern Oil Company, acquired the stock of Southern Oil of Louisiana Inc.

(collectively “Southern Oil”).

Southern Oil primarily operates oil and natural gas properties offshore in the shallow waters of the Gulf of Mexico.

Southern Oil Company ("Southern Oil") primarily operates oil and natural gas properties offshore in the shallow waters of the Gulf of Mexico.

Southern Oil is headquartered in Madisonville, Louisiana.

2 unchanged sentences

The COVID-19 pandemic caused oil demand to decrease significantly during the second and third quarters of 2020, which created oversupplied markets and lower commodity prices and margins.

In response, the Company cut production and expenses in its oil and natural gas business.

In response, the Company cut production and expenses in its oil and natural gas business during 2020.

However, the significant increase in average crude oil and natural gas prices in 2021 compared to 2020 resulting from the lifting of COVID-19 restrictions, the resumption of normal economic activity, and the resulting improvement in supply and demand fundamentals caused Southern Oil to return to full production during 2021.

Southern Oil competes with fully integrated, major global petroleum companies, as well as independent and national petroleum companies.

In addition, the Company is subject to a variety of risks inherent in the oil and gas businesses, including a wide range of local, state, and federal regulations.

Media and Licensing Business

Maxim’s business lies principally in media and licensing.

In addition, the Company is subject to a variety of risks inherent in the oil and gas business, including a wide range of local, state, and federal regulations.

Brand Licensing Business

Maxim’s business lies principally in brand licensing.

Maxim is headquartered in New York City, New York.

2 unchanged sentences

In addition, publishing is a highly competitive business.

The Company's magazines and related publishing products and services compete with other mass media, including the Internet.

Maxim products are marketed under various registered brand names, including, but not limited to, “MAXIM®” and “Maxim®”.

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business