What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-23 compared with 2022-02-18 · 414 added, 383 removed, 204 unchanged (80% of the section changed)

1 unchanged sentence

was formed on September 23, 2014 as a Delaware corporation for the purpose of facilitating an initial public offering and other related transactions in order to carry on the business of SSE Holdings, LLC and its subsidiaries ("SSE Holdings").

We are the sole managing member of SSE Holdings and, as sole managing member, we operate and control all of the business and affairs of SSE Holdings.

As a result, we consolidate the financial results of SSE Holdings and report a non-controlling interest representing the economic interest in SSE Holdings held by the other members of SSE Holdings.

Shake Shack Inc.

is the sole managing member of SSE Holdings and, as sole managing member, it operates and controls all of the business and affairs of SSE Holdings.

As a result, Shake Shack Inc.

consolidates the financial results of SSE Holdings and reports a non-controlling interest representing the economic interest in SSE Holdings held by the other members of SSE Holdings.

Shake Shack Inc.

Class A common stock trades on the New York Stock Exchange under the symbol "SHAK." Unless the context otherwise requires, "we," "us," "our," "Shake Shack," the "Company" and other similar references refer to Shake Shack Inc.

and, unless otherwise stated, all of its subsidiaries, including SSE Holdings.

COVID-19 Pandemic Update

COVID-19 was officially declared a global pandemic by the World Health Organization in March 2020 and continues to impact all global economies, including in the U.S., which continues to experience varying levels of restrictions implemented by national, state, and local authorities.

Although the pandemic has presented challenges to our global business, it has also caused us to accelerate a variety of existing strategic growth initiatives — including new digital capabilities.

By proactively taking steps to expand access, safety and convenience for our guests, we believe we have better positioned ourselves to return to growth, as described herein.

Convertible Note Offering

In March 2021, the Company issued $225 million aggregate principal amount of 0% Convertible Senior Notes due 2028 (“Convertible Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933.

The Company granted an option to the initial purchasers to purchase up to an additional $25 million aggregate principal amount of Convertible Notes to cover over-allotments, which was subsequently fully exercised during March 2021, resulting in a total issuance of $250 million aggregate principal amount of Convertible Notes.

The Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in certain circumstances.

Upon conversion, the Company pays or delivers, as the case may be, cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at the Company's election.

Shake Shack is a modern day "roadside" burger stand serving a classic American menu of premium burgers, chicken sandwiches, hot dogs, crinkle cut fries, shakes, frozen custard, beer and wine.

Originally founded in 2001 by Danny Meyer's Union Square Hospitality Group ("USHG"), which owns and operates some of New York City's most acclaimed and popular restaurants — such as Union Square Cafe, Gramercy Tavern and Blue Smoke, to name a few — Shake Shack began as a hot dog cart to support the rejuvenation of New York City's Madison Square Park through its Conservancy's first art installation, "I Y Taxi." The cart was an instant success, with lines forming daily throughout the summer months over the next three years.

Shake Shack serves modern, fun and elevated versions of American classics using only the best ingredients.

We are known for our made-to-order Angus beef burgers, crispy chicken, hand-spun milkshakes, house-made lemonades, beer, wine, and more.

With our fine dining roots and a commitment to crafting uplifting experiences, Shake Shack has become a cult-brand and created a new category, fine-casual.

Our purpose is to Stand For Something Good®, from thoughtful ingredient sourcing and employee development to inspiring designs and deep community investment.

Originally founded in 2001 by Danny Meyer's Union Square Hospitality Group ("USHG"), which owns and operates some of New York City's most acclaimed and popular restaurants — such as Union Square Cafe and Gramercy Tavern, to name a few — Shake Shack began as a hot dog cart to support the rejuvenation of New York City's Madison Square Park through its Conservancy's first art installation, "I Y Taxi." The cart was an instant success, with lines forming daily throughout the summer months over the next three years.

In response, the city's Department of Parks and Recreation awarded Shake Shack a contract to create a kiosk to help fund the park's future.

1 unchanged sentence

It soon became a gathering place for locals and visitors alike, and a beloved New York City institution, garnering significant media attention, critical acclaim and a passionately devoted following.

Since its inception, Shake Shack has grown rapidly — with more than 240 domestic locations in 32 U.S.

States and the District of Columbia and more than 125 international locations — and we continue to expand globally bringing the Shake Shack experience to new guests around the world.

Shake Shack Inc.

Form 10-K | 2

Since the original Shack opened in 2004 in NYC’s Madison Square Park, the Company has expanded to over 400 locations system-wide, including over 260 in 32 U.S.

States and the District of Columbia, and over 140 international locations across London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo, Seoul and more.

WE STAND FOR SOMETHING GOOD

1 unchanged sentence

We are on an endless pursuit to create uplifting experiences through elevated, modern and fun versions of classic food and we are committed to seeing this vision executed across all aspects of the business, through the following actions:

▪ We elevate everything we do.

Shake Shack is about creating uplifting experiences and moments of pure satisfaction.

▪ We elevate everything we do — Shake Shack is about creating uplifting experiences and moments of pure satisfaction.

We aim to be thoughtful in every ingredient we buy, recipe we develop, Shack we design, team we build and community we support.

▪ We deliver Enlightened Hospitality at every touchpoint.

Shake Shack was founded on the idea of Enlightened Hospitality.

▪ We deliver Enlightened Hospitality ™ at every touchpoint — Shake Shack was founded on the idea of Enlightened Hospitality.

Today, we deliver on that vision by building hospitality through all our guest touchpoints.

To us, hospitality is all about taking care of our team, our guests, our communities — and bringing those groups together.

▪ We gather communities and enrich our neighborhoods.

Across the globe, Shacks have been an integral part of their communities, and, we believe we have a role to play in supporting and revitalizing the neighborhoods where we work and serve.

▪ We do the right thing and hold ourselves accountable.

At Shake Shack, we've always believed in leading by example and making better possibilities come to life with our teams and community, beyond just making great food.

▪ We gather communities and enrich our neighborhoods — Across the globe, Shacks have been an integral part of their communities, and, we believe we have a role to play in supporting and revitalizing the neighborhoods where we work and serve.

Shake Shack Inc.

Form 10-K | 2

▪ We do the right thing and hold ourselves accountable — At Shake Shack, we've always believed in leading by example and making better possibilities come to life with our teams and community, beyond just making great food.

Our commitment to doing things differently includes a focus on exceptional career support for our teams, while creating meaningful impact in both our neighborhoods and the global industry.

▪ We empower our teams to act like entrepreneurs.

At the heart of a Shake Shack experience is our teams’ personal commitment to craft and hospitality.

▪ We are committed to environmental responsibility — We source our world-class ingredients from suppliers who share our values, including 100% antibiotic- and hormone-free proteins from ethically raised animals and non-GMO buns, and are committed to sustainable packaging, a focus on renewable energy, and assessing and managing our greenhouse gas emissions.

▪ We empower our teams to act like entrepreneurs — At the heart of a Shake Shack experience is our teams’ personal commitment to craft and hospitality.

As we grow, we are developing our leaders and building tools that empower our Shacks to better promote uplifting experiences.

HUMAN CAPITAL MANAGEMENT

Our most important asset is our people and as a result, we have remained committed to investing in our people so we can recruit, reward and retain a winning team.

Our strategy continues to be to recruit talented people who have integrity, who are warm, motivated, self-aware, and intellectually curious alongside having the competencies and skills that continue to foster our growth.

We train our team to understand and practice the values of Enlightened Hospitality:

caring for each other, caring for our guests, caring for our communities, caring for our suppliers and caring for our investors.

We believe this culture is fundamental to the way we operate our business, and a key driver of our ability to deliver great guest experiences, and therefore, successfully grow our footprint.

Due to the challenging macro labor environment, which is present in both our field operations and home office, we are focused on attracting and recruiting talent as much as retaining our team members to grow and move the business forward.

We are doing this in the following ways:

▪ Building a diverse winning team, staffed for success.

▪ Creating a positive, uplifting team member experience through incentivizing total rewards and cultural programs.

▪ Providing leadership opportunities through multi-faceted development programs.

▪ Prioritizing compliance for scalable growth via technology and procedural initiatives while providing operational efficiency.

▪ Creating an environment that supports cultural alignment, process improvement, and enhanced communication.

Working at Shake Shack is about more than making a great burger, it's about creating elevated and uplifting experiences for our team members and guests and getting opportunities to build a rewarding career.

We strive to make every team member at Shake Shack feel empowered to impact our Shacks and the communities around them.

We promote a family of passionate, fun-loving, and hardworking people who encourage and uplift each other.

We are committed to doing the right thing for our teams, guests and communities.

We challenge ourselves, hold each other accountable, and take care of one another.

We Stand For Something Good.

We have expanded our People Resources team to enable us to better navigate complex team member relations issues to prevent risk and litigation.

We've layered in predictive scheduling support to maximize Fair Workweek compliance across respective jurisdictions.

Additionally, we have aligned our safety and OSHA practices under one resource for the organization.

Shake Shack Inc.

Form 10-K | 3

We are enabling our managers to build, coach, and lead strong teams by giving them the knowledge, tools, and resources to drive strong people practices in their Shacks.

Key accomplishments include:

▪ Market Leader Training — Robust, in-person curriculum for exempt managers focused on driving compliance throughout the team member lifecycle.

▪ Predictive Scheduling Team and Tools — Built a team to cover predictive scheduling locations, multi-level audit procedures, and implemented a predictive scheduling tool.

▪ Shack Safe — Hired a dedicated OSHA and safety resource to establish a Safety Committee and programming to keep our teams safe, identify gaps, and meet statutory requirements.

With a focus on technology and automation we are working to streamline and eliminate manual work for our teams while driving compliance and minimizing human error.

We are dedicated to the continuous improvement of technology, processes, and experiences within the Shake Shack team member journey.

In fiscal year 2022, we enabled a new recruiting platform and reporting technology that will help us continue to scale and grow.

The key accomplishments include:

▪ Building the People Resources Technology Team — Dedicated team to support growing administration needs, on-going level one people resources tech support, and more robust reporting and insights.

▪ Recruiting Platform — Implemented a new Applicant Tracking System (ATS), leveraging the strategic advantages of a fully integrated ERP.

Simplified high volume recruiting & hiring, enhanced candidate communication and experience.

Increased WOTC tax assessment rate.

▪ Messaging Capabilities — Enables Shake Shack to communicate with team members and candidates via modern communication channels.

As of December 28, 2022, we had 11,704 team members, of whom 11,316 were hourly team members and Shack-level managers and 388 were home office personnel.

Recruit A Winning Team

Our largest opportunity in the performance of our current Shacks and new openings lies in fully staffing and retaining our Team Members.

Within the Talent Acquisition function, fiscal year 2022 has been a year of building a foundation to support the staffing needs of the business as well as new Shack growth.

By focusing on a framework that supports integration and automation, we are set up to tackle the competitive landscape of attracting and hiring top talent today and into 2023 with more data than ever before.

We are committed to better leveraging our external partnerships, working cross-functionally with Marketing, and utilizing analytics to deliver a strong talent acquisition strategy and employer branding presence.

With a robust candidate focused framework enabled for talent acquisition alongside an elevated employment branding effort, we look to execute a strategic vision to recruit the best and the brightest talent to our Shacks.

Taking into consideration the work we've done to stabilize our foundation, our current resources, labor environment and other competitive factors, we are focused on diversifying our talent acquisition strategy.

We will do this through a variety of recruitment media channels.

We have a full Team of Regional Talent Acquisition Partners and Coordinators supporting Operations.

We are also partnering with a new marketing media firm to leverage data and metrics to launch programmatic job advertising.

The firm will work to diversify our media and increase our network reach to include partnering on our diversity, equity and inclusion initiatives.

Reward A Winning Team

Our goal is to focus on providing highly competitive compensation and benefits to our Teams for their hard work and service.

With that we have grown our Benefits staff to enable us to have the dedicated Team to audit and improve our support processes as well as provide the care and communication to get our Teams what they need, when they need it most.

Shake Shack Inc.

Form 10-K | 4

Technology and education enable our Teams and management to have the best experiences for their health and welfare, and we will continue to develop our design and pay practices to reward a winning Team.

By unlocking opportunities in our design and processes, we provide new ways to more effectively and efficiently engage our Teams.

Key accomplishments include:

▪ Wellness — We initiated the first phase of a Wellness campaign through home grown communication, material curation, and partnerships to promote awareness and participation in events across a series of health and wellness topics.

▪ Shift Manager Bonus Eligibility — Beginning in fiscal 2022, Shift Managers are eligible to participate in the Shack Management Bonus Plan.

This group represents our largest Team providing supervisory support in our Shacks to both our Teams and Guests.

▪ Tipping — In 2022, we rolled out tipping at most of our Shacks across POS, App, Web, and Kiosk.

With our new tipping availability, Team Members have the opportunity to increase their hourly pay.

We want to incentivize our Shack leaders, give them the opportunity to feel like owners and reward them for their performance.

One way we try to achieve this is by extending our equity-based compensation program to all General Managers.

As an incentive for General Manager hires, we added General Manager sign-on equity grants and created additional compensation opportunities for our General Managers.

We are not immune to the staffing challenges presented across our industry, but we are committed to building Teams that drive growth for the long term.

Retain A Winning Team

We are committed to delivering a strong pipeline of talent for our Teams while retaining our solid performers.

Our Shacks must be fully staffed, operating at full capacity with optimized throughput to capture maximum sales potential.

We help foster an environment that attracts and welcomes diverse talent;

enables a culture of belonging, inclusion, and equity;

and supports an engaging, and overall positive Team Member experience.

To solidify our culture, in 2022 we created meaningful opportunities for connection and engagement at our weeklong leadership retreat and evolved the Shack Pact core values that support our mission and brand commitments to help Team Members understand the behaviors needed to live our purpose.

We Are All-In

To make sure every Shake Shack Team Member at every level has a positive experience, we strive to build an inclusive workplace, made up of diverse talent throughout the Company.

Our Diversity Equity and Inclusion (DEI) program, All-In, is part of that mission.

With the support of executive leaders, All-In works to ensure Shake Shack provides equal opportunities for all, and removes obstacles or barriers to success, while also fostering a culture of inclusion and belonging.

Our All-In program's initiatives include:

▪ 5-Year Diversity Targets — We set time-based goals that help to focus attention, clarify accountabilities, and demonstrate our commitment to increase the diversity within our Shack and home office leadership Teams.

Our 5-year diversity targets were set based on analysis of our industry, demographics of the workforce at large and the changing landscape of this country, and the reality of whom we employ today.

We have focused our attention on women and people of color specifically, as we look to match the demographics of our workforce and the country at large.

▪ Employee Resource Groups (ERG) — We strive to foster a strong internal community and awareness for diverse groups and cultures through our ERGs.

Our current ERGs focus on women, Black, Hispanic, Asian and LGBTQ+ identifying Team Members.

These are voluntary, Team Member led groups of people who gather based on common interests, backgrounds or demographics such as gender, race or ethnicity.

These groups support both personal and professional development while helping to foster an inclusive workplace.

Shake Shack Inc.

Form 10-K | 5

▪ Diversity, Equity & Inclusion (DEI) Curriculum — We are building a DEI curriculum to raise awareness and educate our Team Members on how to foster a strong work environment.

The curriculum is aligned to our leadership and talent development framework, and provides a common framework for what DEI means and why it matters at Shake Shack.

All home office and operations Team Members participate in the course, including all new hires.

The curriculum plan also provides for unconscious bias and courageous leadership teachings.

▪ Stand Together Series — We host a Stand Together Series forum to discuss on-going social issues.

The Company-wide sessions served as an open forum and safe space for sharing personal stories to help deepen the collective understanding of diversity issues in the U.S.

while strengthening our community and Team.

In 2022, we hosted live sessions on topics such as women in leadership, Black-owned businesses, Asian and Pacific Islander heritage, LGBTQ inclusion, and more.

▪ External Recognition — We were proud to be named one of the "Best places to work for LGBTQ+ Equality" for the fourth year in a row earning a 100% score on the Human Rights Campaign's Corporate Equality Index for our support of the LGBTQ+ community in the workplace.

This designation highlights the core of our Enlightened Hospitality ethos and our commitment to a great workplace for all.

One of the ways we embrace Enlightened Hospitality internally is through the administration of our own HUG (Help Us Give) Fund, a 501(c)(3) organization available for all our Team Members.

The HUG Fund provides an opportunity for all Shake Shack Team Members to take care of each other through tax-deductible payroll and other one-time contributions.

The HUG Fund provides timely financial assistance to Team Members impacted by financially devastating circumstances far beyond their control and their means.

During fiscal 2022, we provided 41 Team Members with financial grants to help alleviate financial burdens caused by catastrophic events.

Leadership & Talent Development

We are dedicated to producing the human capabilities the Company needs to accomplish its business objectives, and to provide modern content and experiences that develop and retain Team Members.

As our learning culture continues to evolve, we have made consistent strides in creating a foundational footprint in various learning opportunities throughout the year.

We are focused on understanding who our leaders are, what their personal and professional developmental needs may be, and how to meet them where they are with scalable development opportunities.

In 2022, our leadership and talent development offerings were impactful in various ways.

From crafting and delivering our core leadership competency courses to coaching and preparing leaders to teach at the Leadership Retreat, we are in the beginning stages of laying an understructure of content, programs, and approaches essential to scale and grow alongside our people and business.

During 2022, development focus areas included:

▪ Providing effective feedback

▪ Learning to navigate and lead change

▪ Organizing and delegating work

▪ The culture of Shake Shack

▪ Train the trainer orientation practices

▪ Essential communication methods

▪ Hospitality trends and business operations

▪ Managing a Team and delivering results

Shake Shack Inc.

Form 10-K | 6

Our Leadership Retreat was held in Tucson, AZ with the theme of Evolve Together.

Over the course of the week, nearly 1,000 Shake Shack leaders, licensed partners, and sponsors gathered from all over the world to connect, learn, and grow.

The event featured inspirational speakers, leadership development sessions, and the recognition of Team Members who contribute to Shake Shack’s success.

On-going Leadership Programs

We invest in leadership development programs so that Shake Shack remains a compelling career choice for Team Members at every level, through their entire career.

As our Team continues to grow, we believe that our culture of Enlightened Hospitality helps us deliver a consistent Shack experience, and to develop future leaders from within.

One such program is The Shacksperience — a functional growth model and overall employment experience for Shake Shack Team Members.

A key element of The Shacksperience is the Steppin' Up Model, which defines the steps in the employment life cycle, from Team Member to General Manager.

It clarifies the eligibility requirements and training necessary for each position, outlines the growth opportunities at all levels of the organization and furthers our philosophy of "leaders training future leaders."

Through the Steppin' Up Model, Team Members are provided the opportunity to surpass the national average hourly wage through training roles and promotion to manager roles.

Efforts such as this allow us to continue to attract and retain the best restaurant talent, while recognizing the importance of our Team — the heartbeat of Shake Shack — to ensure current and future Team Members feel cared for and have opportunities for sustainable career growth.

We care about our Team and we're committed to setting them up for success, at Shake Shack and in their future careers.

In 2022, we promoted 2,604 people throughout our Company, 55% of whom were women and 77% were under-represented minorities.

We are proud of our leaders who graduate from hourly roles to managers, managers to General Managers and General Managers to regional leadership.

This year, 75% of our new General Managers and 73% of new Area Directors were promoted from within.

Another part of our long-term investment in our people is the Shift Up program, which is our development program that provides an avenue for mid-level managers to improve their skill set and ability to move to the next level of management.

In partnership with Food Education Fund, a nonprofit organization specializing in culinary arts, we developed a curriculum and program to help bridge the gap between Shift Managers and Exempt Managers by offering and teaching the skills necessary to enable the confidence that can lead to career growth.

This 18-week classroom-style program aligns to our organizational competencies and supports the transfer of learning between graduates through cohort mentoring, business integration and real-world Shack experience.

During fiscal year 2022, the Shift Up program had 86 participants.

Additionally, the program had a 88% completion rate and 91% retention rate for fiscal year 2022.

Of the 86 participants, 31 Team Members were promoted into Manager-In-Training, Manager or California Non-Exempt Manager roles.

GUEST EXPERIENCE

1 unchanged sentence

We believe that culture is the single most important factor in our success.

To maintain this, we take care of our teams first and foremost, and this allows us to take care of our guests, our community, our suppliers and our investors.

To maintain this, we take care of our teams first and foremost, and this allows us to take care of our guests, our communities, our suppliers and our investors.

With Enlightened Hospitality, we strive to create a personalized experience for our guests at each of our Shacks around the world.

We achieve this through innovations in service, trendsetting culinary innovation, and the design of warm community gathering places.

Digital Transformation

Shake Shack Inc.

Form 10-K | 7

Digital Evolution

The focus of our digital strategy is to deliver Enlightened Hospitality to our guests across multiple channels.

Through modern platforms, we continuously strive to build more frictionless ways to deliver the unique Shake Shack experience with convenience and accessibility.

Our digital initiatives are defined by each of the following three themes:

Our digital initiatives are defined by each of the following themes:

▪ Enlightened Hospitality — Using our digital channels to bring guests an uplifted sense of hospitality.

1 unchanged sentence

▪ Personalized Guest Experience — Knowing, understanding and creating a personal guest experience that drives loyalty, frequency, and brand engagement across multiple digital platforms and in the Shacks themselves.

Shake Shack Inc.

Form 10-K | 3

▪ Smarter Every Day – Building and refining our data platform and overall approach so we may drive return on investment on marketing campaigns and technology spending, and improving our ability to make smart decisions that fuel growth.

As we have evolved our physical Shack design to serve our guests more efficiently, the continued development of our digital ordering tools has also been essential.

▪ Smarter Every Day — Building and refining our data platform and overall digital approach so we may drive return on investment on marketing campaigns and technology spending and improve our ability to make smart decisions that fuel growth.

As we have evolved our Shack design to serve our guests more efficiently, the continued development of our digital ordering tools has also been essential.

The COVID-19 pandemic accelerated those plans, as we used those tools to connect with our guests directly, more frequently, and safely while focusing on a return to growth in the process.

Our Company-owned web and app channels continue to grow on a year-on-year basis since the second quarter of 2020.

At the end of fiscal 2021, we added 3.5 million first-time guests to those channels since mid-March of 2020.

We have also retained a high digital mix in 2021, with digital accounting for 46% of our sales.

Our ongoing digital investments provide opportunities to capitalize on new marketing and targeting strategies, which may help drive both frequency and average check size, as well as new digital guest acquisition.

During fiscal 2021, we continued to refine the order pick-up experience with expanded order options for our guests.

We have rolled out the option for consumers to order delivery through our Shack app and web platforms nationwide, along with Shack Track pick-up options in-Shack pick-up, curbside pick-up, walk-up windows and drive-up windows.

We also continue to offer third-party delivery through Uber Eats, DoorDash, Grubhub and other third-party delivery providers.

To provide our guests with flexibility, in 2020, we introduced Shack Track, as an enhanced digital pre-order and fulfillment solution that allows guests to order through our Company-owned app or web channels and pick-up however they like, whether through curbside pick-up, walk-up window, drive-up window or at an improved in-Shack pick-up area.

It allows for intentional, directional and friction-reduced order and pick-up across all formats.

Shack Track is integrated in the design of the Shack, while remaining separate and distinct from the in-Shack guest experience allowing any guest's journey to be intuitive and efficient.

Within Shack Track, our overarching goal is to bring together our physical and digital infrastructure to reduce friction at every step of the Shake Shack experience.

In 2021, we continued to expand the availability of Shack Track across more Shacks and integrated these pick-up modes across our Shack app and web digital experiences

In fiscal 2021, we added 13 Shack Track interior pick-up areas, 12 walk-up windows, six curbside pick-up areas and five drive-up windows.

For fiscal 2022, we expect most of our new Shacks to have some version of Shack Track, whether a drive-up or walk-up window, or a combination of enhanced interior pick-up, curbside pick-up, and/or dedicated delivery courier pick-up areas.

New Web and Android Platforms

To continue modernizing our digital platforms, a key initiative in 2021 was the launch of a new Shake Shack website.

The ordering platform is now Company owned and the ordering experience is under the same domain as our content website.

The project included an optimized order flow, updated investor site, updated career site, as well as clear prompts for guests to download the Shake Shack App from the website.

Owning this platform decreases platform fees, improves our content delivery and drives search engine optimization.

We plan to relaunch our Android platform in early 2022.

The new Android app will improve the parity among guest facing ordering channels, with the ability to order via delivery in the app and pick-up via Shack Track locations.

The app will have a modernized look and feel focused on making it easier for guests to order food and pick-it up.

The app will also include an updated payment solution which includes Google Pay and digital wallet.

Delivery Service

Over the past several years, we have executed various third-party delivery options in an effort to bring Shake Shack to our guests wherever they are and whenever they want.

Delivery accelerated during the COVID-19 pandemic and is an essential part of how consumers order today.

With that in mind, in fiscal 2020, we entered into an integrated delivery partnership with Uber Eats, expanded our existing integrated delivery partnership with DoorDash and moved to a non-exclusive arrangement with Grubhub.

We launched delivery through our own channels as a pilot in late 2020.

In February 2021, we rolled out nationwide delivery through the Shack app, on iOS devices, and in September 2021, we began offering delivery through the Shake Shack website.

Delivery will be across all our native digital platforms with the anticipated launch of the new Android experience in early

Our Company-owned web and app channels continue to grow in the number of web sessions and app users on a year-on-year basis, driven by our ongoing focus on acquiring and converting users across our digital ecosystem.

In 2022, we focused on leveraging growth in guests visiting us on web as a lead funnel to our mobile apps, which offer a better guest experience and drive higher frequency.

As a result, we saw meaningful increases in our mobile orders year over year, further enabled by ongoing investments in our guest experiences.

In fiscal 2022, we continued to improve our digital guest experience by enhancing our digital offerings.

We improved and expanded our ability to interact with guests before and after purchases by implementing new lifecycle marketing and customer support solutions.

We continued to improve the guest order experience as well, by adding kiosks to a number of Shacks, launching new gift card capabilities, the introduction of pick-up tipping, an all-new Android app, and iterating on 2021’s web redesign with a streamlined order creation flow.

Lifecycle Marketing

To enhance our ability to drive frequency across digital channels, we integrated Braze as a lifecycle marketing and automation tool.

Through Braze, we elevated the guest onboarding experience into our marketing funnel by automating this process, providing information about our brand relevant to guest preferences and behavior, and re-enforced how we Stand for Something Good in everything we do.

We also introduced more timely, personalized content and targeted digital offers, and are using these tools to drive guest frequency.

We have unlocked the capability to personalize and test multichannel campaigns, with digital touchpoints across email, push notifications, and in-app messaging, by a guest’s location and digital ordering behavior which has led to an incremental lift in users who visit our website and mobile apps.

With a better sense of guest behavior and real-time targeting, we’re able to provide our digital guests with a better experience inclusive of targeted offers and app exclusive items.

These efforts have led to meaningful growth in our marketable digital audiences with email subscription and push notification subscription both increasing since the launch of Braze in June 2022.

Overall, we’re seeing an incremental lift in digital sessions as a direct result of the campaign targeting we rolled out with Braze this year.

Android Modernization

In February 2022, version 2.0 of the Android Shack app launched which delivered new capabilities and a better guest experience while bringing development control of the platform in house.

This release saw dozens of under the hood improvements, including making the app more stable and faster to launch, but primarily focused on a few marquee feature introductions.

Specifically, we introduced new order modes to Android including delivery, curbside, and walk-up that made it easier for guests to experience

Shake Shack Inc.

Form 10-K | 8

Offering delivery through our own channels has allowed us to create consistent and personal experiences, gather additional data and insights to allow for better service, and connect with guests more directly as part of our broader digital strategy.

Guest Insights and Customer Relationship Management (CRM)

In an effort to better understand the preferences of our guests, in October 2020, we completed the first phase of an initiative to bring together disparate data and derive actionable insights through improved analytics and business intelligence.

The first phase was focused on supporting our digital strategies, with the aim of increasing sales across all channels, improving our transactional and marketing communications, and, most importantly, delivering an enhanced guest experience.

Our improved guest data allowed us to expand our digital marketing strategies and channels.

With a better sense of guest behavior we were able to acquire new guests through digital marketing and improve our communications with existing guests.

In 2021, we expanded our CRM efforts to include push notifications, new guest welcome flows, birthday offers and Rate Your Order features in the Shack app.

These efforts have led to meaningful improvement in guest retention and frequency.

In 2021 we grew our first time app and web purchasers base by more than 80% and we have been able to retain nearly 80% of digital sales in fiscal December 2021 when compared to fiscal January 2021, when digital sales peaked.

Additionally, App & Web saw a notable increase in guest frequency.

Contactless Mobile Payment Method

With the safety and convenience of our guests in mind, we implemented a mobile contactless payment method in 2021.

This technology provides our guests with an easier, faster and more convenient way to pay for their meals and was rolled out nationwide during the third quarter.

This new contactless payment method allows guests to pay through a secure payment device and utilize digital wallets on their own device.

Digital Strategy

Our omnichannel approach has unlocked new opportunities for us to better understand and personalize both our menu items and preferred channels for guests.

We are continuing to explore the optimal balance of event-based marketing and targeted offerings to bring Shake Shack to anyone who wants it whether our guests dine with us once a year or once a week.

We are in the process of ensuring all of our channels offer a uniform user experience so that a pick-up order placed in the app looks and feels the same as a curbside order placed from a browser.

No matter what channel guests use, our goal is to bring them a customized and enhanced payment experience that suits their particular needs.

Costs differ among our various digital channels In 2021, we began to charge higher menu prices through our third-party delivery channels to help offset some of the added costs associated with delivery.

We did not inflate menu prices through our Shack app delivery service.

Our ongoing digital strategy in fiscal 2022 and beyond will continue to focus on these themes — safety, personalization and consistency — allowing us to expand on the omnichannel foundational work performed during fiscal 2022, and offer innovative digital interactions and dynamic personal relationships with our guests throughout every Shake Shack experience.

Shake Shack however they preferred.

Additionally, we made it easier for guests to transact on the Shack app by introducing Google Pay, which streamlines numerous steps in the checkout process.

Since launching in February, we’ve continued to iterate on the Android app through improvements to the order experience.

This Fall, we made it even easier to start building an order from the app’s home screen, increasing the number of guests who add an item to their bag.

Digital Hospitality

As our guests have become more accustomed to our digital channels, it’s increasingly important for our Hospitality team to be able to meet the guest wherever and whenever they prefer.

To help us reach guests faster and on more channels, we implemented Gladly as a new customer engagement platform.

Through Gladly, our Hospitality team is able to deliver Enlightened Hospitality beyond the in-Shack experience by improving the speed and effectiveness by which we resolve guest contacts.

Since launching in August, we’ve seen an improvement in hospitality case resolution time for our guests.

Prior to 2022, guests were unable to redeem gift cards on any digital channel.

Gift cards are a key pillar in our guest experience strategy, as it’s one of the best ways for guests to share Shake Shack with their friends and loved ones.

To make sure guests get the full utility of their gift cards, we migrated to a new gift card partner and introduced digital redemption in the fourth quarter of 2022 across web, iOS, and Android.

We also took this opportunity to improve the purchase experience for both in-Shack and digital gift cards as well, introducing a new digital portal for purchases, and a streamlined in-Shack experience.

Our new gift card partner also unlocks the opportunity for B2B sales of Shake Shack gift cards which we look forward to exploring in early 2023.

Tipping on all non-delivery order modes

We’ve heard from guests that they would like the opportunity to tip our team members.

In 2022, we introduced the ability to tip on all order modes across all digital channels and in our Shacks.

Guests who are dining in-Shack or taking their order to-go can show appreciation to Shack team members by tipping.

Website optimization

We continued to evolve our web experience in 2022 by focusing on making the ability to start and complete an order more intuitive.

We made foundational changes to the way guests start an order on our website by moving to a traditional e-commerce “bag” as the core shopping component while streamlining the interactions for adding items to that bag.

Engaging the Community

A Warm Community Gathering Place

Shacks are so much more than a place to get burgers, fries and shakes;

Our Shacks are so much more than a place to get burgers, fries and shakes;

they’re places for the community to safely gather.

We place a high premium on connecting with our communities whether through the physical design of our Shacks or by the local causes we support.

Although more of our guests are enjoying us through our omnichannel experience, including our digital options, in-Shack dining remains a good opportunity for the long term growth of our business.

We remain laser focused on delivering a great guest experience both digitally and in-Shack with elevated offerings reflective of our fine dining culinary roots.

In fiscal 2022, our same-Shack sales grew 7.8% year over year driven by 4.9% traffic growth.

This strength was led mostly by a consistent return to in-Shack dining, a trend we like to see.

With more guests wanting to gather, there is an increased energy felt across our Shacks which remains a competitive advantage for us and part of our strategy to provide a great guest experience no matter how our guests prefer to order.

No matter the format or region, each Shack is specifically designed to be of its place and connect with its community.

1 unchanged sentence

Today, across our domestic and international locations, we secure vibrant sites and give them a hand-crafted, community-appropriate look by blending unique local features with our core Shake Shack design elements.

We have also developed a number of iconic brand identifiers, like wrap-around steel beams, open kitchens, large distinctive

We have also developed a number of iconic brand identifiers, like wrap-around steel beams;

open kitchens;

large, distinctive menu boards;

and comfortable, distinctive furniture that advances our sustainability initiatives.

We believe these identifiers are key components to the expression of the brand and the Shake Shack experience.

Shake Shack Inc.

Form 10-K | 9

menu boards and comfortable, distinctive furniture that advances our sustainability initiatives.

We believe these identifiers are key components to the expression of the brand and the Shake Shack experience.

The overall atmosphere of our new Shacks evokes our original upbeat and relaxed park ambiance, combined with the fine dining experience that has become part of our brand's DNA.

The overall atmosphere of our Shacks evokes our original upbeat and relaxed park ambiance, combined with the fine dining experience that has become part of our brand's DNA.

We use high-quality tactile materials, warm lighting that highlights every table and textured wall, as well as seating layouts that encourage guests to relax and stay for a while.

Additionally, whenever possible, our Shacks feature either outdoor seating or easy access to a park or green space.

From time to time during the construction of certain new Shacks, we re-imagine the often-uninspiring plywood barriers that surround a construction site and use them as a canvas to introduce Shake Shack to the community prior to opening.

We also collaborate with local artists and designers to bring beautiful artwork and installations to our Shacks.

Each Shack is designed to convey a consistent brand message while also tailoring marketing efforts to its specific region.

We offer menu items that feature ingredients and beers specific to each Shack's community, and we often team up with local chefs and restaurants to offer our guests unique, collaborative menu items.

We also collaborate with local artists and designers to bring beautiful artwork and installations to our Shacks.

We participate in local celebrations and develop relationships within the community, helping position Shake Shack as a premium brand that is connected to its neighborhood.

Community and Charitable Partners

In addition to special events, we regularly serve our communities by hosting 25% Donation Days to show support for local schools and organizations.

Supporters who participate in these fundraisers have 25% of their order totals donated to a local non-profit.

In addition to special events, we regularly serve our communities in a variety of ways including 25% Donation Days to show support for local schools and organizations.

Supporters who participate in these fundraisers have a portion of their order totals donated to a local nonprofit.

Guests can support by mentioning the fundraiser when checking out in-Shack or using a fundraiser code on the Shack app for pick-up or delivery.

Additionally, we provide a Donation Day flyer for the partner to use as an invitation to their community.

For certain new Shack openings, we partner with local charities for opening day.

In some markets, we have existing tenured partnerships with organizations, like Food Bank of the Rockies in Colorado, and in others we are building new non-governmental organization relationships.

These partnerships manifest in either dollar donations or food donations correlated to the number of burgers sold on opening day.

As we continue to grow our presence across the U.S., our opening day charitable partners are a great example of how we continue to act small and drive home our Stand for Something Good mission.

Additionally, we provide a Donation Day flyer for the local school or organization to use as an invitation to the community.

For all new Shack openings, we partner with local charities for opening day.

In some markets, we have existing tenured partnerships with organizations, like Food Bank of the Rockies in Colorado, and in others we are building new relationships in our local communities with every Shack we open.

In 2022, we matched $1 for every sandwich purchased at every new Shack opening day back to our chosen local nonprofit partner.

As we continue to grow our footprint across the U.S., our opening day charitable partners are a great example of how we continue to drive home our Stand for Something Good mission.

We listen to our communities and seek opportunities to get involved, whether it is charity events or disaster relief, we are on the ground helping.

We regularly donate cash, food and gift cards to support dozens of local nonprofit organizations, schools, and hospitals around the country.

For example, in 2022, we donated $10,000 to Children’s Hospital Los Angeles as part of their annual Make March Matter campaign.

We find ways to support charity events and often serve food such as our involvement this year at the Hilarity for Charity Annual Gala, Ping Pong for a Purpose, Taste of Asia, Hole in the Wall Gala, and so many more.

Engaging With our Guests

Shake Shack grew up alongside social media and we believe we have benefited from our close relationship with passionate fans who want to engage with us and share their real-time experiences.

We're proud to be recognized by media and influencers alike, garnering attention around the world.

We're proud to be recognized by media, influencers, and creators alike, garnering attention around the world.

Our positioning and brand voice, derived from the spirit, integrity and light-hearted nature of Shake Shack, are reinforced by our contemporary, responsible designs and hospitable team members who Stand for Something Good.

This identity also anchors our marketing efforts, with the heart of our marketing strategy to provide an uplifting experience while cultivating community and connecting with guests both in our Shacks and through digital channels.

Just as we design our Shacks as community gathering places, our social media strategy creates an online, on-brand community gathering place.

With our social media, we mirror the in-person hospitality a guest experiences when they visit a Shack.

We interact with fans across Facebook, Instagram, Twitter and TikTok through comments, replies and the use of user-generated content;

Just as we design our Shacks as community gathering places, our social media strategy creates an online community gathering place.

Through our social media presence, we bring Enlightened Hospitality to new audiences by mirroring the in-person experience a guest has when they visit a Shack.

We interact with fans across Facebook, Instagram, Twitter, TikTok and more by sharing engaging content, comments, replies and the use of user-generated content;

a quick search of "#shakeshack" on Instagram reveals over 1.1 million organic posts from our fans.

This year, we doubled down on our creator partnerships, expanded our brand storytelling with new types of content and even ventured into gaming by building a Shake Shack in The Sims 4.

In addition to social media, we also connect with our guests through our email marketing program via targeted menu item alerts, local event invites, new Shack opening information and other relevant Shake Shack news.

Shake Shack Inc.

Form 10-K | 10

Media, Product Placement and Influencers

Shake Shack’s unique positioning has helped us garner robust media coverage across food, lifestyle, business and trade publications.

In addition, we have been featured across various media outlets, allowing us to increase brand awareness and be a key voice of leadership in the industry.

We have also been featured across various media outlets, allowing us to increase brand awareness and be a key voice of leadership in the industry.

Shake Shack’s popularity and cultural relevance are reflected in our countless celebrity and influencer fans across Hollywood, music, fashion, sports and more.

Shake Shack Inc.

Form 10-K | 6

Promotions and Events

Campaigns, Promotions and Events

Throughout fiscal 2022 we continued to extend our brand by collaborating with celebrated chefs, developing new creative concepts, unveiling exciting promotions and participating in special events to drive brand awareness and engage with our guests.

These initiatives were key to harnessing the growing strength of the Shake Shack brand and helping it stand out through unique moments and activations.

Some notable collaborative promotions and events included:

▪ Now Serving Collaboration Series — Now Serving is a series of collaborations with a diverse group of well-known chefs and restaurateurs across the U.S.

Each collaboration featured unique, exclusive menu items available for a limited time, with a portion of net proceeds benefiting local nonprofits helping those in the restaurant community.

In 2021 we partnered with six chefs across San Francisco, Atlanta, Chicago, Dallas and New York City to bring these one-of-a-kind collaborations to our guests.

▪ Boyz II Men Valentine’s Day Concert:

Door Dash x Shake Shack — We partnered with DoorDash and Boyz II Men, to offer an exclusive Berryz II Men Chocolate Covered Strawberry Shake from February 8, 2021 to February 14, 2021, alongside a virtual Boyz II Men performance that took place on February 14, 2021.

We also handed out, “Love Delivered” boxes in select NYC and Philly Shacks to select customers.

▪ Brandon Maxwell Fashion Show — This is our fourth time working with Brandon since we first struck up the relationship in 2018.

From food provided at back and front of house for models and VIP attendees, respectively, to popping up our food truck at his show, Shake Shack has become a well-known part of Brandon’s shows.

This year, under the constraints of COVID-19, we worked with the Goldbelly team to deliver custom ShackBurger kits as part of the show invite to a curated group of top-tier models, stylists, celebrities/influencers and fashion media.

▪ Benny Blanco Collab — We partnered with Grammy-award-winning songwriter and producer Benny Blanco to serve Benny’s Nacho Burger, a cheeseburger topped with Shack-made queso, Shack ranch sauce with Cool Ranch® Doritos®, scallions, and charred serrano salsa verde, as well as Benny’s Fries, crispy crinkle cuts topped with the same Shack-made queso.

We tapped Benny’s extensive network and were able to secure social media coverage from celebrities and tier 1 influencers alike.

For these VIPs, we curated an at-home grill experience to bring the collaboration to life.

▪ Vax 4 Fries — Shake Shack partnered with the New York City Mayor’s Office to encourage more New Yorkers to get vaccinated against COVID-19.

Shake Shack offered New York City residents free crinkle cut fries with the purchase of any burger or chicken sandwich by showing proof of vaccination in-store at participating New York City locations.

Following the success of the New York City promotion, we expanded the promotion to all U.S.

Shack locations.

▪ Los Angeles Shack Truck — Over the summer , Shack Shack’s first-ever West Coast food truck popped up at Los Angeles hot spots.

Our goal for this campaign was to drive our brand awareness in the Los Angeles market and limited time summer menu, featuring the Hot Honey Chicken Sandwich, with programming that included events and vending, celebrities and influencers, and community support.

▪ Milk Bar Tasting Party — We hosted two tasting parties in Los Angeles and in New York City to celebrate our Milk Bar Shake Collaboration.

We invited lifestyle and food influencers to experience the collaboration and participate in these spirited “Best Friend” themed events.

In New York City, Milk Bar founder and CEO Christina Tosi joined us to help tell the story of the two brands.

▪ Snap Shack — For the first time, we partnered with Snap Inc.

to deliver a custom one-of-a-kind experience at Shake Shack Hudson Yards with the launch of Snap Shack.

Snap Shack featured a full restaurant takeover, transforming consumers to an augmented reality excursion with custom Snapchat Lenses, limited edition Snap Shack merchandise and free food offers.

▪ Klay’s Trey:

Uber Eats x Shake Shack — A campaign in partnership with Uber Eats, featuring Golden State Warrior Klay Thompson to offer an exclusive bundle “Klay’s Trey” with his go-to Shake Shack order.

We also included exclusive co-branded merchandise in select delivery orders to guests across the country.

These initiatives were key to harnessing the growing strength of the Shake Shack brand and helping it stand out through unique moments.

Some notable campaigns, promotions and events included:

▪ Enrique Olvera x Shake Shack — We teamed up with world renowned chef Enrique Olvera to bring a taste of Mexico City to our West Village and Santa Monica Shacks.

Over the course of the four nights across two cities, over 200 guests, more than 40 influencers and media enjoyed a unique Shack dining experience starring the Ant Burger among vibrant greenery, live music and smoky palo santo.

▪ Apotheke x Shake Shack Candle Duo — We launched a candle duo with Apotheke, a NYC-based luxury home fragrance brand.

We worked closely with Apotheke to create two unique scents, Burger in the Park and Shake & Fries, that celebrate the spirit of NYC, our love of innovation and creating warm spaces that are welcoming to all.

Fans proved to be excited about the collab because the candles sold out in less than two days.

▪ EEEEEATSCON with the Infatuation — This year, we headlined NYC and LA EEEEEATSCON.

In New York, we teamed up with Hoppers, a Sri Lankan restaurant in London, to create the Lankan Shack.

Originally created for our London Shacks, the Lankan Shack is a cheeseburger topped with curry-braised short rib, coriander chutney mayo, mustard cream, pickled red onion, fresh coriander and green chilli served on a toasted potato bun.

In LA, we partnered with Tacos y Birria La Unica, a beloved family-owned LA food truck, to create the Birria Shack:

a Jack cheeseburger, Birra de rez, hand-made corn tortilla, onion, cilantro, and Shack Sauce, served on a birria-buttered potato roll, with an optional side of consommé for dipping.

▪ Una Pizza x Shake Shack — We teamed up with chef Anthony Mangieri of Una Pizza Napoletana to offer a three-course menu at Madison Square Park.

This was our first time executing a pre-ticketed event, which sold out in just over a day, and offering an upscale, prix fixe service style for collab, paying tribute to our fine dining roots.

Over the course of two nights, 200 guests sat down to enjoy a three-course meal with wine pairings and live Italian music under string lights in the park.

▪ Hot Ones Tasting Event — To promote the Hot Ones menu, we hosted a press and influencer event at the Santa Monica Shack.

Given Hot Ones' deep connection to the celebrity and entertainment world, the event served as an excellent moment to further cement Shake Shack as a key player in the LA market.

▪ The Drew Barrymore Show — John Karangis, our Executive Chef, was featured on The Drew Barrymore Show.

The episode, which also starred Ina Garten, included a segment titled "Drew's News" where John and Ina showcased our signature Chicken Shack.

In the segment, John shared a bit about our origin story and fine dining roots.

▪ Shake Shack Pickleball Club — This year, we launched the Shake Shack Pickleball Club ("SSPC").

We hosted SSPC events in multiple cities, including Chicago and Los Angeles.

The events were so popular among the tight-knit pickleball community that we had to turn down many walk-ups, and even had an audience of spectators who came out just to watch the tournaments.

Pickleball is a great way for us to engage with the communities outside of the Shacks.

▪ Shack Jams with Sofar Sounds — To amplify our Bourbon Bacon Cheddar campaign, we hosted a six-city concert series in partnership with Sofar Sounds called Shack Jams.

Throughout the series, we turned select Shacks into unexpected concert venues, hosted over 400 guests and highlighted our culinary innovation.

Shake Shack Inc.

Form 10-K | 11

▪ "Eat Cute” - Door Dash x Shake Shack — For Valentine's Day we teamed up with DoorDash to empower singles.

We created a dating site for Buffalo Chicken sandwich lovers called ‘Eat Cute,’ to help break the ice and spice things up.

Singles who matched on our dating site could send each other a code to redeem for a free Buffalo Chicken Sandwich.

▪ Maker’s Mark Distillery Trip — In June, we took 15 influencers to Kentucky to celebrate and promote our Bourbon Bacon Cheddar menu.

The trip consisted of a two-day experience including a welcome happy hour at our Lexington Shack, a full day Maker’s Mark distillery tour, an elaborate three-course dinner curated by our chefs, post-dinner cocktails and live music.

▪ Shake Shack x Not Co at The W South Beach — To celebrate our Non-Dairy Chocolate Shake and Custard, we hosted an event at the W South Beach in partnership with NotCo.

The event theme was “treat yourself,” with curated experiences like cryotherapy facials, Shack inspired nail art, hair braiding and of course, a shake and custard station.

We saw a great turnout from top-tier Miami lifestyle and food influencers as well as key reporters and bloggers.

Capitalizing on Our Brand Awareness

Since 2004, we have become a globally recognized brand with significant consumer awareness relative to our current footprint of over 360 Shacks.

Shake Shack has become a New York City institution, a vibrant and authentic community gathering place delivering an exceptional experience to our loyal guests.

Since 2004, Shake Shack has become a globally recognized brand with significant consumer awareness relative to our current footprint of over 430 Shacks.

We pride ourselves on providing a vibrant and authentic community gathering place that delivers an exceptional experience to our loyal guests.

One great advantage for Shake Shack has been our birthplace and headquarters in New York City, and our origination from a fine dining company.

1 unchanged sentence

Shake Shack continues to receive recognition for being a fan and industry favorite.

In fiscal 2021, Shake Shack was awarded a Thrillist Fastie Award, honoring the best foods from customers’ favorite chains.

In fiscal 2022, Shake Shack was awarded QSR Magazine's Best Brands to Work For, USA Today 10 Best Reader’s Choice Awards, and Nation’s Restaurant News’ Top 500 2022.

Culinary Innovation

Shake Shack's unique value proposition is partially defined by our roots in fine dining.

We embrace that heritage and are committed to sourcing premium ingredients, such as all-natural, hormone and antibiotic-free beef, chicken and pork while offering excellent value to our guests.

We embrace that heritage and are committed to sourcing premium ingredients, such as antibiotic- and hormone-free proteins while offering excellent value to our guests.

Our core menu is inspired by the finest versions of the classic American roadside burger stand.

2 unchanged sentences

As we grow across the country, we are excited to expand these collaborations with industry-leading chefs and suppliers.

While we’re extraordinarily proud of our legacy and current position, we will continue to look for the best ingredients and culinary partners, in an effort to exceed our guests' expectations in every aspect of their experience.

Our menu focuses on premium food and beverages, carefully crafted from a range of classic American foods at more accessible price points than full-service restaurants.

Our burgers are made with a proprietary whole-muscle blend of 100% all-natural, no added hormone and antibiotic-free Angus beef, ground fresh, cooked to order and served on a non-GMO potato bun.

While we’re extraordinarily proud of our legacy and current position, we will continue to look for the best ingredients and culinary partners to exceed our guests' expectations in every aspect of their experience.

All of our locations offer premium food and beverages, carefully crafted from a range of classic American foods at more accessible price points than full-service restaurants.

While ingredient specifications and menu options can vary by country, the core menus at our US-based locations include the following:

Our burgers are made with a proprietary whole-muscle blend of 100% all-natural, hormone and antibiotic-free Angus beef, ground fresh, cooked to order and served on a non-GMO potato bun.

We take great care in the preparation of our burgers — from sourcing, to handling, to cooking — to ensure their taste and quality is second to none.

1 unchanged sentence

Our burger offerings also include the SmokeShack®, 'Shroom Burger™ (a vegetarian burger), Shack Stack®, Avocado Bacon Burger and Hamburger.

Our Chicken Shack is a 100% all-natural, antibiotic-free and cage-free chicken breast, slow cooked in buttermilk herbs, hand-battered, hand-breaded and crisp-fried to order.

Shake Shack Inc.

Form 10-K | 12

Our Chicken Shack is a 100% all-natural, hormone-free, antibiotic-free and cage-free chicken breast, slow cooked in buttermilk herbs, hand-battered, hand-breaded and crisp-fried to order.

Our Chicken Bites are made with all-natural, antibiotic-free whole muscle chicken that is sous-vide cooked for optimum flavor, moisture and texture.

7 unchanged sentences

Our hot dogs are made from 100% all-natural, hormone and antibiotic-free beef.

Shake Shack Inc.

Form 10-K | 8

Shakes and Frozen Custard

Our premium, dense, rich and creamy custard, hand-spun daily on-site, is crafted from our proprietary vanilla and chocolate recipes.

Our premium, dense, rich and creamy frozen custard, hand-spun daily on-site, is crafted from our proprietary vanilla and chocolate recipes.

We use only real sugar (no high-fructose corn syrup) and milk from dairy farmers who pledge not to use artificial growth hormones.

3 unchanged sentences

At select locations, we also offer local craft beers.

Our Shack Red ® ,Shack White ® and Shack Rosé wines are sourced and produced exclusively by Gotham Project, providing our guests with premium beverage options not commonly found in our industry;

Our Shack Red®, Shack White® and Shack Rose wines are sourced and produced exclusively by Gotham Project, providing our guests with premium beverage options not commonly found in our industry;

a nod to our fine dining heritage.

1 unchanged sentence

Innovation Kitchen

To explore exciting new menu items for our guests, our Innovation Kitchen is located on the lower level of the West Village Shack and connected to our home office.

This dedicated space allows our culinary team to get even more creative, dig deeper into our fine dining roots, collaborate with other chefs and explore new opportunities as we continue to grow.

The West Village Shack’s menu has all of our classic items and also features a rotating list of items from the Innovation Kitchen, with guest-favorite test items potentially becoming permanent menu items.

Our Innovation Kitchen is located on the lower level of the West Village Shack and connected to our home office and allows us to explore exciting new menu items for our guests.

The culinary team uses this dedicated space to get even more creative, dig deeper into our fine dining roots, collaborate with other chefs and explore new opportunities as we continue to grow.

The West Village Shack’s menu has all our classic items and features items from the Innovation Kitchen, with guest-favorite test items potentially becoming permanent menu items.

This space also allows us to house our quality assurance and culinary teams together, ensuring that every item on our menu meets our strict standards.

2 unchanged sentences

Some of our notable LTOs throughout 2022 were:

▪ Korean Style Fried Chicken, Bites, and Fries — Launched in January 2021, we brought a regional favorite from our South Korean Shacks to the U.S.

for the first time ever, a spicy Korean-Style Fried Chicken sandwich featuring a gochujang-glazed chicken breast topped with roasted sesame seeds over a white kimchi slaw made by Choi’s Kimchi from Portland, OR.

▪ Avocado Bacon Burger and Chicken — We gave fans their most-requested ingredient with the launch of two sandwiches in April – a cheeseburger topped with freshly sliced avocado, Niman Ranch applewood-smoked bacon and ShackSauce and a crispy chicken breast with freshly sliced avocado, Niman Ranch applewood-smoke bacon, lettuce, pickles and buttermilk herb mayo.

The combination of avocado and bacon has been so popular that these sandwiches remained as core menu items starting in July.

▪ Hot Honey Chicken, Bites and Fries — This sweet and spicy sandwich showcased a honey-glazed crispy chicken breast topped with our habanero mayo sauce and shredded lettuce on a toasted potato bun.

The menu also featured chicken bites and fries dusted with hot honey seasoning and a side of habanero sauce.

▪ Black Truffle Burger and Parmesan Garlic Fries with Black Truffle Sauce — Launched in October 2021, our Black Truffle burger was a gruyere cheeseburger topped with real black truffle sauce made with Regalis organic black truffle oil and our crispy shallots on a toasted potato bun.

Fans also clamored for our crinkle cut fries topped with garlic parmesan cheese and served with our real black truffle sauce.

This was the first burger and fry LTO initially launched exclusively on the Shack app.

▪ Featured Shakes — Throughout 2021 we offered our guests new shakes, including flavors like Black Sugar Vanilla to pair with our Korean-Style menu, Brownie Batter Hot Cocoa, Cherry Pop, Strawberry Rhubarb and Triple Chocolate Chip, to name a few.

In June we partnered with the Trevor Project during Pride month by donating 5% of sales from a unique Pride shake made with berry custard and topped with mango, passion fruit, whipped cream and glitter sprinkles.

In September, we collaborated with our friends at Milk Bar, with two special shakes, a Chocolate B’Day Cake shake

▪ Buffalo Chicken Sandwich and Fries — In January we put a Shake Shack spin on the classic Buffalo Chicken Sandwich, paired with Buffalo Spiced Fries and Buffalo Spiced Cheese Fries, all complete with our signature ranch sauce.

▪ Bourbon Bacon Cheddar Burger and Chicken — In May, we partnered with renowned bourbon producer Maker’s Mark to bring a Bourbon Bacon Cheddar menu to Shacks, which featured a burger and chicken sandwich that showcased a bourbon bacon jam made with Maker’s Mark Bourbon and applewood smoked bacon.

▪ Hot Ones Burger Menu — Partnering with the hit YouTube interview series, Hot Ones™ from First We Feast™, this menu focused on a spicy version of our signature ShackSauce by incorporating hot sauces made by the creators of the hit YouTube series.

The spicy ShackSauce was highlighted on the Hot Ones Burger, chicken sandwich, and fries.

Shake Shack Inc.

Form 10-K | 13

and Cornflake Chocolate Drizzle shake.

Additionally, we featured our trio of holiday shakes during November and December, which included fan-favorite Christmas Cookie, Chocolate Milk & Cookies and Sugar Plum Fairy.

▪ Lemonade — In addition to a variety of shakes offered throughout 2021, we launched our first-ever cold beverage trios, featuring seasonal flavors like Blackberry Lychee, Mango Passion Fruit, Watermelon Mint Limeade and Apple Ciderade along with corresponding Fifty/Fifty options which is a blend of our lemonades with our unsweetened iced tea.

▪ Featured Shakes — Throughout 2022 we offered our guests new shakes, including collaborations on flavors like Wake & Shake with Red Bay Coffee and Chocolate Pie with Four & Twenty Blackbirds.

In June we partnered with the Trevor Project during Pride month by donating 3% of sales from our limited time shake trio, OREO Funnel Cake, Sprinkle Cookie and Chocolate Churro shakes.

In September, we launched seasonal shakes with our Pumpkin Patch, Apple Cider Donut, and Choco Salted Toffee shakes.

Additionally, we brought back fan-favorites for our trio of holiday shakes during November and December, which included Christmas Cookie, Chocolate Milk & Cookies, and Chocolate Peppermint.

▪ Lemonades — Throughout 2022, we launched seasonal flavors like Hibiscus Lychee Punch, Kiwi Apple Limeade, Mango Passionade, Harvest Berry Lemonade and fan-favorite Strawberry Lemonade along with corresponding Fifty/Fifty options.

Exclusive Offerings

1 unchanged sentence

Some examples of our exclusive offerings from 2022 included:

▪ Veggie Shack — The Veggie Shack is made with real greens, grains, and herbs, served with avocado, tomato, shredded lettuce and tangy vegan lemon mayo.

The Veggie Shack is available for a limited time at select Shacks across the U.S.

▪ Bourbon Bacon Cheddar — In December, we paired up with renowned bourbon producer Maker’s Mark® to bring a Bourbon Bacon Cheddar menu to select Shacks in California, Ohio and New York City for a limited time.

Our Bourbon Bacon Cheddar menu featured a burger, hot dog and fries with a bourbon bacon jam made with Maker’s Mark® Bourbon and Niman Ranch applewood-smoked bacon.

▪ Now Serving — Throughout 2021 we partnered with celebrated chefs and restaurateurs across the U.S.

to cook up exclusive, limited-time menu items, with a portion of net proceeds from each collaboration going to non-profits helping local restaurant communities.

The series launched in April 2021 in Atlanta with Pinky Cole of Slutty Vegan, with subsequent events with Chris Shepherd, owner and Executive Chef of Underbelly Hospitality in Houston, Dominique Crenn of Atelier Crenn in San Francisco, Junghyun Park of Atoboy and Atomix in New York, Sarah Grueneberg of Monteverde Restaurant & Pastificio in Chicago, and Joseph “JJ” Johnson of FIELDTRIP in New York.

▪ Veggie Shack — In November, we launched an updated vegetarian sandwich at select locations with crispy onions, pickles, ShackSauce, American cheese, and a vegetarian patty packed with real vegetables and grains like quinoa, mushrooms, and sweet potatoes.

▪ Non-Dairy Chocolate Shake and Frozen Custard — In May, we partnered with NotCo to offer a non-dairy chocolate frozen custard and non-dairy chocolate shake at select locations in NYC and Florida.

▪ Caffeinated Lemonades — In June, we launched our first-ever caffeinated lemonades at select Shacks in San Diego, featuring Strawberry Lemonade, Mango Passionade and Cherry Hibiscus, made in-house with naturally caffeinated green coffee extract and guarana.

▪ Frozen Lemonade — At our West Village Shack, we offered a Strawberry Frozen Lemonade for the Summer season, made with real strawberries and lemon juice.

GROWTH STRATEGIES

Even amidst the challenges of fiscal 2021, we added 58 net new system-wide Shacks and reached 369 Shacks worldwide.

Going forward, we believe we are well-positioned to continue significant, sustainable financial growth.

We plan to execute our growth strategies while remembering to Stand For Something Good in everything we do.

Opening New Domestic Company-Operated Shacks

We believe a key opportunity for growth lies in opening new, Company-operated Shacks.

We waited nearly five years to open our second Shack, and a little over a decade since then, we are still in the early chapters of our story.

We see a tremendous whitespace opportunity to expand in both new and existing U.S.

markets, and we will continue to invest in infrastructure with an eye toward growing rapidly, but with discipline.

Fiscal 2022 remained a challenging year for our business as permitting delays and equipment availability resulted in pressures on our development schedule and sales growth.

Amidst these challenges, we added 67 net new system-wide Shacks and reached 436 Shacks worldwide.

We remain well-positioned to continue significant, sustainable financial growth and we plan to continue to execute our growth strategies while remembering to Stand For Something Good in everything we do.

Domestic Company-Operated Shacks

We have a strong pipeline of Shacks, however, further opportunity for growth lies in opening new, domestic Company-operated Shacks and we believe there is still tremendous whitespace opportunity to expand in both new and existing U.S.

We will continue to invest in infrastructure with an eye toward growing rapidly, but with discipline.

In the long-term, we believe we have the potential to grow our current domestic Company-operated Shack footprint to at least 450 Shacks;

2 unchanged sentences

As a result, we do not currently have an anticipated timeframe for such expansion.

With the gradual and sequential recovery of sales throughout the year, we increased our new Shack development during the second half of 2021.

Domestically, we expanded our Company-operated footprint by opening 35 net new Shacks in 2021 — a 19% increase in our domestic Company-operated Shack count from the prior fiscal year.

In the first quarter of 2021, we announced that our Penn Station Shack closed as the landlord is remodeling the terminal.

Domestically, we expanded our Company-operated footprint by opening 36 net new Shacks in 2022, which represents a 17% increase from the prior fiscal year.

As of December 28, 2022, we had 254 domestic Company-operated Shacks.

1 unchanged sentence

our disciplined expansion strategy is designed to leverage our business model's strength and our brand awareness.

As we look to 2022, we intend to ramp up the development and we are

For 2023, we are targeting to open approximately 40 new Company-operated

Shake Shack Inc.

Form 10-K | 14

targeting between 45 and 50 new Company-operated Shacks as we continue to be encouraged by the success of our multi-format strategy which includes but is not limited to freestanding buildings, drive-thrus, shopping centers, regional malls, outlet malls and more.

In 2022 we will continue building new formats like drive-thru, while expanding proven formats like urban street retail and suburban freestanding.

Shacks as we continue to be encouraged by the success of our multi-format strategy which includes but is not limited to, freestanding buildings, drive-thrus, shopping centers, regional malls, outlet malls and more.

In addition to opening new Shacks, we continue to focus on improving our same-Shack sales performance by providing a dynamic, personalized guest experience that includes new seasonal and Shack-specific offerings, technological upgrades like the Company-owned app and web ordering/delivery, thoughtful integration with local communities and excellent standards of hospitality.

We also continue to innovate our core menu to deliver fresh offerings and the ability for our guests to purchase premium add-ons such as bacon, avocado or cherry peppers, all while maintaining the standard of our core menu items.

Shake Shack Drive-Thru

To further expand our guests' range of choices for pick-up, we launched our first-ever drive-thru locations in Maple Grove, Minnesota and Lee Summit, Missouri in December 2021.

We are investing ahead with drive-thru and optimizing our investments for quick learning, including Shack design and site selection, with the goal increasing our total addressable market and to provide our guests with an additional option to enjoy Shake Shack.

The launch of drive-thru was a massive cross-functional effort, and we are encouraged by the performance to date.

The Shake Shack drive-thru is a modern version of the traditional drive-thru experience, supported by technology-enhanced hospitality and innovative design.

We view this as an opportunity to increase our market share while maintaining our core tradition of building community gathering places.

We are targeting to have a total of 10 drive-thru locations by the end of 2022.

Our new drive-thru design direction is light, bright and an expression of nature.

In essence, we’re going back to our roots of Madison Square Park which remains nestled in nature today and is part of our ongoing drive to create memorable experiences for guests.

The guest is front and center and will have many options to experience Shake Shack.

Our drive-thru color palettes will consist of different shades of white, black and earthy greens that will be complemented by warm woods and added textures of more intimate lighting.

We are partnering with sustainable furniture company Crow Works in Ohio to provide a mix of interior and exterior furniture which will be a mix of reclaimed wood, metal and upholstery.

Site Selection

As of December 28, 2022, we had 11 drive-thru Shacks in operation and we are targeting to open at least 10 to 15 more in 2023.

Our drive-thrus are light, bright and designed with a focus on convenience and efficiency with guests having an additional option to experience Shake Shack.

The layout offers flexibility for our guests to order and pay at multiple points along the journey, based on demand, and is part of our ongoing drive to create memorable experiences for guests.

Our drive-thru color palette consists of different shades of white, black and earthy greens that are complemented by warm woods and added textures of more intimate lighting.

We partner with sustainable furniture company Crow Works in Ohio to provide interior and exterior furniture which will be a mix of reclaimed wood, metal and upholstery for guests who choose to dine in.

Growing Our Licensed Shack Business

In addition to expanding the footprint of our Company-operated Shacks, we see additional opportunities to continue growing our licensed portfolio by expanding further both domestically and internationally.

To date, our licensed business has been an asset-light and high-return strategy for growing our brand awareness and increasing cash flow.

As of December 28, 2022 we had 182 licensed Shacks, of which 149 were international and 33 were domestic.

Through learnings from our licensed partnerships, we are able to share insights with the broader Company and we continue to work with our licensees to navigate both COVID-19 pressures and inflationary challenges across the globe.

Thanks to our roots in New York and the success of our licensed Shacks around the world, we continue to attract interest from potential licensees from many different markets.

In 2023, we look forward to opening our first Shack in two new countries--Thailand and the Bahamas--and we are optimistic about future expansion opportunities beyond these exciting new markets.

We are also excited about opening our first Shack in Malaysia in 2024, and continuing to consider opening up new markets in the future.

The enduring strength of our brand continues to create opportunities to expand domestically and abroad.

Shake Shack Inc.

Form 10-K | 15

International Licensed Operations

In fiscal 2022, we opened 25 international Shacks and closed two international Shacks.

The 25 new international Shacks included 13 Shacks in China and Hong Kong, one in the United Arab Emirates, four in South Korea, one in Japan, one in the Philippines, one in Singapore, two in Mexico, one in Turkey, and one in Qatar.

As of the end of fiscal 2022, one of our international licensed Shacks was temporarily closed.

Looking to fiscal 2023, we plan to go even deeper as we expand into new markets such as Guadalajara in Mexico and Wuhan in China.

Although many international licensed markets have recovered significantly from peak pandemic levels, conditions remain volatile and ever-changing, especially in China.

Domestic Licensed Operations

In fiscal 2022, we opened eight domestic licensed Shacks, including one in a stadium (Enterprise Center in St.

Louis, Missouri), three in airports (Nashville International Airport, Indianapolis International Airport, and Orlando International Airport), three in roadway travel plazas (two in New Jersey–Vince Lombardi Travel Plaza and Molly Pitcher Travel Plaza—and one in New York, Junius Ponds Travel Plaza), and one in a museum (Smithsonian Hazy Center in Chantilly, Virginia).

While COVID-19 related pressures still exist, our domestic licensed Shacks continue to benefit from considerable improvements to capacity and movement restrictions across airports and major U.S.

sports venues.

Capital Investments & Development

In fiscal 2022 timelines to build our Shacks remained pressured due to the impacts of the COVID-19 pandemic, inflation, supply chain disruptions, permitting delays and other macro-economic factors.

In an attempt to mitigate the missed expectations in our development pipeline we pre-ordered additional materials and equipment in the second half of the year.

Despite the setbacks of 2022, we remain focused on our long term development pipeline and building Shacks to stand the test of time.

We believe we have significant opportunity ahead and we remain methodical and accountable for results.

Capital Expenditures

In choosing a new site, we focus first and foremost on the guest experience so that each new location can be the ideal spot for people to gather together.

Our experienced development team actively leads the site selection process, and their recommendations are reviewed and approved by our Real Estate Committee, which follows a stringent approval process to ensure quality, fiduciary responsibility and overall adherence to our strategic growth goals.

Our analytical tools allow for extensive demographic analysis and data collection for both existing and new potential sites.

Our analytical tools allow for extensive demographic analysis and data collection for both existing and potential sites.

In addition to our in-house team of experienced real estate professionals, we also use a national real estate broker to manage a network of regional brokers to leverage external resources in pursuit of pipeline development.

Looking beyond, we are pursuing and developing sites where we can continue to implement our Shack Track and drive-thru concepts.

In fiscal 2021, a Shack took between 15 and 60 weeks to build.

The total investment cost of a new Shack, which includes costs related to items such as furniture, fixtures and equipment, ranged from approximately $0.7 million to $4.2 million for the year.

We try to learn quickly from our successes and failures.

In fiscal 2022, a Shack took between 17 and 52 weeks to build as we managed through landlord, permitting and industry-wide supply chain delays.

One Shack experienced an extended build time, excluding this Shack, the Shack class of 2022 took between 17 and 38 weeks to build.

The total investment cost of a new Shack, which includes costs related to leasehold improvements, furniture, fixtures and equipment ranged from approximately $1.3 million to $4.1 million.

The average investment cost was approximately $2.7 million, or approximately $2.4 million net of tenant improvement allowances received from our landlords.

We use a number of general contractors on a regional basis and employ a mixed approach of bidding and strategic negotiation in order to ensure the best value and highest quality construction.

Looking to fiscal 2022, we expect costs to be on average 10 to 15 percent higher due to the new drive-thru Shack formats and supply chain and labor challenges.

Additionally, our 2022 timelines are at risk of being extended due the aforementioned supply chain and labor challenges.

Growing Same-Shack Sales

We use a number of regional general contractors and employ a mixed approach of bidding and strategic negotiation to ensure the high quality construction.

Higher investment costs in fiscal 2022 were attributable to inflationary pressures across the construction sector as well as higher costs to build our drive-thru Shacks, which are more expensive than traditional formats.

In addition to investments in new Shacks, we also undertook some special projects to renovate and refresh some of our existing Shacks.

As our Shacks continue to age, we will need to make additional investments to keep them operating effectively.

We saw elevated costs to repair and maintain our restaurants and equipment due to shortages and inflationary press in fiscal 2022.

Digital Capital Expenditures

To further support our Shacks and improve the guest experience we have made investments in various digital tools to expand our reach with more convenient channels, laying the groundwork for sustainable, long-term growth

Shake Shack Inc.

Form 10-K | 16

Growing Our Licensed Shack Business

Beyond our Company-owned Shacks, we see additional opportunities to keep growing our licensed portfolio by expanding further domestically and internationally.

Historically, this strategy has been a low-cost, high-return method to grow our brand awareness and increase cash flow.

As of December 29, 2021 we had 151 licensed Shacks, of which 126 were international and 25 were domestic.

The partnerships with our licensees are great opportunities for our team to grow, learn and bring back insights to the broader Company and we continue to work with our partners to navigate the COVID-19 pressures being faced across the globe.

Given our position in New York and the success of our existing licensed Shacks at home and abroad, we continue to attract interest from potential licensees around the world.

We see continued opportunities to expand our licensing footprint in existing and new domestic and international markets as our team and supply chain matures.

International Licensed Operations

In fiscal 2021, we opened 23 international Shacks and closed three international Shacks.

The 23 new international Shacks included six Shacks in China, one in the United Arab Emirates, six in South Korea, three in Singapore, three in Mexico, two in Kuwait, one in Turkey, and one in the Philippines.

Looking to fiscal 2022, we plan to go even deeper in these regions as we expand into new markets such as Chengdu in central China.

As of the end of fiscal 2021, three of our airport locations around the world were temporarily closed.

We believe our brand's strength continues to reinforce opportunities for global expansion.

In the near-term, a meaningful part of our international business strategy remains focused on the Chinese and broader Asian markets.

In fiscal 2021, we increased the Asian market Shack count by approximately 34% and the opening of our first Shack in Shenzhen saw one of the highest opening week sales ever across all system-wide Shacks.

Domestic Licensed Operations

In fiscal 2021, we opened three domestic licensed Shacks located in Denver International Airport in Denver, Colorado, Dodger Stadium in Los Angeles, California and PNC Arena in Raleigh, North Carolina.

While pressures still exist due to the COVID-19 pandemic, our domestic licensed Shacks continue to benefit from more air travel and reduced restrictions on capacity at major U.S.

sports venues.

While we continue to benefit from the overall global recovery, conditions still remain volatile and ever-changing.

In 2021, we signed an agreement with Applegreen to open licensed Shake Shack locations on roadways in the Northeast.

Kiosk is an example of how we are bridging the in-Shack and digital world.

In fiscal 2022 we rolled out digital kiosks to most of our domestic Company-operated Shacks and we have committed to retrofitting all domestic Company-operated Shacks with kiosks by the end of 2023.

Kiosk is our highest margin channel and highest in-Shack check and, we believe we can better utilize our team members to support other parts of the guest journey.

At Shake Shack, we believe our success depends upon maintaining efficient and nimble operations.

Just as we invest in our menu items and in-Shack experience, we take special care to ensure our supply chain, distribution, quality assurance and management information systems are constantly being evaluated and streamlined to ensure cohesiveness.

Just as we invest in our menu items, digital offerings, drive-thru and in-Shack experience, we take special care to ensure our supply chain, distribution, quality assurance and management information systems are constantly being evaluated and streamlined to ensure cohesiveness.

Focus on Profitability

Profitability is vital to our success and impacts our ability to grow.

Since early 2020, we have not fully recovered our sales and profit profile.

To address this, we are taking actions to improve our overall Shack margins back to pre-pandemic levels.

We have tasked all teams to improve the areas they are accountable for and we have empowered our leaders to act creatively, quickly, and responsibly to manage costs while continuing to drive sales.

Our Shacks must be fully staffed, operating at full capacity with optimized throughput to capture maximum sales potential.

In 2022, we made significant investments in our teams in addition to digital and technology initiatives to support our current Shacks and those to come.

However, as we place a renewed focus on improving profitability, disciplined management of our general and administrative expenses is prudent given the uncertain macroeconomic backdrop.

Sourcing and Supply Chain

1 unchanged sentence

We work with best-in-class suppliers across our supply chain, and we're always looking for the best ways to provide top quality food at an excellent value.

We pride ourselves on working with like-minded ranchers, farmers and food purveyors to source premium ingredients like 100% all-natural proteins with no hormones or antibiotics, that are humanely raised and source-verified.

We pride ourselves on sourcing premium ingredients from partners who share our dedication to quality, like 100% all-natural proteins with no hormones or antibiotics, that are humanely raised and source-verified.

In fact, we are committed to sourcing 100% cage-free eggs for our global supply chain by 2025, and we're already sourcing 100% cage-free eggs for both the U.S.

supply chains.

Our domestic regional strategy for ground beef production ensures we consistently serve freshly ground beef at our domestic Shacks.

As we've grown domestically, we have eight approved raw beef suppliers and ten approved beef processors around the country who produce our burgers on a daily basis.

As we grow, we will continue to partner with regional suppliers in new markets.

Shake Shack Inc.

Form 10-K | 12

Our domestic regional strategy for ground beef production is designed to help make sure we consistently serve freshly ground beef at our domestic Shacks.

As we've expanded domestically, we have nine approved raw beef suppliers and 10 approved beef processors around the country who produce our burgers on a daily basis.

To ensure dependable quality, we have a limited number of domestic suppliers for our major ingredients, including beef patties, chicken, potato buns, custard, portobello mushrooms and cheese sauce.

In fiscal 2021, we purchased all of our (i) ground beef patties from nine of our ten approved beef processors, with approximately 41% of our ground beef patties from one supplier;

(ii) chicken breasts from one supplier;

During fiscal 2022, we purchased all of our (i) ground beef patties from 10 approved beef processors, with approximately 42% of our ground beef patties from one supplier;

(ii) chicken breasts from two suppliers;

(iii) potato buns from one supplier;

4 unchanged sentences

We believe we have developed a reliable supply chain, but we have also taken strides to identify alternative sources to help lessen the possible interruptions of service and product.

However, our supply chain is also facing staffing pressures which has at times impacted our ability to stock our restaurants to the level we desire.

In some instances, we have had to close or not open restaurants for one or more days due to supply chain challenges.

We have pursued a centralized distribution process by contracting with one distributor, which we refer to as our "broadline" distributor, to provide virtually all of our food distribution services in the U.S.

As of December 29, 2021, approximately 81% of certain food and beverage ingredients including chicken, fries and custard were processed through our broadline distributor for distribution and delivery to each Shack which collectively represents approximately 45% of our total purchases.

We have a centralized distribution process with one distributor, which we refer to as our "broadline" distributor, to provide virtually all of our food distribution services in the U.S.

As of December 28, 2022, approximately 95% of certain food and beverage ingredients including chicken, fries and custard were fulfilled through our broadline distributor for distribution and delivery to each Company-operated Shack which collectively represents approximately 43% of our total purchases.

Shake Shack Inc.

Form 10-K | 17

As of December 28, 2022, we were utilizing 20 affiliated distribution centers to supply our domestic Company-operated Shacks.

2 unchanged sentences

Food Safety and Quality Assurance

As should go without saying, food safety is our top priority.

Food safety is our top priority.

We have rigorous quality assurance and food safety protocols in place throughout our supply chain and in our Shacks.

5 unchanged sentences

Management Information Systems

Our Company-operated Shacks use computerized point-of-sale and back-office systems designed for the restaurant industry;

Our domestic Company-operated Shacks use computerized point-of-sale and back-office systems designed for the restaurant industry.

We use many customized features to increase operational effectiveness, improve internal communication and enhance data analysis.

This system uses a touch screen interface, graphical order confirmation display, touch screen kitchen display and integrated, high-speed credit card and gift card processing.

The point-of-sale system collects daily transaction data, which generates information about sales, product mix and average transaction size.

The point-of-sale system uses a touch screen interface, graphical order confirmation display, touch screen kitchen display and integrated, high-speed credit card and gift card processing.

This system also collects daily transaction data, which generates information about sales, product mix and average transaction size.

From there, our back-office systems assist in the management of our Company-operated Shacks and provide real-time labor and food cost management tools.

1 unchanged sentence

We expect to continue improving our information technology infrastructure to better serve our business needs and accommodate growth.

HUMAN CAPITAL MANAGEMENT

We are committed to investing in our people so we can build, elevate and retain the best teams.

We aim to recruit talented people who have integrity, who are warm, motivated, self-aware and intellectually curious alongside having the competencies

Shake Shack Inc.

Form 10-K | 13

and skills to continue to foster our growth.

Our team is trained to understand and practice the values of Enlightened Hospitality:

caring for each other, caring for our guests, caring for our community, caring for our suppliers and caring for our investors.

We believe this culture is fundamental to the way we operate our business, and a key driver of our ability to deliver great guest experiences, and therefore, successfully grow our footprint.

Due to the challenging macro labor environment, which is present in both our field operations and home office, we are focused on attracting talent as much as retaining our talent to grow and move the business forward.

We are doing this in the following ways:

▪ Developing a diverse and flexible workforce strategy based on future state business needs

▪ Redesigning and enhancing our culture to meet the new realities of today’s workforce

▪ Creating a team member experience that treats our team members like critical drivers of value

▪ Embracing new supporting processes, programs, and technology investments to create a different workforce delivery model

As of December 29, 2021, we had 9,695 team members, of whom 9,371 were hourly team members and Shack-level managers and 324 were home office personnel.

Our Employee Value Proposition

Working at Shake Shack is about more than making a great burger, it's about creating elevated experiences for our team members and guests and getting opportunities to build a rewarding career.

We want every team member at Shake Shack to be empowered to impact our Shacks and the communities around them.

We're a family of passionate, fun-loving and hardworking people who encourage and uplift each other.

We are committed to doing the right thing for our teams, guests and communities.

We challenge ourselves, hold each other accountable and take care of one another.

We Stand For Something Good.

Leaders Training Future Leaders

Shake Shack is committed to leadership and excellence at all levels within our Company.

During fiscal 2021 we launched a new leadership competency model for the organization that encompasses an intentional mission and a leadership journey rooted in our organizational competencies.

This new model is closely aligned to our Learning and Talent Development strategy and includes multiple learning journeys to enable personal and professional growth.

The objective is to provide opportunities for growth by promoting, supporting, and enabling learning across the Company.

▪ Promote — The goal is to ensure awareness and help our team members take responsibility for their own continuous personal learning and development by launching our new organizational competency series.

These leadership competencies will serve as the bedrock of our Talent strategy for years to come.

They will be interwoven into every facet of our people business, from job descriptions to performance reviews.

Competencies have long been used as a framework to help focus team members' behavior on things that matter most to an organization and help drive success.

▪ Support — We help managers develop individual potential and talent while building their coaching and leadership skills by providing operational toolkits that support knowledge transfers for team members, infuse talent selection models and add learning best practices into new and existing programs, such as Shift Up described in detail below.

▪ Enable — We enable growth for all team members by creating modern content with upgraded training software, partnering to build a new diversity, ethics and inclusion (DEI) curriculum, elevating our mentoring program, and providing unique, robust developmental experiences at our retreats and events.

The leadership competency model is a comprehensive, multi-year, virtual training program for exempt Shack leaders and all home office team members.

The training program is conducted 100% online through virtual classrooms and online platforms.

Shake Shack Inc.

Form 10-K | 14

Several sessions are conducted in a cohort style, allowing for a community atmosphere and relationship building while requiring rigor and commitment to get the most out of the program.

On-going Leadership Programs

We invest in leadership development programs so that Shake Shack remains a compelling career choice for team members at every level, through their entire career.

As our team continues to grow, we believe that our culture of Enlightened Hospitality helps us deliver a consistent Shack experience, and to develop future leaders from within.

One such program is The Shacksperience — this functional growth model and overall employment experience for Shake Shack team members.

A key element of The Shacksperience is the Steppin' Up Model, which defines the steps in the employment life cycle, from team member to general manager.

First and foremost, we train new team members on our culture and guiding principles.

From there, we move to menu knowledge, followed by operational training.

We know everyone learns differently, so our training programs use various formats:

online interactive, video, hands-on and paper based.

For our online sessions, every team member has access to ShackSource™, our proprietary online training portal, which is used both as a learning platform and communication tool.

ShackSource gives team members a platform to send recognition messages, comments, praise and thanks to their fellow team members across the Company.

And for hands-on training sessions, we gather our teams around the country whenever possible, as well as in our Leadership Center, located below our home office on the lower level of our West Village Shack.

The Leadership Center is dedicated to the training and development of our Shack and home office teams.

We care about our team and we're committed to setting them up for success, at Shake Shack and in their future careers.

In 2021, we promoted 2,835 people throughout our Company, 56% of whom were women and 73% were under-represented minorities.

We are proud of our leaders who graduate from hourly roles to managers, managers to General Managers and General Managers to regional leadership.

This year, 82% of our new General Managers and 67% of new Area Directors were promoted from within.

We are committed to retaining our leaders by continuing to evolve our training, development programs, compensation and benefits.

We want to incentivize our Shack leaders, give them the opportunity to feel like owners and reward them for their performance.

One way we try to achieve this is by extending our equity-based compensation program to all General Managers.

As an incentive for General Manager hires, we added General Manager sign-on equity grants and created opportunities for our General Managers to make over $100,000 a year.

We are not immune to the staffing challenges presented across our industry, but we are committed to building teams that drive growth for the long term.

Through the Steppin' Up Model, team members are provided the opportunity to surpass the national average hourly wage through training roles and promotion to manager roles.

In July 2021 we announced a $10 million investment in our Shack teams through mid-2022 which includes more than $9 million for wage increases, sign-on and retention bonuses, and also includes program funding to promote leadership development, and Diversity, Equity and Inclusion at all levels of the Shack Family.

We remain committed to providing competitive wages for our team members and continue to evaluate areas where we should increase wages to help staffing, beyond the amount we announced in July 2021.

Efforts such as this allow us to continue to attract and retain the best restaurant talent, while recognizing the importance of our team — the heartbeat of Shake Shack — to ensure current and future team members feel cared for and have opportunities for sustainable career growth.

Shift Up Program

Another part of our long-term investment in our people is the launch of the Shift Up program, which is designed to provide skills that help accelerate Shift Managers' career paths within the Company.

Shift Up is Shake Shack's development program that provides an avenue for mid-level managers to improve their skill set and ability to move to the next level of management.

Shake Shack Inc.

Form 10-K | 15

enable the confidence that can lead to career growth.

This 18-week classroom-style program is aligned to our organizational competencies and supports the transfer of learning between graduates through cohort mentoring, business integration and real-world Shack experience.

During fiscal 2021, the Shift Up program had 73 participants.

Additionally, the program had a 100% completion rate and 84% retention rate for fiscal 2021.

Of the 73 participants, 16 team members were promoted into Manager In Training, Manager or California Non-Exempt Manager roles.

As part of our commitment to leadership and team member development, our mentorship program facilitates learning and growth, while providing tools and opportunities to connect with other members of the program, and the Company as a whole.

As we enter our fourth cohort session, we have elevated our matching process by leveraging our in-house HRIS system.

This new and unique algorithm will offer greater alignment by matching development, personality and mentee needs all while supporting future company growth and talent scaling capabilities.

We Are All-In

To make sure every Shake Shack team member at every level has a positive experience, we strive to build an inclusive workplace, made up of diverse talent throughout the Company.

Our Diversity Equity and Inclusion (DEI) program, All-In, is part of that mission.

With the support of executive leaders, All-In works to ensure Shake Shack provides equal opportunities for all, and removes obstacles to success, while also fostering a culture of inclusion and belonging.

Our All-In program's initiatives include:

Our 5-year diversity targets were set based on analysis of our industry, demographics of the workforce at large and the changing landscape of this country, and the reality of whom we employ today.

We have focused our attention on women and people of color specifically, as we look to match the demographics of our workforce and the country at large.

▪ Employee Resource Groups — We strive to foster a strong internal community and awareness for diverse groups and cultures through our Employee Resource Group (ERG).

Our current ERGs focus on women, Black, Hispanic, Asian and LGBTQ+ identifying team members.

These are voluntary team member led groups of people who gather based on common interests, backgrounds or demographics such as gender, race or ethnicity.

These groups support both personal and career development and help to foster an inclusive workplace.

▪ Diversity, Equity & Inclusion Curriculum — We are building a diversity, equity and inclusion (DEI) curriculum to raise awareness and educate our team members on how to foster a strong work environment.

The curriculum is aligned to our leadership and talent development framework, and we rolled out the first course, DEI 101 to all team members this year.

The course provides a common framework for what DEI means and why it matters at Shake Shack.

All home office and operations team members were asked to complete the course in 2021, and the training will be added to the learning plan for all new hires going forward.

Our next course will focus on unconscious bias and how to be a courageous leader.

▪ Stand Together Series — We host a Stand Together Series forum to discuss on-going social issues.

The Company-wide sessions served as an open forum and safe space for sharing personal stories to help deepen the collective understanding of diversity issues in the U.S.

while strengthening our community and team.

In 2021, we hosted live sessions on topics such as women in leadership, Hispanic heritage, racial discrimination and injustice, gender equity, LGBTQ inclusion, and more.

▪ External Recognition — We were proud to be named one of the "Best places to work for LGBTQ+ Equality" for the third year in a row earning a 100% score on the Human Rights Campaign's Corporate Equality Index for our support of the LGBTQ+ community in the workplace.

This designation highlights the core of our Enlightened Hospitality ethos and our commitment to a great workplace for all.

Shake Shack Inc.

Form 10-K | 16

One of the ways we embrace Enlightened Hospitality internally is through the administration of our own HUG (Help Us Give) Fund, a 501(c)(3) organization available for all our team members.

The HUG Fund provides an opportunity for all Shake Shack team members to take care of each other through tax-deductible payroll and other one-time contributions.

The HUG Fund provides timely financial assistance to team members impacted by financially devastating circumstances far beyond their control and their means.

In fiscal 2021, we provided 44 team members with financial grants to help alleviate financial burdens caused by catastrophic events, which was a 38% increase in grants issued compared to fiscal 2020.

Actions Taken to Protect our Teams and Guests During the COVID-19 pandemic

As the COVID-19 pandemic continues to disrupt how we live and do business, our top priority remains the safety and wellness of our teams and guests, while keeping our Shacks open wherever we can.

We continue to take significant actions to ensure maximum safety for our team members and guests in these times, including increased cleaning, sanitizing and hand washing protocols, social distancing and always wearing gloves and masks.

We also incurred additional costs in procuring and distributing the supplies necessary to keep our teams and guests safe, such as face coverings, gloves, additional secure packaging for all orders, directional signage and cleaning supplies, which are all expected to be ongoing for the immediate future.

We have also installed state-of-the-art air purification systems in all Shacks to ensure a safe and clean working and dining environment for our team members and guests.

Additionally, understanding the burden that the COVID-19 pandemic has placed on people's mental health, our team members have free access to a 24-hour emotional support helpline.

Environmental Responsibility

We focus on environmental responsibility across our operations, including with respect to our ingredients, where we are committed to sourcing our world-class ingredients from suppliers who share our values, using 100% antibiotic- and hormone-free proteins from ethically raised animals and non-GMO buns, continuing to mitigate impact by removing unnecessary packaging elements and substituting more sustainable, certified materials where possible, and increasing our use of renewable energy and improving our energy management.

We have also begun greenhouse gas emissions reporting in compliance with industry standards, in order to assess our current standing as we establish a baseline and can continue to implement action plans toward progress and improving our environmental impact.

The restaurant industry is highly competitive and fragmented, with restaurants competing on a variety of fronts, including taste, price, food quality, service, location and the ambiance and condition of the restaurant.

Our primary competitors include other fast casual restaurants, quick service restaurants and casual dining restaurants.

Our competition includes multi-unit national and regional chains, as well as a wide variety of locally-owned restaurants.

Our competition includes multi-unit international, national, and regional chains, as well as a wide variety of locally-owned restaurants.

Our competitors may operate company-owned restaurants, franchised restaurants or some combination.

1 unchanged sentence

In certain ways, we also compete with companies outside of the traditional restaurant industry, such as grocery store chains, meal subscription services and delicatessens — especially those that target guests who seek high-quality food — as well as convenience food stores, cafeterias and other dining outlets.

As new competitors enter the burger and fast casual segment and offer new digital experiences as well as subscription based meal offerings, our competition continues to intensify.

We also face increasing pressures from certain competitors who have announced initiatives to offer better quality ingredients relative to their previous offerings, such as antibiotic-free meat or plant-based meat alternatives.

For more information regarding the risks we face from our competitors — who may have, among other things, a more diverse menu, greater financial resources, lower operating costs, a more well-established brand, additional locations and more extensive marketing than we do — see "Risks Related to Operating in the Restaurant Industry — We face significant competition for guests, and if we are unable to compete effectively, our business could be adversely affected" in Item 1A, Risk Factors .

As new competitors enter the burger and fast casual segment and offer new digital experiences as well as companies that offer subscription based meal options, our competition continues to intensify.

We also face increasing pressures from certain

Shake Shack Inc.

Form 10-K | 18

competitors who have announced initiatives to offer better quality ingredients relative to their previous offerings, such as antibiotic-free meat or plant-based meat alternatives.

For more information regarding the risks we face from our competitors, see "Risks Related to Operating in the Restaurant Industry — We face significant competition for guests, and if we are unable to compete effectively, our business could be adversely affected" in Item 1A, Risk Factors .

We see ourselves as well-positioned to continue our market growth, as we believe consumers will keep seeking higher quality offerings, especially given an increasing consumer focus on responsible sourcing, ingredients and preparation.

Additionally, we place a focus on culinary innovation to ensure our menu offerings stand out from our competitors.

We believe that many consumers want to associate with brands whose ethos matches their own, and that Shake Shack, with our mission to Stand For Something Good and our culture of Enlightened Hospitality, reflects the values of conscientious consumers.

1 unchanged sentence

Since our inception, we have strategically and proactively developed our intellectual property portfolio by registering our trademarks and service marks worldwide.

As of December 29, 2021, we had 21 registered marks domestically, including

Shake Shack Inc.

Form 10-K | 17

registrations of our core marks ("Shake Shack," "Shack Burger," " " and " ") and certain other marks, such as Stand for Something Good.

As of December 28, 2022, we had 23 registered marks domestically, including registrations of our core marks ("Shake Shack," "Shack Burger," " " and " ") and certain other marks, such as Stand for Something Good.

Internationally, we have registered our core marks in 81 countries spanning six continents.

4 unchanged sentences

We've developed several product formulations including our ShackSauce, 'Shroom Burger, chicken breast, chicken bites, chicken breading, buttermilk herb mayo, cheese sauce, unflavored custard base, vanilla custard base, chocolate custard base, as well as certain toppings and custard mix-ins.

We also have exclusive arrangements with our suppliers of crinkle cut fries, ShackMeister Ale, Shack Red wine, Shack White wine, Shack Rosé wine, hot dog and relish and cherry peppers.

We also have exclusive arrangements with our suppliers of crinkle cut fries, ShackMeister Ale, Shack Red wine, Shack White wine, Shack Rosé wine, hot dogs and cherry peppers.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

4 unchanged sentences

We are not aware of any federal, state or local provisions that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, that have materially affected, or are reasonably expected to materially affect, our results of operations, competitive position, or capital expenditures.

Our business is subject to slight seasonal fluctuations which can impact sales from quarter-to-quarter.

Shake Shack Inc.

Form 10-K | 19

Our business is subject to seasonal fluctuations which can impact sales from quarter-to-quarter.

Year-over-year and quarter-to-quarter results can be also be impacted by the number and timing of new Shack openings.

Additionally, given our use of a fiscal calendar, there may be some fluctuations between quarters due to holiday shifts in the calendar year.

And of course, the COVID-19 pandemic may continue to have an impact on consumer behaviors and guest traffic that may result in temporary changes in the seasonal fluctuations of our business.

The effects of the COVID-19 pandemic may continue to have an impact on consumer behaviors and guest traffic that may result in temporary changes in the seasonal fluctuations of our business.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The name, age and position held by each of our executive officers as of December 29, 2021 is set forth below.

The name, age and position held by each of our named executive officers as of December 28, 2022 is set forth below.

Name Age Position

2 unchanged sentences

Zachary Koff 43 Chief Operating Officer

Shake Shack Inc.

Form 10-K | 18

Randy Garutti has served as Shake Shack’s Chief Executive Officer and on the Board of Directors since April 2012.

8 unchanged sentences

Garutti graduated from Cornell University’s School of Hotel Administration in 1997.

Garutti currently serves on the boards of directors of Block, Inc.

SQ) and USHG Acquisition Corp.

Garutti currently serves on the board of directors of Block, Inc.

Garutti also is a member of the board of directors of the Columbus Avenue Business Improvement District, a not-for-profit organization.

Fogertey has served as our Chief of Finance since June 2021.

Prior to joining Shake Shack, Mrs.

Fogertey spent the last 16 years at Goldman Sachs, where she recently served as Vice President & Lead Equity Analyst for the Restaurant sector.

In this position, she had a heavy focus on the impact of technology on restaurant profitability and market share.

She additionally developed deep relationships and unique insights into the largest peers in our industry.

Prior to covering the Restaurant sector, Mrs.

Fogertey has served as our Chief Financial Officer since June 2021.

Prior to joining Shake Shack, Ms.

Fogertey spent 16 years at Goldman Sachs, where she recently served as Vice President & Lead Equity Analyst for the Restaurant sector.

In this position, she had a heavy focus on the impact of technology on restaurant profitability and market share and built various statistical forecasting models.

She additionally developed deep relationships and unique insights into the largest peers in our industry, and currently serves as a Member of the Society of Fellows for the Culinary Institute of America.

Prior to covering the Restaurant sector, Ms.

Fogertey was a Vice President, Lead Derivative Strategist overseeing single stock options in the US and Latin America as well as global ETFs and market structure.

During her tenure at Goldman Sachs, she pioneered numerous proprietary investments, primarily in Consumer and Technology sectors.

Fogertey has a BSBA in Accounting, Finance and International Business from Washington University in St.

4 unchanged sentences

Prior to joining Shake Shack, Mr.

Koff spent 8 years working in operations for Bravo Brio Restaurant Group.

Koff spent eight years working in operations for Bravo Brio Restaurant Group.

Koff graduated from Cornell University’s School of Hotel Administration in 2002 with a Bachelor’s Degree in Hospitality Administration.

3 unchanged sentences

Securities and Exchange Commission ("SEC").

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, statements of changes in beneficial ownership and amendments to those reports are available for free on our investor relations website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.

Shake Shack Inc.

Form 10-K | 20

soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.

The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

7 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