Top investor warned Cracker Barrel in 2024 its rebrand would kill the company: It 'will not work!'

One of Cracker Barrel's biggest investors criticized the company's investment plan in 2024, saying it would damage the brand further.

Cracker Barrel's now infamous rebrand blunder that changed its classic store model and logo could have been avoided had executives listened to Sardar Biglari, who owns over 9% of Cracker Barrel's shares through Biglari Capital Corp.

The brand change — which the company has now reversed — all started when the new CEO, Julie Felss Masino, released her "Strategic Transformation Plan" in May 2024. The plan included a five-pillar strategy that turned out to be the source of consumer outrage.

'Cracker Barrel Old Country Store is a history-steeped place that channels Americana.'

Along with revealing plans to spend upwards of $700 million on the rebrand, Masino sought to "evolve" the Cracker Barrel brand with a "leading branding agency" that would "delight" guests.

As well, she listed plans to implement "improved store design and atmosphere," while "enhancing the menu" to focus on "craveability."

The plan, which eventually failed, was highly criticized by Biglari, who owns other brands like Maxim Magazine, Steak 'n Shake, and Western Sizzlin.

Biglari sent scathing letters to shareholders, including in October 2024, when he pointed to the company's poor returns and noted Cracker Barrel's share price had dropped over 50% since Masino became CEO in 2023.

He called the opening of new stores "unnecessary and costly" and declared "Cracker Barrel is not a broken brand, but it has a broken board."

Biglari also put together a 120-page slide deck that not only showed he believed the company was going downhill but that he knew customers would not like the rebrand.

RELATED: Cracker Barrel caves to outrage against rebranding

Perhaps the most eye-opening portion of the presentation was the revelation of the company's minuscule operating income margins, which were just 1.3%. This was just a tenth of companies like Dave & Buster's or Darden, which owns Olive Garden and Cheddar's. Denny's was also light-years ahead of Cracker Barrel in this regard.

Biglari also showed key figures like guest traffic being down nearly 20% in the last five years. He linked product quality and portion sizes, showing a comparison to a sirloin steak from 2021 to "steak tips" in 2024.

The presentation even went after some of the shareholders, showing one in particular seemingly tanking her own brand in six years.

The last slides of Biglari's package were dedicated to customer feedback, which displayed customers calling the food overpriced and showing disgust with the restaurant remodels.

Comments that took issue with the decor and the company losing the "home feeling" were seemingly spot-on given the recent loss of revenue.

All of these points led to Biglari escalating his rhetoric in a November 2024 letter to shareholders.

RELATED: Cracker Barrel desperately rewrites 'inclusion' and DEI web page after backlash

MUNCY, PENNSYLVANIA, UNITED STATES - 2023/11/22: Photo by Paul Weaver/SOPA Images/LightRocket via Getty Images

"If you had $100 in Cracker Barrel stock in January 2019, five years later it is worth about $30. Therefore, there is just $30 to go before the entire investment is lost," Biglari's November letter began.

The investor mocked the company's costly "big strategy" and urged shareholders to vote for himself and Milena Alberti-Perez, former CFO of Getty Images, as directors, not Carl Berquist and Meg Crofton, "who have overseen a loss of about 70% during their tenures as board members."

He told other investors that CEO Masino could "use our help" to avoid falling into the "trap" of overspending on remodels.

"Cracker Barrel Old Country Store is a history-steeped place that channels Americana; there are a few brands like it, and none require wholesale changes to their aesthetic," Biglari wrote. "The day Cracker Barrel opened, it was already old — its theme derived from the 1920s. ... Let me make my position clear: The company's $700 million remodel plan will not work!"

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In the end, Berquist and Crofton were indeed elected as directors with 30% of Cracker Barrel's stock — which subsequently sank — shutting out Biglari, who was proven to be right.

According to Fox Business, Biglari is still one of the company's largest investors alongside BlackRock, GMT Capital, the Vanguard Group, and AllianceBernstein.

His ownership of Steak 'n Shake is likely the reason behind the company firing shots at Cracker Barrel on social media, where the brand called Cracker Barrel's remodel "insane" and "soulless" while also thanking President Trump for his remarks on the matter.

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