10q10k10q10k.net

What changed in Shake Shack Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Shake Shack Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+404 added−511 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-21)

Top changes in Shake Shack Inc.'s 2025 10-K

404 paragraphs added · 511 removed · 322 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

68 edited+47 added−125 removed24 unchanged
Biggest changeThe following summarizes some of the benefits offered to eligible team members: ▪ Comprehensive health insurance coverage and health and flexible spending accounts are offered to eligible team members working 25 hours or more each week. ▪ We offer eligible team members a 401(k) plan that includes a competitive matching component to support and encourage retirement savings. ▪ Team members can accrue paid time off and sick time based on hours worked, which can be used for personal needs or to care for family members. ▪ Parental leave is available for Shift Managers and above who are new parents welcoming a child through birth, adoption, or foster placement. ▪ Our Employee Assistance Program, available on the first day of employment, provides various resources to support team member's mental health and help improve the quality of work life. ▪ Our Shake Shack Field Management Bonus Program incentivizes our leaders to grow both sales dollars and operating profit percentage.
Biggest changeForm 10-K | 3 ▪ Comprehensive health insurance coverage and health and flexible spending accounts are offered to eligible team members working 25 hours or more each week. ▪ We offer eligible team members a 401(k) plan that includes a competitive matching component to support and encourage retirement savings. ▪ Our tipping availability has offered team members the opportunity for increased hourly wages and is optional if our guests are inclined to reward our teams for additional hospitality and service. ▪ Team members can accrue paid time off and sick time based on hours worked, which can be used for personal needs or to care for family members. ▪ Parental leave is available for Shift Managers and above who are new parents welcoming a child through birth, adoption, or foster placement. ▪ Our Shake Shack Field Management Bonus Program incentivizes our leaders to grow both sales dollars and operating profit percentage. ▪ General Managers participate in our equity-based compensation program, empowering them to share in the success of our business.
Lynch served as Vice President of Marketing at Taco Bell. Mr. Lynch has over 25 years combined experience in the QSR and consumer packaged goods industries and has also held senior roles at BJ Heinz Company and Procter & Gamble. Mr. Lynch is a graduate of the University of Rochester, where he obtained his B.A. and M.B.A. Katherine I.
Lynch served as Vice President of Marketing at Taco Bell. Mr. Lynch has over 25 years combined experience in the QSR and consumer packaged goods industries and has also held senior roles at BJ Heinz Company and Procter & Gamble. Mr. Lynch is a graduate of the University of Rochester, where he obtained his B.A. and M.B.A.
The contents of our website are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. Shake Shack Inc. Form 10-K | 17
The contents of our website are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. Shake Shack Inc. Form 10-K | 12
However, given our use of a fiscal calendar, there may be some fluctuations between quarters due to holiday shifts in the calendar year. Year-over-year and quarter-to-quarter results can also be impacted by the number and timing of new Shack openings. Shake Shack Inc.
However, given our use of a fiscal calendar, there may be some fluctuations between quarters due to holiday shifts in the calendar year. Year-over-year and quarter-to-quarter results can also be impacted by the number and timing of new Shack openings.
We recognize that the safety and consistency of our products begins with our suppliers, and therefore, we require our suppliers must meet certain criteria and strict quality control standards in the production and delivery of our food and other products.
We recognize that the safety and consistency of our products begins with our suppliers, and therefore, we require our suppliers to meet certain criteria and strict quality control standards in the production and delivery of our food and other products.
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 . Shake Shack Inc.
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 .
Form 10-K | 14 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 those of our competitors.
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 those of our competitors.
Capitalizing on Our Brand Strength Since 2004, Shake Shack has become a globally recognized brand with significant consumer awareness relative to our current footprint of 579 Shacks system-wide. We pride ourselves on providing a vibrant and authentic community gathering place that delivers an exceptional experience to our loyal guests.
Capitalizing on Our Brand Strength Since 2004, Shake Shack has become a globally recognized brand with strong consumer awareness relative to our current footprint of 659 Shacks system-wide. We pride ourselves on providing a vibrant and authentic community gathering place that delivers an exceptional experience to our loyal guests.
We continue to strive to improve our sourcing practices across our international supply chain while maintaining the quality and standards we are known for. Our domestic regional strategy for ground beef production is designed to help ensure we consistently serve freshly ground beef at our domestic Shacks.
We are currently sourcing 100% cage-free eggs across our domestic supply chain. We continue to strive to improve our sourcing practices across our international supply chain while maintaining the quality and standards we are known for. Our domestic regional strategy for ground beef production is designed to help ensure we consistently serve freshly ground beef at our domestic Shacks.
As of December 25, 2024, 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 45% of our total purchases. As of December 25, 2024, we were utilizing 20 affiliated distribution centers to supply our Company-operated Shacks.
As of December 31, 2025, 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 42% of our total purchases. As of December 31, 2025, we were utilizing 20 affiliated distribution centers to supply our Company-operated Shacks.
Form 10-K | 6 Engaging the Community Community and Charitable Partners We regularly serve our communities in a variety of ways including Donation Days to show support for local schools and organizations.
Engaging the Community Community and Charitable Partners We regularly serve our communities in a variety of ways including Donation Days to show support for local schools and organizations.
Form 10-K | 13 Distribution We have a centralized distribution process with one distributor, which we refer to as our "broadline" distributor, to provide nearly all of our food distribution services in the U.S.
Distribution We have a centralized distribution process with one distributor, which we refer to as our "broadline" distributor, to provide nearly all of our food distribution services in the U.S.
In this role she was responsible for a $1.5 billion dollar business across 1,100 company-owned restaurants with over 22,000 restaurant team members in the U.S. Previously, Ms. Sentell held the position of SVP Restaurant Operations & Innovation at Inspire Brands. Earlier, Ms.
In this role she was responsible for a $1.5 billion dollar business across 1,100 company-owned restaurants with over 22,000 restaurant team members in the U.S. Previously, Ms. Sentell held the position of SVP Restaurant Operations & Innovation at Inspire Brands. Earlier, Ms. Sentell served as SVP Restaurant Excellence as well as SVP Shake Shack Inc.
Additionally, we provide notifications of news or announcements regarding our financial performance, Shake Shack Inc. Form 10-K | 16 including SEC filings, investor events, and press and earnings releases as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by subscribing to email alerts.
Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, and press and earnings releases as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by subscribing to email alerts.
Sentell served as SVP Restaurant Excellence as well as SVP Product Development and Menu Delivery at Arby's Restaurant Group. Ms. Sentell also spent over 11 years at Dairy Queen as the Director of Marketing and a franchisee owner. Ms. Sentell is a graduate of the University of Wisconsin at River Falls, where she obtained her A.S. in Marketing Communications.
Form 10-K | 11 Product Development and Menu Delivery at Arby's Restaurant Group. Ms. Sentell also spent over 11 years at Dairy Queen as the Director of Marketing and a franchisee owner. Ms. Sentell is a graduate of the University of Wisconsin at River Falls, where she obtained her A.S. in Marketing Communications.
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.
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.
To make sure every Shake Shack team member at every level has a positive experience, we strive to build an inclusive workplace, where all team members have the support and resources they need to succeed, feel a sense of belonging, and are valued for their contributions. We call this All-In.
To make sure every Shake Shack team member at every level has a positive experience, we strive to build an inclusive workplace, where all team members have the support and resources they need to succeed and feel a sense of belonging.
Since the original Shack opened in 2004 in Madison Square Park, the Company has expanded to 579 Shacks system-wide, of which 329 were Company-operated Shacks and 250 were licensed Shacks, including Shacks across London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo, Seoul, Toronto, Kuala Lumpur, and more.
Since the original Shack opened in 2004 in Madison Square Park, the Company has expanded to 659 Shacks system-wide, of which 373 were Company-operated Shacks and 286 were licensed Shacks, including Shacks across London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo, Seoul and more.
Our proprietary products include the burger recipe for our specific blend, our patty grinding specifications and the product formulations. 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.
Our proprietary products include the burger recipe for our specific blend, our patty grinding specifications and the product formulations. 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, Shake Shack Inc.
Guests who participate in these fundraisers have a portion of their order totals donated to a local nonprofit by mentioning the fundraiser when placing an order in-Shack or using a fundraiser code on the Shack app for pick-up or delivery. For certain new Shack openings, we partner with local charities for opening day.
Guests who participate in these fundraisers have a portion of their order totals donated to a local nonprofit by mentioning the fundraiser when placing an order in-Shack or using a fundraiser code on the Shack app, website, or kiosk for pick-up or delivery.
Internationally, we have registered our core marks in 83 countries spanning six continents. These marks are registered in multiple international trademark classes, including for restaurant services, food services, non-alcoholic beverages and apparel. We also own the domain www.shakeshack.com, as well as over 410 other domain names for use in other markets.
These marks are registered in multiple international trademark classes, including for restaurant services, food services, non-alcoholic beverages and apparel. We also own the domain www.shakeshack.com, as well as over 420 other domain names for use in other markets.
We interact with fans across Instagram, TikTok, X (formerly Twitter), Facebook, 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 continued our creator partnerships and expanded our brand storytelling to include long-form video.
We interact with fans across Instagram, TikTok, X (formerly Twitter), Facebook, 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.
Fogertey 41 Chief Financial Officer Stephanie Sentell 46 Chief Operations Officer Robert Lynch has served as Shake Shack’s Chief Executive Officer and as a member of the Board of Directors since May 2024. Prior to joining Shake Shack, Mr.
Name Age Position Robert Lynch 49 Chief Executive Officer and Director Stephanie Sentell 47 Chief Operations Officer Robert Lynch has served as Shake Shack’s Chief Executive Officer and as a member of the Board of Directors since May 2024. Prior to joining Shake Shack, Mr.
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 Evolution The focus of our digital strategy is to deliver Enlightened Hospitality to our guests across multiple channels.
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.
GROWTH STRATEGIES During fiscal 2024, we focused our development strategy on improving how we build and open Shacks, which included reducing build cost, implementing strategies to better track and forecast timelines and expenses, evolving our design efforts to standardize key components of our restaurants while maintaining brand quality and guest experience, and opening a balanced portfolio of formats that allowed us to maximize our potential in each market.
Form 10-K | 6 DEVELOPMENT During fiscal 2025, we focused our development strategy on improving how we build and open Shacks, which included reducing build costs, implementing strategies to better predict and forecast timelines and manage our supply chain, evolving our design efforts to standardize key components of our Shacks while maintaining brand quality and guest experience, and opening a mixed portfolio of formats that allowed us to maximize our potential in each market.
Form 10-K | 9 Shack-Wide Limited Time Offerings ("LTO") Our LTO program generally features a new, premium burger or chicken sandwich, and special fry options for varying time periods throughout the year along with unique beverages and shakes.
Shack-Wide Limited Time Offerings ("LTO") Our LTO program generally features a new, premium burger or chicken sandwich, special side innovation, and unique beverages and shakes for varying periods of time throughout the year.
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 neighborhoods.
We participate in local celebrations and develop relationships within the community, helping position Shake Shack as a premium brand that is connected to its neighborhoods. Shake Shack Inc.
Form 10-K | 4 ▪ Learning and Talent Development — We are dedicated to providing content and experiences that develop and retain team members. At Shake Shack, we continue to rethink how we provide career growth opportunities with lattice mobility replacing the traditional promotion ladder to ensure team members continue to succeed in a market that is rapidly changing.
At Shake Shack, we continue to rethink how we provide career growth opportunities with lattice mobility replacing the traditional promotion ladder to ensure team members continue to succeed in a market that is rapidly changing.
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.
Form 10-K | 10 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 dogs and cherry peppers.
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 communities, our suppliers and our investors.
GUEST EXPERIENCE Danny Meyer's original vision of Enlightened Hospitality guided the creation of Shake Shack's unique culture. 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 communities, our suppliers, and our shareholders.
We opened 61 net new system-wide Shacks, which included 34 Company-operated and 27 Licensed Shacks. We believe we remain well-positioned to continue significant, sustainable financial growth and we plan to continue to execute our growth strategies with our purpose to Stand For Something Good in everything we do.
We opened 80 net new system-wide Shacks, which included 44 net Company-operated and 36 net Licensed Shacks. We believe we remain well-positioned to continue significant, sustainable financial growth and we plan to continue to execute our growth strategies.
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.
OPERATIONS At Shake Shack, we believe our success depends upon maintaining efficient and nimble operations. Just as we invest in our menu items, digital offerings, drive-thru and in-Shack experiences, 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.
As of December 25, 2024, we have nine approved raw beef suppliers and nine approved ground beef processors in the U.S. who produce our burgers on a daily basis.
As of December 31, 2025, we have 11 approved raw beef suppliers and seven approved ground beef Shake Shack Inc. Form 10-K | 8 processors in the U.S. who produce our burgers on a daily basis.
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. Our purpose is to Stand For Something Good®, from premium ingredients and employee development to inspiring designs and community investment.
OVERVIEW Shake Shack serves modern, fun and elevated versions of American classics using only premium 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.
We believe that many consumers want to associate with brands whose ethos matches their own, and that Shake Shack, with our purpose to Stand For Something Good and our culture of Enlightened Hospitality, reflects the values of conscientious consumers.
We believe that many consumers want to associate with brands whose ethos matches their own, and that Shake Shack, with our purpose to Stand For Something Good, reflects the values of conscientious consumers. INTELLECTUAL PROPERTY Since our inception, we have strategically and proactively developed our intellectual property portfolio by registering our trademarks and service marks worldwide.
One great advantage for Shake Shack has been our birthplace and headquarters in New York City, and our origination from a fine-dining company. This gives us tremendous media and brand power, often outweighing our relative size.
One great advantage for Shake Shack has been our birthplace and headquarters in New York City and our origination from a fine-dining company, which have contributed to influential media visibility and brand recognition.
In fiscal 2025, we look forward to unlocking further opportunities for improving on how we build our Shacks — including continuing our efforts to lower build costs — in order to enable accelerated growth in new Shacks.
In fiscal 2026, we look forward to unlocking further opportunities for improving on how we build our Shacks including continuing our efforts to maintain our build cost structure and deliver strong cash-on-cash return across accelerated growth in new Shacks.
The gross investment cost of a new Shack, which includes costs related to leasehold improvements, furniture, fixtures and equipment ranged from approximately $1.7 million to $4.6 million. Shacks opened during fiscal 2024 took between 14 and 39 weeks to build, compared to 16 and 56 weeks in the prior year.
Gross investment cost of a new Shack, which includes costs related to leasehold improvements, furniture, fixtures and equipment ranged from approximately $1.6 million to $4.1 million in fiscal 2025. Shacks opened in fiscal 2025 took between 15 and 51 weeks to build. One Shack experienced an extended build time largely due to landlord and utility company delays.
Form 10-K | 15 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The name, age and position held by each of our named executive officers as of December 25, 2024 is set forth below. Name Age Position Robert Lynch 48 Chief Executive Officer and Director Katherine I.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS The name, age and position held by each of our named executive officers as of December 31, 2025 is set forth below.
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.
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. As of December 31, 2025, we had 13,873 team members, of whom 13,427 were hourly team members and Shack-level managers and 446 were Shack Support Center personnel.
Our primary competitors include other fast casual restaurants, quick service restaurants and casual dining 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.
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. Many of our competitors offer breakfast, lunch and dinner, as well as dine-in, carry-out, drive-thru and delivery services.
Sourcing and Supply Chain We pride ourselves on sourcing premium ingredients from partners who share our dedication to quality, such as 100% all-natural proteins with no added hormones or antibiotics, that are humanely raised and source-verified. We are currently sourcing 100% cage-free eggs across our domestic supply chain.
We remain focused on identifying and executing opportunities to streamline our operations, including optimizing staffing levels, refining processes, and consistently delivering an elevated guest experience. Sourcing and Supply Chain We pride ourselves on sourcing premium ingredients from partners who share our dedication to quality, such as 100% all-natural proteins with no added hormones, that are humanely raised and source-verified.
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. Social Media Just as we design our Shacks as community gathering places, our social media strategy creates an online community gathering place.
This identity also anchors our marketing efforts, with the heart of our marketing strategy to awaken the world to joyful eating through uplifting experiences, cultivating community and connecting with guests both in our Shacks and through digital channels.
We lowered our build costs with structural redesigns including moving from steel to wood construction, improving the cost profile on finishes, as well as making meaningful improvements to interior furniture, kitchen equipment optimization, signage, and mechanical, electrical, and plumbing systems.
We lowered our build costs by implementing further standardization, including our first free-standing drive thru prototype. We further refined key building systems, improving the cost profile on finishes, as well as making meaningful improvements to interior furniture, kitchen equipment optimization, signage, and mechanical, electrical, and plumbing systems across all formats.
We conduct quarterly, third-party food safety assessments of our Shacks, utilize technology to manage and document food safety procedures, and ensure appropriate corrective actions are implemented for any noncompliance findings. In fiscal 2024, we implemented new technology designed to digitize our food safety specifications, improving our capabilities to maintain consistent food safety procedures.
We conduct quarterly, third-party food safety assessments of our Shacks, utilize technology to manage and document food safety procedures, and ensure appropriate corrective actions are implemented for any noncompliance findings. In fiscal 2025, we implemented Belltower Instant Recall System, an industry-leading system for communicating product recalls from supplier to distributor to restaurant level.
Unless the context otherwise requires or unless specific reference is made to our licensed business, statements in this Part I of our Annual Report on Form 10-K refer to Shake Shack's Company-operated business. OVERVIEW Shake Shack serves modern, fun and elevated versions of American classics using only premium ingredients.
Unless the context otherwise requires or unless specific reference is made to our licensed business, statements in this Part I of our Annual Report on Form 10-K refer to Shake Shack's Company-operated business. WE STAND FOR SOMETHING GOOD Our Purpose — Stand for Something Good: We will nurture the world’s communities by delivering exceptional food and hospitality.
Each Shack is designed to convey a consistent brand message while also tailoring marketing efforts to its specific region. We may offer menu items that feature ingredients and beers specific to a Shack's community, and we often team up with local chefs and restaurants to offer our guests unique, collaborative menu items.
We may offer menu items that feature ingredients and beers specific to a Shack's community, and we may 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.
A Warm Community Gathering Place Our Shacks are so much more than a place to get burgers, fries and shakes; they’re places for the community to gather. We place a high premium on connecting with our communities through the physical design of our Shacks and by the local causes we support.
In some markets, we have existing tenured partnerships with organizations and in other markets we are building new relationships in our local communities as we open Shacks. A Warm Community Gathering Place Our Shacks are so much more than a place to get burgers, fries and shakes; they’re places for the community to gather.
We have a comprehensive supplier and ingredient selection process, and we maintain a list of approved suppliers that meet our standards. We thoroughly review the results of suppliers' internal and external quality audits, insurance coverage and track record on an on-going basis.
We thoroughly review the results of suppliers' internal and external quality audits, insurance coverage, and track record on an on-going basis. To stress test for exceptional scenarios, we conduct mock food recalls across a selection of our suppliers on a quarterly basis.
We track and calculate scope 1 and scope 2 greenhouse gas emissions to report in compliance with industry standards, in order to assess our current standing. COMPETITION 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.
COMPETITION 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 teams are made up of 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.
Form 10-K | 2 HUMAN CAPITAL MANAGEMENT To ensure the near-term and long-term success of our business, we are focused on recruiting, developing. and rewarding high performing teams. Our teams are made up of 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 continue to work diligently to ensure our team members have access to benefits to support their personal and family wellness and continue to explore new and meaningful ways to reward our high performing team members. GUEST EXPERIENCE Danny Meyer's original vision of Enlightened Hospitality guided the creation of Shake Shack's unique culture.
Total Rewards Our team members are at the center of all we do, and we remain committed to investing in their success and well-being. We continue to work diligently to ensure our team members have access to benefits to support their personal and family wellness and continue to explore new and meaningful ways to reward our high performing team members.
To stress test for exceptional scenarios, we conduct mock food recalls across a selection of our suppliers on a quarterly basis. We have developed and implemented training and operating standards related to the food preparation, cleanliness and safety in each Shack, and we have a dedicated Quality Assurance team.
We have developed and implemented training and operating standards related to the food preparation, cleanliness and safety in each Shack, and we have a dedicated Quality Assurance team. Environmental Responsibility We focus on environmental responsibility across our operations, including with respect to ingredients, where we are committed to sourcing premium ingredients from like-minded suppliers.
INTELLECTUAL PROPERTY Since our inception, we have strategically and proactively developed our intellectual property portfolio by registering our trademarks and service marks worldwide. As of December 25, 2024, we had 26 registered marks domestically, including registrations of our core marks ("Shake Shack," "Shack Burger," " " and " ") and certain other marks, such as Stand for Something Good.
As of December 31, 2025, we had 29 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 85 countries spanning six continents.
Our 18-week Shift Up program is a leadership development program for early career Shack managers that provides training through cohort mentoring, business integration and real-world Shack experience to help improve their skill sets and grow their confidence to become senior leaders in our Shacks.
We offer training programs to foster leaders from within, such as: ▪ Our nine-week Rise program is created for exempt managers and California non-exempt managers and focuses on elevating leadership capabilities through coaching, building effective team environments, and driving meaningful business impact within the Shack. ▪ Our nine-week Emerge program is targeted towards assistant general managers and is designed to empower them to influence their teams, drive accountability and deliver results through strategic, data-informed decisions. ▪ Our 18-week Shift Up program is a leadership development program for early career Shack managers that provides training through cohort mentoring, business integration and real-world Shack experience to help improve their skill sets and grow their confidence to become senior leaders in our Shacks.
We are focused on driving traffic to our Company-owned app and web channels, including growing the number of app and web sessions by acquiring and converting users across our digital ecosystem. Our mobile apps drive higher frequency and offer a better guest experience, which we will continue to invest in.
From improving efficiency and availability to seamless checkout and thoughtful user experience interfaces, we remove barriers and deliver experiences that keep guests coming back. We are focused on driving traffic to our Company-owned app and web channels, including growing the number of app and web sessions by acquiring and converting users across our digital ecosystem.
We care about our team and are committed to setting them up for success at Shake Shack and in their future careers. In fiscal 2024, we promoted 3,454 people throughout our Company. We are proud of our leaders who graduate from hourly roles to managers, managers to General Managers and General Managers to regional leadership.
The HUG Fund provides timely financial assistance to team members impacted by emergency circumstances beyond their control and means. We care about our team and are committed to setting them up for success at Shake Shack and in their future careers. In fiscal 2025, we promoted 3,720 people throughout our Company.
Shake Shack continues to receive recognition for being a fan and industry favorite, and was named to Restaurant Business' Top 500 Chain Restaurants and QSR Magazine's QSR 50 in 2024. Culinary Approach Shake Shack's unique value proposition is partially defined by our roots in fine-dining.
Shake Shack continues to receive recognition for being a fan and industry favorite, and was named to Restaurant Business' Top 500 Chain Restaurants and QSR Magazine's QSR 50 in 2025. Social Media Just as we design our Shacks as community gathering places, our social media strategy creates an online community gathering place.
Executing a Multi-Format Strategy We are focused on creating a balanced portfolio of Shacks across multiple formats and improving how we build our Shacks. We continue to build our Shacks with a premium look and feel, while being more efficient with our level of investment.
Executing a Multi-Format Strategy We are focused on creating a balanced portfolio of Shacks across multiple formats and improving how we build our Shacks. In 2025, we continued to refine our multi-format approach, including core urban locations, suburban drive-thrus, small-format Shacks, and select flagship experiences.
Through these initiatives, we are committed to broadening our reach as we expand in new and existing markets. Talent Management At Shake Shack we foster an environment that attracts and welcomes individuals of all abilities, backgrounds, cultures, perspectives, skill sets, and experiences.
Talent We attract and recruit a workforce of top talent through employer branding, diversification of recruitment channels, and optimal recruiting practices to create a talent pipeline to support current staffing needs as well as enabling new Shack growth. At Shake Shack we foster an environment that attracts and welcomes individuals of all abilities, backgrounds, cultures, perspectives, skill sets, and experiences.
We believe we have developed a reliable supply chain, but have also taken strides to identify alternative sources to help lessen the possible interruptions of service and product, including testing with new suppliers. Shake Shack Inc.
We believe we have developed a reliable supply chain, but have also taken strides to identify alternative sources to help mitigate business risk and optimize costs, including diversifying our supplier base and supplier footprint, and optimizing logistics.
Having a high performing and engaged workforce is important, and we have been working to ensure our team members feel recognized, connected, and proud to work at Shake Shack. We established a cross-functional workgroup that has been focused on addressing the areas our team members deemed as most important to their workplace experience through our annual engagement survey.
Having a high performing and engaged workforce is important, and we seek to understand the needs of our teams through feedback to help to ensure they feel recognized, connected and proud to work at Shake Shack. We are dedicated to providing content and experiences that develop and retain team members.
These designations highlight the core of our Enlightened Hospitality ethos and our commitment to a great workplace for all. ▪ The Help Us Give (HUG) Fund — One of the ways we embrace Enlightened Hospitality internally is through the administration of our own HUG Fund, a 501(c)(3) organization funded by and available for our team members.
We foster this sense of belonging in part through our employee resource groups, which are open to all team members. Another way we support our team members is through the administration of our HUG Fund, a 501(c)(3) organization funded by and available for our team members.
We also continue to offer third-party delivery through Uber Eats, DoorDash, Grubhub and other third-party delivery providers. Offer Management In early November 2024, we launched a new offer management integration which will give us better visibility into the redemption of offers across our system, allowing us to have a more holistic view of how promotions are performing.
Our mobile app drives higher frequency and offers a better guest experience, which we will continue to invest in. We also continue to offer third-party delivery through Uber Eats, DoorDash, Grubhub and other third-party delivery providers.
In fiscal 2024, the average investment cost was approximately $2.8 million, or approximately $2.4 million net of tenant improvement allowances received from our landlords, achieving a decrease of roughly 7.7% compared to the prior year.
We made further progress in reducing development costs and delivered approximately 20% reduction in net cost-to-build for the year, despite continued inflationary pressures across the industry. In fiscal 2025, average investment cost was approximately $2.3 million, or approximately $1.9 million net of tenant improvement allowances received from our landlords.
Environmental Responsibility We focus on environmental responsibility across our operations, including with respect to our ingredients, where we are committed to sourcing our premium ingredients from suppliers who share our values. We remained dedicated in our efforts to reduce our environmental footprint by using streamlined and minimal packaging elements and continued to use more sustainable, certified packaging materials whenever possible.
We remain dedicated in our efforts to reduce our environmental footprint by using streamlined and minimal packaging elements and continue to use more sustainable, certified packaging materials whenever possible. We track and calculate scope 1 and scope 2 greenhouse gas emissions to publicly report in compliance with industry standards and assess our emissions year-over-year.
This year, 68% of our new General Managers and 60% of new Area Directors were promoted from within. Total Rewards Our team members are at the center of all we do, and we remain committed to investing in their success and well-being.
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, 61% of our new General Managers and 63% of new Area Directors were promoted from within.
In some markets, we have existing tenured partnerships with organizations and in other markets, we are building new relationships in our local communities with Shacks we open. At select new Shack openings in fiscal 2024, we donated $1 from each designated menu item sold on opening day to the chosen local nonprofit partner.
In 2025, Donation Days supported several of our Shack communities in need following disasters, including the Los Angeles-area wildfires and floods in North Carolina. For new Shack openings, we partner with local charities to donate $1 from each designated menu item sold on opening day.
Removed
WE STAND FOR SOMETHING GOOD At Shake Shack, we Stand For Something Good in everything we do.
Added
Our purpose is to Stand For Something Good ® , from premium ingredients and employee development to inspiring designs and community investment.
Removed
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.
Added
Everything that we do should be in service of our team members, guests, and communities. Our prosperity is a means to an end, with the end being improving the world in which we work, live, and play.
Removed
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: caring for each other, caring for our guests, caring for our communities, caring for our suppliers and our Shake Shack Inc.
Added
Our Mission — To bring the world’s best fine casual experience to as many guests, team members, and communities as possible and, in doing so, to bring pride to everyone in our company and to deliver a strong financial benefit for our team members and shareholders. Shake Shack Inc.
Removed
Form 10-K | 2 investors. Today, we deliver on that vision by building hospitality through all our guest touchpoints.
Added
The following summarizes some of the benefits offered to eligible team members: Shake Shack Inc.
Removed
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.
Added
Brand Marketing Model In 2025, we evolved our brand marketing model to create a durable, demand-driving engine that supports long-term sales growth, in part, by adopting a unified approach across advertising, paid media, insights & analytics, and earned/social engagement.
Removed
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 are committed to environmental responsibility — We source our domestic ingredients from suppliers who share our values, including antibiotic-free and no added hormone 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.
Added
As part of this evolution, we invested in paid media at scale for the first time supporting campaigns such as the Dubai Chocolate Shake, The Big Shack, and $1 soda in-app only promotion. The evolution of our brand marketing model has Shake Shack Inc.

… 160 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

133 edited+15 added−49 removed254 unchanged
Biggest changeForm 10-K | 20 ▪ our ability to control construction and development costs of new Shacks, particularly in inflationary environments and including the impacts of tariffs or the responses of other governments, consumers or suppliers to U.S. imposed tariffs; ▪ competition in new markets, including competition for appropriate sites; ▪ the risk of opening too many Shacks in a particular location, or in too close proximity; ▪ failure of the landlords to timely deliver real estate to us and other landlord delays; ▪ proximity of potential sites to an existing Shack, and the impact of cannibalization on future growth; ▪ anticipated commercial, residential and infrastructure development near our new Shacks; and ▪ cost and availability of capital to fund construction costs and pre-opening costs.
Biggest changeForm 10-K | 15 ▪ failure of the landlords to timely deliver real estate to us and other landlord delays; ▪ proximity of potential sites to an existing Shack, and the impact of cannibalization on future growth; ▪ anticipated commercial, residential and infrastructure development near our new Shacks; and ▪ cost and availability of capital to fund construction costs and pre-opening costs.
The restaurant industry is intensely competitive with many well-established companies that compete directly and indirectly with us with respect to taste, menu, price, food quality, service, value, design and location. We compete in the restaurant industry with multi-unit national, regional and locally-owned and/or operated limited-service restaurants and full-service restaurants.
The restaurant industry is intensely competitive with many well-established and new companies that compete directly and indirectly with us with respect to taste, menu, price, food quality, service, value, design, and location. We compete in the restaurant industry with multi-unit national, regional and locally-owned and/or operated limited-service restaurants, and full-service restaurants.
Shortened windows of certainty can impact our ability to plan our business from a supply and profitability perspective and we face greater risk of margin volatility. The digital and delivery business, related expenses, execution and expansion thereof, is uncertain and subject to risk.
Shortened windows of certainty can impact our ability to plan our business from a supply and profitability perspective and we face greater risk of margin volatility. The digital and delivery strategy, related expenses, execution and expansion thereof, is uncertain and subject to risk.
We rely heavily on information systems, including point-of-sale processing in our Shacks, for management of our supply chain, accounting, payment of obligations, collection of cash, credit and debit card transactions, digital ordering and other processes and procedures.
We rely heavily on information technology systems, including point-of-sale processing in our Shacks, for management of our supply chain, accounting, payment of obligations, collection of cash, credit and debit card transactions, digital ordering and other processes and procedures.
In fiscal 2024, we continued with the implementation of menu price increases on our third-party delivery platforms to help offset a portion of this fee; the higher menu prices could result in loss of sales. We face significant competition for guests, and if we are unable to compete effectively, our business could be adversely affected.
In fiscal 2025, we continued with the implementation of menu price increases on our third-party delivery platforms to help offset a portion of this fee; the higher menu prices could result in loss of sales. We face significant competition for guests, and if we are unable to compete effectively, our business could be adversely affected.
If our information technology systems fail and our redundant systems or disaster recovery plans are not adequate to address such failures, or if our business interruption insurance does not sufficiently compensate us for any losses that we may incur, our revenues and profits could be reduced and the reputation of our brand and our business could be materially adversely affected.
If our information technology systems fail and our redundant systems or disaster recovery plans are not adequate to address such failures, or if our business interruption insurance does not sufficiently compensate us for any losses that we may incur, our sales and profits could be reduced and the reputation of our brand and our business could be materially adversely affected.
If we are unable to continue to compete effectively on any of the factors mentioned above, our traffic, Shack sales and Restaurant-level profit margins could decline and our business, financial condition and results of operations would be adversely affected. Shake Shack Inc.
If we are unable to continue to compete effectively on any of the factors mentioned above, our traffic, Shack sales and Restaurant-level profit margins could decline and our business, financial condition and results of operations would be adversely affected.
We are dedicated to using sustainable materials and equipment whenever possible, and distinctive furniture and fixtures that advance our sustainability initiatives, as well as being committed to achieving ethical and humane practices for the animals in our supply chain. We also strive to be the best employer and a good citizen in each community we call home.
We are dedicated to using sustainable materials and equipment whenever possible, and distinctive furniture and fixtures that advance our sustainability initiatives, as well as being committed to achieving ethical and humane practices for the animals in our supply chain. We also strive to be the best employer and a good citizen in each community we call home. Shake Shack Inc.
In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. Shake Shack Inc.
In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, if our suppliers fail to comply with food safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. We cannot assure you that we would be able to find replacement suppliers on commercially reasonable terms or a timely basis, if at all. Shake Shack Inc.
In addition, if our suppliers fail to comply with food safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. We cannot assure you that we would be able to find replacement suppliers on commercially reasonable terms or a timely basis, if at all.
If our efforts to maintain and protect our intellectual property are inadequate, or if any third party misappropriates, dilutes or infringes on our intellectual property, the value of our brand may be harmed, which could have a material adverse effect on our business and might prevent our brand from achieving or maintaining market acceptance. Shake Shack Inc.
If our efforts to maintain and protect our intellectual property are inadequate, or if any third party misappropriates, dilutes or infringes on our intellectual property, the value of our brand may be harmed, which could have a material adverse effect on our business and might prevent our brand from achieving or maintaining market acceptance.
We are a holding company and our principal asset is our interest in SSE Holdings, and, accordingly, we will depend on distributions from SSE Holdings to pay our taxes and expenses, including payments under the Tax Receivable Agreement. SSE Holdings' ability to make such distributions may be subject to various limitations and restrictions.
We are a holding company and our principal asset is our interest in SSE Holdings, and, accordingly, we will depend on distributions from SSE Holdings to pay our taxes and expenses, including payments under the Tax Receivable Agreement. SSE Holdings' ability to make such distributions may be subject to various limitations and restrictions. Shake Shack Inc.
We pride ourselves on sourcing premium ingredients from like-minded producers — 100% all-natural proteins with no added hormones or antibiotics that are humanely raised and source verified.
We pride ourselves on sourcing premium ingredients from like-minded producers — 100% all-natural proteins with no added hormones that are humanely raised and source verified.
Additionally, the techniques and sophistication used to conduct cyber-attacks and breaches of information technology systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time.
Additionally, the techniques and sophistication used to conduct cyber-attacks and breaches of information technology systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time. In Shake Shack Inc.
Our significant growth rate could affect the accuracy of our estimates. If a greater amount of claims are reported, or if medical costs increase beyond what we expect, our liabilities may not be sufficient and we could recognize additional expense, which could adversely affect our results of operations.
Our significant growth rate could affect the accuracy of our estimates. If a greater amount of claims are reported, or if medical costs increase beyond what we expect, our liabilities may not be sufficient and we could recognize additional expense, which could adversely affect our results of operations. Shake Shack Inc.
Due to this concentration of suppliers, the cancellation of our supply arrangements with any one of these suppliers or the disruption, delay or inability of these suppliers to deliver these major products to our Shacks may materially and adversely affect our results of operations while we establish alternate distribution channels.
Due to this concentration of suppliers and our food quality expectations, the cancellation of our supply arrangements with any one of these suppliers or the disruption, delay or inability of these suppliers to deliver these major products to our Shacks may materially and adversely affect our results of operations while we establish alternate distribution channels.
We may be adversely affected if any of our third-party service providers experience any interruptions in their systems, which could potentially impact the services we receive from them and cause a material failure or interruption in our own systems.
We may be adversely affected if any of our third-party service providers experience any interruptions in their systems, which could potentially impact the services we receive from them and cause a material failure or interruption in our own systems. Shake Shack Inc.
Generally, our leases are net leases that require us to pay our share of the costs of real estate taxes, utilities, building operating expenses, insurance and other charges in addition to rent. We generally cannot cancel these leases. Additional sites that we lease are likely to be subject to similar long-term, non-cancelable leases.
Form 10-K | 23 Generally, our leases are net leases that require us to pay our share of the costs of real estate taxes, utilities, building operating expenses, insurance and other charges in addition to rent. We generally cannot cancel these leases. Additional sites that we lease are likely to be subject to similar long-term, non-cancelable leases.
Form 10-K | 31 We are also subject in certain states to "dram shop" statutes, which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. We carry liquor liability coverage as part of our existing comprehensive general liability insurance.
We are also subject in certain states to "dram shop" statutes, which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. We carry liquor liability coverage as part of our existing comprehensive general liability insurance.
As a result, our expenses for legal, tax and accounting compliance may be significantly greater than other companies of our size that do not have a similar organizational structure or a tax receivable agreement in place.
As a result, our expenses for legal, tax, and accounting compliance may be significantly greater than other companies of our size that do not have a similar organizational structure or a tax receivable agreement in place. Shake Shack Inc.
In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could be used to satisfy short positions, or anticipated conversion of the Notes into shares of our Class A common stock could depress the price of our Class A common stock.
In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could be used to satisfy short positions, or anticipated conversion of the Notes into shares of our Class A common stock could depress the price of our Class A common stock. Shake Shack Inc.
We do, however, face many challenges in carrying out our purpose to Stand For Something Good. We incur higher costs and other risks associated with purchasing high quality ingredients grown or raised with an emphasis on quality and responsible practices and paying highly competitive compensation to our team members.
Form 10-K | 17 We do, however, face many challenges in carrying out our purpose to Stand For Something Good. We incur higher costs and other risks associated with purchasing high quality ingredients grown or raised with an emphasis on quality and responsible practices and paying highly competitive compensation to our team members.
Form 10-K | 35 We may also from time to time be required to institute litigation to enforce our trademarks, service marks and other intellectual property. Such litigation could result in substantial costs and diversion of resources and could negatively affect our sales, profitability and prospects regardless of whether we are able to successfully enforce our rights.
We may also from time to time be required to institute litigation to enforce our trademarks, service marks and other intellectual property. Such litigation could result in substantial costs and diversion of resources and could negatively affect our sales, profitability and prospects regardless of whether we are able to successfully enforce our rights.
Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money away from our operations. In addition, they may generate negative publicity, which could reduce guest traffic and Shack sales.
Form 10-K | 24 Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money away from our operations. In addition, they may generate negative publicity, which could reduce guest traffic and Shack sales.
In addition to the expected increased costs of labor, if we are unable to identify and recruit a sufficient number of individuals to meet our growing needs, we may need to decrease the operating hours of some of our Shacks, which would result in lost sales.
Form 10-K | 20 In addition to the expected increased costs of labor, if we are unable to identify and recruit a sufficient number of individuals to meet our growing needs, we may need to decrease the operating hours of some of our Shacks, which would result in lost sales.
Our ability to implement our business plan successfully depends in part on our ability to further build brand recognition using our trademarks, service marks, proprietary products and other intellectual property, including our name and logos and the unique character and atmosphere of our Shacks.
Our ability to implement our business plan successfully depends in part on our ability to further build brand recognition in both domestic and international markets using our trademarks, service marks, proprietary products and other intellectual property, including our name and logos and the unique character and atmosphere of our Shacks.
In addition, the laws of some foreign countries do not protect intellectual property to the same extent as the laws of the United States.
The laws of some foreign countries do not protect intellectual property to the same extent as the laws of the United States.
In addition, given our geographic concentrations, negative publicity regarding any of our Shacks in these areas and other regional occurrences such as local strikes, terrorist attacks, increases in energy prices, inclement weather or natural or man-made disasters could have a material adverse effect on our business and operations.
In addition, given our geographic concentrations, negative publicity regarding any of our Shacks in these areas and other regional occurrences such as local strikes, terrorist attacks, increases in essential living costs, inclement weather or natural or man-made disasters could have a material adverse effect on our business and operations.
Any failure to remediate a material weakness, or to implement and maintain effective internal control over financial reporting also could adversely affect the results of management evaluations and independent registered public accounting firm audits of our internal control over financial reporting that we are required to include in our periodic reports that will be filed with the SEC.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of management evaluations and independent registered public accounting firm audits of our internal control over financial reporting that we are required to include in our periodic reports that will be filed with the SEC.
Any future failure to comply with these regulations and obtain or retain licenses could adversely affect our business, financial condition and results of operations. Shake Shack Inc.
Any future failure to comply with these regulations and obtain or retain licenses could adversely affect our business, financial condition and results of operations.
Risks Related to Operating in the Restaurant Industry ▪ Incidents involving food safety and food-borne illnesses could adversely affect guests' perception of our brand, result in lower sales and increase operating costs. ▪ Rising labor costs and difficulties recruiting and retaining the right team members could adversely affect our business. ▪ Increased food commodity and energy costs could decrease our Restaurant-level profit margins or cause us to limit or otherwise modify our menu, which could adversely affect our business. ▪ The digital and delivery business, related expenses, execution and expansion thereof, is uncertain and subject to risk. ▪ We face significant competition for guests, and if we are unable to compete effectively, our business could be adversely affected. ▪ Shortages or interruptions in the supply or delivery of food products could adversely affect our operating results. ▪ Inflationary environment poses a risk to broader demand for restaurants, including ours. ▪ Pandemics or disease outbreaks, such as the COVID-19 pandemic, have disrupted, and may continue to disrupt our business, and have materially affected our business, results of operations and our financial condition. ▪ Our international licensed Shacks import many of our proprietary and other core ingredients from the United States and other countries.
Risks Related to Operating in the Restaurant Industry ▪ Incidents involving food safety and food-borne illnesses could adversely affect guests' perception of our brand, result in lower sales and increase operating costs. ▪ Rising labor costs and difficulties recruiting and retaining the right team members could adversely affect our business. ▪ Increased food commodity and energy costs could decrease our Restaurant-level profit margins or cause us to limit or otherwise modify our menu, which could adversely affect our business. ▪ The digital and delivery strategy, related expenses, execution and expansion thereof, is uncertain and subject to risk. ▪ We face significant competition for guests, and if we are unable to compete effectively, our business could be adversely affected. ▪ Pandemics or disease outbreaks, such as the COVID-19 pandemic, have disrupted, and may continue to disrupt our business, and have materially affected our business, results of operations and our financial condition. ▪ Our international licensed Shacks import many of our proprietary and other core ingredients from the United States and other countries.
General Business and Economic Risks ▪ Damage to our reputation could negatively impact our business, financial condition and results of operations. ▪ Changes in economic conditions, both domestically and internationally, could materially affect our business, financial condition and results of operations. ▪ Because many of our Company-operated Shacks are concentrated in local or regional areas, we are susceptible to economic and other trends and developments, including adverse weather conditions, in these areas. ▪ Security breaches of either confidential guest information in connection with, among other things, our electronic processing of credit and debit card transactions; kiosk, app, or web ordering; or confidential team member information may adversely affect our business. ▪ If we are unable to maintain and update our information technology systems to meet the needs of our business, our business could be adversely impacted. ▪ If we experience a material failure or interruption in our systems, our business could be adversely impacted. ▪ Because a component of our strategy is to continue to grow our licensed business internationally, the risks of doing business internationally could lower our revenues, increase our costs, reduce our profits or disrupt our business. ▪ We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brand and adversely affect our business. ▪ We depend on key members of our executive management team. ▪ Our insurance coverage and self-insurance reserves may not provide adequate levels of coverage against claims.
Form 10-K | 13 General Business and Economic Risks ▪ Damage to our reputation could negatively impact our business, financial condition and results of operations. ▪ Changes in economic conditions, both domestically and internationally, could materially affect our business, financial condition and results of operations. ▪ Because many of our Company-operated Shacks are concentrated in local or regional areas, we are susceptible to economic and other trends and developments, including adverse weather conditions, in these areas. ▪ Security breaches of either confidential guest information in connection with, among other things, our electronic processing of credit and debit card transactions; kiosk, app, or web ordering; or confidential team member information may adversely affect our business. ▪ If we are unable to maintain and update our information technology systems to meet the needs of our business, our business could be adversely impacted. ▪ If we experience a material failure or interruption in our systems, our business could be adversely impacted. ▪ Because a component of our strategy is to continue to grow our licensed business internationally, the risks of doing business internationally could lower our revenues, increase our costs, reduce our profits or disrupt our business. ▪ Our stock price could be extremely volatile, and, as a result, stockholders may not be able to resell shares at or above their purchase price. ▪ We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brand and adversely affect our business. ▪ We depend on key members of our executive management team. ▪ Our insurance coverage and self-insurance reserves may not provide adequate levels of coverage against claims.
Certain provisions in the indenture governing the Notes may delay or prevent an otherwise beneficial takeover attempt of us. Certain provisions in the indenture governing the Notes may make it more difficult or expensive for a third party to acquire us.
Form 10-K | 37 Certain provisions in the indenture governing the Notes may delay or prevent an otherwise beneficial takeover attempt of us. Certain provisions in the indenture governing the Notes may make it more difficult or expensive for a third party to acquire us.
We also could see higher costs from our digital partners which we may not be able to fully offset by price. Information processed by these third parties could also be impacted by cyber attacks, which could not only negatively impact our sales, but also harm our brand image.
We also could see higher costs from our digital partners which we may not be able to fully offset by price. Information processed by these third parties could also be impacted by cyber attacks and guest credit card fraud, which could not only negatively impact our sales, but also harm our brand image.
REGULATORY AND LEGAL RISKS If we fail to develop and maintain effective internal controls over financial reporting, our ability to produce timely and accurate financial information or comply with Section 404 of the Sarbanes-Oxley Act of 2002 could be impaired, which could have a material adverse effect on our business and stock price.
If we fail to develop and maintain effective internal controls over financial reporting, our ability to produce timely and accurate financial information or comply with Section 404 of the Sarbanes-Oxley Act of 2002 could be impaired, which could have a material adverse effect on our business and stock price. Shake Shack Inc.
If we are unable to obtain a sufficient and consistent supply for our ingredients on a cost-effective basis, our food costs could increase or we may experience supply interruptions which could have an adverse effect on our operating margins. Additionally, some of our competitors have announced initiatives to offer better quality ingredients, such as antibiotic-free and fresh meat.
If we are unable to obtain a sufficient and consistent supply for our ingredients on a cost-effective basis, our food costs could increase or we may experience supply interruptions which could have an adverse effect on our operating margins. Additionally, some of our competitors have announced initiatives to offer better quality ingredients.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"), and the listing standards of the New York Stock Exchange.
Form 10-K | 31 As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"), and the listing standards of the New York Stock Exchange.
Such increases have and may continue to cause an increase to our labor and related expenses and cause our Restaurant-level profit margins to decline.
Such increases have and may continue to cause an increase to our labor and related expenses and cause our Restaurant-level profit margins to decline. Shake Shack Inc.
Additionally, changes in behavior and routine may disrupt consumer activity and foot traffic in our Shacks, such as remote and hybrid work practices.
For example, changes in behavior and routine may disrupt consumer activity and foot traffic in our Shacks, such as remote and hybrid work practices.
We are subject to risks associated with leasing property subject to long-term leases. We do not own any real property and all of our Company-operated Shacks are located on leased premises. The leases for our Shacks generally have initial terms ranging from 10 to 15 years and typically include two five-year renewal options.
We are subject to risks associated with leasing property subject to long-term leases. We do not own any real property and all of our Company-operated Shacks are located on leased premises. The leases for our Shacks generally have initial terms ranging from ten to fifteen years and typically include two five-year renewal options. Shake Shack Inc.
Because a component of our strategy is to continue to grow our licensed business internationally, the risks of doing business internationally could lower our revenues, increase our costs, reduce our profits or disrupt our business.
Form 10-K | 27 Because a component of our strategy is to continue to grow our licensed business internationally, the risks of doing business internationally could lower our revenues, increase our costs, reduce our profits or disrupt our business.
If our suppliers or distributor are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs. ▪ Our marketing strategies and channels will evolve and our programs may or may not be successful. ▪ We rely on a limited number of licensees for the operation of our licensed Shacks, and we have limited control with respect to the operations of our licensed Shacks, which could have a negative impact on our reputation and business. ▪ If we fail to maintain our corporate culture, our relationships with our team members and guests could be negatively affected.
If our suppliers or distributor are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs. ▪ We rely on a limited number of licensees for the operation of our licensed Shacks, and we have limited control with respect to the operations of our licensed Shacks, which could have a negative impact on our reputation and business. ▪ If we fail to maintain our corporate culture, our relationships with our team members and guests could be negatively affected.
We are a holding company and have no material assets other than our ownership interest in SSE Holdings, certain deferred tax assets and our note receivable from SSE Holdings.
Form 10-K | 35 We are a holding company and have no material assets other than our ownership interest in SSE Holdings, certain deferred tax assets and our note receivable from SSE Holdings.
Risks Related to Our Organizational Structure ▪ Shake Shack has non-controlling interest holders, whose interests may differ from those of our public stockholders. ▪ Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the non-controlling interest holders that will not benefit Class A common stockholders to the same extent as it will benefit the non-controlling interest holders. ▪ The non-controlling interest holders have the right to have their LLC Interests redeemed or exchanged into shares of Class A common stock, which may cause volatility in our stock price. ▪ We will continue to incur relatively outsized costs as a result of being a public company and in the administration of our complex organizational structure. ▪ Our anti-takeover provisions could prevent or delay a change in control of our Company, even if such change in control would be beneficial to our stockholders. ▪ We do not currently expect to pay any cash dividends.
Risks Related to Our Organizational Structure ▪ Shake Shack has non-controlling interest holders, whose interests may differ from those of our public stockholders. ▪ Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the non-controlling interest holders that will not benefit Class A common stockholders to the same extent as it will benefit the non-controlling interest holders. ▪ We will continue to incur relatively outsized costs as a result of being a public company and in the administration of our complex organizational structure. ▪ Our anti-takeover provisions could prevent or delay a change in control of our Company, even if such change in control would be beneficial to our stockholders. ▪ We do not currently expect to pay any cash dividends.
In addition, if our licensees fail to make investments necessary to maintain or improve their Shacks, guest preference for the Shake Shake Shack Inc. Form 10-K | 24 Shack brand could suffer. Failure of these Shacks to operate effectively could adversely affect the results of operations from our licensed business or have a negative impact on our reputation.
In addition, if our licensees fail to make investments necessary to maintain or upgrade their Shacks, guest preference for the Shake Shack brand could suffer. Failure of these Shacks to operate effectively could adversely affect the results of operations from our licensed business or have a negative impact on our reputation.
During fiscal 2024, we purchased our (i) ground beef patties from 10 approved ground beef processors, with approximately 40% of our ground beef patties from one supplier; (ii) chicken breasts from two suppliers; (iii) potato buns from two suppliers; (iv) custard base from four suppliers; (v) 'Shroom Burgers from one supplier; (vi) crinkle cut fries from three suppliers; and (vii) ShackSauce from one supplier.
During fiscal 2025, we purchased our (i) ground beef patties from 11 approved ground beef processors, with approximately 38% of our ground beef patties from one supplier; (ii) chicken breasts from two suppliers; (iii) potato buns from two suppliers; (iv) custard base from three suppliers; (v) 'Shroom Burgers from one supplier; (vi) crinkle cut fries from three suppliers; and (vii) ShackSauce from one supplier.
There can be no assurance that we will be able to fund or finance our obligations Shake Shack Inc. Form 10-K | 43 under the Tax Receivable Agreement. Furthermore, any increases in the federal corporate tax rate may result in an increase in our Tax Receivable Agreement liability, including a gross up of our deferred tax balances.
There can be no assurance that we will be able to fund or finance our obligations under the Tax Receivable Agreement. Furthermore, any increases in the federal corporate tax rate may result in an increase in our Tax Receivable Agreement liability, including a gross up of our deferred tax balances.
Our anti-takeover provisions could prevent or delay a change in control of our Company, even if such change in control would be beneficial to our stockholders.
Form 10-K | 34 Our anti-takeover provisions could prevent or delay a change in control of our Company, even if such change in control would be beneficial to our stockholders.
Ultimately, the risks associated with any such negative publicity or incorrect information cannot be completely eliminated or mitigated and may materially harm our reputation, business, financial condition and results of operations. Shake Shack Inc. Form 10-K | 32 Changes in economic conditions, both domestically and internationally, could materially affect our business, financial condition and results of operations.
Ultimately, the risks associated with any such negative publicity or incorrect information cannot be completely eliminated or mitigated and may materially harm our reputation, business, financial condition and results of operations. Changes in economic conditions, both domestically and internationally, could materially affect our business, financial condition and results of operations.
Form 10-K | 44 Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our Class A common stock. The conversion of some or all of the Notes may dilute the ownership interests of our stockholders.
Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our Class A common stock. The conversion of some or all of the Notes may dilute the ownership interests of our stockholders.
Form 10-K | 30 sustainability and social matters affecting our industry and meeting evolving stakeholder expectations, our brand image may suffer, which could lead to a loss of sales. Certain investors may choose not to invest in our securities if we do not meet their relevant ESG expectations, which may continue to evolve over time.
If we are not effective in addressing environmental, sustainability and social matters affecting our industry and meeting evolving stakeholder expectations, our brand image may suffer, which could lead to a loss of sales. Certain investors may choose not to invest in our securities if we do not meet their relevant ESG expectations, which may continue to evolve over time.
Form 10-K | 34 ▪ the imposition of restrictions on currency conversion or the transfer of funds or limitations on our ability to repatriate non-U.S. earnings in a tax effective manner; ▪ inability to achieve international tax treaty status with select licensed partners; ▪ the possibility of business corruption in various international markets; ▪ the ability to comply with, or impact of complying with, complex and changing laws, regulations and policies of foreign governments that may affect investments or operations, including foreign ownership restrictions, import and export controls, tariffs, embargoes, intellectual property, licensing requirements and regulations and changes in applicable tax laws; ▪ the enforceability of contract rights; ▪ the difficulties involved in managing an organization doing business in many different countries; ▪ the ability to comply with, or impact of complying with, complex and changing laws, regulations and economic policies of the U.S. government, including U.S. laws and regulations relating to economic sanctions, export controls and anti-boycott requirements; ▪ increase in an anti-American sentiment and the identification of the licensed brand as an American brand; ▪ the effect of disruptions caused by severe outbreak of disease, weather, natural disasters or other events that make travel to a particular region, as well as domestic visits, less attractive or more difficult; and ▪ political, social and economic instability.
As a result, we are and will be, on an increasing basis, subject to the risks of doing business outside the United States, including: ▪ changes in foreign currency exchange rates or currency restructurings and hyperinflation or deflation in the countries in which we operate; ▪ the imposition of restrictions on currency conversion or the transfer of funds or limitations on our ability to repatriate non-U.S. earnings in a tax effective manner; ▪ inability to achieve international tax treaty status with select licensed partners; ▪ the possibility of business corruption in various international markets; ▪ the ability to comply with, or impact of complying with, complex and changing laws, regulations and policies of foreign governments that may affect investments or operations, including foreign ownership restrictions, import and export controls, tariffs, embargoes, intellectual property, licensing requirements and regulations and changes in applicable tax laws; ▪ the enforceability of contract rights; ▪ the difficulties involved in managing an organization doing business in many different countries; ▪ the ability to comply with, or impact of complying with, complex and changing laws, regulations and economic policies of the U.S. government, including U.S. laws and regulations relating to economic sanctions, export controls and anti-boycott requirements; ▪ increase in an anti-American sentiment and the identification of the licensed brand as an American brand; ▪ the effect of disruptions caused by severe outbreak of disease, weather, natural disasters or other events that make travel to a particular region, as well as domestic visits, less attractive or more difficult; and ▪ political, social and economic instability.
RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE Shake Shack has non-controlling interest holders, whose interests may differ from those of our public stockholders. As of December 25, 2024, the non-controlling interest holders control approximately 13.2% of the combined voting power of our common stock through their ownership of both our Class A and Class B common stock.
RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE Shake Shack has non-controlling interest holders, whose interests may differ from those of our public stockholders. As of December 31, 2025, the non-controlling interest holders control approximately 12.9% of the combined voting power of our common stock through their ownership of both our Class A and Class B common stock.
Due to these scenarios we cannot provide assurance that we will be successful in preventing such breaches or data loss. Shake Shack Inc. Form 10-K | 33 Additionally, the information, security and privacy requirements imposed by governmental regulation are increasingly demanding.
Due to these scenarios we cannot provide assurance that we will be successful in preventing such breaches or data loss. Additionally, the information, security and privacy requirements imposed by governmental regulation are increasingly demanding.
In this manner, increased costs could adversely affect our results of operations. Additionally, with elevated inflationary pressures across the business, we face an above average risk that we will have to renegotiate contracts and agreements with suppliers on a more frequent basis.
All of these things may be difficult to predict and beyond our control. In this manner, increased costs could adversely affect our results of operations. Additionally, with elevated inflationary pressures across the business, we face an above average risk that we will have to renegotiate contracts and agreements with suppliers on a more frequent basis.
Additionally, the use of social media platforms and similar devices provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact.
Shake Shack Inc. Form 10-K | 25 Additionally, the use of social media platforms and similar devices provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact.
In addition, certain of the non-controlling interest holders may hold, and may from time to time in the future acquire interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business or the business of our Shake Shack Inc. Form 10-K | 40 suppliers.
In addition, certain of the non-controlling interest holders may hold, and may from time to time in the future acquire interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business or the business of our suppliers.
Should our competitors increase spending on marketing and advertising or our marketing funds decrease for any reason, or should our advertising and promotions be less effective than those of our competitors, there could be a material adverse effect on our business, financial condition and results of operations.
Should our competitors increase spending on marketing and advertising or our marketing funds decrease for any reason, or should our advertising and promotions be less effective than those of our competitors, there could be a material adverse effect on our business, financial condition and results of operations. Our purpose to Stand For Something Good subjects us to risks.
Form 10-K | 25 may also have a more difficult time recovering from a food-borne illness incident and may be required to incur significant costs to repair our reputation.
We may also have a difficult time recovering from a food-borne illness incident and may be required to incur significant costs to repair our reputation.
These risks are discussed more fully below and include, but are not limited to the following: Risks Related to Our Growth Strategies and Operations ▪ Our long-term success is dependent on the selection, design and execution of appropriate business strategies. ▪ Our primary growth strategy is highly dependent on the availability of suitable locations and our ability to develop and open new Shacks on a timely basis and on terms attractive to us. ▪ Our plans to open new Shacks, the ongoing need for capital expenditures at our existing Shacks and our ongoing digital enhancements require us to spend capital. ▪ Our expansion into new domestic markets may present increased risks, which could affect our profitability. ▪ Our failure to manage our growth effectively could harm our business and operating results. ▪ New Shacks, once opened, may not be profitable, and may negatively affect Shack sales at our existing Shacks. ▪ Our investments to enhance the guest experience through expanding the availability of our drive-thru options has required and will continue to require significant capital expenditures and may not generate the expected returns. ▪ If we are unable to maintain and grow Shack sales at our existing Shacks, our financial performance could be adversely affected. ▪ Our purpose to Stand For Something Good subjects us to risks. ▪ We have a limited number of suppliers for our major products and rely on one national distribution company for the majority of our domestic distribution needs.
These risks are discussed more fully below and include, but are not limited to the following: Risks Related to Our Growth Strategies and Operations ▪ Our long-term success is dependent on the selection, design and execution of appropriate business strategies. ▪ Our primary growth strategy is highly dependent on the availability of suitable locations and our ability to develop and open new Shacks on a timely basis and on terms attractive to us. ▪ Our plans to open new Shacks, the ongoing need for capital expenditures at our existing Shacks and our ongoing digital enhancements require us to spend capital. ▪ Our expansion into new domestic markets may present increased risks, which could affect our profitability. ▪ Our failure to manage our growth effectively could harm our business and operating results. ▪ New Shacks, once opened, may not be profitable, and may negatively affect Shack sales at our existing Shacks. ▪ Our marketing strategies and channels will evolve and our programs may not be successful. ▪ Our purpose to Stand For Something Good subjects us to risks. ▪ We have a limited number of suppliers for our major products and rely on one national distribution company for the majority of our domestic distribution needs.
The non-controlling interest holders may also pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.
The non-controlling interest holders may also Shake Shack Inc. Form 10-K | 33 pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.
Our ability to respond to increased costs by increasing prices or by implementing alternative processes or products will depend on our ability to anticipate and react to such increases and other more general economic and demographic conditions, as well as the responses of our competitors and guests. All of these things may be difficult to predict and beyond our control.
Our ability to respond to increased costs by increasing menu prices or by implementing alternative processes or products will depend on our ability to anticipate and react to such increases and other more general economic and demographic conditions, as well as the responses of our competitors and guests.
We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brand and adversely affect our business.
Shake Shack Inc. Form 10-K | 28 We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brand and adversely affect our business.
Cannibalization of Shack sales among our Shacks may become significant in the future as we continue to expand our operations and could adversely affect our Shack sales growth, which could, in turn, adversely affect our business, financial condition and results of operations.
Cannibalization of Shack sales among our Shacks may become significant in the future as we continue to expand our operations and could adversely affect our Shack sales growth, which could, in turn, adversely affect our business, financial condition and results of operations. Our marketing strategies and channels will evolve and our programs may not be successful.
For example, the current avian flu has impacts on the costs of poultry and eggs. Other events, including events for products we do not serve, could increase commodity prices or cause shortages that could affect the cost and quality of the items we buy or require us to further raise prices or limit our menu items.
Other events, including events for products we do not serve, could increase commodity prices or cause shortages that could affect the cost and quality of the items we buy or require us to further raise prices or limit our menu items.
As a result, our expenses for legal, tax and accounting compliance may be significantly greater than other companies of our size that do not have a similar organizational structure or a tax receivable agreement in place.
We have and will continue to incur significant expenses in connection with the administration of our organizational structure. As a result, our expenses for legal, tax and accounting compliance may be significantly greater than other companies of our size that do not have a similar organizational structure or a tax receivable agreement in place.
Our profitability depends, in part, on our ability to anticipate and react to changes in the price and availability of food commodities, including among other things beef, poultry, fries, grains, dairy, and produce. Prices may be affected due to market Shake Shack Inc.
Our profitability depends, in part, on our ability to anticipate and react to changes in the price and availability of food commodities, including among other things beef, poultry, fries, grains, dairy, and produce.
We have experienced pressure to make commitments relating to sustainability matters that affect companies in our industry, including the design and implementation of specific risk mitigation strategic initiatives relating to sustainability and the environment. If we are not effective in addressing environmental, Shake Shack Inc.
We have experienced pressure to make commitments relating to sustainability matters that affect companies in our industry, including the design and implementation of specific risk mitigation strategic initiatives relating to sustainability and the environment.
We believe that our culture of Enlightened Hospitality and our purpose to Stand For Something Good creates a truly differentiated experience for our guests and is one of the reasons guests choose to dine with us and team members choose us as a place of employment.
We believe that our purpose to Stand For Something Good creates a truly differentiated experience for our guests and is one of the reasons guests choose to Shake Shack Inc. Form 10-K | 19 dine with us and team members choose us as a place of employment.
Regulatory requirements, both domestic and abroad, have been changing with increasing regulation relating to the privacy, security and protection of data. Such regulatory requirements may become more prevalent in other states and jurisdictions as well.
The collection and use of such information is regulated at the federal and state levels, as well as internationally. Regulatory requirements, both domestic and abroad, have been changing with increasing regulation relating to the privacy, security and protection of data. Such regulatory requirements may become more prevalent in other states and jurisdictions as well.
We may experience ownership changes in the future, some of which are outside our control. This could limit the amount of NOLs that we can utilize annually to offset future taxable income or tax liabilities. Subsequent statutory or regulatory changes in respect of the utilization of NOLs for federal or Shake Shack Inc.
We may experience ownership changes in the future, some of which are outside our control. This could limit the amount of NOLs that we can utilize annually to offset future taxable income or tax liabilities.
The number and timing of new Shacks opened during any given period may be negatively impacted by a number of factors including: ▪ identification and availability of attractive sites for new Shacks; ▪ difficulty negotiating suitable lease terms; ▪ shortages of construction labor, materials, and restaurant equipment; ▪ recruitment and training of qualified personnel in the local market; ▪ our ability to obtain all required governmental permits in a timely manner, including zoning approvals; Shake Shack Inc.
The number and timing of new Shacks opened during any given period may be negatively impacted by a number of factors including: ▪ identification and availability of attractive sites for new Shacks; ▪ difficulty negotiating suitable lease terms; ▪ shortages of construction labor, materials, or restaurant equipment; ▪ recruitment and training of qualified personnel in the local market; ▪ our ability to obtain all required governmental permits in a timely manner, including zoning approvals; ▪ our ability to control construction and development costs of new Shacks, particularly in inflationary environments and including the impacts of tariffs or the responses of other governments, consumers or suppliers to U.S. imposed tariffs; ▪ competition in new markets, including competition for appropriate sites; Shake Shack Inc.
As of December 25, 2024, 11 licensees operated all of our domestic licensed Shacks and 10 licensees operated all of our international licensed Shacks, with one such licensee operating 34% of our international licensed Shacks and one such licensee operating 32% of our domestic licensed Shacks.
As of December 31, 2025, 11 licensees operated all of our domestic licensed Shacks and 10 licensees operated all of our international licensed Shacks, with one such licensee operating 30% of our international licensed Shacks and one such licensee operating 30% of our domestic licensed Shacks.
As of December 25, 2024, 206 of our 250 licensed Shacks are located outside the United States and we expect to continue to expand our licensed operations internationally.
As of December 31, 2025, 239 of our 286 licensed Shacks are located outside the United States and we expect to continue to expand our licensed operations internationally.
Regulatory and Legal Risks ▪ We may be unable to develop and maintain effective internal controls over financial reporting. ▪ We are subject to many federal, state, local and foreign laws and regulations, as well as other statutory and regulatory requirements, with which compliance is both costly and complex.
Regulatory and Legal Risks ▪ We are subject to many federal, state, local and foreign laws and regulations, as well as other statutory and regulatory requirements, with which compliance is both costly and complex.
Form 10-K | 26 changes, increased competition, the general risk of inflation, the impacts of tariffs or the responses of other governments, consumers or suppliers to U.S. imposed tariffs, shortages or interruptions in supply due to weather, disease or other conditions beyond our control, or other reasons.
Prices may be affected due to market changes, increased competition, the impacts of tariffs or the responses of other governments consumers or suppliers to U.S. imposed tariffs, shortages or interruptions in supply due to weather, disease or other conditions beyond our control, or other reasons.
Our profitability is also adversely affected by increases in the price of utilities, such as natural gas, electric and water, whether as a result of inflation, shortages or interruptions in supply, or otherwise.
In addition, the use of these arrangements may limit our ability to benefit from favorable price movements. Our profitability is also adversely affected by increases in the price of utilities, such as natural gas, electric, and water, whether as a result of inflation, shortages or interruptions in supply, or otherwise.
Form 10-K | 18 ▪ The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results. ▪ Restaurant companies have been the target of class action lawsuits and other proceedings that are costly, divert management attention and, if successful, could result in our payment of substantial damages or settlement costs. ▪ Our business is subject to risks related to our sale of alcoholic beverages.
If this international supply chain is interrupted, our international licensed operations could encounter supply shortages and incur higher costs. ▪ We are subject to risks associated with leasing property subject to long-term leases. ▪ The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results. ▪ Restaurant companies have been the target of class action lawsuits and other proceedings that are costly, divert management attention and, if successful, could result in our payment of substantial damages or settlement costs. ▪ Our business is subject to risks related to our sale of alcoholic beverages.
In addition, as has happened when other restaurant concepts have tried to expand, we may find that our concept has limited appeal in new markets or we may experience a decline in the popularity of our concept in the markets in which we operate.
In addition, we may find that our concept has limited appeal in new markets or we may experience a decline in the popularity of our concept in the markets in which we operate.
Form 10-K | 39 state purposes, such as suspensions on the use of NOLs or limitations on the deductibility of NOLs carried forward, or other unforeseen reasons, may result in our existing NOLs expiring or otherwise being unavailable to offset future income tax liabilities.
Subsequent statutory or regulatory changes in respect of the utilization of NOLs for federal or state purposes, such as suspensions on the use of NOLs or limitations on the deductibility of NOLs carried forward, or other unforeseen reasons, may result in our existing NOLs expiring or otherwise being unavailable to offset future income tax liabilities. Shake Shack Inc.

… 117 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−1 removed11 unchanged
Biggest changeOur cybersecurity risk management program includes: ▪ Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; ▪ A security team led by our Chief Information and Technology Officer principally responsible for managing our (1) cybersecurity risk assessment processes, (2) security controls, and (3) response to cybersecurity incidents; ▪ the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls and designed to anticipate cyber-attacks and prevent breaches; Shake Shack Inc.
Biggest changeOur cybersecurity risk management program includes: ▪ Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; ▪ A security team led by our Chief Information and Technology Officer principally responsible for managing our (1) cybersecurity risk assessment processes, (2) security controls, and (3) response to cybersecurity incidents; ▪ The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls and designed to anticipate cyber-attacks and prevent breaches; ▪ Cybersecurity awareness training of our employees, incident response personnel, and senior management; ▪ A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ▪ A structured third-party risk management program that includes due diligence, contractual security requirements, and continuous monitoring for service providers, suppliers, and vendors to mitigate risks associated with external partnerships.
Cybersecurity risks are actively monitored through continuous security assessments, real-time threat intelligence, and adaptive security controls, enable proactive adjustments to our security program as threats evolve.
Cybersecurity risks are actively monitored through continuous security assessments, real-time threat intelligence, and adaptive security controls, which enable proactive adjustments to our security program as threats evolve.
While these risks and threats, as well as others we identify, require active and ongoing efforts to mitigate, we have not currently identified any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
While these risks and threats, as well as others we identify, require active and ongoing efforts to mitigate, we have not currently Shake Shack Inc. Form 10-K | 38 identified any prior cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Removed
Form 10-K | 45 ▪ cybersecurity awareness training of our employees, incident response personnel, and senior management; ▪ a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ▪ a structured third-party risk management program that includes due diligence, contractual security requirements, and continuous monitoring for service providers, suppliers, and vendors to mitigate risks associated with external partnerships..

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−1 removed0 unchanged
Biggest changeCompany- Operated Licensed Total Alabama 1 — 1 Arizona 5 1 6 California 49 1 50 Colorado 9 1 10 Connecticut 8 — 8 Delaware 1 — 1 District of Columbia 6 1 7 Florida 22 2 24 Georgia 7 1 8 Illinois 12 — 12 Indiana 3 1 4 Kansas 1 — 1 Kentucky 1 — 1 Louisiana 3 1 4 Maryland 9 1 10 Massachusetts 15 1 16 Michigan 8 — 8 Minnesota 4 1 5 Missouri 6 3 9 Nevada 6 2 8 New Hampshire 1 — 1 New Jersey 19 7 26 New York 46 10 56 North Carolina 7 2 9 Ohio 7 1 8 Oregon 3 — 3 Pennsylvania 14 2 16 Rhode Island 3 — 3 Tennessee 5 1 6 Texas 26 2 28 Utah 4 1 5 Virginia 9 1 10 Washington 6 — 6 Wisconsin 3 — 3 DOMESTIC 329 44 373 Bahamas — 1 1 Shake Shack Inc.
Biggest changeCompany- Operated Licensed Total Alabama 1 — 1 Arizona 8 1 9 California 50 — 50 Colorado 9 1 10 Connecticut 9 — 9 Delaware 1 — 1 District of Columbia 6 1 7 Florida 25 2 27 Georgia 8 1 9 Illinois 14 — 14 Indiana 4 1 5 Kansas 2 — 2 Kentucky 1 — 1 Louisiana 3 1 4 Maryland 10 1 11 Massachusetts 16 1 17 Michigan 8 — 8 Minnesota 4 1 5 Missouri 7 3 10 Nevada 6 2 8 New Hampshire 1 — 1 New Jersey 20 8 28 New York 55 12 67 North Carolina 8 2 10 Ohio 10 1 11 Oklahoma 1 — 1 Oregon 4 — 4 Pennsylvania 17 3 20 Rhode Island 3 — 3 Tennessee 5 1 6 Texas 27 2 29 Utah 6 1 7 Virginia 13 1 14 Washington 8 — 8 Wisconsin 3 — 3 Shake Shack Inc.
We do not own any real property, nor do we own or lease any property related to our licensed Shacks. The following table sets forth the number of Company-operated and licensed Shacks by geographic location as of December 25, 2024.
We do not own any real property and lease all of our Company-operated Shacks, and we do not own or lease any property related to our licensed Shacks. The following table sets forth the number of Company-operated and licensed Shacks by geographic location as of December 31, 2025.
Form 10-K | 47 Bahrain — 3 3 Canada — 2 2 Mainland China, Hong Kong and Macau — 47 47 Israel — 2 2 Japan — 14 14 Kuwait — 15 15 Malaysia — 2 2 Mexico — 18 18 Philippines — 8 8 Qatar — 5 5 Saudi Arabia — 5 5 Singapore — 10 10 South Korea — 29 29 Thailand — 4 4 Turkey — 9 9 United Arab Emirates — 15 15 United Kingdom — 16 16 Wales — 1 1 INTERNATIONAL — 206 206 SYSTEM-WIDE 329 250 579
Form 10-K | 40 DOMESTIC 373 47 420 Bahamas — 1 1 Bahrain — 3 3 Canada — 6 6 England — 17 17 Mainland China, Hong Kong and Macau — 51 51 Israel — 5 5 Japan — 18 18 Kuwait — 14 14 Malaysia — 4 4 Mexico — 21 21 Philippines — 11 11 Qatar — 5 5 Saudi Arabia — 5 5 Singapore — 11 11 South Korea — 34 34 Thailand — 5 5 Turkey — 12 12 United Arab Emirates — 15 15 Wales — 1 1 INTERNATIONAL — 239 239 SYSTEM-WIDE 373 286 659
Removed
Item 2. Properties. Our home office is located at 225 Varick Street, Suite 301, New York, NY 10014. We lease our home office, which is approximately 32,000 square feet and all of our Company-operated Shacks. We also lease an international office in Hong Kong.
Added
Item 2. Properties. We have three Shack Support Centers, located in New York City, Hong Kong, and The Battery Atlanta, all of which are leased locations. Our newest Shack Support Center, located in The Battery Atlanta, opened in fiscal 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeAs of December 25, 2024, we do not expect the amount of ultimate liability with respect to these matters to be material to the Company's financial condition, results of operations or cash flows. Shake Shack Inc. Form 10-K | 48 Part II
Biggest changeAs of December 31, 2025, we do not expect the amount of ultimate liability with respect to these matters to be material to the Company's financial condition, results of operations or cash flows. Shake Shack Inc. Form 10-K | 41 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed5 unchanged
Biggest changeComparison of 5 Year Cumulative Total Return 12/25/2019 12/30/2020 12/29/2021 12/28/2022 12/27/2023 12/25/2024 Shake Shack Inc. $ 100.00 $ 141.55 $ 116.95 $ 70.98 $ 126.67 $ 220.23 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 S&P 600 Restaurants Index 100.00 126.87 121.51 96.84 117.55 139.43 Shake Shack Inc. Form 10-K | 50 Item 6. Selected Financial Data.
Biggest changeComparison of 5 Year Cumulative Total Return 12/30/2020 12/29/2021 12/28/2022 12/27/2023 12/25/2024 12/31/2025 Shake Shack Inc. $ 100.00 $ 82.62 $ 50.14 $ 89.49 $ 155.59 $ 95.65 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 S&P 600 Restaurants Index 100.00 95.77 76.33 92.66 109.90 93.67 Shake Shack Inc. Form 10-K | 43 Item 6. Selected Financial Data.
As of February 12, 2025, there were 16 shareholders of record of our Class B common stock. DIVIDEND POLICY We currently intend to retain all available funds and any future earnings for use in the operation of our business, and therefore we do not currently expect to pay any cash dividends on our Class A common stock.
As of February 18, 2026, there were 15 shareholders of record of our Class B common stock. DIVIDEND POLICY We currently intend to retain all available funds and any future earnings for use in the operation of our business, and therefore we do not currently expect to pay any cash dividends on our Class A common stock.
HOLDERS OF RECORD As of February 12, 2025, there were 159 shareholders of record of our Class A common stock. The number of record holders does not include persons who held shares of our Class A common stock in nominee or "street name" accounts through brokers.
HOLDERS OF RECORD As of February 18, 2026, there were 143 shareholders of record of our Class A common stock. The number of record holders does not include persons who held shares of our Class A common stock in nominee or "street name" accounts through brokers.
Form 10-K | 49 STOCK PERFORMANCE GRAPH The following graph and table illustrate the total return from December 25, 2019 through December 25, 2024 for (i) our Class A common stock, (ii) the Standard and Poor's 500 Index, and (iii) the Standard and Poor’s 600 Restaurants Index, assuming an investment of $100 on December 25, 2019 including the reinvestment of dividends, where applicable.
Form 10-K | 42 STOCK PERFORMANCE GRAPH The following graph and table illustrate the total return from December 30, 2020 through December 31, 2025 for (i) our Class A common stock, (ii) the Standard and Poor's 500 Index, and (iii) the Standard and Poor’s 600 Restaurants Index, assuming an investment of $100 on December 30, 2020 including the reinvestment of dividends, where applicable.
Not applicable. Shake Shack Inc. Form 10-K | 51
Not applicable. Shake Shack Inc. Form 10-K | 44

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

106 edited+19 added−13 removed59 unchanged
Biggest changeForm 10-K | 55 RESULTS OF OPERATIONS The following table summarizes our results of operations for fiscal 2024 and fiscal 2023: (dollar amounts in thousands) 2024 2023 Shack sales $ 1,207,561 96.4 % $ 1,046,819 96.3 % Licensing revenue 45,047 3.6 % 40,714 3.7 % TOTAL REVENUE 1,252,608 100.0 % 1,087,533 100.0 % Shack-level operating expenses (1) : Food and paper costs 339,940 28.2 % 305,041 29.1 % Labor and related expenses 338,750 28.1 % 304,254 29.1 % Other operating expenses 178,381 14.8 % 149,449 14.3 % Occupancy and related expenses 93,069 7.7 % 79,846 7.6 % General and administrative expenses 149,047 11.9 % 129,542 11.9 % Depreciation and amortization expense 102,468 8.2 % 91,242 8.4 % Pre-opening costs 15,547 1.2 % 19,231 1.8 % Impairments, loss on disposal of assets, and Shack closures 32,368 2.6 % 3,007 0.3 % TOTAL EXPENSES 1,249,570 99.8 % 1,081,612 99.5 % INCOME FROM OPERATIONS 3,038 0.2 % 5,921 0.5 % Other income, net 13,251 1.1 % 12,776 1.2 % Interest expense (2,045) (0.2) % (1,717) (0.2) % INCOME BEFORE INCOME TAXES 14,244 1.1 % 16,980 1.6 % Income tax expense (benefit) 3,424 0.3 % (4,010) (0.4) % NET INCOME 10,820 0.9 % 20,990 1.9 % Less: Net income attributable to non-controlling interests 613 — % 726 0.1 % NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. $ 10,207 0.8 % $ 20,264 1.9 % (1) As a percentage of Shack sales.
Biggest changeForm 10-K | 48 RESULTS OF OPERATIONS The following table summarizes our results of operations for fiscal 2025 and fiscal 2024: (dollar amounts in thousands) 2025 (1) 2024 Shack sales $ 1,391,166 96.3 % $ 1,207,561 96.4 % Licensing revenue 54,140 3.7 % 45,047 3.6 % TOTAL REVENUE 1,445,306 100.0 % 1,252,608 100.0 % Shack-level operating expenses (2) : Food and paper costs 396,714 28.5 % 339,940 28.2 % Labor and related expenses 360,693 25.9 % 338,750 28.1 % Other operating expenses 212,677 15.3 % 178,381 14.8 % Occupancy and related expenses 106,632 7.7 % 93,069 7.7 % General and administrative expenses 176,233 12.2 % 149,047 11.9 % Depreciation and amortization expense 106,600 7.4 % 102,468 8.2 % Pre-opening costs 18,001 1.2 % 15,547 1.2 % Impairments, loss on disposal of assets, and Shack closures 5,248 0.4 % 32,368 2.6 % TOTAL EXPENSES 1,382,798 95.7 % 1,249,570 99.8 % INCOME FROM OPERATIONS 62,508 4.3 % 3,038 0.2 % Other income, net 12,260 0.8 % 13,251 1.1 % Interest expense (2,159) (0.1) % (2,045) (0.2) % INCOME BEFORE INCOME TAXES 72,609 5.0 % 14,244 1.1 % Income tax expense 22,903 1.6 % 3,424 0.3 % NET INCOME 49,706 3.4 % 10,820 0.9 % Less: Net income attributable to non-controlling interests 3,981 0.3 % 613 — % NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. $ 45,725 3.2 % $ 10,207 0.8 % (1) We operate on a 52/53 week fiscal year ending on the last Wednesday of December.
The components of Food and paper costs are variable by nature, change with sales volume, impacted by menu mix, channel mix and fluctuations in commodity costs, as well as geographic scale and proximity.
The components of Food and paper costs are variable by nature, change with sales volume, and are impacted by menu mix, channel mix and fluctuations in commodity costs, as well as geographic scale and proximity.
Presentation of adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share should not be considered alternatives to Net income (loss) and earnings (loss) per share, as determined under GAAP.
Presentation of adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should not be considered alternatives to Net income and earnings (loss) per share, as determined under GAAP.
By assuming the full exchange of all outstanding LLC Interests, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income (loss) attributable to Shake Shack Inc. driven by increases in our ownership of SSE Holdings, which are unrelated to our operating performance, and excludes items that are non-recurring or may not be indicative of our ongoing operating performance.
By assuming the full exchange of all outstanding LLC Interests, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income attributable to Shake Shack Inc. driven by increases in our ownership of SSE Holdings, which are unrelated to our operating performance, and excludes items that are non-recurring or may not be indicative of our ongoing operating performance.
Adjusted Pro Forma Net Income (Loss) and Adjusted Pro Forma Earnings (Loss) Per Fully Exchanged and Diluted Share Adjusted pro forma net income (loss) represents Net income (loss) attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring items that we do not believe are directly related to our core operations and may not be indicative of our recurring business operations.
Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share Adjusted pro forma net income represents Net income attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring items that we do not believe are directly related to our core operations and may not be indicative of our recurring business operations.
Impairments, loss on disposal of assets, and Shack closures Impairments, loss on disposal of assets, and Shack closures primarily consists of the net book value of assets that have been retired which primarily consists of furniture, equipment and fixtures that were replaced in the normal course of business; impairment charges related to our long-lived assets, which includes property and equipment, as well as operating and finance lease assets; and miscellaneous Shack closure expenses, including employee-related costs, cleaning, and sign removal costs.
Impairments, loss on disposal of assets, and Shack closures Impairments, loss on disposal of assets, and Shack closures primarily consists of the net book value of assets that have been retired which mainly includes furniture, equipment and fixtures that were replaced in the normal course of business; impairment charges related to our long-lived assets, which includes property and equipment, as well as operating and finance lease assets; and miscellaneous Shack closure expenses, including employee-related costs, cleaning, and sign removal costs.
NON-GAAP FINANCIAL MEASURES To supplement the Consolidated Financial Statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we use the following non-GAAP financial measures: Restaurant-level profit, Restaurant-level profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma net income (loss), and adjusted pro forma earnings (loss) per fully exchanged and diluted share (collectively the "non-GAAP financial measures").
NON-GAAP FINANCIAL MEASURES To supplement the Consolidated Financial Statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we use the following non-GAAP financial measures: Restaurant-level profit, Restaurant-level profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma net income, and adjusted pro forma earnings per fully exchanged and diluted share (collectively the "non-GAAP financial measures").
Adjusted EBITDA is defined as EBITDA (as defined above) excluding equity-based compensation expense, Impairments, loss on disposal of assets, and Shack closures, amortization of cloud-based software implementation costs, as well as certain non-recurring items that we do not believe directly reflect our core operations and may not be indicative of our recurring business operations.
Adjusted EBITDA is defined as EBITDA excluding equity-based compensation expense, Impairments, loss on disposal of assets, and Shack closures, amortization of cloud-based software implementation costs, as well as certain non-recurring items that we do not believe directly reflect our core operations and may not be indicative of our recurring business operations.
Adjusted pro forma earnings (loss) per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income (loss) by the weighted average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Interests, after giving effect to the dilutive effect of outstanding equity-based awards. Shake Shack Inc.
Adjusted pro forma earnings per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income by the weighted average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Interests, after giving effect to the dilutive effect of outstanding equity-based awards. Shake Shack Inc.
Any interest and penalties associated with uncertain tax positions are included in Income tax expense (benefit) in the accompanying Consolidated Statements of Income (Loss). A valuation allowance is established for deferred tax assets if it is more likely than not that they will not be realized.
Any interest and penalties associated with uncertain tax positions are included in Income tax expense (benefit) in the accompanying Consolidated Statements of Income. A valuation allowance is established for deferred tax assets if it is more likely than not that they will not be realized.
While these measures are useful in evaluating our performance, they do not account for the earnings attributable to the non-controlling interest holders and therefore do not provide a complete understanding of the Net income (loss) attributable to Shake Shack Inc.
While these measures are useful in evaluating our performance, they do not account for the earnings attributable to the non-controlling interest holders and therefore do not provide a complete understanding of the Net income attributable to Shake Shack Inc.
Limitations of the Usefulness of These Measures Adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share may differ from similarly titled measures used by other companies due to different methods of calculation.
Limitations of the Usefulness of These Measures Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share may differ from similarly titled measures used by other companies due to different methods of calculation.
A reconciliation of adjusted pro forma net income (loss) to Net income (loss) attributable to Shake Shack Inc., the most directly comparable GAAP measure, and the computation of adjusted pro forma earnings (loss) per fully exchanged and diluted share are set forth below.
A reconciliation of adjusted pro forma net income to Net income attributable to Shake Shack Inc., the most directly comparable GAAP measure, and the computation of adjusted pro forma earnings per fully exchanged and diluted share are set forth below.
Of these amounts, revenue is limited to licensing revenue based on a percentage of sales from licensed Shacks, as well as certain up-front fees, such as territory fees and opening fees.
Of these amounts, revenue is limited to licensing revenue based on a percentage of sales from licensed Shacks, as well as certain up-front fees, such as territory fees, opening fees, and termination fees.
Form 10-K | 68 Valuation of Long-Lived Assets We assess potential impairments to our long-lived assets, which includes property and equipment and operating and finance lease assets, at least annually or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability evaluation is first performed at the market service area level ("MSA").
Form 10-K | 61 Valuation of Long-Lived Assets We assess potential impairments to our long-lived assets, which includes property and equipment and operating and finance lease assets, at least annually or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability evaluation is first performed at the market service area level ("MSA").
Adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share should be evaluated in conjunction with our GAAP financial results.
Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should be evaluated in conjunction with our GAAP financial results.
Form 10-K | 69 Liabilities Under Tax Receivable Agreement As detailed in Note 14 of the Consolidated Financial Statements included in Item 8, we are party to a Tax Receivable Agreement ("TRA") under which we are obliged to pay non-controlling interest holders 85% of any tax benefits we realize, or are deemed to realize, as a result of specific transactions.
Form 10-K | 62 Liabilities Under Tax Receivable Agreement As detailed in Note 14 of the Consolidated Financial Statements included in Item 8, we are party to a Tax Receivable Agreement ("TRA") under which we are obliged to pay non-controlling interest holders 85% of any tax benefits we realize, or are deemed to realize, as a result of specific transactions.
Forward-looking statement reflect our current views with respect to future events and are based on certain assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from trends, plans, or expectations set forth in the forward-looking statement, as set forth in this Form 10-.
Forward-looking statements reflect our current views with respect to future events and are based on certain assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from trends, plans, or expectations set forth in the forward-looking statement, as set forth in this Form 10-K.
Form 10-K | 52 OVERVIEW Shake Shack serves modern, fun and elevated versions of American classics using only premium ingredients. We are known for our made-to-order 100% Angus beef burgers, crispy chicken, hand-spun milkshakes, house-made lemonades, beer, wine, and more.
Form 10-K | 45 OVERVIEW Shake Shack serves modern, fun and elevated versions of American classics using only premium ingredients. We are known for our made-to-order 100% Angus beef burgers, crispy chicken, hand-spun milkshakes, house-made lemonades, beer, wine, and more.
Although the amount of any payments that must be made under the Tax Receivable Agreement may be significant, the timing of these payments will vary and will generally be limited to one payment per member per year. The amount of such payments are also limited to the extent we utilize the related deferred tax assets.
Although the amount of any payments that must be made under the Tax Receivable Agreement may be significant, the timing of these payments will vary and will generally be limited to one payment per member per year. The amount of such payments is also limited to the extent we utilize the related deferred tax assets.
There were no transactions subject to the TRA for which we did not recognize the related liability, as we concluded that we would have sufficient future taxable income to utilize all of the related tax benefits generated by all transactions that occurred in fiscal 2024.
There were no transactions subject to the TRA for which we did not recognize the related liability, as we concluded that we would have sufficient future taxable income to utilize all of the related tax benefits generated by all transactions that occurred in fiscal 2025.
EBITDA and Adjusted EBITDA EBITDA is defined as Net income (loss) before Interest expense (net of interest income), Income tax expense (benefit) and Depreciation and amortization expense.
EBITDA and Adjusted EBITDA EBITDA is defined as Net income before Interest expense (net of interest income), Income tax expense (benefit) and Depreciation and amortization expense.
Our ongoing capital expenditures are principally related to opening new Shacks, existing Shack capital investments (both for remodels and maintenance), as well as investments in our corporate technology infrastructure to support our home office, Shake Shack locations, and digital strategy. In addition, we are obligated to make payments to certain members of SSE Holdings under the Tax Receivable Agreement.
Our ongoing capital expenditures are principally related to opening new Shacks, existing Shack capital investments (both for remodels and maintenance), as well as investments in our corporate technology infrastructure to support our Shack Support Centers, Shake Shack locations, and digital strategy. In addition, we are obligated to make payments to certain members of SSE Holdings under the Tax Receivable Agreement.
Form 10-K | 64 How These Measures Are Useful When used in conjunction with GAAP financial measures, adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors.
Form 10-K | 57 How These Measures Are Useful When used in conjunction with GAAP financial measures, adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors.
All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about the Company's growth, including our long-term growth goals, strategic initiatives, and liquidity. Forward-looking statements discuss our current expectations, targets and projections relating to our financial position, results of operations, plans, objectives, future performance and business.
All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about our growth, including our long-term growth goals, strategic priorities and initiatives, and liquidity. Forward-looking statements discuss our current expectations, targets and projections relating to our financial position, results of operations, plans, objectives, future performance and business.
Form 10-K | 63 Limitations of the Usefulness of These Measures EBITDA and adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation.
Form 10-K | 56 Limitations of the Usefulness of These Measures EBITDA and adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation.
The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us or to SSE Holdings, but we expect the cash tax savings we will realize from the utilization of the related deferred tax assets to fund the required payments. Shake Shack Inc.
The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us or to SSE Holdings, but we expect the cash tax savings we will realize from the utilization of the related deferred tax assets to fund the required payments.
OFF-BALANCE SHEET ARRANGEMENTS Except for operating leases entered into in the normal course of business where we have not yet taken physical possession of the leased property, certain letters of credit entered into and the unrecorded contractual obligations set forth above, we did not have any other off-balance sheet arrangements as of December 25, 2024.
OFF-BALANCE SHEET ARRANGEMENTS Except for operating leases entered into in the normal course of business where we have not yet taken physical possession of the leased property, certain letters of credit entered into and the unrecorded contractual obligations set forth above, we did not have any other off-balance sheet arrangements as of December 31, 2025.
The Third Amended and Restated Limited Liability Company Agreement of SSE Holdings provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis.
Form 10-K | 54 The Third Amended and Restated Limited Liability Company Agreement of SSE Holdings provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis.
As of December 25, 2024, we were in compliance with all covenants. Contractual Obligations Material contractual obligations arising in the normal course of business primarily consist of operating and finance lease obligations, long-term debt, liabilities under the Tax Receivable Agreement and purchase obligations.
As of December 31, 2025, we were in compliance with all covenants. Contractual Obligations Material contractual obligations arising in the normal course of business primarily consist of operating and finance lease obligations, long-term debt, liabilities under the Tax Receivable Agreement and purchase obligations.
Form 10-K | 60 Interest Expense Interest expense generally consists of interest on the current portion of our liabilities under the Tax Receivable Agreement, imputed interest related to our financing equipment leases, amortization of deferred financing costs, interest and fees on our Revolving Credit Facility and amortization of debt issuance costs.
Interest Expense Interest expense generally consists of interest on the current portion of our liabilities under the Tax Receivable Agreement, imputed interest related to our financing equipment leases, amortization of deferred financing costs, interest and fees on our Revolving Credit Facility and amortization of debt issuance costs.
As of December 25, 2024 and December 27, 2023, no amounts were outstanding under the Revolving Credit Facility. The obligations under the Revolving Credit Facility are secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors.
As of December 31, 2025 and December 25, 2024, no amounts were outstanding under the Revolving Credit Facility. The obligations under the Revolving Credit Facility are secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors.
(8) Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation of Adjusted Pro Forma Net Income (Loss) above, for additional information. LIQUIDITY AND CAPITAL RESOURCES Sources and Uses of Cash Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, short-term investments and availability under our Revolving Credit Facility.
(9) Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation of Adjusted pro forma net income above, for additional information. LIQUIDITY AND CAPITAL RESOURCES Sources and Uses of Cash Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, and availability under our Revolving Credit Facility.
Restaurant-Level Profit Restaurant-level profit, formerly referred to as Shack-level operating profit, is defined as Shack sales less Shack-level operating expenses which include Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses.
Restaurant-Level Profit Restaurant-level profit is defined as Shack sales less Shack-level operating expenses which include Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses.
Accordingly, we consolidate the financial results of SSE Holdings and report a non-controlling interest on our Consolidated Statements of Income (Loss), representing the portion of net income attributable to the other members of SSE Holdings.
Accordingly, we consolidate the financial results of SSE Holdings and report a non-controlling interest on our Consolidated Statements of Income, representing the portion of net income attributable to the other members of SSE Holdings. Shake Shack Inc.
Therefore, these measures may not provide a complete understanding of our performance and should be reviewed in conjunction with our GAAP financial measures. A reconciliation of EBITDA and adjusted EBITDA to Net income (loss), the most directly comparable GAAP measure, is as follows.
Therefore, these measures may not provide a complete understanding of our performance and should be reviewed in conjunction with our GAAP financial measures. Reconciliations of EBITDA and adjusted EBITDA to Net income, the most directly comparable GAAP measure, were as follows.
The decrease was primarily due to a decline in net results compared to the same period last year, partially offset by a decrease in the non-controlling interest holders' weighted average ownership, which was 6.2% and 6.7%, respectively for fiscal 2024 and fiscal 2023.
The increase was primarily due to increased net results compared to the same period last year, partially offset by a decrease in the non-controlling interest holders' weighted average ownership, which was 5.7% and 6.2%, respectively for fiscal 2025 and fiscal 2024.
As of December 25, 2024, we recognized $247.7 million of liabilities relating to our obligations under the TRA, after concluding that it was probable that we would have sufficient future taxable income to utilize the related tax benefits.
As of December 31, 2025 and December 25, 2024, respectively, we recognized $246.8 million and $247.7 million of liabilities relating to our obligations under the TRA, after concluding that it was probable that we would have sufficient future taxable income to utilize the related tax benefits.
As a percentage of Shack sales, the decrease in Labor and related expenses for fiscal 2024 was primarily due to labor efficiencies and sales leverage, partially offset by increased wages and incremental expenses from the opening of 43 new Company-operated Shacks during fiscal 2024.
As a percentage of Shack sales, the decrease in Labor and related expenses for fiscal 2025 was primarily due to labor efficiencies and sales leverage, partially offset by incremental expenses from the opening of 45 new Company-operated Shacks during fiscal 2025.
Form 10-K | 59 Pre-Opening Costs Pre-opening costs consist primarily of occupancy, manager and team member wages, cookware, travel and lodging costs for our opening training team and other supporting team members, marketing expenses, legal fees and inventory costs incurred prior to the opening of a Shack.
Pre-Opening Costs Pre-opening costs consist primarily of occupancy, manager and team member wages, cookware, travel and lodging costs for our opening training team and other supporting team members, marketing expenses, legal fees and inventory costs incurred prior to the opening of a Company-operated Shack.
As of December 25, 2024, we maintained a Cash and cash equivalents balance of $320.7 million. In March 2021, we issued 0% Convertible Senior Notes (“Convertible Notes”), and received $243.8 million of proceeds, net of discounts. Refer to Note 8, Debt, in the accompanying Consolidated Financial Statements, for additional information.
As of December 31, 2025, we maintained a Cash and cash equivalents balance of $360.1 million. In March 2021, we issued 0% Convertible Senior Notes (“Convertible Notes”), and received $243.8 million of proceeds, net of discounts. Refer to Note 8, Debt, in the accompanying Consolidated Financial Statements, for additional information.
Occupancy and Related Expenses Occupancy and related expenses consist of Shack-level occupancy expenses (including rent, common area expenses and certain local taxes), and exclude occupancy expenses associated with unopened Shacks, which are recorded separately in Pre-opening costs. Shake Shack Inc.
Form 10-K | 51 Occupancy and Related Expenses Occupancy and related expenses consist of Shack-level occupancy expenses (including rent, common area expenses and certain local taxes), and exclude occupancy expenses associated with unopened Shacks, which are recorded separately in Pre-opening costs.
As of December 25, 2024, such obligations totaled $247.7 million. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws.
As of December 31, 2025, such obligations totaled $246.8 million. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws.
Summary of Cash Flows The following table presents a summary of our cash flows from operating, investing and financing activities.
Form 10-K | 59 Summary of Cash Flows The following table presents a summary of our cash flows from operating, investing and financing activities.
For the fifty-two weeks ended December 25, 2024 and December 27, 2023, this exchange is included in weighted-average shares of Class A common stock outstanding-diluted and therefore no additional share and per share adjustments are required. (2) Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
For fiscal 2024 and 2023 , this exchange is included in weighted-average shares of Class A common stock outstanding-diluted and therefore no additional share and per share adjustments are required. (3) Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
Form 10-K | 65 (1) Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income (loss) attributable to non-controlling interests.
(2) Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income attributable to non-controlling interests.
Form 10-K | 66 We believe our existing cash and cash equivalents balances and cash from operations will be sufficient to fund our operating and finance lease obligations, capital expenditures, Tax Receivable Agreement obligations and working capital needs for at least the next 12 months and the foreseeable future.
We believe our existing cash and cash equivalents balances and cash from operations will be sufficient to fund our operating and finance lease obligations, capital expenditures, Tax Receivable Agreement obligations and working capital needs for at least the next 12 months. Shake Shack Inc.
This increase was primarily due to a $50.5 million improvement in net results after excluding non-cash charges, partially offset by changes in working capital of $11.4 million.
This increase was primarily due to a $49.2 million improvement in net results after excluding non-cash charges, partially offset by changes in working capital of $2.0 million.
As a percentage of Shack sales, the increase in Other operating expenses for fiscal 2024 was primarily due to increased delivery commissions associated with higher delivery sales and increased marketing spend, partially offset by sales leverage.
As a percentage of Shack sales, the increase in Other operating expenses for fiscal 2025 was primarily due to increased delivery commissions associated with the growth in our digital business and increased marketing spend, partially offset by sales leverage. Shake Shack Inc.
(7) For the fifty-two weeks ended December 25, 2024, December 27, 2023 and December 28, 2022, amounts represent the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 20.1%, 24.5% and 31.0%, respectively, which include provisions for U.S. federal income taxes, certain LLC entity-level taxes and foreign withholding taxes, assuming the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.
(8) For fiscal 2025, 2024 and 2023, amounts represent the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 24.6%, 20.1% and 24.5%, respectively, which include provisions for U.S. federal income taxes, certain LLC entity-level taxes and foreign withholding taxes, assuming the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.
(5) Expenses incurred to establish accruals related to the settlements of legal matters. Refer to Note 17, Commitments and Contingencies, in the accompanying Consolidated Financial Statements, for additional information. (6) Expenses incurred for professional fees related to non-recurring matters.
Refer to Note 17, Commitments and Contingencies, in the accompanying Consolidated Financial Statements, for additional information. (7) Expenses incurred for professional fees related to non-recurring matters.
License fees are calculated as a percentage of sales and territory fees are payments for the exclusive right to develop Shacks in a specific geographic area.
Licensing Revenue Licensing revenue is comprised of license fees and opening fees, territory fees, and termination fees for certain licensed Shacks. License fees are calculated as a percentage of sales and territory fees are payments for the exclusive right to develop Shacks in a specific geographic area.
There were six permanent licensed Shack closures and nine permanent Company-operated Shack closures in fiscal 2024. Below are Shacks opened during the fourth quarter of 2024.
There were four permanent licensed Shack closures and one permanent Company-operated Shack closure in fiscal 2025. Below are Shacks opened during the fourth quarter of 2025.
Revolving Credit Facility In August 2019, we entered into a Revolving Credit Facility, which matures in March 2026 and permits borrowings up to $50.0 million, with the ability to increase available borrowings up to an additional $100.0 million, subject to satisfaction of certain conditions.
Revolving Credit Facility In August 2019, we entered into a Revolving Credit Facility, which permits borrowings up to $50.0 million, with the ability to increase available borrowings up to an additional $100.0 million, subject to satisfaction of certain conditions. The Revolving Credit Facility also permits the issuance of letters of credit upon our request of up to $15.0 million.
(dollar amounts in thousands) 2024 2023 Shack sales $ 1,207,561 $ 1,046,819 Percentage of Total revenue 96.4 % 96.3 % Dollar change compared to prior year $ 160,742 Percentage change compared to prior year 15.4 % Shack sales for the fiscal year ended December 25, 2024 increased 15.4% to $1.2 billion versus the prior year.
(dollar amounts in thousands) 2025 2024 Shack sales $ 1,391,166 $ 1,207,561 Percentage of Total revenue 96.3 % 96.4 % Dollar change compared to prior year $ 183,605 Percentage change compared to prior year 15.2 % Shack sales for the fiscal year ended December 31, 2025 increased 15.2% to $1.4 billion versus the prior year.
Same-Shack sales for the thirteen weeks ended December 25, 2024 increased 4.3% compared to the same period last year, driven by a 4.8% increase in price mix, partially offset by a 0.5% decline in guest traffic.
Same-Shack sales 1 for the fiscal year ended December 31, 2025 increased 2.3% compared to the same period last year, driven by a 3.1% increase in price mix, partially offset by a 0.8% decline in guest traffic.
As a percentage of Total revenue, General and administrative expenses were flat for fiscal 2024 primarily due to sales leverage offset by the aforementioned items. Depreciation and Amortization Expense Depreciation and amortization expense primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment.
As a percentage of Total revenue, the increase in General and administrative expenses for fiscal 2025 was primarily due to the aforementioned items. Depreciation and Amortization Expense Depreciation and amortization expense primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment.
(dollar amounts in thousands) 2024 2023 Interest expense $ (2,045) $ (1,717) Percentage of Total revenue (0.2) % (0.2) % Dollar change compared to prior year $ (328) Percentage change compared to prior year 19.1 % Interest expense for the fiscal year ended December 25, 2024 increased 19.1% to $2.0 million versus the prior year.
(dollar amounts in thousands) 2025 2024 Interest expense $ (2,159) $ (2,045) Percentage of Total revenue (0.1) % (0.2) % Dollar change compared to prior year $ (114) Percentage change compared to prior year 5.6 % Interest expense for the fiscal year ended December 31, 2025 increased 5.6% to $2.2 million versus the prior year.
For discussion of our results of operations and changes in financial condition for fiscal 2023 compared to fiscal 2022 refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the fiscal year ended December 27, 2023, filed on February 29, 2024.
The additional operating week of fiscal 2025 is referred to as the "53rd week." For discussion of our results of operations and changes in financial condition for fiscal 2024 compared to fiscal 2023 refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the fiscal year ended December 25, 2024, filed on February 21, 2025.
The increase was primarily due to increased investments in marketing and increased wages and other team costs to support our Shack growth and strategic initiatives, as well as costs associated with the prior restatement of prior periods included in the fiscal 2023 Form 10-K.
The increase was primarily due to increased investments in marketing as well as increased wages and other team costs to support our Shack growth, partially offset by a decrease in professional fees related to non-recurring matters and costs associated with the restatement of prior periods included in the fiscal 2023 Form 10-K.
(dollar amounts in thousands) 2024 2023 Impairments, loss on disposal of assets, and Shack closures $ 32,368 $ 3,007 Percentage of Total revenue 2.6 % 0.3 % Dollar change compared to prior year $ 29,361 Impairments, loss on disposal of assets, and Shack closures for the fiscal year ended December 25, 2024 increased to $32.4 million versus the prior year.
(dollar amounts in thousands) 2025 2024 Impairments, loss on disposal of assets, and Shack closures $ 5,248 $ 32,368 Percentage of Total revenue 0.4 % 2.6 % Dollar change compared to prior year $ (27,120) Impairments, loss on disposal of assets, and Shack closures for the fiscal year ended December 31, 2025 decreased to $5.2 million versus the prior year.
The increase was primarily due to the openings from the fiscal 2023 class of Shacks, which contributed approximately $20.7 million of incremental expense as well as the opening of 43 new Company-operated Shacks during fiscal 2024, which contributed approximately $18.2 million. Shake Shack Inc.
The increase was primarily due to the openings from the fiscal 2024 class of Shacks, which contributed approximately $24.8 million of incremental expense as well as the opening of 45 new Company-operated Shacks during fiscal 2025, which contributed Shake Shack Inc. Form 10-K | 50 approximately $20.8 million.
(in thousands, except per share amounts) 2024 2023 2022 Numerator: Net income (loss) attributable to Shake Shack Inc. $ 10,207 $ 20,264 $ (21,229) Adjustments: Reallocation of Net income (loss) attributable to non-controlling interests from the assumed exchange of LLC Interests (1) 613 726 (1,876) Restatement costs (2) 2,378 — — CEO transition costs 679 206 — Employee benefit charges (3) 453 — — Impairment charge and Shack closures (4) 29,348 — 99 Legal settlements (5) — 619 6,710 Severance — 211 — Gift card breakage cumulative catch-up adjustment — — (1,281) Other (6) 3,652 3,386 — Tax impact of above adjustments (7) (6,785) (9,254) 4,636 Adjusted pro forma net income (loss) $ 40,545 $ 16,158 $ (12,941) Denominator: Weighted average shares of Class A common stock outstanding—diluted 44,203 43,899 39,237 Adjustments: Assumed exchange of LLC Interests for shares of Class A common stock (1) — — 2,892 Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding—diluted 44,203 43,899 42,129 Adjusted pro forma earnings (loss) per fully exchanged share—diluted $ 0.92 $ 0.37 $ (0.31) 2024 2023 2022 Earnings (loss) per share of Class A common stock—diluted $ 0.24 $ 0.48 $ (0.54) Assumed exchange of LLC Interests for shares of Class A common stock (1) — — (0.01) Non-GAAP adjustments (8) 0.68 (0.11) 0.24 Adjusted pro forma earnings (loss) per fully exchanged share—diluted $ 0.92 $ 0.37 $ (0.31) Shake Shack Inc.
(in thousands, except per share amounts) 2025 (1) 2024 2023 Numerator: Net income attributable to Shake Shack Inc. $ 45,725 $ 10,207 $ 20,264 Adjustments: Reallocation of Net income attributable to non-controlling interests from the assumed exchange of LLC Interests (2) 3,981 613 726 Restatement costs (3) 354 2,378 — CEO transition costs 35 679 206 Employee benefit charges (4) — 453 — Impairment charges and Shack closures (5) 2,949 29,348 — Legal settlements (6) 983 — 619 Severance 379 — 211 Other (7) 3 3,652 3,386 Tax impact of above adjustments (8) 3,906 (6,785) (9,254) Adjusted pro forma net income $ 58,315 $ 40,545 $ 16,158 Denominator: Weighted average shares of Class A common stock outstanding—diluted 41,847 44,203 43,899 Adjustments: Assumed exchange of LLC Interests for shares of Class A common stock (2) 2,441 — — Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding—diluted 44,288 44,203 43,899 Adjusted pro forma earnings per fully exchanged share—diluted $ 1.32 $ 0.92 $ 0.37 2025 2024 2023 Earnings per share of Class A common stock—diluted $ 1.09 $ 0.24 $ 0.48 Assumed exchange of LLC Interests for shares of Class A common stock (2) 0.03 — — Non-GAAP adjustments (9) 0.20 0.68 (0.11) Adjusted pro forma earnings per fully exchanged share—diluted $ 1.32 $ 0.92 $ 0.37 Shake Shack Inc.
Restaurant-level profit excludes certain costs, such as General and administrative expenses and Pre-opening costs, which are considered normal, recurring cash operating expenses and are essential to support the operation and development of our Shacks.
Restaurant-level profit excludes certain costs, such as General and administrative expenses and Pre-opening costs, which are considered normal, recurring cash operating expenses and are essential to support the operation and development of our Shacks. Therefore, this measure may not provide a complete understanding of the operating results of our Company as a Shake Shack Inc.
The increase was primarily due to increased finance lease charges from the opening of 43 new Company-operated Shacks during fiscal 2024. Income Tax Expense (Benefit) We are the sole managing member of SSE Holdings, and as a result, consolidate the financial results of SSE Holdings.
The increase was primarily due to increased finance lease charges from the opening of 45 new Company-operated Shacks during fiscal 2025, partially offset by a decrease in various sales tax audit assessment charges compared to prior year. Income Tax Expense We are the sole managing member of SSE Holdings, and as a result, consolidate the financial results of SSE Holdings.
(in thousands) 2024 2023 Net cash provided by operating activities $ 171,155 $ 132,139 Net cash used in investing activities (66,079) (132,320) Net cash used in financing activities (9,017) (5,684) Effect of exchange rate changes on cash and cash equivalents 2 (3) Net Increase (decrease) in cash and cash equivalents 96,061 (5,868) Cash and cash equivalents at beginning of period 224,653 230,521 Cash and cash equivalents at end of period $ 320,714 $ 224,653 Operating Activities For fiscal 2024, net cash provided by operating activities was $171.2 million compared to $132.1 million for fiscal 2023, an increase of $39.1 million.
(in thousands) 2025 2024 Net cash provided by operating activities $ 222,355 $ 171,155 Net cash used in investing activities (165,849) (66,079) Net cash used in financing activities (17,097) (9,017) Effect of exchange rate changes on cash and cash equivalents — 2 Net Increase in cash and cash equivalents 39,409 96,061 Cash and cash equivalents at beginning of period 320,714 224,653 Cash and cash equivalents at end of period $ 360,123 $ 320,714 Operating Activities For fiscal 2025, net cash provided by operating activities was $222.4 million compared to $171.2 million for fiscal 2024, an increase of $51.2 million.
(dollar amounts in thousands) 2024 2023 Other operating expenses $ 178,381 $ 149,449 Percentage of Shack sales 14.8 % 14.3 % Dollar change compared to prior year $ 28,932 Percentage change compared to prior year 19.4 % Other operating expenses for the fiscal year ended December 25, 2024 increased 19.4% to $178.4 million versus the prior year.
(dollar amounts in thousands) 2025 2024 Other operating expenses $ 212,677 $ 178,381 Percentage of Shack sales 15.3 % 14.8 % Dollar change compared to prior year $ 34,296 Percentage change compared to prior year 19.2 % Other operating expenses for the fiscal year ended December 31, 2025 increased 19.2% to $212.7 million versus the prior year.
(dollar amounts in thousands) 2024 2023 Pre-opening costs $ 15,547 $ 19,231 Percentage of Total revenue 1.2 % 1.8 % Dollar change compared to prior year $ (3,684) Percentage change compared to prior year (19.2) % Pre-opening costs for the fiscal year ended December 25, 2024 decreased 19.2% to $15.5 million versus the prior year.
(dollar amounts in thousands) 2025 2024 Pre-opening costs $ 18,001 $ 15,547 Percentage of Total revenue 1.2 % 1.2 % Dollar change compared to prior year $ 2,454 Percentage change compared to prior year 15.8 % Pre-opening costs for the fiscal year ended December 31, 2025 increased 15.8% to $18.0 million versus the prior year.
Form 10-K | 67 In June 2023, the Company entered into the fourth amendment to the Revolving Credit Facility ("Fourth Amendment"), which, among other things, modified the benchmark interest rate to either: (i) the base rate plus applicable margin ranging from 0.0% to 1.5% or (ii) the Secured Overnight Financing Rate (“SOFR”) plus applicable margin ranging from 1.0% to 2.5%, in each case depending on the net lease adjusted leverage ratio.
Form 10-K | 60 Outstanding borrowings under the Revolving Credit Facility bear interest at either: (i) the base rate plus applicable margin ranging from 0.0% to 1.5% or (ii) the Secured Overnight Financing Rate (“SOFR”) plus applicable margin ranging from 1.0% to 2.5%, in each case depending on the net lease adjusted leverage ratio.
Form 10-K | 58 (dollar amounts in thousands) 2024 2023 Occupancy and related expenses $ 93,069 $ 79,846 Percentage of Shack sales 7.7 % 7.6 % Dollar change compared to prior year $ 13,223 Percentage change compared to prior year 16.6 % Occupancy and related expenses for the fiscal year ended December 25, 2024 increased 16.6% to $93.1 million versus the prior year.
(dollar amounts in thousands) 2025 2024 Occupancy and related expenses $ 106,632 $ 93,069 Percentage of Shack sales 7.7 % 7.7 % Dollar change compared to prior year $ 13,563 Percentage change compared to prior year 14.6 % Occupancy and related expenses for the fiscal year ended December 31, 2025 increased 14.6% to $106.6 million versus the prior year.
(dollar amounts in thousands) 2024 2023 Other income, net $ 13,251 $ 12,776 Percentage of Total revenue 1.1 % 1.2 % Dollar change compared to prior year $ 475 Percentage change compared to prior year 3.7 % Other income, net for the fiscal year ended December 25, 2024 increased from $12.8 million to $13.3 million.
Form 10-K | 53 (dollar amounts in thousands) 2025 2024 Other income, net $ 12,260 $ 13,251 Percentage of Total revenue 0.8 % 1.1 % Dollar change compared to prior year $ (991) Percentage change compared to prior year (7.5) % Other income, net for the fiscal year ended December 31, 2025 decreased from $13.3 million to $12.3 million.
(dollar amounts in thousands) 2024 2023 Income tax expense (benefit) $ 3,424 $ (4,010) Percentage of Total revenue 0.3 % (0.4) % Dollar change compared to prior year $ 7,434 Percentage change compared to prior year (185.4) % Our effective income tax rate for the fiscal year ended December 25, 2024 increased to 24.0% from (23.6)% in the prior year.
(dollar amounts in thousands) 2025 2024 Income tax expense $ 22,903 $ 3,424 Percentage of Total revenue 1.6 % 0.3 % Dollar change compared to prior year $ 19,479 Percentage change compared to prior year 568.9 % Our effective income tax rate for the fiscal year ended December 31, 2025 increased to 31.5% from 24.0% in the prior year.
(dollar amounts in thousands) 2024 2023 General and administrative expenses $ 149,047 $ 129,542 Percentage of Total revenue 11.9 % 11.9 % Dollar change compared to prior year $ 19,505 Percentage change compared to prior year 15.1 % General and administrative expenses for the fiscal year ended December 25, 2024 increased 15.1% to $149.0 million versus the prior year.
(dollar amounts in thousands) 2025 2024 General and administrative expenses $ 176,233 $ 149,047 Percentage of Total revenue 12.2 % 11.9 % Dollar change compared to prior year $ 27,186 Percentage change compared to prior year 18.2 % General and administrative expenses for the fiscal year ended December 31, 2025 increased 18.2% to $176.2 million versus the prior year.
(dollar amounts in thousands) 2024 2023 Licensing revenue $ 45,047 $ 40,714 Percentage of Total revenue 3.6 % 3.7 % Dollar change compared to prior year $ 4,333 Percentage change compared to prior year 10.6 % Licensing revenue for the fiscal year ended December 25, 2024 increased 10.6% to $45.0 million versus the prior year.
(dollar amounts in thousands) 2025 2024 Licensing revenue $ 54,140 $ 45,047 Percentage of Total revenue 3.7 % 3.6 % Dollar change compared to prior year $ 9,093 Percentage change compared to prior year 20.2 % Licensing revenue for the fiscal year ended December 31, 2025 increased 20.2% to $54.1 million versus the prior year.
(dollar amounts in thousands) 2024 2023 Labor and related expenses $ 338,750 $ 304,254 Percentage of Shack sales 28.1 % 29.1 % Dollar change compared to prior year $ 34,496 Percentage change compared to prior year 11.3 % Labor and related expenses for the fiscal year ended December 25, 2024 increased 11.3% to $338.8 million versus the prior year.
(dollar amounts in thousands) 2025 2024 Labor and related expenses $ 360,693 $ 338,750 Percentage of Shack sales 25.9 % 28.1 % Dollar change compared to prior year $ 21,943 Percentage change compared to prior year 6.5 % Labor and related expenses for the fiscal year ended December 31, 2025 increased 6.5% to $360.7 million versus the prior year.
(dollar amounts in thousands) 2024 2023 Food and paper costs $ 339,940 $ 305,041 Percentage of Shack sales 28.2 % 29.1 % Dollar change compared to prior year $ 34,899 Percentage change compared to prior year 11.4 % Food and paper costs for the fiscal year ended December 25, 2024 increased 11.4% to $339.9 million versus the prior year.
(dollar amounts in thousands) 2025 2024 Food and paper costs $ 396,714 $ 339,940 Percentage of Shack sales 28.5 % 28.2 % Dollar change compared to prior year $ 56,774 Percentage change compared to prior year 16.7 % Food and paper costs for the fiscal year ended December 31, 2025 increased 16.7% to $396.7 million versus the prior year.
The increase was primarily due to expenses related to the closure of nine Company-operated Shacks in August 2024. Other Income, Net Other income, net consists primarily of interest income, adjustments to liabilities under the Tax Receivable Agreement, dividend income and net unrealized and realized gains and losses from marketable securities.
Other Income, Net Other income, net consists primarily of interest income, adjustments to liabilities under the Tax Receivable Agreement, dividend income, and net unrealized and realized gains and losses from marketable securities. Shake Shack Inc.
(dollar amounts in thousands) 2024 2023 2022 Net income (loss) $ 10,820 $ 20,990 $ (23,105) Depreciation and amortization expense 102,468 91,242 72,796 Interest (income) expense, net 1,284 (726) 1,518 Income tax expense (benefit) 3,424 (4,010) (1,180) EBITDA 117,996 107,496 50,029 Equity-based compensation 15,915 15,093 13,326 Amortization of cloud-based software implementation costs 2,138 1,798 1,500 Impairments, loss on disposal of assets, and Shack closures 32,368 3,007 2,425 Restatement costs (1) 2,378 — — CEO transition costs 679 206 — Employee benefit charges (2) 453 — — Legal settlements (3) — 619 6,710 Severance — 211 — Gift card breakage cumulative catch-up adjustment — — (1,281) Other (4) 3,652 3,386 — Adjusted EBITDA $ 175,579 $ 131,816 $ 72,709 Adjusted EBITDA margin (5) 14.0% 12.1% 8.1% (1) Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
(dollar amounts in thousands) 2025 (1) 2024 2023 Net income $ 49,706 $ 10,820 $ 20,990 Depreciation and amortization expense 106,600 102,468 91,242 Interest (income) expense, net 1,994 1,284 (726) Income tax expense (benefit) 22,903 3,424 (4,010) EBITDA 181,203 117,996 107,496 Equity-based compensation 19,503 15,915 15,093 Amortization of cloud-based software implementation costs 2,188 2,138 1,798 Impairments, loss on disposal of assets, and Shack closures 5,248 32,368 3,007 Restatement costs (2) 354 2,378 — CEO transition costs 35 679 206 Employee benefit charges (3) — 453 — Legal settlements (4) 983 — 619 Severance 379 — 211 Other (5) 3 3,652 3,386 Adjusted EBITDA $ 209,896 $ 175,579 $ 131,816 Adjusted EBITDA margin (6) 14.5% 14.0% 12.1% (1) The Company operates on a 52/53 week fiscal year.
(dollar amounts in thousands) 2024 2023 Net income attributable to non-controlling interests $ 613 $ 726 Percentage of Total revenue — % 0.1 % Shake Shack Inc. Form 10-K | 61 Net income attributable to non-controlling interests for the fiscal year ended December 25, 2024 decreased from $0.7 million to $0.6 million.
(dollar amounts in thousands) 2025 2024 Net income attributable to non-controlling interests $ 3,981 $ 613 Percentage of Total revenue 0.3 % — % Net income attributable to non-controlling interests for the fiscal year ended December 31, 2025 increased from $0.6 million to $4.0 million.
The increase was primarily due to the openings from the fiscal 2023 class of Shacks weighted to the second half of fiscal 2023, which contributed approximately $4.6 million, as well as the opening of 43 new Company-operated Shacks during fiscal 2024.
The increase was primarily due to the openings from the fiscal 2024 class of Shacks, which contributed approximately $7.7 million of incremental expense as well as the opening of 45 new Company-operated Shacks during fiscal 2025, which contributed $4.3 million, partially offset by the closure of nine Company-operated Shacks in fiscal 2024.

… 58 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed8 unchanged
Biggest changeIncome (loss) from operations would have decreased or increased by approximately $3.3 million and $3.0 million in 2024 and 2023, respectively, if all foreign currencies uniformly weakened or strengthened 10% relative to the U.S. dollar, holding other variables constant, including sales volume.
Biggest changeIncome from operations would have decreased or increased by approximately $3.8 million and $3.3 million in fiscal 2025 and fiscal 2024, respectively, if all foreign currencies uniformly weakened or strengthened 10% relative to the U.S. dollar, holding other variables constant, including sales volume.
If several of the various costs in our business experience inflation at the same time, we may not be able to adjust prices to sufficiently offset the effect of the various cost increases without negatively impacting consumer demand. Shake Shack Inc. Form 10-K | 71
If several of the various costs in our business experience inflation at the same time, we may not be able to adjust prices to sufficiently offset the effect of the various cost increases without negatively impacting consumer demand. Shake Shack Inc. Form 10-K | 64
Our Revolving Credit Facility carries interest at a floating rate. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities. As of December 25, 2024, we had no outstanding borrowings under the Revolving Credit Facility.
Our Revolving Credit Facility carries interest at a floating rate. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities. As of December 31, 2025, we had no outstanding borrowings under the Revolving Credit Facility.

Other SHAK 10-K year-over-year comparisons