Yahoo Finance Shake Shack considering 'Chicken Shack'
Shake Shack (SHAK) may be shaking things up by adding chicken to its menu.
A subsidiary of Shake Shack recently filed a trademark application for "chicken shack." While Shake Shack has yet to reveal details of its plans, the filing discloses that the name pertains to chicken sandwiches. Shares of the chain are flirting with a new high this morning, trading near $90 a share.
“It's not exactly Apple (AAPL) filing a patent for a car,” says Yahoo Finance Senior Columnist Michael Santoli. He does think, however, that Wall Street will be paying close attention.
“I think it makes a lot of sense for Shake Shack to explore expanding the menu,” he says. “You have the existing big fast-food chains like McDonald's (MCD), they get criticized for having these very crowded menus and for trying to do too many things. Shake Shack has the opposite, they've got a very stripped down menu. And yes, I think [adding] chicken makes sense."
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The addition of chicken to Shake Shack’s menu would place the company in direct competition with Chick-fil-A, the number one fast-food chicken chain. Shake Shack could also see competition from Yum! Brands (YUM) new restaurant Super Chix.
Shake Shack plans to open at least ten new restaurants in the U.S. and five locations internationally this year. The chain reopened its flagship store in Madison Square Park on Wednesday, and was overwhelmed with customers. Santoli notes that Shake Shack will eventually need to address the issue of long lines.
“Tourists come and they they want to have it as part of their experience, that they waited on a ridiculously long line," he says. "I don't think long term that's sustainable. You want to have relatively brisk service and if this thing really reaches the potential that the valuation implies, then they have to be [focused on] getting people through the stores and not just waiting outside."
