The Founder Of Shake Shack Is Now A Billionaire

Forbes

2 days ago

for Airbnb
D anny Meyer made his name opening up a string of successful upscale restaurants in Manhattan. First came Union Square Cafe in 1985 when he was just 27. That was followed by Gramercy Tavern and Eleven Madison Park. These restaurants made him famous, but it was a hot dog stand he opened in 2001 to raise funds for a public park that led to Shake Shack, Meyer's super successful twist on hamburgers and frozen custards. Now with 585 locations and $1.3 billion in revenue, Shake Shack is a fast food giant Meyer is the latest restaurant billionaire.
Forbes estimates the 67-year old St Louis native's net worth is at least $1 billion, thanks mainly to Shake Shack's soaring stock price. The chain's shares are trading near record highs, up 73% over the past year, due to strong financial performance and an aggressive expansion strategy. Meyer, who did not respond to a request for comment on Forbes ' estimates, owns around 3.5 million shares, currently worth about half a billion dollars. He's got hundreds of millions more from selling down his stake in Shake Shack over the past decade. He also still owns his collection of restaurants under Union Square Hospitality Group, in addition to a wide investment portfolio filled with winners like Goldbelly and coffee chain Joe.
Meyer joins a growing list of American billionaires who made their fortunes in fast food, including Jersey Mike's Peter Cancro, Panda Express' Andrew and Peggy Cherng, and, recently, Chipotle founder Steve Ells.
Like Ells, Meyer got his start in fine dining before going global in fast food. The son of a consultant for Pan American airlines, he grew up enjoying global cuisine thanks to $44 roundtrip plane tickets handwritten by his father. 'Throughout my college years I could not afford not to fly…to Italy for any long weekend,' he writes in his book Setting the Table . After studying political science at Trinity College, he planned to go to law school.
The night before his scheduled LSAT exam, Meyer, who had moved to New York City after college, went out for dinner with his uncle Elio on the Upper East Side. He wasn't feeling too enthusiastic about his future career, and Elio noticed his gloomy mood, Meyer recalled in an interview with Forbes last Spring. 'Why on earth would you pursue something you're not interested in doing?' his uncle asked.
Meyer realized he had no idea what he truly wanted to do. Luckily, his uncle did: 'All I've ever heard you talk about your entire life has been restaurants and food,' he told him, 'Open a restaurant, for God's sake.'
In 1985, at the age of 27, Meyer opened his first business: Union Square Cafe, a modern American restaurant which blends upscale dining with unpretentious warmth and hospitality. The cafe quickly became a staple of Manhattan dining and is still open today.
Despite his first restaurant's success, Meyer did not replicate the concept into additional locations as he would later do with Shake Shack. Instead, he expanded his culinary portfolio with a series of diversified restaurant offerings: In 1994, he opened Gramercy Tavern, a dimly-lit spot with a more rustic aesthetic that quickly earned him his first Michelin star. Then came Eleven Madison Park in the late nineties, which marked a further push into high-end dining and earned three Michelin stars and global recognition.
By the early 2000s, Meyer had a growing portfolio of six renowned restaurants spread out across New York City. He certainly didn't need to open a hot dog cart in the middle of a public square to stay afloat. But that's exactly what he did.
Madison Square Park wasn't as safe in 2001 as it is today, and the city had asked Meyer for help keeping it busy. 'The goal was to raise money for the park…and to provide a reason for people to use [it] from morning till night,' he told Forbes last year.
But the cart, whose profits were being in part donated to Madison Square Park Conservancy, quickly grew popular: 'I wanted to see if we could infuse a hot dog cart with hospitality…and we had lines around the corner,' Meyer told Wharton Professor Adam Grant in an interview.
Still, he waited three years to convert the cart into a permanent kiosk, which he named Shake Shack, and another five before opening a second location on the Upper West Side. 'Ironically, the lines only got longer,' he told Forbes last Spring. 'That's when we began to plan our third and fourth.'
From there, Shake Shack quickly became a beloved NYC haunt. Meyer had grown it to 66 locations in over 16 cities by the time he took it public on the New York Stock Exchange in 2015.
Today, Shake Shack owns and operates about 380 stores within the United States, and has an additional 210 global locations under a franchise model spread across more than 15 countries. Last year, the chain did $1.3 billion in revenue, a 15% increase from 2023. Shack Shack has plans to expand to 1,500 company-operated stores in the long term.
Meyer owned more than 20% of the company at the time of the IPO, but has whittled his stake down to about 4% today through regular stock sales, presumably to diversify his portfolio. He positioned Shake Shack as a "fine-casual" chain with more premium burgers than its competitors.
In addition, Meyer has invested in a diversified portfolio of hospitality businesses through Enlightened Hospitality Investments, a strategic growth equity fund affiliated with Union Square Hospitality Group. He was an early investor in New York City coffee chain Joe, which today operates 23 locations, and reservation app Resy, which was acquired by American Express in 2019.
In 2022, he transitioned from CEO to executive chairman of Union Square Hospitality Group, and is still active in its management. He continues to serve as Shake Shack's chairman, a position he's held since 2010.
'All my learning came from trattorias and bistros. What I loved more than anything was a sense of place…that made a big impact on me,' Meyer explained in a 2015 TED talk. As he told Forbes last year, 'It was never a dream to have more than one [Shake Shack].'