Steak n Shake closed

(CBS NEWS) -- Steak 'n Shake is hemorrhaging cash, and its CEO did little to inspire confidence in his ability to turn things around when he suggested cutting costs by ditching the cherries that have adorned the struggling restaurant's chain's signature milkshakes for more than 80 years.

Read: Steak 'n Shake closes nearly half of St. Louis locations: What's next?

That's according to a recent account that had Steak 'n Shake chief executive Sardar Biglari suggesting the change to save $1 million a year. The brand had an operating loss of nearly $19 million in the first quarter. Investors who attended the annual meeting of parent company Biglari Holdings late last month seems to have been less than impressed, according to a story by the Indianapolis Business Journal.

The outlook for the Indianapolis-based chain is dimming, with customer traffic down 13% the last three years and 7.7% in the first quarter, according to IBJ. And Biglari did not help his cause when he detailed how he intends to reverse course, a plan that includes transferring Steak 'n Shake's 400 company-owned restaurants to single-store franchisees, as well as investing about $40 million on new milkshake machines.

As part of the shift to a franchise model, Steak 'n Shake has temporarily shuttered 60 restaurants this year, and Biglari told those at the New York meeting there might be more closures.

"He is literally inventing a new milkshake making process — he said at the meeting that this was going to be a patented process — and that is going to speed up service," one shareholder told IBJ. "The shareholders seemed to think this was ridiculous — and I would tend to agree — to think that Sardar, with all his free time, is going to be able to invent a milkshake process to turn the whole chain around."

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