Steak 'N Shake Sues To Close 2 Denver Metro Area Locations

SHERIDAN, Colo. (CBS4) - There's a big commotion at Steak 'n Shake and it's not about the food. The chain is suing to stop the operation of two Denver metro area locations.

The lawsuit was apparently prompted by customer complaints that local operators were charging too much. The company claims the restaurant in Sheridan and one in Centennial are targeted and that the agreement to run the two restaurants is over, but the franchisees keep cooking.

Richard Montoya is a Steak 'n Shake aficionado.

"The food is good, the service is good, the pricing, I thought, was just excellent," Montoya said.

Montoya was surprised to learn the restaurant in Sheridan may be more expensive than Steak 'n Shake should be. A lawsuit filed in federal court by the corporation alleges prices at the two stores are far higher than in national ads. In fact, they don't even offer the popular $4 mandatory promotions.

The chain says it already ended its agreement with the franchisees and now it wants the court to shut them down.

"If you're a franchisee you've got to follow their rules, and that's how it goes, that's their name," a customer said.

But the franchisees are sizzlin'. They claim "all of the prices charged have been approved by Steak 'n Shake in advance." They say they are preparing a counterclaim. They say Steak 'n Shake's "attempt to terminate the Denver area franchise agreements is clearly retaliation against the Denver owners for daring to raise questions about the fairness of the corporate policies."

Both sides will be grilled in court.