A situation to watch, Part I

So many jaw-dropping situations, so little time.

During this extraordinary period for the restaurant industry, you can get a research-worthy case of whiplash from trying to watch all the dramas unfolding in the business. Instead of rubberizing your neck, consider a focus on this standout among the nail biters. Its only rival as a potential tell-all book is the other situation that's not to be missed, detailed in Part II below.

Steak 'n Shake 'n Biglari, or What Would Warren Do?
If Warren Buffett asked business bravehearts who should succeed him as Holding Company Guru, Sardar Biglari would be the guy jumping up and down with his hand in the air, yelling, “Me! Me! Pick me!!”

Instead, Biglari has set out to prove himself the de facto heir to the Bard of Omaha. Buffett became the second richest man in America in large part by spotting repairman’s specials that were undervalued. He gathered them into what’s now Berkshire Hathaway, a holding company he turned into a cash-flow machine by adding insurance companies to the portfolio.

Biglari, a thirtysomething business school grad who has cast a former professor as his Charlie Munger, is apparently trying to follow Buffett’s blueprint to a T-square. First he bought the wheezing Western Sizzlin buffet chain, then turned around and amassed a major stake in Steak 'n Shake, a burgers-and-fries chain with the distinction of offering table service. His investment allowed him to wrest control of Steak 'n Shake from a management team that was likely drawing death threats from investorsecs.

Amazingly, Biglari has been able to bring his two flagging operations together without being lynched by those investors, probably because they welcomed any change in leadership. Among the reasoned objections they might have posed was how a company could turn around both brands simultaneously, when reviving just one of the flatliners would be a Harvard Business case study.

Then again, hasn’t Buffett done that time and again?

Even more of a parallel was Biglari’s use of Steak 'n Shake Holdings to buy about a 10% interest in—surprise, surprise—an insurance company, Fremont Michigan InsuraCorp.

You can read all about Biglari’s efforts when he releases an extended and likely candid letter to investors next week. It’s exactly what Buffett does every year in his legendary reports to Berkshire’s shareholders.

The key question to keep in mind as you munch some popcorn and watch this CNBC saga unfold: Has Biglari actually duplicated Buffett’s magic formula, or is he merely reciting a spell without the mojo to make it work? Is he really going to conjure the money?