Steak n Shake accuses former exec of taking confidential information to competing restaurant 

Steak n Shake is suing a former executive for breach of contract, accusing him of using the company’s confidential information to support business efforts at Freddy’s Frozen Custard & Steakburgers.  

Former Senior Vice President of Business Development Rafik Farouk left Indianapolis-based Steak n Shake Inc. last November and then accepted a franchise development role for Freddy’s in April, according to a complaint filed Friday in Marion Superior Court. 

In June, Steak n Shake learned Farouk was reaching out to at least two of its franchisee and business locations about establishing Freddy’s locations, presumably using confidential information he got from Steak n Shake, according to court documents.  

Steak n Shake sent Farouk a cease-and-desist letter on July 2, ordering him and Freddy’s to return all Steak n Shake-owned assets to the company within three days. While attorneys for Freddy’s responded, Farouk has not, the court filing states.  

As recently as late August, Steak n Shake learned that Freddy’s, through Farouk, has been in communication with a Las Vegas casino operator for a new restaurant in a location that’s also being pursued by Steak n Shake, according to court documents.  

Steak n Shake is asking the court to grant an injunction against Farouk to stop him from using the company’s confidential information. 

Farouk did not respond Monday to a request for comment from The Indiana Lawyer.

Steak n Shake says Farouk entered into a code of conduct agreement in January 2025 — several months before he left — that included a confidential and propriety information provision stating that he could not disclose any of the company’s confidential information or trade secrets to people outside the company.  

That included all non-public business, financial or personnel information, pricing and sales information, recipes, intellectual property and marketing plans. The disclosure of any confidential information could be useful to competitors or harm the company, according to the agreement.  

The terms of the agreement were expected to be preserved even after employment ended, according to court documents, which also note that Farouk agreed to not take for himself or others any information that would result in personal gain or the benefit of an entity he had interest in.  

In his role for Steak n Shake, Farouk would’ve had access to confidential information regarding the company’s business and franchisee opportunities. That includes lease agreements, business plans and pricing.

And during his employment, he emailed confidential information about the company’s franchisee and business locations from his Steak n Shake account to his personal account, the lawsuit states.  

The case is Steak n Shake, Inc. v. Rafik Farouk, 49D01-2608-CE-048104.