Steak n Shake Operations Inc., a wholly-owned subsidiary of Biglari Holdings Inc. ( BH ) , recently announced that it has inked its first international development agreement with the Saleh Bin Lahej Group to spread its footprints outside the U.S. As per the agreement, the company is set to open around 40 restaurants across the United Arab Emirates (UAE), with the first unit to come up in Dubai in 2013.

The Saleh Bin Lahej Group owns and operates a chain of fast food American restaurants brands in the Middle East. The company holds franchise rights of well known brands such as − Chili’s of Brinker International, Inc. ( EAT - Analyst Report ) , Black Canyon Asian Cuisine, El Chico Mexican Restaurant, Macaroni Grill, Cantina Laredo and The Pizza Company.

Dubai, one of the seven emirates within the UAE, is a famous tourist hub and well-known for its cosmopolitan cuisines. Dubai has a flourishing and competitive restaurant industry, which reported a 13.9% growth in 2011. The emerging restaurant industry coupled with seamless amalgamation of a huge array of world cultures spurred Steak n Shake to choose Dubai to launch its first restaurant outside the U.S.

The UAE, often referred as high-income developing economy, offers many cosmopolitan entertainment attractions, shopping centers, fine dining and quality hotels. The table-service restaurants in the UAE produce around $600 million annually, which is expected to grow by 30% to $780 million by 2015, dominated by American fast food brands. Moreover, The GCC forecasts that the fast food industry in the Saudi Arabian and UAE markets are expected to maintain a compound annual growth rate (CAGR) of 5% in sales from 2010 to 2014.

However, Steak n Shake should be wary of its competitors. Some of the top American fast food restaurateurs such as Dunkin’ Brands Group, Inc. ( DNKN - Snapshot Report ) , Ruby Tuesday, Inc. ( RT - Snapshot Report ) and Starbucks Corporation ( SBUX - Analyst Report ) - already have a strong presence in the UAE.

San Antonio, Texas-based, Biglari Holdings was previously known as The Steak n Shake Company. The company primarily owns, operates, and franchises restaurants in the U.S. under the name ‘Steak n Shake’. Established in 1934, Steak n Shake is a leader in serving finest burgers and shakes. Currently, Steak n Shake establishes and operates around 500 restaurants units across the U.S.

Biglari Holdings is expected to release its third-quarter 2012 results on December 12. The Zacks Consensus Estimate for the third quarter is currently pegged at $6.36 per share.

We currently have a long-term Neutral recommendation on the stock. However, it carries a short-term Zacks #5 Rank (Strong Sell).