Shake Shack CEO Says NYC Indoor Dining Rules 'Make Less Sense' For Fast Casual Chain

New York City restaurants can resume indoor dining at 25% capacity beginning Sept. 30, but NYC-born Shake Shack Inc SHAK CEO Randy Garutti isn't overly optimistic about the landscape there, Fox Business reported.

What Happened: Shake Shack will have to comply with indoor dining rules and regulations including mandatory temperature checks, enhanced air filtration systems and collecting contact information for the New York diners.

The rules "make sense" for large restaurants that can collect information as part of the reservations process, but it "makes less sense" for casual fast food joints that welcome hundreds of people a day, Garutti said at a Goldman Sachs conference last week.

Why It's Important: Despite the reopening date for restaurants being two weeks away, "details are limited" on what indoor dining will look like in New York, the CEO said.

New York City accounts for 20% to 25% of Shake Shack's total revenue.

The success of New York City location is important after the company's dismal second-quarter performance: a 50% decline in same-store sales and a 40% revenue decline to $91.8 million.

What's Next: Shake Shack's shares have rebounded 5% since the announcement that indoor dining will return in New York City.

All the company can do is hope for a sense of return to normalcy, Garutti said. 

"We'll get it worked out and we'll get those dining rooms reopened," he said. "I'm hopeful that will just be another sign of New York getting back on its feet."

SHAK Price Action: Shake Shack shares were trading down 1.25% at $71.26 at last check Wednesday. 

Related Links:

Indoor Dining Finally Returns To New York City: Here's The Timeline

'We Risk Losing It All': NYC Restaurant Lobby Group Says Government Action Is Needed

Benzinga file photo by Dustin Blitchok.