Franchisees of Colorado’s first Steak ‘n Shake restaurants have lost a long-running federal lawsuit filed by the restaurant company over alleged misconduct that included intentionally overcharging consumers.

The decision by U.S. District Judge Raymond Moore brings to a close a saga that began in mid-2013, when customers of the restaurants in Centennial and Sheridan complained they couldn’t find the chain’s popular $4 menu.

Following a lengthy undercover investigation of its own, the chain learned the Baerns family, who held the franchise, had been hiding the menu from customers unless they specifically asked for it. Otherwise, $4 meals were suddenly costing more than $5 each and large soft drinks were actually regular-sized ones.

And, it turned out, a number of other prices were being hiked without Steak ‘n Shake’s permission, the company alleged.

“Indisputably, such pricing not only violated the franchise agreements but also — as acknowledged by (the franchisee’s management) — was deceptive,” Moore wrote in a 46-page opinion issued in late June.

A lengthy trial was to have begun July 20.

The company has until mid-August to determine how much money it believes it should be awarded for the contract breach, and whether damages should be awarded as well.

The Baernses, who did not respond to efforts to reach them, had alleged in a cross-complaint that Steak ‘n Shake misled them into believing the franchise was more profitable than it was.

The Baernses said they were losing money because of undisclosed costs of labor and supplies that corporate officials purportedly withheld when they signed up to run the two restaurants.

The company said the family, which purchased the franchise from original owner Tom Caruso not long after it opened to long lines of customers, had run afoul of an agreement requiring all branded restaurants to abide by uniform pricing and promotions.

The Baernses charged customers a la carte prices on combination-meal orders, ensuring they made more money, according to the lawsuit, and intentionally avoided telling headquarters in Indiana.

“The reason we may not let (Steak ‘n Shake) know is in the hopes that it takes a month or more for them to notice, thus keeping the subsidy checks coming,” according to an e-mail Christopher Baerns wrote to employees and quoted in Moore’s decision.

The company offered subsidy payments to the franchise because of its remote location compared to the restaurant’s predominance in the Midwest.

The dispute led Steak ‘n Shake to disable the restaurants computerized cash registers from ringing up the a la carte prices — but overlooked one additional register at each location, which employees used to continue the practice, court records show.

The Indiana-based company took over control of the stores in late 2013 and has been running them ever since.

David Migoya: 303-954-1506, dmigoya@denverpost.com or twitter.com/davidmigoya