SoCal Outback Steakhouse franchisee files for bankruptcy, citing California’s labor costs
-
asserted
franchisee → file → costs
A San Diego-based franchisee of Outback Steakhouse filed for bankruptcy on Monday, citing expensive food and labor costs and declining customer traffic.
Cerca Trova Restaurant Group, which operates 61 Outback Steakhouse locations mostly in California, said it has been struggling since the COVID-19 pandemic.
asserted
it → base → pandemic
The company filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Wilmington, Del., seeking relief from hundreds of millions in debt.
asserted
company → file → debt
Cerca Trova also operates Outback Steakhouses in Arizona, Colorado, Nevada and New Mexico but said that California’s minimum wage laws have made labor especially pricey for a majority of its restaurants.
asserted
labor → operate → restaurants
More than half the company’s employees work in California, according to court documents.
uncertain
employees → work → documents
Fast-food employers must pay a higher minimum wage of $20 per hour, but Outback Steakhouse is not classified as a fast-food establishment under the law.
asserted
Steakhouse → pay → law
Beverly Hills-based Fat Brands Inc. said in a statement that it filed for bankruptcy on Monday to restructure the debt it accumulated while expanding its company portfolio, citing ‘difficult and largely unforeseen’ market conditions.
asserted
it → base → conditions
“By 2026, the pressures on the business had converged,” Cerca Trova Chief Executive David Goronkin said in a court filing.
asserted
Goronkin → converge → filing
“Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise.”
asserted
food → continue → ?
The company’s debt has increased from $269 million in late 2020 to $449 million this year.
asserted
debt → increase → million
It has between one and 49 creditors, court documents said.
asserted
documents → have → creditors
Outback Steakhouse is not the only full-service casual dining restaurant to face challenges since the pandemic.
asserted
Steakhouse → face → pandemic
Red Lobster filed for bankruptcy in 2024, after its disastrous $20 all-you-can-eat shrimp deal.
asserted
Lobster → file → deal
More recently, the Oprah-backed chain True Food Kitchen filed for Chapter 11 bankruptcy and closed three Southern California locations.
asserted
chain → back → locations
Inflation and economic pressure have led more Americans to eat at home or turn to fast food for a cheaper option, while the rise of GLP-1 weight-loss drugs such as Ozempic has curbed customers’ appetites.
asserted
rise → lead → appetites
The cost of beef has also been rising, up as much as 5% each year since 2022, Cerca Trova said in court filings.
asserted
Trova → rise → filings
Shares of Wendy’s jumped 15% at the opening bell after noted investor Nelson Peltz made an offer to buy the struggling burger chain
Cerca Trova was once the largest Outback Steakhouse franchisee, with 99 restaurants in 2018.
asserted
Trova → jump → 2018
The rest are run by franchisees.
asserted
rest → run → franchisees
Bloomin’ Brands, headquartered in Tampa, Fla., also owns Bonefish Grill, Carrabba’s Italian Grill and Fleming’s Prime Steakhouse and Wine Bar.
asserted
Brands → headquarter → Grill
The company has thrived this year despite pressures on the restaurant industry, with shares rising 60% since January.
asserted
shares → thrive → January
Shares fell Tuesday after Cerca Trova’s bankruptcy announcement and ended the day at $10.23, down 6.15%.
asserted
Shares → fall → 10.23
The Scottsdale, Ariz.-based health food chain True Food Kitchen announced it filed for Chapter 11 bankruptcy on Monday and has closed 12 locations.
asserted
it → announce → locations
Cerca Trova, also known as Out West Restaurant Group, proposed selling its assets to Bloomin’ Brands for $26.3 million unless a higher offer emerges during the bankruptcy process.
asserted
offer → know → process
“This is an isolated situation involving the franchisee and does not affect Bloomin’ Brands’ corporate operations, financing, or liquidity,” Bloomin’ Brands spokesperson Elizabeth Daly said in an email.
asserted
Daly → involve → email
“Bloomin’ Brands is participating in the process as a stalking‑horse bidder to acquire Out West’s assets and seeking to support operational continuity and protect the brand while the court‑supervised process moves forward.
asserted
process → participate → brand
”
Cerca Trova could not be immediately reached for comment.
uncertain
Trova → reach → comment
The Aporia
