Rising food costs prompt big Outback Steakhouse franchisee to file for bankruptcy

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1. 26m ago

   Outback Steakhouse Franchisee Files For Bankruptcy

   Outback Steakhouse's former largest franchisee, Out West Restaurant Group, also known as Cerca Trova Restaurant Group, filed for Chapter 11 bankruptcy in US Bankruptcy Court in Wilmington, Delaware. The San Diego-based operator cited rising food and labor costs, declining customer traffic, and lingering struggles since the COVID-19 pandemic. The Chapter 11 filing lists $449 million in debt and follows the closure of 13 restaurants, leaving 61 remaining Western locations up for sale. Parent company Bloomin Brands has made an opening bid of $26.3 million for the assets.

   Why it matters

   The bankruptcy filing highlights ongoing cost pressures within the casual dining sector, particularly in states with high operational expenses like California where many of the affected restaurants are located. Bloomin Brands has stepped in to acquire the remaining operational footprint, protecting dozens of steakhouses from immediate liquidation. The situation illustrates the vulnerability of major restaurant franchisees facing high leverage and inflation.

   What is confirmed

   • San Diego-based Cerca Trova Restaurant Group, also operating as Out West Restaurant Group, filed for Chapter 11 bankruptcy in US Bankruptcy Court in Wilmington, Del.
   • The company once operated nearly 100 Outback Steakhouse restaurants and currently runs 61 locations across Western states.
   • Parent company Bloomin Brands has offered $26.3 million for the franchisee's assets.
   • The filing cites rising food and labor costs, declining customer traffic, and struggles since the COVID-19 pandemic.
   • The Chapter 11 filing lists $449 million in debt.

   Still unconfirmed

   • Ten locations have already closed according to some reports, while other reports place the total number of closed restaurants at 13.

   What to watch next

   • Whether competing bids emerge to challenge Bloomin Brands' $26.3 million offer for the 61 remaining Outback Steakhouse locations.
   • Further details from bankruptcy court proceedings regarding the total number of permanently shuttered restaurants.
   Sources used for this update (19)

   1. nypost.com — New York Post – Breaking News, Top Headlines, Photos & Videos
   2. cashwalklabs.io — GM will switch to Nasdaq from the NYSE on Nov. 17
   3. Fox Business — Outback Steakhouse franchisee files for bankruptcy
   4. Restaurant Dive — Outback’s largest U.S. franchisee goes bankrupt
   5. New York Post — Rising food costs prompt big Outback Steakhouse franchisee to file for bankruptcy
   6. Los Angeles Times — SoCal Outback Steakhouse franchisee files for bankruptcy, citing California’s labor costs
   7. finance.yahoo.com — SoCal Outback Steakhouse franchisee files for bankruptcy ...
   8. Fast Company — Outback Steakhouse store closures: See a list of doomed locations as franchisee files for bankruptcy
   9. finance.yahoo.com — Outback Steakhouse franchisee files for bankruptcy after closures
   10. 1851franchise.com — Outback Franchisee Files for Bankruptcy Amid Rising Costs
   11. www.foxbusiness.com — Companies urged to adapt as restaurant franchisee files for bankruptcy: 'Businesses want to make excuses'
   12. capitaldigest.com — Outback Steakhouse Franchisee Files Bankruptcy, Closes 13
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