SAN DIEGO — An Outback Steakhouse franchisee based in Southern California filed for bankruptcy this week, citing the high costs of food and labor, according to reports.
Cerca Trova Restaurant Group of San Diego — also known as Out West Restaurant Group — runs 61 locations, mainly in California, with others in Arizona, Nevada, Colorado and New Mexico, according to the Los Angeles Times, which reported that the company made its Chapter 11 filing Monday.
Its debt has reached $449 million, up from $269 million in late 2020, the newspaper reported.
"Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise," David Goronkin, the company's chief executive, said in a filing, according to the Times, which noted that California's minimum wage reached $16.90 per hour this year.
Parent company Bloomin' Brands is set to acquire the franchisee's assets in a deal with a $26.3 million value, according to Newsweek.
"This is an isolated situation involving the franchisee and does not affect Bloomin' Brands' corporate operations, financing, or liquidity," Bloomin' Brands told Newsweek, with the parent company referring to itself as a "stalking-horse bidder."
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