SoCal Outback Steakhouse franchisee files for bankruptcy, citing California's labor costs
This is read by an automated voice.Please report any issues or inconsistencies here.
See more from the L.A.Times in Google Search.
Set us as preferred 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.
The company filed for Chapter 11 bankruptcy in U.S.Bankruptcy Court in Wilmington, Del., seeking relief from hundreds of millions in 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.More than half the company’s employees work in California, according to court documents.
California’s minimum wage, effective at the start of this year, is $16.90 per hour.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.
Business 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.“By 2026, the pressures on the business had converged,” Cerca Trova Chief Executive David Goronkin said in a court filing.
“Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise.”The company’s debt has increased from $269 million in late 2020 to $449 million this year.It has between one and 49 creditors, court documents said.
Outback Steakhouse is not the only full-service casual dining restaurant to face challenges since the pandemic.Red Lobster filed for bankruptcy in 2024, after its disastrous $20 all-you-can-eat shrimp deal.
M...