Major Steakhouse Chain's Largest Franchisee Files For Bankruptcy As Debt Explodes
The casual dining industry has suffered another major blow following the bankruptcy filing of Outback Steakhouse's largest U.S. franchisee after years of soaring costs, declining customer traffic, and mounting debt.
San Diego-based Out West Restaurant Group, also known as Cerca Trova Restaurant Group, filed for Chapter 11 bankruptcy protection Monday in Delaware, putting 61 restaurants across five Western states into bankruptcy proceedings.
The company's debt has exploded from $269 million in 2020 to approximately $449 million in 2026, according to the Los Angeles Times.
"Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise," CEO David Goronkin said, according to court filings.
California's rising minimum wages have been a major problem, with more than half the company's employees working in the Golden State. The COVID-19 pandemic also delivered another devastating blow, sending revenue plunging approximately 35%.
Outback parent company Bloomin' Brands said that it is preparing to swoop in. The restaurant giant has offered $26.3 million to acquire the struggling franchisee's assets, alongside up to $5.5 million in emergency financing. "This is an isolated situation involving the franchisee," a Bloomin' Brands spokesperson said. The 61 restaurants are expected to remain open during bankruptcy proceedings.
The bankruptcy comes just weeks after another major restaurant franchisee went belly-up, underscoring the mounting financial pressures gripping America's dining industry.
Meritage Hospitality Group, one of Wendy's largest franchise operators, filed for Chapter 11 bankruptcy protection on September 17, after suffering a $31.5 million loss in 2025 and another $23.1 million loss during the first half of 2026.
The franchisee blamed weak sales, aggressive discounting, and ineffective marketing, while stubbornly high beef prices added to its financial troubles.
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Tyler Durden Wed, 11/04/2026 - 15:15
Continue reading...
[ H/T ZeroHedge ]
The casual dining industry has suffered another major blow following the bankruptcy filing of Outback Steakhouse's largest U.S. franchisee after years of soaring costs, declining customer traffic, and mounting debt.
San Diego-based Out West Restaurant Group, also known as Cerca Trova Restaurant Group, filed for Chapter 11 bankruptcy protection Monday in Delaware, putting 61 restaurants across five Western states into bankruptcy proceedings.
The company's debt has exploded from $269 million in 2020 to approximately $449 million in 2026, according to the Los Angeles Times.
"Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise," CEO David Goronkin said, according to court filings.
California's rising minimum wages have been a major problem, with more than half the company's employees working in the Golden State. The COVID-19 pandemic also delivered another devastating blow, sending revenue plunging approximately 35%.
Outback parent company Bloomin' Brands said that it is preparing to swoop in. The restaurant giant has offered $26.3 million to acquire the struggling franchisee's assets, alongside up to $5.5 million in emergency financing. "This is an isolated situation involving the franchisee," a Bloomin' Brands spokesperson said. The 61 restaurants are expected to remain open during bankruptcy proceedings.
The bankruptcy comes just weeks after another major restaurant franchisee went belly-up, underscoring the mounting financial pressures gripping America's dining industry.
Meritage Hospitality Group, one of Wendy's largest franchise operators, filed for Chapter 11 bankruptcy protection on September 17, after suffering a $31.5 million loss in 2025 and another $23.1 million loss during the first half of 2026.
The franchisee blamed weak sales, aggressive discounting, and ineffective marketing, while stubbornly high beef prices added to its financial troubles.
***
Tyler Durden Wed, 11/04/2026 - 15:15
Continue reading...
[ H/T ZeroHedge ]
