Outback Steakhouse franchisee files Chapter 11, citing California labor costs
Cerca Trova Restaurant Group, the San Diego‑based operator of Outback Steakhouse outlets, entered Chapter 11 bankruptcy. The company said a $449 million debt load, higher payroll expenses in California and falling customer traffic forced the filing. It runs 61 restaurants in five western states and has proposed selling the assets to parent Bloomin’ Brands for $26.3 million. Bloomin’ Brands is acting as a stalking‑horse bidder and will also provide up to $5.5 million of debtor‑in‑possession financing.
Why it matters
The bankruptcy could affect Bloomin’ Brands’ balance sheet if the asset purchase price or financing terms change, and it may signal further stress for full‑service casual‑dining chains operating in high‑wage states.
Key facts
- 1Cerca Trova filed for Chapter 11 in the U.S. Bankruptcy Court in Wilmington, Delaware. siliconvalley.com
- 2The franchisee carries $449 million of debt, up from $269 million in late 2020. siliconvalley.com
- 3It operates 61 Outback Steakhouse restaurants in California, Arizona, Colorado, Nevada and New Mexico. siliconvalley.com
- 4Bloomin’ Brands offered $26.3 million to acquire the franchisee’s assets. finance.yahoo.com
- 5Bloomin’ Brands will provide up to $5.5 million of interest‑free debtor‑in‑possession financing. foxbusiness.com
- 6California’s statewide minimum wage rose to $16.90 per hour on Jan 1, 2026; the fast‑food minimum is $20 per hour. finance.yahoo.com
Summary written by AlphAI AI Desk from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.