Outback Steakhouse's largest franchisee files for Chapter 11 bankruptcy

Summarised from 2 outlets · Updated 4 Nov, 21:15 · Archive

Cerca Trova Restaurant Group, which owns 61 Outback Steakhouse locations on the West Coast, has filed for Chapter 11 bankruptcy citing rising food and labour costs.

Cerca Trova Restaurant Group, which operates 61 Outback Steakhouse locations across the West Coast, filed for Chapter 11 bankruptcy this week. The company cited rising food and labour costs, reduced customer traffic and slow pandemic recovery as contributing factors. Chief Executive Officer David Goronkin stated in a court filing that 'by 2026, the pressures on the business had converged', with guest traffic and earnings continuing to decline whilst costs rose.

The franchisee's troubles have been mounting for years. In 2018, the group owned 99 Outback restaurants with annual sales of around $340 million, making it the country's largest Outback franchise owner. However, falling restaurant traffic began reducing revenue from that point, a decline the pandemic deepened when revenue plunged 35 per cent in 2020.

Bloomin' Brands, Outback's parent company, has proposed acquiring the restaurants and assets for $26.3 million. The deal will serve as a 'stalking horse' bid in the bankruptcy process, establishing a minimum price for other potential buyers to exceed. Bloomin' Brands will provide up to $5.5 million to keep the restaurants operating during bankruptcy, with no immediate changes expected for customers or employees. Circa Trova also faces wage-and-hour class action settlements in California, where 31 of its locations are situated.

How it is being reported

• Outback steps in to save dozens of steakhouses after franchise owner files for bankruptcyThe steakhouse chain has around 115 franchised restaurants across the USIndependent World · 4 Nov, 20:48
• Rising food costs prompt big Outback Steakhouse franchisee to file for bankruptcyOne of the biggest owners of Outback Steakhouse restaurants in the country filed for bankruptcy this week, citing factors including rising food costs.New York Post · 3 Nov, 22:32

In this story: Cerca Trova Restaurant Group · Outback Steakhouse · Bloomin' Brands · David Goronkin · West Coast · California

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