Outback Steakhouse franchisee files for bankruptcy after closures

Key Points:

• Cerca Trova Restaurant Group Holdings, operating as Out West Restaurant Group and a franchisee of Outback Steakhouse, filed for Chapter 11 bankruptcy on Nov. 2, putting its 61 remaining western U.S. locations up for sale after closing 13 restaurants earlier this year.
• The franchisee has faced financial struggles since 2018 due to declining customer traffic, exacerbated by the pandemic and rising food and labor costs, with debt increasing from $269 million in 2020 to approximately $449 million.
• Bloomin' Brands, Outback Steakhouse's parent company, has proposed a $26.3 million initial bid to acquire Out West's assets and will provide up to $5.5 million in interest-free financing during bankruptcy, aiming to take direct control of more than half of Outback's franchised locations if approved.
• The 10 Outback restaurants closed in October across Arizona, California, Colorado, and Nevada are excluded from Bloomin' Brands' acquisition offer; Out West plans to keep operating its remaining restaurants throughout the bankruptcy process.
• Outback Steakhouse itself has not filed for bankruptcy and continues operating approximately 659 U.S. locations, with Bloomin' Brands also owning other restaurant brands like Carrabba's Italian Grill and Bonefish Grill.