Cerca Trova Restaurant Group, which was once the largest franchisee within the Outback Steakhouse network, has filed for bankruptcy.
Based in San Diego, US, the operator attributed its collapse to rising food prices and legislated minimum wage hikes in California.
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The company currently runs 61 Outback restaurants, down from a peak of 99 locations in 2018, Bloomberg reported, citing court filings lodged in Wilmington, Delaware.
The business has faced persistent financial strain since the Covid-19 pandemic. Its total liabilities grew from $269m in late 2020 to roughly $449m.
Staffing expenses rose substantially following statutory minimum pay increases across California, where over half of the operator’s workforce is based.
In a court filing. Cerca Trova Restaurant Group CEO David Goronkin said: “By 2026, the pressures on the business had converged.
“Guest traffic and earnings continued to decline while food, labour, and other production costs continued to rise.”
Cerca Trova plans to sell its assets to Outback parent Bloomin’ Brands for $26.3m, subject to superior bids emerging during the process.
Goronkin stated that the debtor intends to hold a court-supervised auction, with Bloomin’ agreeing to act as the baseline bidder.
As of June, the Outback brand comprised 659 restaurants overall. Bloomin’ directly operated 544 of these sites, with the balance managed by franchisees.
The Bloomberg report said the bankruptcy highlights wider distress across the US dining sector, which suffered initial footfall losses during the pandemic and subsequent shifts in consumer habits.
Established in 1994 in California, Cerca Trova employs nearly 3,700 people across Arizona, California, Colorado, Nevada, and New Mexico.
