A San Diego-based franchisee of Outback Steakhouse filed for bankruptcy on Monday, citing expensive food and labor costs and declining customer traffic. Cerca Trova Restaurant Group, which operates 61 Outback Steakhouse locations mostly in California, said it has been struggling since the COVID-19 pandemic. The company filed for Chapter 11 bankruptcy in U.S.
Bankruptcy Court in Wilmington, Del., seeking relief from hundreds of millions in debt. Cerca Trova also operates Outback Steakhouses in Arizona, Colorado, Nevada and New Mexico but said that California’s minimum wage laws have made labor especially pricey for a majority of its restaurants. More than half the company’s employees work in California, according to court documents.
California’s minimum wage, effective at the start of this year, is $16.90 per hour. Fast-food employers must pay a higher minimum wage of $20 per hour, but Outback Steakhouse is not classified as a fast-food establishment under the law. It has between one and 49 creditors, court documents said.
Outback Steakhouse is not the only full-service casual dining restaurant to face challenges since the pandemic. Red Lobster filed for bankruptcy in 2024, after its disastrous $20 all-you-can-eat shrimp deal. More recently, the Oprah-backed chain True Food Kitchen filed for Chapter 11 bankruptcy and closed three Southern California locations.
Inflation and economic pressure have led more Americans to eat at home or turn to fast food for a cheaper option, while the rise of GLP-1 weight-loss drugs such as Ozempic has curbed customers’ appetites. The cost of beef has also been rising, up as much as 5% each year since 2022, Cerca Trova said in court filings. Cerca Trova was once the largest Outback Steakhouse franchisee, with 99 restaurants in 2018.
As of June, there were 659 Outback Steakhouse locations nationwide, 544 owned and operated by the brand owner, Bloomin’ Brands. The rest are run by franchisees. Bloomin’ Brands, headquartered in Tampa, Fla., also owns Bonefish Grill, Carrabba’s Italian Grill and Fleming’s Prime Steakhouse and Wine Bar.
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