Outback steps in to save dozens of steakhouses after franchise owner files for bankruptcy

Outback steps in to save dozens of steakhouses after franchise owner files for bankruptcy The steakhouse chain has around 115 franchised restaurants across the US - Bookmark - CommentsGo to comments Become an Independent member to bookmark this article Already a member? Log in Outback Steakhouse’s largest U.S. franchisee has filed for bankruptcy, putting 61 western restaurants up for sale as the chain’s parent company seeks to take them over. Out West Restaurant Group, also known as Cerca Trova Restaurant Group, filed for Chapter 11 bankruptcy Monday after years of declining sales and rising costs. Its financial troubles date back to 2018, when falling restaurant traffic began eating into revenue. The pandemic further deepened the losses, with revenue plunging 35 percent in 2020, according to court filings. The franchisee has reached a $26.3 million agreement with Outback’s parent company, Bloomin’ Brands, to sell its restaurants and assets. The deal serves as a “stalking horse” bid, establishing a minimum starting price that other potential buyers can attempt to beat during the bankruptcy process. Bloomin’ Brands is providing up to $5.5 million to keep the restaurants open during bankruptcy with no immediate changes expected for customers or employees. The steakhouse chain has around 115 franchised restaurants in the U.S., along with about 544 company-owned locations. If Bloomin’ Brands completes the acquisition, it would take direct control of more than half of Outback’s remaining U.S. franchised restaurants, according to Restaurant Dive. Bloomin’ said it was “working closely with Out West, its lenders, and other stakeholders throughout the Bankruptcy Court-supervised process as it focuses on maintaining stability in Out West’s restaurant operations, supporting Team Members and continuing to serve guests,” Restaurant Dive reports. The company said that buying Out West’s restaurants “gives [Bloomin’] direct operational insight, allows it to invest in the units through its development initiatives, and to mitigate disruption to guests and employees.” Out West’s restaurants are primarily located in the Southwest with locations in Arizona, Nevada, New Mexico and Colorado. The company also has significant creditors in California, according to bankruptcy filings cited by Restaurant Dive. News of the bankruptcy filing comes as Outback revamps its menu and kitchen practices to improve food quality and win back diners. The changes include adding a New York strip to its regular menu for the first time and introducing a thick-cut ribeye called the “Down Under Delmonico.” Outback is also updating its cut specifications, hand-trimming techniques and seasoning methods for existing favorites, including its center-cut sirloin, Rockhampton ribeye and Victoria’s barrel-cut filet mignon, the company said. Bloomin' Brands also owns Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse & Wine Bar. Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies Comments [Image text:] H 57BJ755 DUBAGK STEAKHOUSE 8VPW833 371689