Cerca Trova Restaurant Group Holdings and four affiliated companies, which operate under the name Out West Restaurant Group, filed voluntary bankruptcy petitions on Monday, November 2, 2026, in the U.S. Bankruptcy Court for the District of Delaware. The company, headquartered at 8885 Rio San Diego Drive in Mission Valley, is the largest franchisee in the Outback Steakhouse system and the brand's exclusive franchise operator in California, Arizona, Colorado, Nevada and New Mexico.
For customers wondering whether their neighborhood Outback is about to disappear, the immediate news is reassuring. All 61 remaining restaurants are expected to continue operating during the bankruptcy proceedings, employees will continue receiving wages, and gift cards will remain valid, according to a declaration submitted by chief executive officer David Goronkin.
San Diego County is home to six of the company's restaurants, located at 4196 Clairemont Mesa Boulevard in Clairemont, 1640 Camino Del Rio North in Mission Valley, 14701 Pomerado Road in Poway, 2980 Plaza Bonita in National City, 722 Jamacha Road in El Cajon and 177 San Marcos Boulevard in San Marcos. None of these locations was among the 13 restaurants the operator closed earlier in 2026.
The bankruptcy is the culmination of a financial crisis that has been building for years, even as the company continued serving steaks, Bloomin' Onions and other familiar Outback dishes to customers throughout the West.
According to Goronkin's sworn declaration, the company entered bankruptcy carrying approximately $319.9 million in secured debt, primarily owed to lenders led by Goldman Sachs Specialty Lending Group. Bloomberg has reported the company's total debt at approximately $449 million, reflecting a broader measure of its outstanding obligations.
Much of that burden stems from a credit agreement dating to 2017, when the franchise operator was expanding its restaurant portfolio. The loans matured in April 2022 without being repaid, and the company has operated under a series of agreements with its lenders allowing it additional time to address the outstanding debt.
Those extensions came at an extraordinary price. According to the bankruptcy declaration, accrued interest and fees ballooned from approximately $11 million to more than $170 million during the company's prolonged financial difficulties. In fiscal 2025 alone, interest expense reached approximately $45.9 million, more than five times the company's earnings measure for that year.
Meanwhile, the underlying restaurant business was moving in the wrong direction.
"By 2026, the pressures on the business had converged," Goronkin wrote in his declaration. "Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise."
Customer traffic declined between 2.7% and 3.6% annually over the preceding four years, despite repeated menu price increases intended to offset rising expenses. The combination left the company facing an increasingly difficult equation: fewer customers walking through the doors, higher costs to serve them and a debt burden that continued growing regardless of how many steaks were sold.
California's operating environment has also played a significant role in the company's financial pressures. Approximately 54% of Out West Restaurant Group's roughly 3,669 employees work in California, where the company reported that average kitchen wages increased approximately 26% between 2019 and 2022.
Labor expenses now account for approximately 34.4% of sales, according to the filing, adding to the financial strain created by food costs, occupancy expenses and the company's substantial interest obligations.
The bankruptcy also follows the final approval of a $1.6 million wage-and-hour class action settlement involving approximately 18,900 current and former employees. The company has indicated that paying the settlement without bankruptcy protection would significantly deplete its remaining cash reserves.
Rather than immediately liquidating its restaurants, however, Out West Restaurant Group has entered bankruptcy with a potential buyer already lined up.
Bloomin' Brands, the Tampa, Florida-based parent company of Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse & Wine Bar, signed an agreement on November 1 to serve as the stalking-horse bidder for the franchise operation.
Under the proposed transaction, Bloomin' Brands would pay approximately $26.3 million in cash to acquire the restaurants, assume certain leases and liabilities, honor outstanding gift card obligations and forgive approximately $13.9 million in deferred royalties and other fees owed by the franchisee.
A stalking-horse bid establishes an initial purchase offer in a bankruptcy sale, setting a baseline against which other potential buyers may compete. The arrangement does not guarantee Bloomin' Brands will ultimately acquire the restaurants, but it gives the parent company a significant head start in the process.
Bloomin' Brands has also agreed to provide up to $5.5 million in financing to help the franchisee continue operating during the bankruptcy proceedings, subject to court approval and the terms of the financing arrangement.
Under the proposed sale schedule, competing bids are due December 8, an auction is scheduled for December 11, and a bankruptcy court hearing to consider approval of the sale is set for December 15.
The proposed purchase agreement also includes protections for restaurant employees. Bloomin' Brands would be required to offer employment to substantially all restaurant-level workers, while approximately $1.3 million of the purchase price would be reserved for accrued severance obligations, bonuses and paid time off.
For the thousands of employees working at Outback restaurants throughout the West, those provisions could help preserve jobs and provide continuity if the sale proceeds as envisioned.
Bloomin' Brands has emphasized that the bankruptcy involves an independently operated franchise business rather than the parent company's own financial condition. The company described the filing as "an isolated situation involving the franchisee" and stated that it does not affect Bloomin' Brands' corporate operations, financing or liquidity.
The distinction is significant because Bloomin' Brands is simultaneously pursuing a broader turnaround of its Outback Steakhouse brand, including a $75 million initiative intended to improve performance at company-operated restaurants.
Acquiring the 61 Western restaurants would give Bloomin' Brands direct control over a majority of Outback's franchised restaurants in the United States, potentially allowing the company to consolidate operations and implement its turnaround strategy across a much larger portion of the chain.
The San Diego-based franchise operator has a history stretching back more than three decades.
The business originated as T-Bird Restaurant Group, established in 1994 by Thomas J. Shannon Jr. to develop Outback Steakhouse locations in California. It expanded over the following years as the Australian-themed steakhouse chain became a familiar fixture in suburban shopping centers and restaurant corridors throughout the region.
In January 2015, an affiliate of private equity firm H.I.G. Capital acquired the business for approximately $112 million. Two years later, the company purchased another 45 Outback restaurants from Bloomin' Brands, significantly expanding its footprint throughout the Western United States.
By the end of 2018, the operator had grown to 99 restaurants generating more than $340 million in annual sales. The expansion made it one of the most substantial franchise operations within the Outback system, although its financial obligations would eventually become a major obstacle to long-term stability.
SanDiegoVille previously covered the company in December 2018, when it opened an unusual concept inside its San Marcos Outback Steakhouse.
Called Beekeeper, the honey-themed speakeasy was tucked inside the restaurant at 177 San Marcos Boulevard, offering a hidden cocktail destination within an otherwise conventional suburban steakhouse. At the time, the company was described as operating more than 100 Outback restaurants across five states, reflecting the scale and ambition of its Western expansion.
The contrast between that period of growth and the company's current financial position is striking. What was once a sprawling regional restaurant empire with nearly 100 locations has contracted to 61 operating restaurants, while the debt accumulated during its expansion has become unsustainable.
The bankruptcy also arrives during a period of significant change for the broader casual-dining industry, where established restaurant chains have been confronting shifting consumer habits, higher labor and ingredient costs, and increased competition from fast-casual operators and other dining alternatives.
For Outback Steakhouse, the situation presents both a challenge and an opportunity. Although the financial collapse of its largest franchisee underscores the difficulties facing traditional sit-down restaurant chains, the proposed acquisition could allow Bloomin' Brands to bring a substantial portion of its Western operations directly under corporate management.
For San Diego, the story is particularly notable because the struggling franchise empire is headquartered in Mission Valley, just a short distance from one of the six local Outback restaurants whose ownership could soon change hands.
At least for now, customers can continue visiting their local restaurants, employees remain on the job, and the company's familiar menu is not disappearing. The more consequential question is who will own and operate those restaurants once the bankruptcy proceedings conclude.
With a December auction approaching and Bloomin' Brands already offering to acquire the business, the future of the San Diego-based Outback franchise operation could become considerably clearer before the end of the year.
For more information about Outback Steakhouse and its locations, visit outback.com.
Originally published on November 2, 2026.
