Rising food costs prompt big Outback Steakhouse franchisee to file for bankruptcy

Cerca Trova Restaurant Group Holdings, a major Outback Steakhouse franchisee, has filed for Chapter 11 bankruptcy, citing rising food and labour costs, declining customer traffic and the slow recovery from the pandemic. The filing matters to its workers, creditors and restaurant locations, while Bloomin’ Brands says the case does not affect its own corporate operations or finances.

The California-based group owns 61 restaurants across several western states and has proposed selling its assets to Bloomin’ Brands for $26.3 million. It had about $3.6 million in cash when it filed and nearly 3,670 employees; beef, its largest expense, rose 15% to 20% in 2022 and about 5% annually since. The company also faces wage-related claims, including a court-approved $1.6 million settlement and two new class actions, with the effect of bankruptcy on settlement payments unclear.