Outback Franchisee Files for Chapter 11 Bankruptcy
San Diego-based Out West Restaurant Group seeks court protection from a $449 million debt load as its 61 Outback Steakhouse locations change hands.
Updated on Nov. 6, 2026 in Dining Out
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Out West Restaurant Group, an Outback Steakhouse franchisee headquartered in San Diego, filed for Chapter 11 bankruptcy protection. The company is seeking court authorization to sell its assets, and Bloomin' Brands has agreed to buy the remaining 61 locations for $26.3 million.
Why it matters
Out West's CEO blamed a shrinking customer base and high operational overhead, while the company pointed to California's labor costs and inflation as primary drivers of its distress. The filing signals how rising costs are pressuring sit-down restaurant operators in the state.
Out West's debt load totals $449 million and its footprint has shrunk from 99 restaurants in 2018 to 61 today. Bloomin' Brands is providing up to $5.5 million in interest-free debtor-in-possession financing while the sale is pending.
The players
Out West Restaurant Group
Out West Restaurant Group, officially known as Cerca Trova Restaurant Group, is a San Diego-based franchisee that operates Outback Steakhouse locations across five Western states.
Bloomin' Brands
Bloomin' Brands is the Florida-headquartered parent company of Outback Steakhouse that agreed to buy the remaining franchise locations.
The details
Out West operates Outback Steakhouse locations across California, Arizona, Colorado, Nevada, and New Mexico. Sit-down chains were exempt from California's $20-per-hour fast-food minimum wage law passed in 2024, while beef prices have risen up to 5% annually since 2022.
Timeline
2018: Out West operated 99 restaurants at its peak.
2022: Beef price increases of up to 5% annually began.
2024: California passed its $20-per-hour fast-food minimum wage law.
January 2026: California's minimum wage reached $19.60 per hour.
November 6, 2026: Out West filed for Chapter 11 bankruptcy protection.
Health Landscape
Out West's bankruptcy follows California's 2024 $20-per-hour fast-food minimum wage law, which exempted sit-down restaurants but still left them facing a $19.60 statewide floor. The case illustrates how wage policy and beef inflation are reshaping the economics of full-service dining in the state.
Diners at the 61 affected Outback locations should expect the restaurants to remain open during the sale process, though menus and pricing could change under new ownership. Sit-down dining costs are likely to stay elevated as beef prices and California's wage floor continue to rise.
The takeaway
Restaurant prices in California may continue climbing as labor and beef costs rise, so comparing menus across dining options can help stretch a budget. Watching how the Outback sale plays out may also show whether acquisitions can stabilize struggling franchise operations.
What happens next
A bankruptcy court hearing on the proposed asset sale to Bloomin' Brands has not been scheduled in the source material.
Further reading
Explore more coverage in Dining Out for context on how restaurant operators are responding to rising costs.
Source note: This article includes information reported by Fox Business.
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