The company behind 61 Outback Steakhouse restaurants across the western United States filed for Chapter 11 bankruptcy protection on Monday, and the brand's own corporate parent is now angling to buy substantially all of its assets for $26.3 million. Cerca Trova Restaurant Group Holdings, which does business as Out West Restaurant Group, filed the petition in the U.S. Bankruptcy Court for the District of Delaware alongside four affiliated entities.
Out West’s western footprint grew from a long-running franchise relationship: Cerca Trova’s predecessor had operated Outback restaurants in California since 1994, and in 2017 Bloomin’ Brands sold Cerca Trova 45 company-owned restaurants in Arizona, Colorado, Nevada and New Mexico. The deal expanded the operator across five states; Bloomin’ described Cerca Trova at the time as its largest franchisee. Bloomin’ Brands’ announcement of the 2017 sale documents the expansion.
According to Quartz, Bloomin' Brands, which owns the Outback Steakhouse brand, agreed on November 1 to buy substantially all of Out West's assets for $26.3 million, less amounts owed under a debtor-in-possession loan. The proposed deal would have Bloomin' Brands assume certain liabilities too, including future lease obligations, unredeemed gift cards and specified vendor liabilities. The offer remains open to higher bids or an auction, meaning the sale still depends on court approval and could change before it closes.
Cerca Trova CEO David Goronkin, who signed the bankruptcy petition, pointed to a familiar squeeze bearing down on restaurant operators nationwide. “Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise,” Goronkin said, per Quartz's reporting. The company specifically cited climbing ingredient prices and California's state-mandated minimum wage as drivers of its troubles.
California’s fast-food wage law is narrower than a statewide wage mandate covering every restaurant. The Labor Commissioner says the $20 hourly floor applies to qualifying limited-service restaurants where customers generally order and pay before eating; California’s general minimum wage is $16.90 an hour in 2026. The distinction matters when assessing the company’s reference to state-mandated wage increases: that reference alone does not establish that Outback locations are covered by the special fast-food rate. The state’s fast-food coverage criteria set out the limited-service test, while the Labor Commissioner’s wage schedule lists the general rate.
Beef Costs and Mounting Debt
Beef prices have been especially punishing. Cerca Trova said beef became roughly 15% to 20% more expensive in 2022 and then kept climbing by as much as 5% annually in the years since, Quartz reported. Meanwhile, the company's borrowings swelled to near $449 million, up sharply from $269 million at the end of 2020.
Court filings list Cerca Trova's estimated assets at between $0 and $50,000, with estimated liabilities between $100,000,001 and $500 million.
Restaurants Staying Open For Now
Despite the bankruptcy filing, nothing changes at the dinner table just yet. Nation's Restaurant News reported that Out West's restaurants will remain open for business during the proceedings, and a Chapter 11 filing does not necessarily mean a business is closing — it allows companies to reorganize debts while continuing operations under court supervision.
Cerca Trova has asked the court for permission to pay certain outstanding amounts owed to employees, suppliers, and vendors as the case proceeds. The company's largest unsecured creditors reportedly include Performance Food Group, Budderfly, Inc., Outback Steakhouse of Florida, Schnitzer Properties LLC and Resolution Economics LLC, with unsecured claims mostly tied to lease obligations and trade debt. Bradford J. Sandler of Pachulski Stang Ziehl & Jones LLP is listed as counsel to Cerca Trova, according to PACER records.
Bloomin' Brands has also agreed to provide up to $5.5 million in interest-free financing to keep Out West's operations running during the bankruptcy, money the company says would help cover operating expenses and proceeding costs. Cerca Trova would be able to tap that financing when its available cash falls below a required minimum, with the loan to be repaid through another sale or a price adjustment should the current deal fall through. The agreement carries an expected closing deadline of January 31, 2027.
A Wider Pattern Among Casual-Dining Franchisees
Cerca Trova's troubles echo a broader strain rippling through casual-dining franchise operators battling rising meat costs. Wendy's franchisee Meritage Hospitality Group filed for Chapter 11 protection in September, citing deteriorating beef economics and weak brand marketing as central causes, Quartz reported. That filing, like Cerca Trova's, underscores how thin margins have gotten for operators squeezed between grocery-bill-style ingredient inflation and reluctant consumers.
For now, Bloomin' Brands could end up serving as the initial, or stalking-horse, bidder for Out West's assets, which would let other interested buyers submit competing offers before a sale is finalized. Whether that ultimately preserves all 61 locations under the Outback banner, or reshapes the footprint further, will depend on how the bankruptcy court and bidding process play out in the months ahead.
