An Outback Steakhouse franchisee operating 61 locations across the western United States has filed for Chapter 11 bankruptcy protection, setting the stage for parent company Bloomin’ Brands to acquire the restaurant assets for $26.3 million.
Cerca Trova Restaurant Group Holdings, operating as Out West Restaurant Group, submitted its Chapter 11 petition on November 2 in the U.S. Bankruptcy Court for the District of Delaware. The San Diego-based franchisee listed debt that climbed from $269 million in late 2020 to approximately $449 million, according to court documents. The case has been assigned to Judge Craig Goldblatt.
The company holds $319.9 million in prepetition secured obligations under a credit agreement, as well as $13.9 million under a deferred payment agreement with its franchisor. Its interest expense of about $45.9 million was more than five times its covenant EBITDA in fiscal year 2025, and its cash dropped to about $5.7 million as of October 25 from about $9.7 million at the end of fiscal year 2023. Cerca Trova is also facing a $1.6 million wage-and-hour class action settlement approved in August, along with other pending cases.
Bloomin’ Brands entered into a preliminary Asset Purchase Agreement to serve as the stalking-horse bidder for Out West’s restaurant operations, setting a baseline price that competing buyers can attempt to exceed during the court-supervised process. To maintain operations through the restructuring, Bloomin’ Brands has agreed to provide up to $5.5 million in interest-free debtor-in-possession financing.
Out West Grows Through Private Equity Acquisition
Out West traces its history to 1994 when it was incorporated as T-Bird Restaurant Group to build out the Outback footprint, becoming Bloomin’ first franchisee to bring the Florida-based brand to the West Coast. In 2015, T-Bird was acquired by private-equity firm H.I.G. Capital, and two years later it acquired 45 corporate Outback locations in Arizona, Nevada, Colorado, and New Mexico, eventually growing to 99 restaurants by 2018 as the system’s largest franchisee and rebranding first as Cerca Trova Restaurant Concepts and later as Out West Restaurant Group. But financial strains mounted following pandemic revenue drops of approximately 35 percent in 2020, compounded by increasing costs and beef price increases of up to 5 percent annually since 2022.
Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise.
Chief Executive David Goronkin
The company operated under forbearance agreements since receiving a notice of events of default from its lender in April.
Out West Shutters Ten Restaurants Before Filing
Ahead of the bankruptcy filing, Out West shuttered 10 underperforming restaurants between October 11 and October 25 in Arizona, California, Colorado, and Nevada, alongside three other locations closed earlier in the year. Those 10 closed units are excluded from the proposed acquisition by Bloomin’ Brands. The remaining 61 franchise-operated locations are expected to continue normal operations during the court proceedings, employing about 3,669 workers.
This is an isolated situation involving the franchisee and does not affect Bloomin’ Brands’ corporate operations, financing, or liquidity. Bloomin’ Brands is participating in the process as a stalking‑horse bidder to acquire Out West’s assets and seeking to support operational continuity and protect the brand while the court‑supervised process moves forward.
Elizabeth Daly, Spokesperson for Bloomin’ Brands
Parent company Bloomin’ Brands operates hundreds of restaurants nationwide, including 544 company-owned and 115 franchisee-owned Outback locations as of June, alongside Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse & Wine Bar.
Outback Steakhouse parent company Bloomin' Brands is moving to acquire 61 restaurants operated by a major franchisee that filed for Chapter 11 bankruptcy protection. Out West Restaurant Group, which operates Outback Steakhouse locations across the western United States, filed… pic.twitter.com/AObn471nhy
Court Sets Bankruptcy Sale Milestones
The U.S. Bankruptcy Court for the District of Delaware has established procedural milestones for the sale of Out West’s assets. A first-day hearing was set for Tuesday, November 3 at 5 p.m. ET before Judge Craig Goldblatt. Competing bids must be submitted by December 8, followed by an auction on December 11 if qualifying offers are received, and a formal sale hearing on December 15. The acquisition is targeted to close by January 31, 2027.