Outback Steakhouse's Largest U.S. Franchisee Files for Bankruptcy; Parent Company Offers $26.3 Million Bid for 61 Restaurants
Out West Restaurant Group and affiliated entities operating as Cerca Trova Restaurant Group, one of Outback Steakhouse's largest U.S. franchisees, filed for Chapter 11 bankruptcy protection in Delaware on November 2. The group operates 61 Outback restaurants, mainly in the western and southwestern United States. Parent company Bloomin' Brands has signed a $26.3 million stalking-horse asset purchase agreement to acquire the restaurants and substantially all related assets, while also agreeing to provide up to $5.5 million in debtor-in-possession financing. The filing does not mean the restaurants are immediately closing: Bloomin' Brands says operations are expected to continue.
According to a filing with the U.S. Securities and Exchange Commission, Out West and its subsidiaries voluntarily filed for Chapter 11 on November 2. The process allows a business to continue operating under court supervision while it pursues a restructuring or asset sale. Out West operates 61 Outback restaurants across several western and southwestern states.
Restaurant Dive notes that Outback has about 115 franchised restaurants and roughly 544 company-owned locations in the United States. The bankruptcy could therefore allow Bloomin' Brands to take direct control of a substantial share of the chain's remaining franchised restaurants.
Bloomin' Brands said the filing has no immediate impact on day-to-day restaurant operations, employees or guests. Out West will continue operating as a debtor in possession under the court's supervision and has sought authority to keep paying employees, suppliers, rent and franchise-related expenses in the ordinary course of business.
The asset purchase agreement between Bloomin' Brands and Out West is valued at $26.3 million and covers the 61 restaurants and “substantially all” of the franchisee's other assets. It is a stalking-horse bid: an initial offer that establishes a floor for a court-supervised sale process. It does not mean the transaction has already received final approval.
The SEC filing also says Bloomin' Brands will provide up to $5.5 million in debtor-in-possession financing to support the business during bankruptcy. The court must still review the proposed transaction and financing, and other potential buyers may be able to submit competing bids. If the transaction is approved, Bloomin' Brands would gain more direct operating control over locations that were previously run by a franchisee.
Bloomberg Law, citing court papers, reported that Cerca Trova once operated 99 Outback locations in 2018 but now runs 61. Its debt reportedly increased from about $269 million at the end of 2020 to approximately $449 million. The company cited rising costs, including food expenses and California minimum-wage requirements, among the pressures contributing to its bankruptcy.
A case summary published by Bondoro says the group generated about $321 million in revenue and approximately $16.1 million in restaurant-level EBITDA in the 12 months ended August 23, 2026. Those figures describe revenue and restaurant-level operating earnings, not the value of the company or the amount available to repay creditors. Court filings can also use different definitions when estimating assets and liabilities.
Bloomin' Brands said restaurants are expected to continue serving customers and that employees' day-to-day work will not be immediately affected by the filing. Any later changes to restaurant ownership, staffing or operations will depend on the court-approved sale process and the terms of a final transaction.
The parent company has previously closed some underperforming Outback locations as part of a broader turnaround effort. This bankruptcy could further change the balance between company-operated and franchised restaurants in the United States, but it does not establish that all 61 locations will close.
Chapter 11 generally allows a company to keep operating while it restructures or sells assets. The current proposal is for Bloomin' Brands to act as the stalking-horse bidder at $26.3 million and provide up to $5.5 million in financing. The court still needs to address the sale process, creditor interests and approval of the transaction. For customers, the key point is that the filing does not automatically close the restaurants; future ownership and operating arrangements remain subject to the bankruptcy proceedings.