Outback Steakhouse Parent Steps In to Buy 61 Locations After Major Franchisee Bankruptcy

2026-11-05 companies

Tampa, Wednesday, 4 November 2026.
Following Out West Restaurant Group’s Chapter 11 filing and store closures, parent company Bloomin’ Brands agreed to a $26.3 million deal to acquire 61 locations and preserve operations.

Franchisee Collapse Triggers Outback Steakhouse Shutdowns

Out West Restaurant Group, the largest franchisee of Outback Steakhouse (NASDAQ: BLMN) operating under the name Cerca Trova Restaurant Group Holdings, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on Monday, 2 November 2026 [1][4]. The filing immediately preceded the closure of 21 Outback Steakhouse locations across Arizona, California, Colorado, and Nevada between 11 October and 25 October 2026, as the franchisee sought to shed unprofitable units [1][4][alert! ‘Closures occurred in October 2026, prior to the bankruptcy filing, as part of asset restructuring efforts’].

Bloomin’ Brands Secures $26.3 Million Deal to Stabilize Operations

In response to the franchisee’s bankruptcy, Bloomin’ Brands (NASDAQ: BLMN), the parent company of Outback Steakhouse, entered into a $26.3 million stalking horse agreement to acquire 61 Outback Steakhouse locations and substantially all other assets from Out West Restaurant Group [4]. The deal, accompanied by up to $5.5 million in debtor-in-possession financing, aims to preserve operational stability and maintain service for affected employees and customers [4]. Bloomin’ Brands emphasized its commitment to working closely with lenders, stakeholders, and the Bankruptcy Court to ensure continuity during the court-supervised process [4].

Financial Pressures Drive Franchisee’s Bankruptcy

Court documents reveal that Cerca Trova Restaurant Group Holdings filed for Chapter 11 to facilitate the sale of its assets, but simultaneously moved to reject leases for 10 recently closed locations operating at a loss or insufficient margins to cover occupancy costs [1][4]. The franchisee, which employed approximately 3,669 workers across 61 Outback Steakhouse restaurants in the Southwest, faced mounting financial pressure from labor costs, food inflation, and shifting consumer spending habits in the casual dining sector [1][4]. Outback Steakhouse operated 660 U.S. restaurants as of the end of 2025, with the acquisition of Out West’s 61 locations potentially giving Bloomin’ Brands direct control of a majority of its U.S. franchise system [1][4].

Industry Implications and Future Outlook

The bankruptcy of Out West Restaurant Group underscores broader challenges within the casual dining industry, where elevated costs and changing consumer preferences are reshaping the competitive landscape [1][4]. Bloomin’ Brands’ acquisition strategy positions the parent company to invest in unit development and mitigate disruptions for guests and employees, while gaining operational insight into franchise operations [4]. With Outback Steakhouse’s U.S. footprint comprising approximately 115 franchised and 544 company-owned units, the deal could solidify Bloomin’ Brands’ control over a significant portion of its franchise network [4][alert! ‘Franchise counts are approximate based on available data’].

Sources

restaurant bankruptcy casual dining