Cerca Trova Restaurant Group files bankruptcy with $449 million in debt

Cerca Trova Restaurant Group held $449 million in debt when it filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Wilmington, Del., on Monday. The San Diego-based company operates 61 Outback Steakhouse locations, with the majority situated in California. The filing marks the latest financial struggle for a major casual dining operator that has expanded its portfolio significantly over the last decade.

The company’s financial position has deteriorated sharply since the pandemic. Court documents show its debt increased from $269 million in late 2020 to the current $449 million. Cerca Trova, also known as Out West Restaurant Group, stated it has struggled to maintain profitability as operating expenses outpaced revenue. The group now has between one and 49 creditors seeking repayment from its assets.

Labor costs in California form the central focus of the bankruptcy petition. More than half of Cerca Trova’s workforce is employed in the state. The California minimum wage rose to $16.90 per hour at the start of 2026. While fast-food chains must pay $20 per hour, Outback Steakhouse is not classified as a fast-food establishment. The franchisee argued that these wage requirements made staffing especially expensive for its California operations compared to its locations in Arizona, Colorado, Nevada, and New Mexico.

Customer behavior has also shifted against the company. David Goronkin, the chief executive of Cerca Trova, stated in a court filing that guest traffic and earnings continued to decline while food and production costs rose. The company noted that beef prices increased by as much as 5% annually since 2022. Broader economic pressures, including inflation and the rise of weight-loss medications, have led consumers to eat at home or choose cheaper dining options.

Cerca Trova was once the largest franchisee for Outback Steakhouse, operating 99 restaurants in 2018. As of June 2026, there were 659 Outback locations nationwide. The parent company, Bloomin’ Brands, owns and operates 544 of those sites. Bloomin’ Brands, which is headquartered in Tampa, Fla., also manages Bonefish Grill, Carrabba’s Italian Grill, and Fleming’s Prime Steakhouse and Wine Bar.

The franchisee has proposed selling its assets to Bloomin’ Brands for $26.3 million. This offer stands as a stalking-horse bid, meaning a higher offer could emerge during the bankruptcy process. Elizabeth Daly, a spokesperson for Bloomin’ Brands, said in an email that the situation is isolated to the franchisee. She noted that Bloomin’ Brands is participating to support operational continuity and protect the brand while the court-supervised process moves forward.

Bloomin’ Brands stock fell 6.15% on Tuesday after the bankruptcy news. Shares ended the day at $10.23, giving the company a market value of nearly $879 million. The stock had risen 60% since January before this latest development. Cerca Trova could not be immediately reached for comment on the filing.