A number of Outback Steakhouse locations closed their doors last month in the lead-up to a bankruptcy petition by one of the casual dining chain’s largest franchisees, court documents reveal. The store closures span four states. Here’s what to know:

Cerca Trova Restaurant Group Holdings, which operates as Out West Restaurant Group, one of Outback Steakhouse’s largest franchisees, sought Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware on Monday.

The San Diego-based company, which currently employs around 3,669 workers, operates 61 Outback Steakhouse restaurants across California, Arizona, Colorado, Nevada, and New Mexico.

Outback Steakhouse, the dining chain known for its Australian theme, had more than 660 U.S. restaurants as of the end of last year, according to parent company Bloomin’ Brands.

Court records show the franchisee filed for bankruptcy to sell the majority of its assets.

However, that same day, Cerca Trova filed a motion to reject the leases on 10 restaurant locations that it had closed between October 11 and October 25.

According to court documents, the shuttered restaurants operated at a loss or at margins insufficient to cover their occupancy costs. These locations aren’t part of the proposed sale. 

The franchisee had previously closed three underperforming locations earlier this year, court documents show.

In court documents, the company noted that it has faced growing financial challenges since 2018 due to declining traffic and rising labor costs.

In 2020, during the COVID-19 pandemic, its revenue dropped around 35%. Cerca Trova has pursued a sale four times since 2018.

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