Outback Steakhouse Parent Agrees to Buy 61 Franchisee Restaurants

Outback Steakhouse parent company Bloomin' Brands has moved to acquire 61 restaurants operated by its largest U.S. franchisee after the operator filed for Chapter 11 bankruptcy protection. Out West Restaurant Group, affiliated with the Cerca Trova Restaurant Group, filed for bankruptcy in Delaware on Monday.

Under the proposed agreement, Bloomin' Brands will act as the stalking-horse bidder to purchase Out West's assets for approximately $26.3 million, subject to adjustments and court approval. The transaction also includes the assumption of specified liabilities and substantially all of the franchisee's other assets.

To support operations during the legal proceedings, Bloomin' Brands agreed to provide up to $5.5 million in interest-free debtor-in-possession financing. Company officials stated that the bankruptcy filing and the proposed sale will have no immediate impact on customers, employees, or daily restaurant operations, noting that the locations will remain open throughout the process.

The affected restaurants are concentrated heavily in the American Southwest and West. Filings associated with the bankruptcy listed operations and creditors across several states, including California, Arizona, Nevada, Colorado, and New Mexico.

According to Bloomin' Brands' most recent financial disclosures, Outback Steakhouse operates roughly 544 company-owned units alongside about 115 franchised restaurants in the United States. If approved by the bankruptcy court, the acquisition could place an outright majority of the chain's U.S. franchised locations back under direct corporate control.

Bloomin' Brands noted that taking over the franchisee's operations will provide direct operational insight, allow for targeted investments through company development initiatives, and help mitigate any potential disruptions for guests and staff. The parent company emphasized that it is working closely with lenders and stakeholders to maintain stability.

The restaurant chain previously closed a number of underperforming locations last year as part of a multi-stage turnaround effort. Following those closures, the brand invested heavily in food quality, which helped reverse a streak of declining same-store sales before this latest franchisee restructuring began.