Bloomin' Brands bids for 61 Outback Steakhouse locations amid franchisee bankruptcy

Bloomin' Brands has initiated a $26.3 million bid to acquire all 61 restaurants operated by Out West Restaurant Group. The move follows the San Diego-based franchisee's Chapter 11 bankruptcy filing earlier this week, which stems from years of financial instability.

Serving as the stalking-horse bidder, Bloomin' Brands intends to facilitate an orderly transfer of assets. The company is also providing up to $5.5 million in debtor-in-possession financing to ensure the restaurants remain operational throughout the court-supervised proceedings. Bloomin' Brands stated that this situation is isolated and does not impact its own liquidity or corporate operations.

Out West's financial troubles date back to the late 2010s when debt-fueled expansion met declining customer traffic. Pandemic-related revenue losses subsequently eroded the operator's ability to meet obligations on nearly $320 million in secured debt.

The 61 affected locations, situated across California, Arizona, Colorado, Nevada, and New Mexico, will continue to serve customers as the acquisition process moves through the Delaware bankruptcy court.