Bloomin' Brands to Acquire Largest Outback Franchisee Amid Bankruptcy

Out West Restaurant Group, the largest domestic franchisee of Outback Steakhouse, filed for Chapter 11 bankruptcy on Monday. Parent company Bloomin’ Brands has agreed to purchase its assets for a starting bid of $26.3 million.

Cerca Trova Restaurant Group Holdings, which does business as Out West Restaurant Group, filed the petition in the U.S. Bankruptcy Court for the District of Delaware. The filing listed assets and liabilities each estimated between $10 million and $50 million. Bloomin’ Brands signed an asset purchase agreement on Sunday, positioning itself as the stalking-horse bidder in a court-supervised sale. The proposed acquisition would give Bloomin’ Brands direct control of the franchisee’s restaurant assets if closed.

The deal is subject to adjustments based on outstanding debtor-in-possession debt and vendor liabilities. A specific mechanism governs the final price.

Bloomin’ Brands will also assume lease obligations and liabilities for unredeemed gift cards. The company stated the acquisition would provide operational insight, enable development investments, and limit guest and employee disruption. An auction could follow if qualified competing bids emerge, and any final sale requires court approval.

Financing and operational continuity

Bloomin’ Brands is providing $5.5 million in debtor-in-possession financing to keep operations running. This interest-free financing will fund Out West’s operating expenses and professional costs, accessible only if operating cash falls below minimum levels.

Out West plans to continue paying franchise fees, royalties, and rent during the bankruptcy process. Its 61 restaurants will remain open. The filing does not immediately affect restaurant operations, and Out West seeks court permission to pay pre-bankruptcy obligations. Out West had experienced payment issues leading up to the bankruptcy, with a December 2023 agreement to delay payments and hold off on enforcing default rights.

Franchisee background and scale

Out West Restaurant Group operates 61 Outback Steakhouse locations across five Western states: California, Arizona, Nevada, Colorado, and New Mexico. Founded in 1992 as T-Bird Restaurant Group, it was Bloomin’ Brands’ first franchisee. It was later known as Cerca Trova Restaurant Concepts before rebranding as Out West Restaurant Group in 2018.

Private equity firm H.I.G. Capital acquired the group in 2015. Cerca Trova made its biggest bet on Outback in 2017 by acquiring 45 corporate-owned locations in Arizona, Colorado, Nevada, and New Mexico, becoming the sole operator for the chain in multiple Western states.

Industry context and turnaround signals

The bankruptcy of a major franchisee occurs amid broader industry headwinds. A recent industry report noted that chain restaurant sales slowed again in 2025 due to reduced consumer dining, though coffee, beverages, snacks, and chicken sectors thrived. Despite this, Outback Steakhouse itself shows signs of a turnaround.

Same-store sales for the chain rose 1.4% in the quarter ended June 28, its highest growth since early 2023. This recovery is supported by a $75 million investment from Bloomin’ Brands. In 2026, as part of a broader turnaround strategy focusing on digitization and customer experience, Bloomin’ Brands closed more than 40 underpertaining locations across its portfolio, which also includes Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse & Wine Bar.

Outback Steakhouse was founded in Tampa in 1988 and has since expanded to approximately 670 U.S. locations and more than 1,000 globally, with presence in countries including Brazil, Canada, and South Korea. Bloomin’ Brands called the bankruptcy an “isolated incident” that will not affect corporate operations or financing. The company plans to integrate the acquired locations while maintaining guest and employee continuity during the bankruptcy process.