Rubio’s Coastal Grill, the long-struggling fast-casual chain that just closed a third of its restaurants, on Wednesday declared bankruptcy for the second time in four years, saying the operating environment has grown too difficult, particularly in California.
The fast-casual taco chain said it plans to use Chapter 11 bankruptcy to oversee a sale process.
Rubio’s said it had estimated assets of $10 million to $50 million, and estimated liabilities of between $100 million and $500 million.
The company announced the filing in a release. It said it has been hurt by years of diminishing in-store traffic due to people working from home, combined with rising food and utility costs.
The $20 fast-food wage in California, where Rubio’s is based and where it operates most of its locations, also made matters challenging.
“Despite the company’s best efforts to right-size the company, the continued challenging economic conditions have negatively impacted its ability to meet the demands of its debt burden,” Nicholas Rubin, chief restructuring officer for Rubio’s, said in a statement.
He said the company’s best path is through a court-supervised sale process.
Rubio’s said it plans to enter into a stalking horse purchase agreement with an as-yet-unidentified buyer. A stalking horse buyer sets the lowest price for a bankruptcy auction.
The filing is not a surprise, as it comes just days after Rubio’s closed 48 locations in California.
But Rubio’s had been closing restaurants this year and last year and sales have been in decline since 2017. Rubio’s filed for bankruptcy in 2020 in the aftermath of the pandemic.
The company now operates 86 locations, most of which are in California. It started the year with 148 restaurants.
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