Out West: The 61-Restaurant Franchisee That Filed for Chapter 11
Published November 4, 2026
Out West Restaurant Group, the largest Outback Steakhouse franchisee with 61 restaurants across five western states, filed for Chapter 11 on November 2, 2026, carrying nearly $320 million in secured debt. Parent company Bloomin' Brands agreed to pay about $26.3 million for substantially all its assets and serve as lead bidder in a court-supervised auction.
On Monday, November 2, 2026, the largest franchisee of Outback Steakhouse filed for Chapter 11 bankruptcy protection in Delaware. The company, San Diego-based Out West Restaurant Group, operated 61 Outback restaurants across five western states: California, Arizona, Colorado, Nevada, and New Mexico. All of the restaurants were to remain open while the case proceeded, but the filing marked the end of a long, slow decline for a business that had once helped carry the Outback brand across the American West.
The story begins in 1992, when the company was founded as T-Bird Restaurant Group and became Outback's first franchisee. It helped expand the Tampa-based chain across the West Coast, and at its peak it managed as many as 100 locations. Private-equity firm H.I.G. Capital acquired T-Bird in 2015, and two years later it bought 45 corporate-owned Outback restaurants in Arizona, Nevada, Colorado, and New Mexico, before the business was rebranded as Out West Restaurant Group. Growth, however, was financed with debt, and the debt outlasted the growth.
According to court documents reported by Inc., Out West took on debt to support expansion during the mid-to-late 2010s, and by the end of 2018 it could no longer meet its financial obligations as customer traffic declined and costs rose. Forbearance agreements with lenders and financial help from Outback's parent company, Bloomin' Brands, kept the business going, but the pandemic then delivered what the company itself described in court papers as a fatal blow: revenue plunged 35 percent, and loans that came due in April 2022 could not be repaid. Since then, Out West operated under a series of forbearance agreements while accumulating nearly $320 million in secured debt.
The years that followed were a search for an exit that never arrived. Out West pursued alternatives to bankruptcy and tried four times to sell itself since 2018, without success. It closed 10 locations in the years leading up to the filing, including three in 2026. Legal pressures added to the strain: a California court approved a $1.6 million wage-and-hour class-action settlement in August 2026, and two similar lawsuits filed in California over the summer were still pending. Its largest unsecured creditors included Performance Food Group, owed more than $4 million, and Matern Law Group, with a claim exceeding $1.6 million. As of October 25, the company had $5.7 million in cash, and it projected that figure would fall to about $3.4 million by the filing date.
The proposed ending is, in a sense, a homecoming. Bloomin' Brands, Outback's parent company, agreed to pay about $26.3 million for substantially all of Out West's assets and to serve as the lead bidder in a court-supervised auction, while also offering up to $5.5 million in financing to sustain operations during the bankruptcy. If the deal closes, the franchisor will reacquire restaurants it once sold to the same operator, converting a sprawling franchise relationship back into company-owned stores. A Bloomin' Brands spokesperson described the filing as an isolated situation involving the franchisee that did not affect the parent company's corporate operations, financing, or liquidity.
Out West's collapse is not a story of a single bad year. It is a story of leverage meeting a changing restaurant business: fewer guests, higher food and labor costs, and a debt load that left no room for a shock. Beef, the company's biggest expense, rose sharply in price, and traffic never fully recovered. Expansion debt works beautifully when every new restaurant adds profit; when traffic stalls, the same debt turns each location into a fixed cost that must be fed whether the dining room is full or not. The lesson is an old one for operators, and a useful one for anyone tempted to borrow against a good run: growth bought with debt is only as durable as the customers who keep showing up to pay for it.
The lesson: Growth bought with debt is only as durable as the customers who keep showing up to pay for it.
Source: original reporting · How we source stories