Bloomin’ Brands said Friday that Outback Steakhouse had 657 U.S. restaurants on September 27, two fewer than at the end of June. That count predates an October round of closures in the West and a November 2 bankruptcy filing by Out West Restaurant Group, an independent operator of 61 Outback restaurants. Bloomin’ has offered to buy substantially all of that operator’s assets through the bankruptcy court.
In its November 2 securities filing, Bloomin’ said the filing had no immediate effect on day-to-day operations and that Out West intended to keep operating during the case. The proposed sale includes assuming liability for unredeemed gift cards. The sale still needs court approval.
Which Outback closures are already reflected in the count?
The Friday earnings release gives a snapshot as of September 27. Outback opened two U.S. restaurants and closed four over the quarter. The company opened and closed two of its own restaurants, leaving that group at 544. Franchise operators closed two, leaving 113 franchised locations. Together, the two groups went from 659 to 657.
Ten Out West restaurants closed ahead of the bankruptcy filing, following three earlier closures this year, according to trade reporting based on bankruptcy documents. The October closures were in Arizona, California, Colorado and Nevada. The September tally excludes those October closures. The 61 in the November filing are the locations Out West operated when it filed.
Out West’s operations span five states, including New Mexico. The Outback restaurant locator is a starting point if you’re checking a particular address. The chain’s locator still lists its restaurant on West Briggsmore Avenue in Modesto, for example. If your location’s listing is missing or the hours are unclear, call before making plans.
What the proposed sale would do
Bloomin’ put the starting cash price at $26.3 million, subject to adjustments for bankruptcy financing and certain vendor liabilities. The agreement would also transfer specified liabilities, including future lease obligations and unredeemed gift cards. That provision would take effect if Bloomin’ completes the purchase.
Bloomin’ expects to be the opening bidder if the court approves that role. Other bidders can make higher or otherwise better offers under court-approved rules. A competing bid could trigger an auction, and the court still has to approve any sale under the proposed process. The purchase agreement gives the franchisee a possible buyer while leaving the final ownership unresolved. If Bloomin’ wins the bidding, the transaction would shift a sizable group of restaurants from an independent operator to the company that owns the brand. The September table puts the potential shift in perspective. Bloomin’ already operated about 83% of U.S. Outbacks, while franchisees operated the other 17%.
Out West sought permission to keep paying certain employees, suppliers and other parties while the case proceeds. The bankruptcy filing and proposed purchase do not give a location-by-location schedule for operations after a sale.
Where you can use an Outback gift card
Outback’s gift card page links to a balance checker and lists 888-731-2610 for balance inquiries. Check the terms on the card before switching restaurants. Bloomin’ issues cards that can be redeemed across its U.S. brands, including Carrabba’s, Bonefish Grill and Fleming’s, as well as cards restricted to Outback. A closure at one address may leave another place to use the balance.
What Friday’s sales figures cover
Bloomin’ reported a 1.9% rise in comparable U.S. Outback sales for the quarter. The figure covers company-operated restaurants that had been open for at least 18 months and excludes the franchisee’s restaurants. For the western franchise locations, the next document to watch is a court order setting the terms or approving a sale. That would show who could take over the restaurants and which obligations would transfer.
