Rubio's Files For Bankruptcy After Closing 48 CA Locations

CARLSBAD, CA — Rubio's Coastal Grill has filed for Chapter 11 bankruptcy, days after the company abruptly closed nearly 50 locations across California.

Rubio's Restaurants, the parent company of the Carlsbad-based fast casual restaurant chain, announced it is pursuing bankruptcy with plans to sell the 41-year-old business. The company will "continue normal operations" at the remaining 86 locations in California, Arizona and Nevada.

"Rubio's Coastal Grill is one of the legendary fast casual chains with a strong and loyal customer following in its communities," said Nicholas Rubin, chief restructuring officer of Rubio's Coastal Grill. "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. The company believes the best path forward for Rubio’s is through a court-supervised sale process that will position the brand for long-term success to grow and flourish."

Rubio's will be entering what is known as a stalking horse purchase agreement, which is a type of negotiation where the company determines the lowest bid price, to sell its business, according to the company. Rubio's expects the agreement to be completed in 75 days.

On May 31, Rubio's closed 48 underperforming locations in California, including 13 in the San Diego area, 24 in the Los Angeles area, and all remaining sites in Northern California.

Founded in 1983 in San Diego, Rubio's is among California fast food restaurants affected by an increase in minimum wage costs, which took effect this year. The state's hourly minimum wage increased to $16 for most workers on Jan. 1 and to $20 for fast food workers in April.

"Making the decision to close a store is never an easy one," the company said in a statement. "While painful, the store closures are a necessary step in our strategic long-term plan to position Rubio's for success for years to come. The closings were brought about by the rising cost of doing business in California."

This is the second time Rubio's has filed for bankruptcy in four years. In 2020, the business filed for Chapter 11 bankruptcy, citing COVID-19 as having a significant impact on the company.

Also see:

• 48 CA Rubio's Close Due To 'Rising Cost Of Doing Business'
• Rubio's Coastal Grill Files For Chapter 11 Bankruptcy