Rubio’s enters Chapter 11 while it shapes itself up for sale

Rubio’s closed 48 locations at the start of June. Supplied: Rubio’s.

Rubio’s Coastal Grill, a fast-casual restaurant chain specializing in coastal Mexican food, announced that it is filing for Chapter 11 bankruptcy while it reorganizes the business ahead of selling.

A number of its locations have been suffering from external economic factors including increases to the minimum wage in California, diminishing in-store traffic attributable to work-from-home practices, as well as rising food and utility costs.

“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,” said Nicholas Rubin, chief restructuring officer of Rubio’s Coastal Grill.

“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.”

On June 1, Rubio’s closed 48 underperforming locations in California; 13 in the San Diego area, 24 in the Los Angeles area and 11 in northern California.

Pending court approval to continue operations during the sale process, daily operations at the other 86 Rubio locations across California, Arizona and Nevada will continue with business as usual.

“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,” the company said in a statement.

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