Bloomin' Brands bids $26.3 million for 61 Outback restaurants as its biggest western franchisee files Chapter 11

The operator of 61 Outback Steakhouse restaurants across the western United States is in Chapter 11, and Outback's own parent is the first bidder for its assets. Out West Restaurant Group, an independent franchisee, filed in Delaware on November 2, according to a Form 8-K from Bloomin' Brands filed with the SEC. Fox Business and the New York Post also reported it; the Post's headline attributes the filing to rising food costs.

The deal in the filing

• Price: $26.3 million for substantially all of Out West's assets, reduced by whatever Out West owes on the financing below, plus the assumption of lease obligations, unredeemed gift cards and specified vendor liabilities.
• A vendor adjustment: the price rises dollar for dollar if the vendor liabilities Bloomin' assumes come in under $6.1 million, and does not rise if they match or exceed it.
• Stalking horse: this is an opening bid. A bankruptcy court has to approve it, and a competing bidder can top it at auction. If Bloomin' is outbid it is entitled to a break-up fee in certain events. The outside closing date is January 31, 2027.
• Financing: Bloomin' agreed to provide up to $5.5 million of interest-free debtor-in-possession financing. Out West could draw $1.5 million after interim approval and the rest after final approval. Whatever is drawn comes off the purchase price. Out West may use its cash from operations only until January 4, 2027, when the financing ends unless a sale has closed.

A rough scale: $26.3 million across 61 restaurants is about $431,000 per restaurant before any adjustment (26.3 divided by 61), and the full $5.5 million facility would be about $90,000 per restaurant. These are our own divisions of the filing's headline figures, not numbers the company reported, and the assumed leases and vendor debts sit on top of the price.

The number behind the number: an old default

The filing shows this did not begin in November. Item 1.02 says Bloomin', Out West and Out West's lenders signed an Amended and Restated Holistic Resolution Agreement on December 31, 2023, covering "deferral and forbearance" of rights over prior payment defaults. That agreement terminated automatically on the bankruptcy filing, and the filing says the lenders would have had priority repayment. The Chapter 11 case puts an automatic stay on that termination, so the parties' rights, including under the franchise agreement, now get resolved in court.

In plain terms: the franchisee had been living on a negotiated pause for roughly two years. The 8-K does not itself state a cause for the original defaults, so we do not offer one. What it does show is that Bloomin' chose to buy the units rather than let them go to a stranger. Its stated reasons are direct operational insight, the ability to invest in the units through its development initiatives, and limiting disruption for guests and employees.

What stays the same for customers and staff

The filing says the bankruptcy has no immediate impact on guests, employees or day-to-day operations at Out West or company-owned Outback restaurants. Out West has asked the court for permission to keep operating normally, including paying certain pre-filing employee, vendor and supplier obligations, and says it will keep paying post-filing franchise fees, royalties and rent on leases that Bloomin' guarantees. That last detail is the one to watch: Bloomin' guaranteed some of these leases, so the parent was exposed to the franchisee's failure either way.

Bloomin' also warns that there is no assurance it will win the assets, and that the bankruptcy could hurt its reputation, results or financial condition. It plans to file the purchase agreement as an exhibit to its quarterly report for the period ended September 27, 2026.

Who this reaches

For a multi-unit franchisee anywhere in casual dining, the lesson is in the structure. A forbearance deal buys time but does not remove the debt, and when it fails the franchisor can hold the strongest hand: it controls the brand, guarantees some leases and can finance the case. Suppliers and landlords to Out West's 61 locations are the other group with a direct stake, since the court filing seeks authority to pay certain pre-filing vendor obligations and the assumed vendor liabilities are a stated term of the sale.

It also lands in a crowded field. The Chronicle holds records for 605,380 independent restaurants in the U.S., chains excluded, and a franchise unit competes with all of them for the same diner. Our restaurant playbook covers operating basics.

Bloomin' Brands shares (BLMN) last closed at $10.23 on November 3, 13.7% below their August 5 peak, according to Yahoo Finance data in our chart. We have not tied that move to this filing.

Sources: Bloomin' Brands Form 8-K (SEC EDGAR); Fox Business; New York Post; Yahoo Finance price history; Chronicle business counts. This is market information, not investment advice.