LA Steakhouse Chain Sizzler files for bankruptcy due to coronavirus

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One of Los Angeles’ most famous restaurant franchises, Crackling, declared bankruptcy following the ongoing coronavirus pandemic. The company said in a public statement today that the legal filing is “a direct result of the financial impact the COVID-19 pandemic has had on the casual dining industry.”

By catering company, the Orange County-based Sizzler currently operates 107 locations but has been unable to meet much of the overhead during the ongoing pandemic. Kind of like with the Souplantation founded in Californiawhich closed permanently earlier this year, and the Cheesecake Factory, landlord issues and high overhead have come to crush much of the fast-casual restaurant business.

Major national chains like Sizzler have been devastated across the country as malls and other gathering areas remain closed, while their clientele retreats to food delivery apps, local restaurants and home cooking. Sizzler’s sales were already down before the pandemic, and it’s still unclear how many locations, if any, will return after the company filed for Chapter 11 bankruptcy. The company says it owns 14 restaurants (the remaining 93 are franchises) and will seek to renegotiate lease terms with the owners of those locations, at least.

In a subsequent statement sent to Eater by representatives of Sizzler, the company clarified that its Chapter 11 bankruptcy specifically targeted these 14 company-owned sites; the franchise locations, while obviously affected by any bankruptcy of its parent company, are not specifically included in the record. “Sizzler USA expects to reach agreements with a majority of owners and is confident that most of its restaurants will remain open,” they add.

Sizzler has a long history in Southern California. The restaurant was founded more than 60 years ago in Culver City by Del and Helen Johnson, selling inexpensive steaks and offering a buffet format that appealed to casual diners and families. This style of restaurant has become increasingly anachronistic in recent years, and many wonder how the modern buffet restaurant will survive the pandemic. For now, much like California Pizza Kitchen, Sizzler will enter bankruptcy proceedings in hopes of shrinking its footprint, consolidating losses, renegotiating important business terms, and surviving in a post-COVID-19 world. It will certainly not be easy.

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