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The venerable family steakhouse chain Sizzler USA has filed for Chapter 11 bankruptcy, citing a business environment disrupted by COVID-19 restrictions – and saying too little has been done to help restaurants to survive.
“Our current financial situation is a direct result of the economic impact of the pandemic,” said Sizzler President Chris Perkins, “due to long-term indoor restaurant closures and owners’ refusal to supply necessary rent reductions”.
The company, which opened 62 years ago, says it wants to keep all of its sites open. Sizzler says he hopes to renegotiate his leases within the next four months; it will also undergo a restructuring process aimed at reducing long-term debt.
Sizzler USA received between $2 million and $5 million in federal loans from the Paycheck Protection Program, which was designed to mitigate job losses from the coronavirus and help keep small businesses afloat. This is according to data published by the US Treasury Department.
“Our ultimate goal is to keep all Sizzler locations open for business throughout this process,” the company said in a statement sent to NPR. He added that he intends to meet his financial commitments to employees, franchisees and suppliers.
Sizzler, based in Mission Viejo, Calif., filed for voluntary Chapter 11 protection in federal bankruptcy court in the Northern District of California. The file directly affects the 14 restaurants of the company which she owns. There are also over 90 franchise locations, which Sizzler says “will not be impacted during the Chapter 11 process.”
During the pandemic, Sizzler has been selling takeout, including take-out versions of its popular salad bar. Some of its locations also offer outdoor dining area. And like many restaurants struggling to find customers, Sizzler offers delivery through third-party companies such as DoorDash, GrubHub, Uber Eats and Postmates.
Sizzler got its start in 1958, when founders Del and Helen Johnson offered steak dinners for 99 cents at their first restaurant in Culver City, California. Sizzler currently has 107 locations in 10 states — most in the West — and Puerto Rico. That’s down from 2018, when the channel said there were 134 pitches.