Sizzler USA, one of the country’s first casual restaurant chains, has filed for bankruptcy.
The 62-year-old company said it filed for Chapter 11 because of Covid-19, which forced it to temporarily close its restaurants’ dining rooms. Sizzler USA also had problems paying rent.
The filing is only for Sizzler’s 14 company-owned restaurants – not its international locations or more than 90 franchised US restaurants. Sizzler explained in a press release that it’s using the bankruptcy process to reduce debt and renegotiate its leases.
“Our current financial state is a direct consequence of the pandemic’s economic impact due to long-term indoor dining closures and landlords’ refusal to provide necessary rent abatements,” said Sizzler President Chris Perkins in a statement. The company aims to exit bankruptcy in about 120 days and company-owned locations will continue to operate.
Sizzler restaurants are predominantly on the West Coast, with a majority of them in California. The chain began in Culver City, California in 1958 with the goal that “everyone could enjoy a great steak dinner at an affordable price,” according to its website. Once a pioneer in the industry, the chain has fallen out of favor with newer rivals like Applebee’s and TGI Friday’s.
The industry faced a new blow this year because of the pandemic. Restrictions on indoor dining and the tough economics on making money from delivery or take out have forced a number of chains to file for bankruptcy, including California Pizza Kitchen and Vapiano. Reservations at restaurants are roughly 40% below average, according to CNN Business’ data.