Sizzler USA, one of the country’s first steak restaurant chains that operated for 62 years has filed for bankruptcy.
The company said it filed for Chapter 11 because of the Covid-19 pandemic, which forced it to temporarily close its restaurants’ dining rooms. Sizzler USA also had problems paying rent.
However, the filing is only for Sizzler’s 14 company-owned restaurants and not its international locations or more than 90 franchised restaurants in the US. In a press release, the company explained 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.
According to CNN Business’ data, the industry faced a new blow this year because of the Covid-19 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.
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 TGI Friday’s and Applebee’s.