SAN DIEGO — The parent company of Carlsbad-based restaurant chain Rubio’s Coastal Grill filed for Chapter 11 bankruptcy protection Monday as part of a restructuring plan the company says will help strengthen its financial standing.
Officials from Rubio’s Restaurants Inc. said in a news release it has reached agreements with Mill Road Capital and its lenders “to recapitalize the company.” The plan allows Rubio’s to cut down some of its debt and transfer ownership to its lenders, opening up additional resources to support its restaurants in California, Arizona and Nevada.
Twenty six locations permanently closed this year with the company citing the “unforeseen business circumstances” of the coronavirus pandemic. Operations at 150 restaurants including those in California will continue as usual, according to the company.
In a statement, Rubio’s President and CEO Marc Simon said the company had a “strong” financial position entering 2020, which helped in “navigating the unprecedented impact of the pandemic.”
“The agreement with our sponsor and lenders will position the Company to thrive in this constantly evolving market,” Simon said. “This plan will strengthen our finances and allow us to continue to serve our loyal guests and drive our business forward.”
Rubio’s first opened in Mission Bay in 1983, according to its website. The chain, best known for its Original Fish Taco, employed more than 4,000 employees in restaurants in California, Arizona, Colorado, Utah and Nevada before the pandemic.
The company defaulted on some of its debt in June after pandemic-related shutdowns slashed sales but it was already grappling with competition, increased labor costs and a faltering expansion to new markets, Bloomberg reported Monday.
But co-founder Ralph Rubio said in a statement the company responded to the pandemic by investing in online ordering, a mobile app and a new loyalty program, among other initiatives, in a push to reach customers this year.
“We quickly launched family meal kits and shifted to takeout, curbside pickup and free delivery operations, allowing our guests to enjoy our delicious food when and where they want it,” Rubio said. “This restructuring plan creates the long-term financial stability we need to continue to serve our communities for years to come.”