US fast-casual restaurant chain Rubio’s Coastal Grill has closed 48 of its locations in California as of 31 May 2024, leaving the company with 86 units across California, Arizona and Nevada.
The closures were attributed to a comprehensive review of operations and the current business climate, including the rising cost of doing business.
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The company told ABC10: “The decision to close a store is never an easy one.”
The closures come after California’s new fast-food wage law, which took effect in April, raised the minimum wage to $20 per hour for employees at chains with 60 or more units nationwide. This has led to price increases across several quick-service chains to manage higher labour costs.
Rubio’s has faced financial challenges in the past, and declared bankruptcy in late 2020 with a debt of $82.3m. At that time, the brand operated 167 locations, as reported in QSR.
During the Covid-19 crisis, 45% of its restaurant support centre and field management staff were furloughed, alongside more than 1,400 restaurant workers, and 26 underperforming restaurants were closed in May and June 2020.
The brand cited several factors in its bankruptcy, including the saturation of the fast-casual segment, minimum wage increases and the rise of off-premises dining.
Founded in 1983 by Ralph Rubio with a single walk-up stand in San Diego, the brand has undergone several rebrandings, from “Rubio’s, Home of the Fish Taco” to its current name, “Rubio’s Coastal Grill,” in 2014. The company went public in 1999 but was taken private in 2010 after being acquired by Mill Road for $91m.
Rubio’s is not alone in facing financial difficulties. Chains such as Tijuana Flats, Sticky’s Finger Joint, Oberweis Dairy, and Foxtrot and Dom’s Kitchen have also declared bankruptcy in 2024.
