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Sizzler files Chapter 11 bankruptcy in the wake of the coronavirus pandemic's impact on sales.

Sizzler USA files for Chapter 11 bankruptcy

Six restaurants have permanently closed since the onset of the pandemic; the 62-year-old brand looks to reorganize to deal with the catastrophic business impacts of COVID-19, the company said Monday in a statement.

Sizzler USA filed for Chapter 11 bankruptcy protection. The 62-year-old brand looks to reorganize to deal with the catastrophic business impacts of COVID-19, the Mission Viejo, Calif.-based company said Monday in a statement.

The restructuring process, filed in U.S. Bankruptcy Court for the Northern District in California, will give the chain time to "renegotiate leases with landlords in order to effectively operate its 14 company-owned restaurants," the company said. 

The company's 93 franchise locations are not part of the bankruptcy filing.  

"It is our ultimate goal to keep all Sizzler locations open for business throughout this process of renegotiating leases, which will be completed within about 120 days," the company said. "The filing is a direct result of the financial impact the COVID-19 pandemic has had on the casual dining sector, particularly long-term indoor dining closures and landlords’ refusal to provide necessary rent abatement. Today’s decisive action to build a stronger future for Sizzler will allow us not only to do everything we can to support our employees and franchisees during this time, but also to be better-positioned for growth as we emerge to become a more vibrant company."

President and CEO Chris Perkins said the filing is directly tied to the pandemic, which has led to the permanent closure of six restaurants. 

Currently, 41 restaurants are open for dine-in with limited capacity. A majority of Sizzler's restaurants are in California, where indoor dining has been restricted for weeks after a surge in coronavirus cases over the summer. Sizzler currently has 38 restaurants offering outdoor dining in California. The company said 23 restaurants remain temporarily closed. 

“Many restaurant brands across the country have suffered because of COVID-19 and Sizzler USA is no exception,"  he said in a statement. "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. But today’s decisive action to build a stronger future for Sizzler will allow us not only to do everything we can to support our employees and franchisees during this time, but also to be better-positioned for growth as we emerge to become a more vibrant company.”

For the fiscal year ended in April 2020, Sizzler reported U.S. system sales, excluding Puerto Rico, of $197.3 million, down 13.7% compared to the prior fiscal year. The company ended the fiscal year with 101 U.S. locations, including 15 company and 86 franchised locations.

Casual dining chains, especially those that have limited outdoor dining, have been hard hit by the coronavirus crisis. Brands witih salad bars or buffet service have also been hit hard. Sizzler's salad bars have been around since the 1970s, according to its website. 

"n a majority of Sizzler restaurants, the Unlimited Craft Salad Bar is closed until local health departments and governments determine they can be reopened for self-service. For those guests that miss the salad bar, Sizzler is offering entrée salads," the company told NRN in a statement. 

The is a developing story. Stay tuned for updates.

Senior Editor Alan Liddle contributed to this report.

Contact Nancy Luna at [email protected] 

Follow her on Twitter: @fastfoodmaven

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