Entrepreneur Marcus Lemonis discusses voters’ feelings about their finances and taxing millionaires after the midterm elections on “Fox & Friends.”
Companies operating in California and across the country are facing increasing pressure to adapt to high overhead costs and are citing local economic conditions as the reason for their financial collapse, experts say.
“A lot of companies want to make excuses now,” entrepreneur and FOX Business contributor Marcus Lemonis said Friday during an appearance on “Fox & Friends.”
“What I say to business owners, small, medium and large. … ‘These are the cards we’re dealt. You’re going to have to make some tough decisions.'”
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Lemonis noted that many businesses continue to thrive in the Golden State despite high costs and strict oversight.
“If the country is to survive the way we want and prosper, we will have to run good businesses no matter what state we are in,” he added.
An Outback Steakhouse franchisee with 61 restaurants files for Chapter 11 bankruptcy amid mounting debt, citing soaring labor costs and inflation in California. (Joshua Lott/Bloomberg via Getty Images, File/Getty Images)
Lemonis’ remarks were in response to a question about San Diego-based Out West Restaurant Group, an Outback Steakhouse franchisee that has filed for Chapter 11 bankruptcy protection, while pointing to California’s labor costs and inflation as the primary catalyst for its distress.
Out West, officially known as Cerca Trova Restaurant Group, is seeking relief from a massive $449 million in debt. The company operates 61 Outback Steakhouse locations in California, Arizona, Colorado, Nevada and New Mexico, down from the 99 restaurants it operated at its peak in 2018.
| Teleprinter | Security | Last | Change | Change % |
|---|---|---|---|---|
| BLMN | BLOOMIN’ BRANDS INC. | 9:75 a.m. | -0.72 | -6.88% |
In court filings, CEO David Goronkin blamed dwindling customers and high operational overhead. California’s minimum wage reached $19.60 an hour in January. The filing also shows beef price increases of up to 5% per year since 2022.
“By 2026, the pressures on the company had converged,” Goronkin said in court papers. “Visitor traffic and revenue continued to decline, while food, labor and other production costs continued to rise.”
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Out West, officially known as Cerca Trova Restaurant Group, is seeking relief from a massive $449 million in debt. (Victor J. Blue/Bloomberg via Getty Images, File/Getty Images)
While table-service restaurant chains were exempt from California’s $20-an-hour fast-food minimum wage law, passed in 2024, full-service restaurants have faced higher labor costs across the state.
To cope with its restructuring (Chapter 11), Out West is seeking court authorization to sell its assets.
“There is a cause and effect for everything,” Lemonis said. “Either I’m going to raise prices or I’m going to downsize (or) I’m going to have to close. There’s always cause and effect, and I think what these DSA candidates are going to realize quickly is that the effect is actually going to impact the people who voted for them.”
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Parent company Bloomin’ Brands, which owns several restaurant chains, agreed to buy Outback’s remaining 61 locations for $26.3 million.
The Florida-based parent company also provides up to $5.5 million in interest-free debtor-in-possession financing.
FOX Business’ Bradford Betz contributed to this report.
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