Rubio’s Coastal Grill, a fast-casual Mexican restaurant based in Carlsbad, has abruptly closed 48 stores in California, citing the rising cost of doing business in the state.
The company did not elaborate on the closures, which came Friday and stunned workers, but it came two months after the state’s $20 an hour minimum wage took effect for fast-food employees.
The closing marks the latest sign of distress in the restaurant industry that has been squeezed by the effects of inflation and higher labor costs.
The iconic seafood chain Red Lobster filed for Chapter 11 bankrutpcy last month after shuttering dozens of locations.
Rubio’s said it would keep operating 86 remaining locations in California, Arizona and Nevada.
The company, in a statement Monday issued by media strategist Sitrick and Co., said the decision came after a “thorough review of its operations and the current business climate.” A Sitrick spokesperson said no Rubio’s executive would be available to comment.
The company did not say how many employees were let go, but comments posted on social media by employees said they were given no notice, with some saying they received phone calls over the weekend that their jobs had been eliminated.
The company was founded in 1983 by Ralph Rubio, who began with a walk-up stand in San Diego. It had nearly 200 stores going into 2020, but later that year, hit hard by the pandemic, the company filed for bankruptcy protection and underwent a complete restructuring. Rubio’s attributed the problems to higher costs then as well, citing minimum wage increases specifically as a factor.
Rubio’s, in its brief statement Monday, said: “While painful, the store closures are a necessary step in our strategic long-term plan to position Rubio’s for success for years to come.”
The chain, which was acquired by the private equity firm Mill Road in 2010 for $91 million and taken private, previously went by “Home of the Fish Taco,” “Rubio’s Baja Grill” and “Rubio’s Fresh Mexican Grill.”
