October 27, 2020

What the Sizzler bankruptcy means for Modesto, Central Valley steakhouse restaurants

Is beef still what’s for dinner in the Central Valley now that Sizzler, the national chain of buffet steakhouses, has filed for bankruptcy due to the ongoing pandemic?

The restaurant’s parent company, Sizzler USA, announced earlier this week it was filing for Chapter 11 bankruptcy protection. But what does that mean for Central Valley steak lovers? The Southern California-based chain has 107 locations known for their steak dinners and extensive salad bars across the country, including Northern San Joaquin Valley sites in Modesto, Turlock, Merced and Manteca.

In its bankruptcy statement, Sizzler USA said the filing was done as 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.” The company hopes to use bankruptcy protection to renegotiate some of its existing leases.

But — if there is any good news with such coronavirus crisis-related financial news — it’s that only the chain’s 14 corporate-owned restaurants are part of the bankruptcy. The company’s other 93 locations, including its Central Valley spots, are all owned by independent franchisees who are not part of the proceedings.

In fact, the franchise owner of close to two dozen of California’s sites — including all of the sites regionally — has put out a statement saying there would be no changes due to the bankruptcy at their restaurants.

Valley Sizzlers all owned by same franchisee

Temecula-based BMW Management, the largest Sizzler franchisee with 22 restaurants in California, sought to reassure its customers that its sites are open. The franchise company owns the restaurants in Modesto on Dale Road, Turlock on Hotel Drive, Merced on West Olive Avenue and Manteca on Daniels Street.

“BMW Management wants to inform their beloved communities and loyal guests that it is NOT filing bankruptcy, nor are they a part of Sizzler USA’s legal decisions. BMW Management will continue to operate their restaurants as they have since 1983,” marketing coordinator Shannon Murdaugh said in a written statement.

All of the valley locations are open for takeout, curbside pickup, third-party delivery and have outdoor patio seating available, said BMA Management co-owner Sally Myers. She said once the state is out of the wide-spread COVID-19 tier, they will reopen their inside dining rooms at all locations as well.

Both Sizzler parent-company Sizzler USA and local franchise company BMW Management separately received between $2 to $5 million each from the taxpayer funded Paycheck Protection Program, the federal coronavirus bailout relief fund meant for small businesses.

Still the steakhouse chain’s fortunes have been in decline in recent years. Started in 1985 when a steak dinner cost $0.99, Sizzler was founded in Culver City just west of Los Angeles and at one point had more than 700 locations worldwide. According to industry magazine Restaurant Business and Technomic, the restaurant chain has 15 fewer locations than at the end of 2019 — most in the western states. Also, since last year, the company’s sales systems have seen a 3.8 percent decline.

National chains file for bankruptcy amid pandemic

The 62-year-old company isn’t the first, or likely the last, to face hard times as the pandemic wears on. Nationally, huge chains from Pier 1 Imports (which closed all of its locations), J.C. Penney (which is closing its Turlock and Los Banos sites) to GNC (which shuttered its Vintage Faire Mall store in Modesto) have filed for bankruptcy protection.

Other major restaurant chains to file bankruptcy as the COVID-19 outbreak continues to slow sales and keep dining rooms shut include Chuck E. Cheese and California Pizza Kitchen.

Despite the bankruptcy news, Sizzler USA President Chris Perkins said he wants all 14 of the corporate-owned locations to remain open during the bankruptcy proceedings, which they estimate will last 120 days. And BMW Management, which owns the local spots, has assured us of the same.

“We’ll continue to operate our dining rooms as normal across all of our restaurants along with offering take-out, delivery and third-party options,” Perkins said in a statement.

So, yes, Central Valley — beef and that endless salad bar are still very much on dinner menu at your local Sizzler.

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©2020 The Modesto Bee (Modesto, Calif.)

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