Carlsbad-based Mexican fast-casual restaurant Rubio’s Coastal Grill suddenly closed 48 locations in California, citing rising operating costs in the state.
The company did not elaborate on the closures, which shocked employees on Friday but come two months after the state’s $20-an-hour minimum wage for fast-food workers took effect.
The closures mark the latest sign of trouble for a restaurant industry hit by inflation and rising labor costs.
Iconic seafood chain Red Lobster closed dozens of stores and filed for Chapter 11 bankruptcy last month.
Rubio’s said it will continue to operate the remaining 86 stores in California, Arizona and Nevada.
The company said in a statement released Monday by media strategist Sitrick and Co. that the decision was made after “a thorough review of its operations and the current business environment.” A spokesman for Citrick said Rubio’s senior officials were unavailable for comment.
The company did not disclose how many employees were laid off, but comments posted by employees on social media said they had received no notification, and some said they received calls over the weekend saying their jobs had been terminated.
The company was founded by Ralph Rubio in 1983, starting with a walk-up stand in San Diego. By 2020, the company had nearly 200 stores, but later that year, hit hard by the epidemic, the company filed for bankruptcy protection and underwent a complete restructuring. Rubio also blamed rising costs at the time for the problem, singling out minimum wage increases as a factor.
“While painful, store closings are a necessary step in our long-term strategic plan to position Rubio’s for success in the years to come,” Rubio’s said in a brief statement Monday.
The chain, which was acquired and taken private by private equity firm Mill Road in 2010 for $91 million, was previously known as “Home of the Fish Taco,” “Rubio’s Baja Grill” and “Rubio’s Fresh Mexican Grill.”
