Rubio's Coastal Grill is closing 48 restaurants in California

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 occurred Friday and stunned workers, but it came two months after the $20-an-hour minimum wage went into effect for fast-food workers.

The closure marks the latest sign of distress in the restaurant industry, which has been under pressure from the impact of inflation and higher labor costs.

Iconic seafood chain Red Lobster filed for bankruptcy last month after dozens of locations closed.

Rubio's said it would continue to operate the remaining 86 locations in California, Arizona and Nevada.

The company said in a statement from media strategist Sitrick and Co. that the decision came after a “thorough review of its operations and the current business environment.” A spokesperson for Sitrick said no Rubio executive would be available for comment.

The company did not say how many employees were laid off, but comments on social media indicate employees did not receive any notice. Some say they received calls over the weekend saying their jobs had been cut.

The company was founded in 1983 by Ralph Rubio, who started with a walk-up stand in San Diego. It had nearly 200 stores in 2020, but later that year, hit hard by the pandemic, the company filed for bankruptcy protection and underwent a complete restructuring. At the time, Rubio's also attributed the problems to higher costs, specifically citing the minimum wage increase as a factor.

Rubio's said in its brief statement Monday: “While painful, the store closures are a necessary step in our long-term strategic plan to position Rubio's for success for years to come.”

The chain, which was acquired by private equity firm Mill Road for $91 million and taken private in 2010, was previously called “Home of the Fish Taco,” “Rubio's Baja Grill” and “Rubio's Fresh Mexican Grill.”

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