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Sizzler, one of America’s first steakhouse chains, files for bankruptcy

Diners are surrounded by new decor at the newly remodeled Sizzler restaurant, Friday afternoon in Atwater Village. The story takes a look at California restaurant companies that are remodeling their outlets to boost business. Sizzler is hoping to breath new life into their brand with thorough makeovers. (Photo by Richard Hartog/Los Angeles Times via Getty Images)

  (CNN) — Sizzler USA, one of the country’s first casual restaurant chains, has filed for bankruptcy.

The 62-year-old company said it filed for Chapter 11 because of Covid-19, which forced it to temporarily close its restaurants’ dining rooms. Sizzler USA also had problems paying rent.

The filing is only for Sizzler’s 14 company-owned restaurants — not its international locations or more than 90 franchised US restaurants. Sizzler explained in a press release that it’s using the bankruptcy process to reduce debt and renegotiate its leases.

“Our current financial state is a direct consequence of the pandemic’s economic impact due to long-term indoor dining closures and landlords’ refusal to provide necessary rent abatements,” said Sizzler President Chris Perkins in a statement. The company aims to exit bankruptcy in about 120 days and company-owned locations will continue to operate.

Sizzler restaurants are predominantly on the West Coast, with a majority of them in California. The chain began in Culver City, California in 1958 with the goal that “everyone could enjoy a great steak dinner at an affordable price,” according to its website. Once a pioneer in the industry, the chain has fallen out of favor with newer rivals like Applebee’s and TGI Friday’s.

The industry faced a new blow this year because of the pandemic. Restrictions on indoor dining and the tough economics on making money from delivery or take out have forced a number of chains to file for bankruptcy, including California Pizza Kitchen and Vapiano. Reservations at restaurants are roughly 40% below average, according to CNN Business’ data.

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