Rubio’s Coastal Grill is closing 48 restaurants in California

Rubio’s Coastal Grill, a Mexican fast food restaurant based in Carlsbad, has suddenly closed 48 stores in California, citing the high cost of doing business in the state.

The company did not elaborate on the closures, which came on Friday and stunned workers, but came two months after the state implemented a $20-an-hour minimum wage for fast food employees.

The closure marks the latest sign of distress in a restaurant industry that has been under pressure from the effects of inflation and rising labor costs.

Popular seafood chain Red Lobster filed for Chapter 11 bankruptcy last month after closing dozens of locations.

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

The company said, in a statement issued on Monday by media strategist Sitric & Partners, that the decision came after “a comprehensive review of its operations and the current business climate.” A Citric spokesman said no Rubio executive would be available for comment.

The company did not say how many employees were laid off, but comments posted by employees on social media said they had not received any notice, with some saying they had received phone calls over the weekend saying their jobs had been cancelled.

The company was founded in 1983 by Ralph Rubio, who started with a small stand in San Diego. It had nearly 200 stores through 2020, but later that year, after being hit hard by the pandemic, the company filed for bankruptcy protection and underwent a complete restructuring. Rubio attributed the problems to rising costs as well, citing the minimum wage increase specifically as a factor.

“While the store closings are painful, they are a necessary step in our long-term strategic plan to position Rubio’s for success for years to come,” Rubio said in her brief statement Monday.

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