In a surprising move that caught many employees off guard, Rubio’s Coastal Grill, a popular fast casual Mexican food chain, abruptly closed 48 of its locations across California on Friday.
The Carlsbad, California based company, which boasted 136 locations prior to the closures, cited the state’s challenging business environment and the underperformance of the affected restaurants as the primary reasons behind this decision.
Employees took to Reddit to express their shock and disappointment at the unexpected closures.
One user shared, “I showed up for my shift, and the doors were locked. No warning, no explanation. It’s just heartbreaking.”
In an official statement, Rubio’s acknowledged the difficulty of the decision, stating, “Making the decision to close a store is never an easy one … The closings were brought about by the rising cost of doing business in California. While painful, the store closures are a necessary step in our strategic long-term plan to position Rubio’s for success for years to come.”
Although not explicitly mentioned, the “current business climate in the state” likely refers to California’s recently implemented AB 1228 law, which took effect on April 1.
The law mandated a 25% increase in the minimum wage, raising it to $20 per hour.
The rising cost of doing business in California" contributed to Rubio's Coastal Grill officials decision to close 48 California locations Friday, a spokesperson told media outlets.
Rubio's is among California fast food restaurants affected by an increase in minimum wage costs,… pic.twitter.com/g7fhu3c8mP
— Mike Netter (@nettermike) June 2, 2024
This significant hike has forced several chains to adjust their menu prices, while some operators have decided against expanding in the state altogether.
In January, two California-based Pizza Hut franchisees even resorted to laying off delivery workers in anticipation of the wage increase.
The closures have affected Rubio’s locations across California, with 11 units shuttered in Northern California, 24 in the Los Angeles market, and 13 in San Diego.
Despite these closures, the chain will continue to operate 86 stores in California, Arizona, and Nevada.
No warning, and all of a sudden, closed.
Rubio's Coastal Grill in River Park now sits with a paper sign taped to the door stating…" Permanently closed… We appreciate your support over the years." pic.twitter.com/CP9Rp3Zv61
— Sophia Lesseos (@SophiaLesseos) May 16, 2024
Rubio’s, which was founded by Ralph Rubio in 1983, underwent a significant change in 2015 when it rebranded from Rubio’s Fresh Mexican Grill to Rubio’s Coastal Grill.
This strategic shift aimed to differentiate the chain from its competitors in the crowded fast casual Mexican segment by placing a greater emphasis on seafood offerings.
The recent closures serve as a stark reminder of the challenges faced by businesses in California, particularly in the wake of the $20 minimum wage law and the ongoing economic hardships brought about by inflation and Bidenomics.
For Rubio’s Coastal Grill, the decision to close nearly a third of its locations shows just how hard it is for companies to thrive and succeed in California.
In California business owners and executives get to experience the devastating affects of Bidenomics combined with the insane rules, regulations and skyrocketing crime that runs rampant in the once golden state.
