4 ms·

Rubios Coastal Grill citing rising costs shuts down 48 restaurants in California

18 points by instagib 2y ago

cranberryturkey 2y ago
Rubio's was started by an SDSU student who stole the recipe from the lady at K14 marker in Mexico.
- mikece 2y ago
  And who he tracked down and paid a massive royalty from what I had read. Not because he had to: it was hardly a secret or patented recipe, but I had already heard he did right by her.
  - cranberryturkey 2y ago
    That's good. I think I heard that too. I'm guessing the founder sold it off long ago.
    - mikece 2y ago
      All he wanted to do after college was just go surfing with his friends but his dad insisted he "find a real job" so he turned his still at making fish tacos into a job. Maybe after selling the franchise he went back to just surfing with his friends? I would like to think so... makes a happy story to think that's what happened.
Flatcircle 2y ago
This is one of my favorite examples to cite regarding corporate culture ruining a brand through optimizing profits. Used to be such a high quality, great restaurant. Now it sucks. The logo is atrocious.
- mikece 2y ago
  I was stationed in San Diego when I was in the navy and loved eating at Rubios. I never missed In-n-Out because there are great burgers everywhere but there was never another Rubios. And yeah, somewhere between 1997 and 2019 when I went back to visit the logo, menu, and quality changed... I wanted to cry.
toomuchtodo 2y ago
> Rubio’s was acquired by the private equity firm Mill Road Capital in 2010 for $91 million and taken private. In the fall of the first year of the pandemic in 2020, the company filed for bankruptcy protection and underwent a complete restructuring. Rubio’s attributed the problems to higher costs then as well, citing minimum wage increases specifically as a factor. Private equity strikes again.
- JumpCrisscross 2y ago
  > in 2020, the company filed for bankruptcy protection and underwent a complete restructuring Who owns it now? (EDIT: Looks like Mill Road still. The bankruptcy was to renegotiate a loan and trim leases [1].) A Californian restaurant going bankrupt during Covid isn't a mark against anyone. Also, it looks like when it went public it was owned by a couple hedge funds, Farallon and Rocker, together with another PE firm, Rosewood. It doesn't seem like it's had operational ownership since its IPO. [1] https://www.latimes.com/business/story/2024-06-03/rubios-coastal-grill-citing-rising-business-costs-abruptly-shuts-down-48-restaurants-in-california https://www.latimes.com/business/story/2024-06-03/rubios-coa...
  - toomuchtodo 2y ago
    Happy to confirm current ownership with Mill Road Capital’s IR team in the morning. Their team is primarily Blackstone and KKR alum, which leads me to the copy paste PE thesis. The pandemic BK was not a material concern in my thesis, the PE story was. https://www.millroadcapital.com/ https://www.millroadcapital.com/
    - JumpCrisscross 2y ago
      Wow, that is a really generic middle-market PE pitch. Glancing at Pitchbook, their Fund I (2006) had a 7.4% IRR (low-mid quartile) with a 1.46 TVPI and, somehow, 0.15 RVPI; their Fund II (2012) 3.3% (bottom) with 1.2 TVPI; and their Fund III (2019) clocks in at 19.6%, also low-mid quartile performance for that vintage. Looks like a lot of Connecticut, Florida, Indiana, Kentucky and Maryland pension money, with some coming from a Texan teachers' pension, 3M's pension.
VirusNewbie 2y ago
I was a huge fan of Rubios, to the point that I’ve sent letters to their mgmt via feedback form telling them their prices are too low and they should be focused on quality even if it means more expensive products. Meanwhile across the street from my local rubios, a smaller baja mexican style place charges 50% more per item, but the quality is so much better it is packed. Hell i’d even pay double if I could get the same plump, lightly battered cod tacos they used to serve in the early 2000s. Instead now it’s some sad sliver of massively breaded, double fried mystery fish…

18 points by instagib 2y ago

cranberryturkey 2y ago

Rubio's was started by an SDSU student who stole the recipe from the lady at K14 marker in Mexico.

mikece 2y ago
And who he tracked down and paid a massive royalty from what I had read. Not because he had to: it was hardly a secret or patented recipe, but I had already heard he did right by her.
- cranberryturkey 2y ago
  That's good. I think I heard that too. I'm guessing the founder sold it off long ago.
  - mikece 2y ago
    All he wanted to do after college was just go surfing with his friends but his dad insisted he "find a real job" so he turned his still at making fish tacos into a job. Maybe after selling the franchise he went back to just surfing with his friends? I would like to think so... makes a happy story to think that's what happened.

Flatcircle 2y ago

This is one of my favorite examples to cite regarding corporate culture ruining a brand through optimizing profits. Used to be such a high quality, great restaurant. Now it sucks. The logo is atrocious.

mikece 2y ago
I was stationed in San Diego when I was in the navy and loved eating at Rubios. I never missed In-n-Out because there are great burgers everywhere but there was never another Rubios. And yeah, somewhere between 1997 and 2019 when I went back to visit the logo, menu, and quality changed... I wanted to cry.

toomuchtodo 2y ago

> Rubio’s was acquired by the private equity firm Mill Road Capital in 2010 for $91 million and taken private. In the fall of the first year of the pandemic in 2020, the company filed for bankruptcy protection and underwent a complete restructuring. Rubio’s attributed the problems to higher costs then as well, citing minimum wage increases specifically as a factor. Private equity strikes again.

JumpCrisscross 2y ago
> in 2020, the company filed for bankruptcy protection and underwent a complete restructuring Who owns it now? (EDIT: Looks like Mill Road still. The bankruptcy was to renegotiate a loan and trim leases [1].) A Californian restaurant going bankrupt during Covid isn't a mark against anyone. Also, it looks like when it went public it was owned by a couple hedge funds, Farallon and Rocker, together with another PE firm, Rosewood. It doesn't seem like it's had operational ownership since its IPO. [1] https://www.latimes.com/business/story/2024-06-03/rubios-coastal-grill-citing-rising-business-costs-abruptly-shuts-down-48-restaurants-in-california https://www.latimes.com/business/story/2024-06-03/rubios-coa...
- toomuchtodo 2y ago
  Happy to confirm current ownership with Mill Road Capital’s IR team in the morning. Their team is primarily Blackstone and KKR alum, which leads me to the copy paste PE thesis. The pandemic BK was not a material concern in my thesis, the PE story was. https://www.millroadcapital.com/ https://www.millroadcapital.com/
  - JumpCrisscross 2y ago
    Wow, that is a really generic middle-market PE pitch. Glancing at Pitchbook, their Fund I (2006) had a 7.4% IRR (low-mid quartile) with a 1.46 TVPI and, somehow, 0.15 RVPI; their Fund II (2012) 3.3% (bottom) with 1.2 TVPI; and their Fund III (2019) clocks in at 19.6%, also low-mid quartile performance for that vintage. Looks like a lot of Connecticut, Florida, Indiana, Kentucky and Maryland pension money, with some coming from a Texan teachers' pension, 3M's pension.

VirusNewbie 2y ago

I was a huge fan of Rubios, to the point that I’ve sent letters to their mgmt via feedback form telling them their prices are too low and they should be focused on quality even if it means more expensive products. Meanwhile across the street from my local rubios, a smaller baja mexican style place charges 50% more per item, but the quality is so much better it is packed. Hell i’d even pay double if I could get the same plump, lightly battered cod tacos they used to serve in the early 2000s. Instead now it’s some sad sliver of massively breaded, double fried mystery fish…