Several well-known restaurant chains with deep roots in California have dramatically reduced their footprints in recent years, reflecting the challenges facing the casual dining and fast-casual industries. The closures come with labor and rent increases as well as reduced consumer spending.
El Tortito shrinks locations
One of the most notable examples is El Torito, the Mexican restaurant chain founded in California in 1954. The company recently closed its Irvine restaurant, capping a long decline that has seen the chain shrink from 187 locations across 25 states at its peak to roughly two dozen restaurants today, most of them still located in California. The closure also marked the brand’s exit from Arizona and Oregon.
Rubio’s bankruptcy leads to dozens of closures
Another California-founded chain, Rubio’s Coastal Grill, underwent a major retrenchment after filing for Chapter 11 bankruptcy in 2024. The company closed 48 California restaurants, including numerous locations in San Diego, where the fish taco chain was founded. The closures eliminated Rubio’s presence in several major California markets, including Sacramento, Stockton, Fresno, Ventura County, and much of the Bay Area.
National chains also retreating
California has also felt the impact of closures by national brands. On The Border recently shut down all 60 of its company-owned restaurants following years of financial struggles and a previous bankruptcy filing. Only a handful of franchised locations remain, including two restaurants in California.
Meanwhile, Denny’s has been closing underperforming locations as it works to improve profitability. The California-founded diner chain has cited changing consumer habits and operational challenges facing the restaurant industry.
Industry pressures continue
Restaurant operators across California continue to face rising labor expenses, higher food costs, inflationary pressures, and increased competition from fast-casual concepts. As consumers become more selective with discretionary spending, many chains are focusing on their strongest markets while closing older or underperforming locations. Industry analysts expect consolidation and restaurant closures to remain a major trend throughout 2026.
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