In a surprising move, Rubio's Coastal Grill, a fast-casual Mexican restaurant chain based in Carlsbad, has announced the sudden closure of 48 of its stores in California. The company cited the escalating cost of doing business in the state as the primary reason behind this decision, which has left employees shocked and uncertain about their future.

No specific details have been given about the closures, which occurred on Friday, catching many workers off guard. However, this development comes just two months after California implemented a $20 an hour minimum wage for fast-food employees. As a result, many restaurant chains are bracing themselves for higher labor costs and preparing to raise prices.

The closure of these 48 locations adds to the growing distress in the restaurant industry, which has been grappling with the impact of inflation and rising labor expenses. Just last month, the iconic seafood chain Red Lobster filed for Chapter 11 bankruptcy after shutting down numerous establishments.

Rubio's Coastal Grill has assured stakeholders that it will continue its operations in California, Arizona, and Nevada, with 86 remaining locations. The company released a statement on Monday through its media strategist, Sitrick and Co., explaining that the decision was made after a comprehensive review of operations and the current business climate. Representatives from Rubio's were not available for further comments, according to a Sitrick spokesperson.

While the company did not disclose the exact number of employees affected, several individuals took to social media, expressing their dismay at receiving no prior notice and learning about their job eliminations over the weekend via phone calls. The situation has raised concerns about worker protection and fair labor practices.

Founded in 1983 by Ralph Rubio, the fast-casual restaurant chain initially started as a walk-up stand in San Diego. Prior to the COVID-19 pandemic, the company boasted nearly 200 stores nationwide. However, the challenging circumstances of 2020 led Rubio's to file for bankruptcy protection and undergo a significant restructuring. At that time, the company also attributed its struggles to increased costs, specifically referencing minimum wage hikes.

Rubio's Coastal Grill emphasized that the store closures, although painful, are part of a strategic long-term plan to position the brand for success in the years to come. In 2010, the chain was acquired by private equity firm Mill Road for $91 million, subsequently undergoing a name change from "Home of the Fish Taco" to "Rubio's Baja Grill" and finally settling on "Rubio's Fresh Mexican Grill."

As the restaurant industry faces ongoing challenges, Rubio's Coastal Grill's decision to close several locations reflects the difficult conditions faced by businesses in California. The impact on employees and the broader industry remains to be seen, highlighting the urgent need for effective solutions to support the viability of the dining sector.