Why these nine Encinitas restaurants are closing Retirement, fire, property taxes, competition, franchise fees, poor economy

Noodles and Company shuttered

What’s happing to restaurants on Encinitas’ El Camino Real? In the last two months, eight restaurants have closed in the ten blocks between Encinitas Boulevard and Leucadia Boulevard.

The latest being on November 25. The owners of the Greek American Family Restaurant, opened since the 1980s, reportedly wanted to retire.

Gone are franchised or corporately owned restaurants of Noodles and Company, Subway, and Firehouse Subs. Also out of business, vacant, and up for lease are the former locations of locally owned businesses Pie Craft, Swirls Frozen Yogurt, and 2 Good 2 Be Bakery. (The McDonalds in the Encinitas Ranch Town Center was closed three weeks ago due to fire. Its expected to be reopened.)

Steve Amster, the 23-year owner of Garden State Bagels, across the street from three of the closed restaurant sites, says the reason is rapidly raising rents. He says even in a high real estate market, shopping centers are being bought and sold. “Every time a center is sold, the Proposition 13-controlled property taxes reset,” said Amster. In his 16-unit center, which changed hands recently, the new owner’s property taxes were adjusted upward radically. “Rents go up to cover the increase, and it forces businesses to leave,” he said.

Opened since 1980, when asked why two restaurants next door to his Subman sandwich shop went out of business, owner Tim Lee said, “There’s too much competition. Too many restaurants around.”

In the case of the closed franchised restaurants, a nearby 7-Eleven owner says the corporations may also be the cause of the closures. “They [franchisors] take their franchise fees off the top, whether or not the owners are making money.

She gave an example of 7-Eleven’s long running 79-cent Big Gulp soft drink promotion pointing out that the corporation doesn’t give a discount or credit to help the owners cover the loss in a low-cost promotion. “We still have to pay our employees, buy the products from the company at their franchisee pricing, and all the other expenses.”

Long-time restaurateur Gerry Sova, owner since 1970 of Capt. Keno’s Restaurant on Coast Highway 101, says he believes the reason for the closures is the economy is not as good as we are being told. Amster and the 7-Eleven owner agree. The 7-Eleven owner says she has had to bring in family to help out. “My store is worth half of what it used to be. We couldn’t sell it if we wanted to, she said.”



Amster believes the closures may also be a sign that a recession is coming, but added “If Trump stays in office, it won’t be as bad as 2008,” pointing to the continuing rise in record levels of the stock market and low unemployment rates.

As of press time, a ninth El Camino Real restaurant announced it is throwing in the towel. Chili’s Bar & Grill, located at the Encinitas Ranch Town Center on the corner of Leucadia Boulevard, will be closing on January 3.