After spending more than a decade building a loyal following, a popular breakfast chain is preparing to close several longtime restaurants as it reshapes its footprint for the future.
For customers, the move means saying goodbye to neighborhood brunch destinations that have served their communities for years. For the company, it’s part of a broader strategy to adapt to rising costs, changing consumer habits, and shifting growth opportunities.
Founded in 2015 in San Diego, California, by Rise & Shine Hospitality Group, Breakfast Republic quickly became a favorite across Southern California, serving inventive brunch dishes such as Oreo Pancakes, Shrimp & Grits, and S’mores French Toast.
Breakfast Republic confirms 3 restaurant closures
Breakfast Republic will permanently close three San Diego restaurants on Aug. 9, 2026, including its original flagship location in North Park, which opened in 2015 as the chain’s first restaurant.
The locations slated to close are:
- North Park: 2730 University Ave. (opened in 2015)
- Encinitas: 251 N. El Camino Real (opened in 2016)
- Ocean Beach: 4839 Newport Ave. (opened in 2017)
“Over the years, we’ve always approached growth thoughtfully, and that means continually evaluating our restaurant portfolio while investing in new opportunities,” said Rise & Shine Hospitality Group Founder Johan Engman in a statement. “We’re incredibly excited about what’s ahead.”
Even after the closures, Breakfast Republic will continue to operate 11 restaurants, with five in San Diego at East Village, Liberty Station, Mission Valley, Pacific Beach, and Scripps Ranch, along with six elsewhere in California, including Costa Mesa, Culver City, Echo Park, Irvine, Long Beach, and Palm Desert, according to the company’s store locator.
Why Breakfast Republic is closing locations
Engman said the three restaurants no longer fit the company’s long-term strategy and were underperforming compared with other locations, The San Diego Union-Tribune reported.
Two restaurants, Encinitas and Ocean Beach, are nearing the end of their leases, allowing the company to exit those locations rather than commit to new agreements.
The Ocean Beach restaurant is significantly larger than Breakfast Republic’s newer locations and occupies a second-floor space that Engman said is less convenient for customers. Meanwhile, the Encinitas restaurant faces a substantial rent increase if the lease is renewed, and its footprint no longer aligns with the company’s current operating model.
The North Park restaurant presented a different challenge. Engman owns the property and plans to sell the building, saying business declined after roughly 175 nearby street parking spaces were removed several years ago to make way for bike lanes.
Rather than signaling a broader pullback, the closures are part of Breakfast Republic’s effort to redirect resources toward markets where it sees greater long-term growth potential.
The company plans to open a new Breakfast Republic restaurant in Palm Springs in mid- to late October, followed by locations in Huntington Beach and Los Angeles’ Highland Park between late February and early March.
Rise & Shine Hospitality Group also plans to enter Texas for the first time. It expects to open Greenville Breakfast Company in Dallas by December 2026, before expanding Breakfast Republic into Austin, Dallas, and Houston.
“The reality is, if I knew then what I know now, I probably wouldn’t have opened this many stores in what I would say is a relatively small market as San Diego is, compared to a Los Angeles or Dallas, where I’m expanding in the future,” said Engman.
Why Breakfast Republic is expanding to Texas
Engman said Texas offers a more favorable business environment for restaurant operators because of its lower operating costs, less burdensome regulatory climate, and stronger opportunities for expansion. In comparison, he said California’s rising labor and operating expenses have made it increasingly difficult to maintain healthy profit margins.
“It has become increasingly difficult to do business in California. There’s everything from increasing costs and labor and California being a state where there are a lot of frivolous lawsuits,” said Engman.
Here’s some of my previous coverage of restaurant closures:
- Popular beverage chain closing multiple locations nationwide
- Pizza chain closing up to 50 locations after years of declines
- 30-year-old restaurant chain confirms more closures in 2026
Although the company still plans to open at least one restaurant in California each year, Engman said future growth will be focused primarily on Texas.
Breakfast Republic’s move mirrors a broader trend of companies expanding into lower-cost markets. Since 2020, more than 100 companies have relocated to Texas, with about 40% moving from California, according to KERA News. During the past six years, 10 Fortune 500 companies have also moved their headquarters to Texas, eight of them from California.
Restaurant operators, in particular, face a much steeper cost structure in California. According to a study by Superior Seating, the state ranks as the second-most expensive in the nation to operate a restaurant. An operator relocating from Texas to California can face an additional $30,000 to $40,000 in monthly labor costs before accounting for rent and other expenses.
The differing business climates have become an increasingly important consideration for companies deciding where to expand. While California and Texas are the nation’s two largest state economies, their tax structures, labor costs, and regulatory environments create very different operating conditions.
“Texas’ advantageous tax policies, coupled with a robust economy, continue to lure businesses from around the globe. With no corporate or individual income tax, Texas offers a less burdensome regulatory environment that fosters entrepreneurial growth,” said the Texas Economic Development Corporation.
While Breakfast Republic is reducing its footprint in San Diego, the company isn’t slowing its ambitions. Instead, it’s repositioning its business by investing in markets where executives believe new restaurants can grow more efficiently, making the latest closures less about shrinking the brand than laying the groundwork for its next phase of expansion.
Related: Sneaker brand closed 140 stores, and it still isn’t working
