In 1991, Jim Collins made a bet that stunned the restaurant world. He sold all 209 of his American KFC restaurants to PepsiCo for $123 million, then renamed his entire company after a chain of steakhouses. Within five years, that company filed for bankruptcy. The chain was Sizzler, and the story of its rise and collapse began decades earlier with a California salesman who thought he could sell a steak dinner for a dime less than the competition.
In 1957, salesman Dell Johnson read a Wall Street Journal article about a San Francisco steakhouse charging $1. 19 for a full steak dinner. Johnson decided he could undercut it. On January 27, 1958, he and his wife Helen opened Dell’s Sizzler Family Steakhouse in a strip mall parking lot in Culver City, California, with just $50 in the register.
The menu was stark: two kinds of steak, a baked potato, and a green salad topped with a single cherry tomato, all for 99 cents. The name came from the presentation. Steaks arrived on hot metal plates set in wooden platters, still sizzling as they crossed the dining room. Customers heard their dinner coming before they saw it.
The concept spread quickly. Within four years, more than a hundred Sizzler locations operated across California, mostly franchised. By 1967, there were 164 restaurants. That is when Jim Collins entered the picture.
Collins owned Hamburger Handout, a stand literally next door to the original Culver City Sizzler. For years, he watched Johnson’s parking lot fill every night. Finally, he decided to buy the whole operation. Collins paid about a million dollars, took the company public as Collins Foods International, and began expanding.
Collins was not just a steakhouse man. On the side, he had built a substantial KFC empire, operating 209 KFC restaurants across the United States and running the entire Australian KFC franchise. That was not a side project; it was a fortune. He kept both empires running through the 1970s and 1980s, while Sizzler transformed from a bare-bones counter stand into a proper sit-down chain.
By 1972, there were 200 restaurants across 23 states. By the early 1980s, more than 400 locations stretched from California to Guam to Kuwait. In the late 1970s, Sizzler added a salad bar. At the time, a loaded salad bar was a major attraction.
Sizzler’s version became a production: soups, pasta salads, a make-your-own taco station, chilled shrimp, and a soft-serve ice cream machine with sprinkles that drew every kid in America. Then there was the cheese toast. Thick slices of white bread topped with a sharp, bubbly cheese spread, served at Sizzler since 1968. It started as a free side in Hollywood, California, and later cost 99 cents in the United States.
People came for the steak and left talking about the cheese toast. Some came exclusively for the cheese toast and soft serve. Nobody noticed the warning sign at the time. The salad bar and cheese toast were quietly becoming more popular than the steaks themselves.
Customers were walking into a steakhouse and spending most of their time at the buffet. The steak, the item that gave the chain its name, was becoming an afterthought. The restaurants were packed and the money was good, so no one flagged it as a problem. At its peak in 1992, Sizzler reached 786 restaurants across 11 countries, with over $1.
12 billion in systemwide sales. That was its best year ever. Locations spanned the United States, Australia, Japan, Southeast Asia, and the Middle East. A child in Brisbane ate the same cheese toast as a child in Phoenix.
It felt like a national institution, as dependable as the post office. That is when Collins made his move. He sold all 209 American KFC restaurants to PepsiCo for $123 million. Then he removed his own name from the company.
Collins Foods International became Sizzler International. Forty years of work, his name on the door, erased. He bet everything on the steakhouse chain. For exactly one year, it looked like the smartest bet in restaurant history.
Then the trap closed. Around the same time, someone inside Sizzler decided a steakhouse was not enough. The company leaned hard into the buffet, adding a full buffet court inside every restaurant: fried shrimp, pasta, chicken wings, soup, desserts, all you can eat. Buffets were booming in early 1990s America.
Golden Corral, Old Country Buffet, and Hometown Buffet were packing customers in. Sizzler already had the salad bar setup, so why not go bigger? The problem was simple. When the buffet was a side feature, customers still ordered steaks.
The steak was the main event. Once the buffet became the whole show, customers realized they could fill up on fried shrimp for eight dollars instead of spending twelve on a sirloin. Steaks carried the profit margins. Buffets had terrible margins, trays of food out all day, half wasted, customers piling plates as high as possible.
The more they ate, the less Sizzler made. To keep the buffet from sinking the operation, management cut quality on everything else. Cheaper ingredients, smaller steak portions, food sitting out too long. You cannot cut steak quality at a steakhouse and get away with it.
The regulars tasted the difference. The Friday night families started coming every other week, then once a month, then not at all. Revenue dropped from $54 million in 1993 to $36 million by 1995. And there was no safety net.
Collins had sold all the KFC stores. Meanwhile, competition arrived. Outback Steakhouse opened its first location in Tampa in 1988 and spread across the country by the mid-1990s. No buffet, no salad bar, just a good steak brought to the table by a server who introduced themselves.
Longhorn and Texas Roadhouse followed. A new generation of sit-down steakhouses built on the exact principle Sizzler had abandoned: focus on the steak, make it good, bring it to the table. Then came the disaster no one could plan for. In the summer of 2000, 64 people in the Milwaukee area got sick from contaminated food at two Sizzler restaurants.
The source was tainted beef from an outside supplier. Over 150 people were hospitalized or fell ill. A three-year-old girl named Brianna Crefall died on July 28 after eating food cross-contaminated near a meat grinding station inside one of the restaurants. Seven years earlier, in 1993, four Sizzler locations in Oregon and Washington had suffered a similar outbreak, 39 confirmed cases, same beef supplier, same problem with in-house meat grinding equipment.
Nothing had changed enough to stop it from happening again. By then, the company had already filed for Chapter 11 bankruptcy protection on June 3, 1996. One hundred sixteen company-owned Sizzler restaurants closed, and 4,600 jobs disappeared. That was five years after Collins sold every KFC franchise to PepsiCo.
Sizzler emerged from bankruptcy in 1997 and spent years trying to stabilize. Ownership changed hands twice in six years. New investors, new management, same problem. Rebranding attempts came and went: American grill, new menus, brighter paint.
Nothing worked. The company’s own chief growth officer later admitted that the effort to change what Sizzler was “just never worked. ” A steakhouse that stopped being a steakhouse, and by the time anyone suggested going back to cooking a good steak, no one was waiting. The strange part is that the chain did not die.
The whole category of budget steakhouses with salad bars collapsed at the same time. Ponderosa and Bonanza peaked at around 700 combined locations; today about 15 remain. York Steakhouse had nearly 200 locations; one is still open in Columbus, Ohio. Sizzler dropped to 74 restaurants, most in California, still serving steaks, still running the salad bar, still making cheese toast.
The chain filed for Chapter 11 a second time in September 2020 during the pandemic, but that filing only covered the 14 company-owned stores. The 90-plus franchised locations kept their doors open. Sizzler emerged in January 2023 with a new approach: going back to the steak. Remodeled dining rooms, brighter interiors, a menu focused on what worked in 1958.
The company reports that remodeled locations have seen sales jump 47 percent, with one location doubling its sales. Turns out people wanted Sizzler the whole time, just the real one. Meanwhile, the chain thrives in unexpected places. Thailand has 63 Sizzler restaurants, operated by Minor International, which purchased the Asian franchise rights.
Japan still has a handful of locations through Royal Holdings. And Australia, where Sizzler arrived in 1985, once had 74 locations, and the cheese toast became a genuine cultural institution. Sizzler Australia served over 22. 5 million slices of cheese toast across 35 years.
On November 15, 2020, the last nine Australian locations closed for good. Lines wrapped around the buildings on closing day, with families who had eaten there for 30 years showing up one last time. As the doors closed, the company finally released the cheese toast recipe. Two ingredients: margarine and pecorino cheese, mixed into a paste and spread on thick white bread.
That was it, after thirty years of internet home cooks trying to reverse-engineer it with eight different cheeses and a blowtorch. But even Australia is not done with Sizzler. Minor International plans to open a location inside a new hotel at Sydney Airport in 2027. Dell Johnson died in 1992, the same year his 99-cent steak stand hit its all-time peak.
He never saw the bankruptcy, the outbreaks, or the closures. Jim Collins lived long enough to see the chain file for bankruptcy and survive anyway. What people miss is not really the restaurant. It is the Friday night when your family piled into the car and went out together, the birthday dinner you chose every time, the sound of a steak on a hot metal plate coming across the dining room while the whole place smelled like toasted cheese.
Sixty-eight years after a salesman with $50 in the register put a steak on a hot plate in a Culver City strip mall, that name is still on signs from California to Bangkok. And the cheese toast is still going out, just two ingredients. That is all it ever was.