Popular pizza chain mulls bankruptcy - fears for its 500 locations
Mod Pizza is preparing to file for bankruptcy as early as next week, sources told Bloomberg on Wednesday. The plans are not finalized and could still change, the person familiar with the matter said.
'We're working diligently to improve our capital structure and are exploring all options to do so,' a Mod Pizza spokesperson said in an emailed statement. Mod Pizza, known for its custom personal pizzas and salads, has more than 500 locations across 28 US states.
It had already shut 26 in the first three months of the year, bosses said at the most recent quarterly earnings. Mod Pizza was founded in 2008 in Seattle and soon expanded in Washington and then across America.
It has the most locations in Texas at 113. The next most are in its home state Washington, with 72. Neighboring Oregon has 32 and California, further down the coast, has 46.
The company received a $150 million investment from Clayton Dubilier & Rice in 2019, and it also filed paperwork for an initial public offering in 2021. Restaurants have increasingly been struggling this year. They have been putting up prices over the past two years - as they pass on higher costs to customers. But these price hikes have led to a fall in visitors.
Bigger chains like Applebee's, TGI Fridays and Boston Market have have all recently shuttered restaurants, as have smaller chains like BurgerFi. Red Lobster filed for bankruptcy in May and also shuttered almost 100 restaurants.
Chains have been worst hit in California where the minimum wage for fast food restaurants jumped to $20-an-hour from April 1. In early June, Mexican chain Rubio's shut 48 locations in the state and also filed for bankruptcy.
Two weeks ago, it emerged that almost 150 Pizza Hut restaurants are set to close due to an ongoing financial dispute with one of its major franchisees. June 14 saw the abrupt shuttering of 15 locations in Indiana that left staff and customers stunned.
A further 129 across Illinois , Georgia, South Carolina and Wisconsin are on the brink of shutting as part of the dispute.
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