Mod Pizza, the fast-casual chain known for its build-your-own pizzas, may soon join the growing list of restaurant companies seeking bankruptcy protection.
Sources familiar with the matter told Bloomberg that the Seattle-based chain could file for bankruptcy as early as next week, though plans aren’t final.
When asked about the situation, a Mod Pizza spokesperson said, “We’re working diligently to improve our capital structure and are exploring all options to do so.” This statement neither confirms nor denies the bankruptcy rumors.
Founded in 2008, Mod Pizza quickly grew from its Seattle roots to become a national brand.
The chain has its largest presence in Texas with 113 locations, followed by 72 in its home state of Washington.
Despite receiving a $150 million investment in 2019 and filing for an initial public offering in 2021, the company now faces financial trouble.
Signs of strain were already visible earlier this year when Mod Pizza closed 26 locations in the first quarter.
Fast-casual restaurant chain Mod Pizza is preparing a potential bankruptcy filing, according to people with knowledge of the matter. https://t.co/8NIemJyWSP
— Bloomberg Markets (@markets) July 3, 2024
This downsizing trend isn’t unique to Mod Pizza, as the restaurant industry as a whole faces significant challenges.
The main issue? Rising costs forcing restaurants to hike prices, which in turn drives customers away.
TRENDING: Michigan Governor Sounds the Alarm, Says Biden Cannot Win in Her State
This vicious cycle has affected both big chains and smaller players.
Applebee’s, TGI Fridays, and Boston Market have all recently closed locations.
Red Lobster filed for bankruptcy in May, closing nearly 100 restaurants.
California’s restaurant scene has been hit particularly hard.
Mod Pizza chain — with 500 shops in the US — could soon be filing for bankruptcy: report https://t.co/KzXqARN6bn pic.twitter.com/GRQ70gLyCn
— New York Post (@nypost) July 4, 2024
A recent increase in the minimum wage for fast-food workers to $20 per hour has put extra pressure on businesses.
In response, Mexican chain Rubio’s closed 48 locations in the state and filed for bankruptcy in early June.
Even pizza giant Pizza Hut isn’t immune.
A dispute with a major franchisee has put almost 150 locations at risk of closure across several states.
The sudden shutdown of 15 Indiana locations in mid-June left employees and customers shocked.
As Mod Pizza potentially heads towards bankruptcy, industry watchers are left wondering: Is this just a bump in the road, or a sign of bigger changes in how Americans eat out?
The coming weeks may provide some answers as Mod Pizza’s fate unfolds.
The restaurant industry’s struggles highlight broader economic challenges.
READ NEXT: Three Quarters of EV Charging Developers Say Biggest Roadblock is They Can’t Get Enough Electricity
As businesses try to balance rising costs with keeping prices attractive to consumers, more restructurings and closures may be on the menu.
