The pizza restaurant sector has faced economic hardship and several bankruptcy filings in 2024, as a result of the lingering effects of the Covid-19 pandemic, inflation that led to rising food and labor costs, and changes in consumer attitudes toward dining.
Seattle-based Mod Pizza is one chain that faced financial distress and considered a bankruptcy filing in July after closing 27 of its 500 stores. Instead, it found a buyer in Chatsworth, Calif.-based Elite Restaurant Group and continues to operate.
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Popular Sonoma, Calif.-based chain Mary's Pizza Shack on Sept. 10 filed for Chapter 7 protection in the U.S. Bankruptcy Court for the Northern District of California as the final step of a restructuring to convert the business from a single corporation into smaller family-owned units.
Related: Distressed automobile lender files for Chapter 11 bankruptcy
Normally, a Chapter 7 bankruptcy filing would be followed by a liquidation and closing of all business locations. But Mary's Pizza Shack's bankruptcy was more of a bookkeeping and legal exercise that resulted in the chain continuing to operate.
Mary's Pizza Shack began a corporate restructuring in fall 2022, which resulted in the company closing five restaurant locations, though it would reopen one location after eight months and continue operating 10 Northern California units.
Next Level Pizza Inc., the parent company of the Oath Pizza chain, on Oct. 22 filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware to liquidate its remaining company assets a year after it closed all corporate-owned locations, as it has said it can't repay its creditors in full.
The Boston-based debtor said it filed its petition facing several problems, including sales and profit challenges and a lawsuit between investors and a proposed buyer.
EYM Pizza, which operated roughly 140 Pizza Hut locations in Texas, Wisconsin, Ohio, and Indiana, faced some financial difficulties and recently closed more than 15 locations in Ohio and Indiana.
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The company filed for Chapter 11 bankruptcy protection in the Eastern District of Texas on July 22 after Pizza Hut sued the franchisee for nonpayment of royalties. The debtor had less than $50,000 in assets and $500,000 to $1 million in liabilities.
Fired Pie
Fired Pie files Chapter 11 to reorganize its business
Finally, popular pizza chain Fired Pie on Nov. 13 filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Arizona to restructure its business under Subchapter V.
More bankruptcy stories:
- Another popular pizza chain files for Chapter 7 bankruptcy
- Distressed retail chains file for Chapter 11 bankruptcy
- Iconic restaurant chain files bankruptcy after closing locations
Fired Pie parent NWFI LLC listed $500,000 to $1 million in assets and $1 million to $10 million in liabilities in its petition. The debtor indicated that funds will be available to distribute to unsecured creditors in the case, according to an RK Consultants alert.
The Phoenix-based pizza chain, which opened its first location in 2013, currently lists 14 open locations on its website, after one store in the Ahwatukee area of Phoenix recently closed. All locations were company-owned with no franchises.
The custom pizza and salad fast-casual restaurant had grown to 20 locations in Arizona in 2019 with plans to grow even further before the Covid-19 pandemic impacted the restaurant industry in 2020.
The debtor did not indicate any specific reasons for filing for bankruptcy in its petition.
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