US-based fast-casual restaurant chain Mod Pizza is reportedly preparing for a potential bankruptcy filing amid increasing industry challenges.
Bloomberg reports that the company may seek court protection as early as mid-July 2024.
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Discussions are ongoing and the final decision has not been made public.
A Mod Pizza spokesperson stated: “We have a brand guests love, a passionate team and a solid turnaround plan underway that is making progress. We are working diligently to improve our capital structure and are exploring all options to do so. Since this is an ongoing process, it would be inappropriate to speculate on the outcome.”
The Wall Street Journal has highlighted that the chain, which began operating in 2008 in Seattle, has engaged the services of law firm Latham & Watkins, investment bank Miller Buckfire, and financial adviser Hilco Global to explore strategic options.
These options include a possible sale of the business or a bankruptcy filing, as the company evaluates its financial position.
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By GlobalDataMod Pizza is known for its customisable personal pizzas and salads and has expanded to 500 locations across the US.
In 2019, the company secured a significant $160m investment from private equity company Clayton Dubilier & Rice.
With this capital infusion, Mod Pizza announced plans to expand its footprint to 1,000 locations and generate 14,000 new jobs within five years.
The additional capital was intended to fuel Mod Pizza’s growth both domestically and internationally.
But the chain’s plans were hampered by the pandemic and subsequent inflationary pressures, which have posed significant challenges to the foodservice industry.
In 2021, Mod Pizza initiated steps towards an initial public offering, but has encountered obstacles since then.
Several casual dining chains have filed for bankruptcy protection in 2024 due to the impacts of rising inflation and shifts in consumer spending.
Rubio’s Coastal Grill announced the closure of 48 of its locations in California as of 31 May 2024.
The closures were attributed to a comprehensive review of operations and the current economic climate, including the rising cost of doing business.
