Fast-casual and fast-food restaurant chains have faced financial distress in 2024, with some companies considering bankruptcy and others following through with Chapter 11 or Chapter 7 filings.
The pizza business has been particularly rough this year with several chains considering bankruptcy filings.
Related: Popular fast-food chain owner files for Chapter 11 bankruptcy
The Covid-19 pandemic had already impacted several pizza chains before this year, as Chuck E. Cheese’s parent company CEC Entertainment filed for Chapter 11 protection in June 2020, blaming the pandemic and the strain from keeping its restaurants closed.
California Pizza Kitchen filed for Chapter 11 bankruptcy in July 2020 in a pre-negotiated reorganization with its lenders, and pizza buffet chain Cici’s, in January 2021 filed for Chapter 11 bankruptcy seeking a sale to D&G Investors. The company had about 318 locations in 2021 and now has 275, according to Cici’s website.
EYM Pizza, which operates roughly 140 Pizza Hut locations in Texas, Wisconsin, Ohio, and Indiana, has faced some financial difficulties and recently closed over 15 locations in Ohio and Indiana
The debtor 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 has less than $50,000 in assets and $500,000 to $1 million in liabilities.
Seattle-based Mod Pizza, which operates over 500 locations in the U.S. and Canada, has closed 27 stores this year and in July was considering filing for Chapter 11 protection.
Related: Popular fast-food burger chain files for Chapter 11 bankruptcy
The pizza chain, which was founded by Scott and Amy Svenson in 2008, started a made-to-order personal pizza craze that led to the establishment of similar pizza chains with Pieology’s launch in 2011 and Blaze in 2012.
As Mod Super Fast Pizza Holdings was considering a bankruptcy filing, Elite Restaurant Group of Chatsworth, Calif., in July acquired 100% of Mod’s equity in a merger agreement between the company and an Elite affiliate.
Mary’s Pizza Shack filed for Chapter 7 bankruptcy as part of a corporate restructuring.
Mary’s Pizza Shack
Mary’s Pizza Shack files for bankruptcy
Finally, iconic Northern California pizza chain parent Mary’s Pizza Shack Corp. 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 that will convert the business from a single corporation into smaller family-owned units.
The restructuring plan, which began in February 2023, calls for founder Mary Fazio’s granddaughters to acquire the brand through the Chapter 7 bankruptcy process, which will include liquidation of assets to pay off creditors.
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In most Chapter 7 bankruptcies, the debtors liquidate their assets and go out of business. In Mary’s Pizza Shack’s case, all 10 restaurant locations will remain open and continue operating, according to a company statement.
Mary’s Pizza Shack in fall 2022 revealed plans for its corporate restructuring. That year, the 65-year-old company shuttered two restaurants in Santa Rosa and Sebastopol, Calif., and then in 2023 closed three more in Dixon, Napa and Novato, Calif., the San Francisco Chronicle reported at the time.
Mary’s reopened the Napa location after eight months of closure.
The company said the after-effects of the Covid-19 pandemic led to the restaurant closings.
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