The economics of operating a pizzeria in the U.S. can be challenging.
The number of pizza restaurants in the U.S. in 2024 amounted to over 74,000 with a total market size of about $50.1 billion, according to a January 2025 Statista report.
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Pizzeria owners have battled stiff competition, as well as rising labor and product costs driven by inflation since the Covid pandemic that has forced restaurant owners to raise prices.
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Food costs rose by an average of 29%, and labor costs jumped by 31% from 2019 to 2024, according to the National Restaurant Association. Menu prices followed this trend, as average prices increased by 27.2% from February 2020 to June 2024.
On an annual basis, full-service menu prices have risen 3.7% year-over-year since February 2024, and limited-service menu prices have increased 3.5%.
Rising prices have become an issue for consumers as many have become more discriminating with their dining choices as they watch their budgets. When customers stop dining at restaurants, it can be devastating for establishment owners.
Restaurant chains often close locations and sometimes file for bankruptcy when the financial distress gets too great.
Franchisees file bankruptcy, close locations
Pizza Hut franchisee EYM Pizza L.P., which at one time operated 142 Pizza Hut locations in Georgia, Illinois, Indiana, South Carolina, and Wisconsin, filed for Chapter 11 bankruptcy protection in July 2024 and sold 77 of its restaurants at a bankruptcy auction for about $11.78 million.
The franchisee said it would end up closing another 50 locations that it was not able to sell.
Giant global pizza chain Domino’s is one of those struggling dining chains, as its largest franchisee, Domino’s Pizza Enterprises, in February said it will shut down 205 low-performing locations, which will include 172 units in Japan “to sharpen market focus and improve profitability.”
Domino’s Pizza Enterprises said it will conduct location closings from April 2025 to June 2025. The restaurant franchisee expects to save about $9.72 million annually with a one-time cost of $60.8 million.
The franchisee decided to close locations after completing an operational and financial review to improve profitability, strengthen franchise partnerships, position the business for long-term growth, and improve shareholder returns.
Another Domino’s Pizza franchisee, People First Pizza Inc., on March 26 filed for Chapter 11 bankruptcy protection to reorganize its business, facing over $500,000 in disputed claims. The franchisee plans to continue operating the restaurant.
Zeppe’s Tavern & Pizzeria franchisee files for bankruptcy.
Image source: Zeppe’s Tavern & Pizzeria
Zeppe’s Tavern files for bankruptcy reorganization
Finally, popular rock and roll-themed pizza restaurant franchise Zeppe’s Tavern in Newbury, Ohio, filed for Chapter 11 bankruptcy on March 31, seeking to reorganize its business.
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The franchise, Pizzeria Management III LLC, filed its Subchapter V petition in the U.S. Bankruptcy Court for the Northern District of Ohio, listing up to $50,000 in assets and $500,000 to $1 million in liabilities.
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The Zeppe’s Tavern & Pizzeria chain, which consists of 13 locations in Northeast Ohio and one in Naples, Fla., was established in 1986 by Led Zeppelin fan Joe Ciresi, according to the restaurant’s website.
The founder combined his love of tasty food and rock and roll, featuring rock and roll videos and live music in the restaurants.
After initially opening Zeppe’s Pizzeria locations, Ciresi expanded to the full-service Zeppe’s Tavern and Zeppe’s Bistro restaurants. The menu includes pizza, burgers, chicken wings, sandwiches, and cocktails.
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