The Zio’s Italian Kitchen chain said it will close a third of its units after filing for Chapter 11 bankruptcy yesterday.
The 16-unit casual operation is the latest affiliate of Food Management Partners to seek protection from creditors. In March, Buffets LLC filed under Chapter 11 of the federal bankruptcy code, triggering a wholesale closing of buffet restaurants operating under the names Ryan’s, Hometown Buffet and Old Country Buffet.
Zio’s is owned by Zio’s Restaurant Co., but managed by an FMP affiliate. FMP is Zio’s largest unsecured creditor.
Zio’s attributed its troubles to an economic slowdown in the oil-dependent areas in which it operates, as well as a general drop in visits to casual-dining chains. In recent months, at least four casual chains—Logan’s, Fox & Hound, Champps and Bailey’s—have been placed under bankruptcy protection by the brand’s owners.
Observers have yet to reach a consensus on why traffic has declined within the segment. Some contend that chain operations are losing the business to independents, while others speculate that consumers are cooking at home more often to take advantage of lower grocery prices.