MOD Pizza, which for years was one of the fastest-growing restaurant chains in the U.S., is reportedly considering a bankruptcy filing, according to a report on Wednesday in the publication Bloomberg.
The publication, citing unnamed sources, said plans aren’t final and the fast-casual pizza chain could ultimately decide on a different course of action.
A MOD spokesperson acknowledged that it is “exploring all options” to improve its capital structure.
“We have a brand guests love, a passionate team and a solid turnaround plan underway that is making progress,” the spokesperson said. “We’re 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.”
But the news may be the most surprising of what has been a string of bankruptcy filings, potential filings or large-scale closures of restaurant chains and franchisees.
MOD Pizza was for years one of the industry’s better growth stories. The chain had been growing at a brisk annual pace to become the largest in a burgeoning sector that specialized in “made-on-demand,” individual-sized pizzas, typically for lunch.
The chain was considering an initial public offering in 2021 and by last year had grown to nearly $700 million in system sales from more than 550 locations. It generated $300 million more in sales from its rival, Blaze Pizza.
MOD was also adept at raising money, including a $160 million fundraise it closed in 2019. At the time, the chain operated 433 locations and vowed to have 1,000 locations within five years.
The pandemic and its inflationary aftermath likely did much to keep the company from reaching that goal. And there have been other indications of deeper problems with MOD Pizza more recently.
Former Coopers Hawk executive Beth Scott was named CEO in January, replacing cofounder Scott Svenson, who moved into an executive role. In April, the chain closed 26 underperforming locations.
A count on the company’s website, however, suggests additional locations have closed since. MOD said it operated 527 locations in April, following the closures. The company’s website lists 513 restaurants.
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