MOD Pizza closed 26 restaurants during the first quarter in a culling of underperforming locations within the fast casual's previously 553-unit portfolio, the chain confirmed Tuesday.
The company shuttered 25 locations in 10 states and the District of Columbia. In addition, a franchisee closed a location in Atlanta during the quarter, bringing the total number of closures to 26. The chain now includes a total of 527 units, of which 438 are company owned and 89 are franchised.
California saw the most units close, with five restaurants shuttered there. But MOD spokesperson Rick Van Warner said the new fast-food minimum wage, which increased to $20 per hour on April 1, was not to blame and that the timing was just coincidence. MOD Pizza had 58 units in California and, even after the five closed, the chain still includes 53 restaurants there.
The 25 company units that closed were simply “underperformers,” Van Warner said.
“Despite the best efforts of the squads and managers of those restaurants, they had not performed well for some time, and that’s just part of the business,” he said. “Sometimes you have to evaluate the performance of your assets.”
In addition to the five in California, the closures were fairly spread out. The closure list included three in Philadelphia; three in Chicago; three in Dallas; and three in Washington, D.C. Two units closed in Wisconsin and two in Seattle. One unit each closed in Florida, Oklahoma, Virginia and Oregon.
Van Warner said workers were offered opportunities to transfer to other units where possible, but those who could not transfer or declined the offer were offered severance pay.
The reevaluation of the portfolio comes after the Bellevue, Washington-based chain brought in a new CEO earlier this year.
Beth Scott, the former chief restaurant officer for Cooper’s Hawk, in January took over the helm from co-founder Scott Svenson, who moved to an executive chairman role. Svenson and his wife, Ally, founded the chain in 2008.
MOD has long been known for its people-first mission as a home for workers that are often overlooked, including those who have been previously incarcerated or those with developmental disabilities.
It was once one of the fastest-growing fast-casual concepts in the country, and in 2021 it filed confidentially for an initial public offering. That IPO, however, never came to fruition as the IPO market soured and the fast-casual pizza segment seemed to lose its shine in the post-pandemic years.
MOD, however, remains the success story within fast-casual pizza.
The chain ended fiscal 2023 with domestic sales of $732 million, a 10.7% increase over the prior year, placing it well ahead of competitors like Blaze Pizza, which recorded a 1.7% increase in sales last year, and Pieology, which was down 4.3%, according to sister brand Technomic’s Ignite data.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.