Popular US fast food chain Mod Pizza is on the brink of bankruptcy, following a spate of restaurant closures, according to a new report.
The fast-casual pizza outlet, which is located in 28 states, is preparing a potential bankruptcy filing and could enter court protection as soon as next week, sources told Bloomberg.
However the situation with Mod Pizza is fluid and plans could change, anonymous sources told the publication.
The company is known for its made-on-the-spot, customizable personal pizzas and has more than 500 locations across the US since opening its first restaurant in Seattle in 2008.
Last year Mod Pizza earned $700m and was once one of the country’s fastest-growing restaurant chains.
In 2019 it planned to operate 1,000 locations across the US by 2024, according to Restaurant Business.
Instead, the chain — which named a new CEO in January, replacing cofounder Scott Svenson — closed 26 underperforming locations in April and more appear to have shut their doors since then.
A spokesperson for Mod Pizza told The Independent: “We have a brand guests love, a passionate team, and a solid turnaround plan underway that is making progress.
“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 about an outcome.”
It comes in the wake of similar financial struggles by other fast-casual restaurants including Olive Garden and Red Lobster.
The beleaguered seafood dining chain faced serious financial damage caused by a $20 “endless shrimp” promotion that proved unexpectedly popular with customers, and reportedly cost it millions last year.
It filed for bankruptcy in May.
An industry expert previously told The Independent that Red Lobster’s collapse signaled the end of the “martini lunch,” as consumers ditch fast-casual dining for quicker or luxury options.
Dennis Gemberling, founder and principal of hospitality industry consultancy group, Perry Group International, said a greater shift in consumer behavior – opting for more “grab and go” food, or full dinner experiences, is pushing out the middle-ground -or fast-casual restaurants such as Mod Pizza, Red Lobster or Olive Garden.
“The fact of the matter is full-service restaurants… [are] becoming more of a specialty operation to go to for the after-work crowd, or on holidays and that type of thing,” Mr Gemberling told The Independent.