How will the MOD Pizza restaurant chain avoid bankruptcy?
The fast-casual chain MOD Pizza, known for its customizable pizza pies, after exploring options announced that it may be able to avoid declaring bankruptcy.
It was reported at the beginning of the month that MOD Pizza could potentially file for bankruptcy but that the chain was “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,” a spokesperson said at the time.
How will the MOD Pizza restaurant chain avoid bankruptcy?
On Wednesday, MOD Pizza announced that it had a new owner, Elite Restaurant Group, which over the years has scooped up other financially troubled restaurant brands. The exact terms of the deal have not been disclosed but the California-based restaurant operator has acquired 100% of MOD Pizza’s equity. The chain hopes to restructure debt and shore up its capital base.
Michael Nakhleh, president of Elite, said in a statement: “MOD has an outstanding culture and passionate, loyal guests and employees. We recognise the inherent value this represents and look forward to helping MOD write the next chapter in its history.”
The fast-casual chain MOD Pizza, founded in Seattle in 2008 and known for its customizable pizza pies, had been one of the fastest-growing restaurant chains in the nation. It doubled the number of its locations in 2017 to over 200 and currently has 512 locations in 28 states and Canada.
In 2019, MOD Pizza secured $160 million in equity financing from private-equity firm Clayton, Dubilier & Rice with the intention of expanding to 1,000 locations within 5 years. In 2021, the pizza chain file plans for an initial public offering.
However, those plans were never realized as it was becoming evident that the company was in trouble due in part to poor real estate choices for new locations. MOD Pizza says that it has closed 44 under-performing locations this year.