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Mod Pizza Prepares for Potential Bankruptcy

Seattle-based fast-casual pizza chain Mod Pizza is contemplating filing for Chapter 11 bankruptcy protection. This development comes after a period of financial strain, marked by restaurant closures and a search for new capital.

Industry publications reported that Mod Pizza has hired legal and financial advisors to explore a potential bankruptcy filing. The company reportedly closed 27 restaurants across the United States in 2024, with some closures attributed to rising labor costs. California’s recent minimum wage increase for fast-food workers to $20 per hour is believed to have played a role in some of these closures.

Mod Pizza’s leadership has acknowledged the company’s financial challenges. However, they have emphasized exploring “all options” to improve their capital structure. This suggests that a bankruptcy filing may not be inevitable, and the company may seek alternative solutions to secure its financial footing.

The potential bankruptcy filing has raised concerns about Mod Pizza’s future locations and workforce. However, the specific impact on employees and restaurants remains unclear.

Industry analysts attribute Mod Pizza’s struggles to a confluence of factors. Increased competition in the fast-casual pizza segment and rising operational costs have likely put pressure on the company’s profitability. Mod Pizza’s initial plans to go public in late 2021 were ultimately shelved, potentially hindering its access to new capital.

The possibility of a Chapter 11 filing underscores the ongoing challenges faced by the restaurant industry. Rising costs, a competitive landscape, and changing consumer preferences continue to exert pressure on restaurant chains. It remains to be seen whether Mod Pizza can navigate these challenges and emerge from this difficult period.

In the coming weeks, it is expected that Mod Pizza will provide further clarity on its financial situation and future plans. The company’s decisions will be closely watched by industry analysts, investors, and employees alike.

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