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Popular US fast food chain Mod Pizza is on the brink of bankruptcy after a series of restaurant closures, according to a new report.
The fast-casual pizza shop, which has operations in 28 states, is preparing to file for bankruptcy and could enter court protection as early as next week, sources told Bloomberg.
However, the situation at Mod Pizza is unpredictable and plans can 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 in the U.S. since opening its first restaurant in Seattle in 2008.
Mod Pizza made $700 million last year and was once one of the fastest-growing restaurant chains in the country.
In 2019, the company planned to open 1,000 locations in the US by 2024, Restaurant business.
Instead, the chain, which named a new CEO in January to replace co-founder Scott Svenson, closed 26 underperforming stores in April and appears to have closed more since then.
A spokesperson for Mod Pizza said The independent: “We have a brand that guests love, a passionate team and a solid turnaround plan that is moving forward.
“We are working hard to improve our capital structure and are exploring all options to do so. As this is an ongoing process, it would be inappropriate to speculate on an outcome.”
It follows similar financial troubles at other fast food restaurants, including Olive Garden and Red Lobster.
The troubled seafood restaurant chain suffered severe financial damage after a $20 “endless shrimp” promotion proved unexpectedly popular with customers and reportedly cost the chain millions last year.
Bankruptcy was filed in May.
An industry expert previously said The independent that the demise of Red Lobster marked the end of the “martini lunch” as consumers traded fast food restaurants for faster or more luxurious options.
Dennis Gemberling, founder and managing director of hospitality consulting group Perry Group International, said a larger shift in consumer behavior — opting for more grab-and-go dining, or full-service dining experiences — is pushing out the middle ground, or fast-casual restaurants like Mod Pizza, Red Lobster or Olive Garden.
“It is a fact that full-service restaurants… [are] “It’s becoming more of a specialist operation for people after work, or during holidays and things like that,” Mr Gemberling said The independent.