Pie Five Pizza, which reported same-store sales declines of 17.4 percent in Q2, shuttered all of its Chicago, Minneapolis, and Denver locations.
The fast casual had eight locations in the Windy City, a market it entered in April 2015. Pie Five abruptly closed four Colorado units and two in Minnesota.
Originally, Pie Five planned to open 21 stores in Chicago by 2016, according to Crain’s. The publication also reports that more than a half dozen pizza brands launched in the same year as Pie Five, creating a saturated and, ultimately, overwhelming market.
In Rave Restaurant Group’s most recent quarter, the company reported a $7.9 million revenue loss on $14.8 million.
A franchisee is also suing the company over misleading financial information. Carl Dissette, the owner of seven locations in Iowa, Indiana, and Illinois, claims to have bought a Pie Five store based on inflated sales. He says the company used 3,000 BOGO coupons to mislead the transaction. Dissette also claims in the lawsuit that Pie Five misrepresented the performance of its restaurants in financial disclosure documents. This includes a failure to calculate royalties franchisees are required to pay, as well as geographic differences. Additionally, he’s contesting Pie Five’s supplier, Performance Food Group, saying that the company doesn’t provide fair pricing to franchisees. The company hasn’t commented on the lawsuit but is said to be moving to get the case dismissed.
In January, former Smashburger president Scott Crane was named the company’s new CEO.