MOD Pizza, the largest fast-casual pizza chain in the U.S., is considering bankruptcy, according to Bloomberg.

A spokesperson said the company—with 500-plus units nationwide—is working to improve its capital structure and “exploring all options.” The court filing could happen as early as next week. Plans aren’t final and could change, the source told Bloomberg.

Earlier this year MOD Pizza closed 26 restaurants across various states. All were company-owned except one. According to CEO Beth Scott, the closures primarily affected underperforming locations that had struggled for some time. Employees were offered severance packages where transfers weren’t possible or declined.

The closures spanned 10 states and Washington, D.C., with notable concentrations in California, Philadelphia, Chicago, and Dallas. Despite speculation, Scott clarified that these decisions were not directly tied to California’s new $20 minimum wage law for fast-food workers, although rising wages did impact some of their closed locations.

MOD Pizza had planned to go public in November 2021 but ultimately did not proceed. Leadership changes included Scott assuming the CEO role in early 2024 and succeeding cofounder Scott Svenson, who transitioned to executive chairperson.

Fast-casual pizza chains initially thrived by offering customizable pizzas akin to Chipotle’s build-your-own style. However, the pandemic exposed weaknesses in their model, particularly in adapting to digital and off-premises trends dominated by larger chains like Domino’s and Pizza Hut. Fellow fast-casual pizza companies like Pieology, &pizza, and Blaze Pizza have gone through serious turnaround efforts to get back on track. Each concept has changed CEOs within the past three years.

“You haven’t seen fast-casual pizza follow the same channels of digital evolution and product evolution,” Pieology CEO Shawn Thompson told QSR. “It just hasn’t changed as much as the world has, and due to some of those missteps, growth has really stagnated within this space.”

If MOD Pizza were to go bankrupt, it would join several entities that have declared bankruptcy thus far in 2024, including Red LobsterRubio’s Coastal GrillTijuana FlatsSticky FingersOberweis Dairy, Foxtrot and Dom’s Kitchena 25-unit Arby’s franchisee, a 48-unit Subway franchiseea 17-unit Popeyes franchisee, and a six-unit Alamo Drafthouse Cinemas franchisee. Corner Bakery Café filed for bankruptcy in 2023, along with major franchisees from Burger King, Wendy’s, CKE, Popeyes, Denny’s, and McDonald’s.

Fast Casual, Franchising, Legal, Pizza, Story, MOD Pizza