MOD Pizza, the fast-casual chain known for its customizable pizzas, announced on Wednesday that it has been acquired by Elite Restaurant Group. This move is part of a strategic effort to avert or delay a potential bankruptcy filing.
Although the specifics of the acquisition were not disclosed, the announcement comes on the heels of reports last week indicating that MOD Pizza was contemplating bankruptcy. At that time, Rick Van Warner, a spokesperson for MOD, stated that the company was actively working on a turnaround plan, emphasizing efforts to improve its capital structure and explore all available options.
The acquisition by Elite Restaurant Group aims to stabilize MOD Pizza, which, like many other fast-casual dining establishments, has been struggling with reduced customer spending amid rising inflation. Earlier this year, Red Lobster filed for Chapter 11 bankruptcy, citing over $1 billion in debt and less than $30 million in cash reserves.
Founded in 2008 in Seattle, MOD Pizza boasts a selection of 40 toppings and eight sauces for its made-to-order pizzas. The chain has expanded to over 540 locations across the United States and Canada.
In January, MOD Pizza appointed Beth Scott as its new CEO, while co-founder Scott Svenson transitioned to the role of executive chairperson. Svenson, who founded MOD with his wife Ally in 2008, had indicated in a previous statement that he anticipated eventually stepping back from daily operations.
However, the chain has faced significant challenges, including the recent closure of 44 restaurants as of July 3, according to a MOD spokesperson. The acquisition by Elite Restaurant Group is seen as a crucial step in addressing these issues and securing the company’s future.