Pizza chains across the country have been struggling to stay afloat for the past two years as they have faced several financial challenges that threaten their existence.
A common reason given by restaurants for financial difficulties in recent years has been the lingering effects of the Covid-19 pandemic in 2020. Several pizza chains had financial problems that worsened during the pandemic and forced them to file for bankruptcy, including the parent company of Chuck E. Cheese. the company CEC Entertainment and California Pizza Kitchen in 2020, and the pizza buffet chain CiCi's in 2021.
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More recently, the pizza chain crisis has been linked to rising food and labor costs tied to rising inflation over the past two years. Companies that may be overleveraged with debt have also seen interest rates rise in recent years, which has increased their debt servicing costs.
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Some businesses that have become embroiled in legal disputes with landlords, lenders and other creditors will sometimes need to file for bankruptcy to stop the rising costs of legal proceedings.
Next Level Pizza Inc., the parent company of the Oath Pizza chain, filed for Chapter 7 U.S. Bankruptcy Court on Oct. 22 to have the District of Delaware liquidate the company's remaining assets one year after close all corporate-owned locations. , since he has said that he cannot pay his creditors in full.
All company-owned locations had closed by December 2023, but a review of Oath Pizza's website on December 3 showed three remaining franchises in El Segundo, California; Poulsbo, Washington; and Wellesley, dough.
The Boston-based debtor said it filed its petition facing several issues, including sales and earnings challenges and a lawsuit between investors and a proposed buyer.
EYM Pizza, which operates Pizza Hut locations in Illinois, Indiana, Ohio, Texas and Wisconsin, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Texas on July 22 with the objective of selling its assets.
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The Irving, Texas-based pizza franchisee had previously been sued by Yum Brands. (Hmm) Pizza Hut after it stopped paying royalties when a forbearance period with its parent company ended.
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An earlier lawsuit filed by EYM against Pizza Hut for alleged breach of fiduciary duty and other charges was dismissed.
Nick's Pizza and Pub
Nick's Pizza & Pub files for Chapter 11 bankruptcy again
Nick's Pizza & Pub, based in Crystal Lake, Illinois, has a history of generating strong public support to keep its restaurants open to the public.
The company discovered in March 2011 that it was losing $30,000 a month, sales fell 30%, and by September 2011, the company was at risk of missing payroll payments and possibly filing for bankruptcy, the Northwest Herald reported. in 2012.
In desperation, business owner Nick Sarillo sent a petition to 16,000 people on the restaurant's email list asking them to patronize Nick's Pizza & Pub to help improve business. Sales reportedly doubled the following week, continued to grow, and remained at 80% for the following month.
Over the next few months, sales increased by 5% to 10% from pre-email levels, and along with some other budget-cutting measures, the company managed to survive and not go bankrupt.
The business continued until Nick's Pizza & Pub in January 2020 was forced to file a Chapter 11 petition in the US Bankruptcy Court for the Northern District of Illinois before the Covid-19 pandemic began. to close businesses throughout the country.
Nick's Pizza & Pub Seeks to Reorganize in Chapter 11
Nick's Pizza & Pub emerged from bankruptcy and operated for more than four years before filing for Chapter 11 protection for a second time on December 2, 2024, to reorganize and restructure its business with plans to continue operating.
The restaurant chain, which operates two locations in Crystal Lake and Elgin, Illinois, listed between $100,000 and $500,000 in assets and between $1 million and $10 million in liabilities in its petition.
The pizza chain opened its doors in 1995 in the Chicago suburbs and in recent months has faced challenges typical of the industry, including managing inventory of perishable products and seasonal business fluctuations, according to court documents. Rising operating costs, caused by inflation, likely hampered the business as well.
The debtor indicated in its petition that the funds would be available for distribution to unsecured creditors.
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