A famous restaurant chain is now saved from bankruptcy protection after being acquired in what seemed to be a last minute attempt.
Mod Super Fast Pizza Holdings has been acquired by Elite Restaurant Group, the pizza chain said in a Wednesday press release.
Elite has acquired 100% of the equity in the company as part of the transaction.
The purchase price was not disclosed.
Mod has been working on a plan to rightsize its portfolio, refresh its brand and improve the guest experience, the company said.
The deal will help Mod avoid bankruptcy, which reports last week stated that Mod Pizza was considering.
Earlier this week, Mod said in an emailed statement that it was considering all avenues to boost its capital structure.
In addition to working on improving its business, Mod Pizza has undergone some leadership changes this year.
Beth Scott became CEO in January, succeeding co-founder Scott Svenson.
Her restaurant experience included working at Cooper’s Hawk and Fleming’s.
The chain also hired Jennifer Anderson as its CMO after her tenure as CMO at Raising Cane’s Chicken Fingers.
“MOD has an outstanding culture and passionate, loyal guests and employees,” Michael Nakhleh, president and owner of Elite Restaurant Group, said in a statement.
“We recognize the inherent value this represents and look forward to helping MOD write the next chapter in its history.”
Nakhleh and Elite Restaurant Group have a history of acquiring struggling restaurant brands.
In 2018, it bought 12-unit Noon, a Mediterranean brand, and turned them into Daphne’s, another Mediterranean concept with over 20 units that it acquired earlier that year.
In 2019, it bought Project Pie and 68-unit Gigi’s Cupcakes
In January, Mod said it had more than 540 locations system wide, but that number has likely declined with the closure of several stores, reports Restaurant Dive.
For more bankruptcy news and updates like this, opt-in for push notifications.
Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
An essential company now files a surprising bankruptcy after miscalculating demand for its inventory after the Covid-19 pandemic.
Supply Source Enterprises, a leading provider of branded and private label cleaning products and personal protective equipment, on May 21 filed for Chapter 11 protection to seek a sale of its assets.
Supply Source brands include The Safety Zone and Impact Products.
The Guilford, Connecticut debtor listed $50 million to $100 million in assets in its petition and $180 million in funded debt, which includes $80 million owed on a term loan credit facility, $60 million owed on an asset-based loan, and about $40 million in unsecured debt.
Before the Covid-19 pandemic, which generated huge demand for cleaning supplies and personal protective equipment in 2020, Supply Source had been consistently profitable with stable single-digit growth, according to a declaration from the debtor’s Chief Restructuring Officer Thomas Studebaker.
Once the pandemic hit in 2020, the debtor had substantial growth due to high demand for safety, hygiene and sanitation products
The debtor reported adjusted Ebitda of $93 million in 2020 which was nearly a 300% increase over the previous year.
However, the company’s financial performance deteriorated in subsequent years.
Based on the unprecedented demand in 2020, the company commissioned an industry study in early 2021 that concluded that the Covid-19 pandemic would fundamentally change the cleaning supplies and protective equipment industry and market for its products.
The study also estimated that the company’s Covid-related growth would likely be sustained through 2024.
In contemplation of continued customer demand at elevated prices, based on the study’s data, the debtor increased purchases of inventory even though the costs were higher due to supply chain constraints during the pandemic.
Despite the study’s assurance that growth would be sustained for years, the pandemic’s positive effect on the market faded by the end of 2021 and demand for PPE decreased to normal rates, reports TheStreet.
The reduction in demand led to large amounts of excess inventory that the company could not sell in the same quantities and prices.
The excess inventory forced the debtor to secure additional storage space, which increased storage costs.
These factors tightened the company’s liquidity and led to a decline in annual revenue in 2023 by 26% from 2022, resulting in a negative 2023 Ebitda of $13 million.
The debtor’s liquidity issues led to it being overdrawn on its asset-based loan facility by $30 million.
The ABL lender in February 2024 swept the debtor’s bank accounts, further impacting the company’s financial distress.
For more news and updates like this, opt-in for push notifications.
Also Read: This Massive Mall Retailer Is Now Closing In California
Market News Published Daily 📰
Don’t forget to opt-in for push notifications so you don’t miss a single article!
Also, thank you to all of our blog sponsors.
This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.
Our readers can now donate $3 per month to support independent journalism.
For daily news and updates on your favorite stories, opt-in for push notifications.
Follow Frank Nez on X (Twitter), Instagram, or Facebook.
Support Independent Journalism ✍🏻
Support independent journalism for just $3 per month!
Your contributions help power Franknez.com as the cost of widgets and online tools continue to rise.
Thank you for your support!
Recommended For You ✨
About The Author
Leave your thoughts below.
For more news and updates like this, opt-in for push notifications.