MOD Pizza, once the fastest-growing restaurant chain in the country, is reportedly considering filing for bankruptcy or finding a new owner.
According to the Wall Street Journal, the chain, founded in 2008 by Scott and Allie Svenson, has engaged the services of law firm Latham & Watkins, investment bank Miller Buckfire and financial adviser Hilco Global to help the brand explore its options. The WSJ article stated that “the company’s cash is running low, and it is seeking financing options, including for a loan that would fund a stay in bankruptcy.”
A source with knowledge of the matter reportedly told Bloomberg that MOD Pizza could enter court protection as early as next week. However, no final decisions had been made at the time of the Bloomberg report, and “plans could change,” the news site noted.
PMQ has reached out to MOD Pizza for comment and is awaiting a response.
In a statement to Bloomberg, MOD Pizza said, “We have a brand guests love, a passionate team and a solid turnaround plan underway that is making progress. We are working diligently to improve our capital structure and are exploring all options to do so. Since this is an ongoing process, it would be inappropriate to speculate on the outcome.”
Earlier this year, MOD Pizza closed 26 stores in 11 states and the District of Columbia. One of those states was California, prompting media speculation that the brand was reacting to California’s minimum wage hike to $20 an hour for employees of larger companies.
However, MOD CEO Beth Scott told PMQ at the time that those closed stores “had underperformed for some time.” She added, “While rising wages in California and other states certainly were a factor in the underperformance of the five locations we closed, the timing of California’s minimum wage hike taking effect and our closings in the state was coincidental.”
Scott took over as MOD’s CEO in January 2024, replacing co-founder Scott Svenson in that role. The chain also brought in a new CMO, Jennifer Anderson, in April 2024.
Since its first store opened in Seattle in 2008, MOD Pizza evolved into a leader in the fast-casual pizza segment. It was the fastest-growing restaurant chain in the U.S. in 2018 and 2019 and moved to the No. 3 spot in 2020. Restaurant Dive named MOD its “emerging brand of the year” for 2019, noting that the company had “leveraged savvy tech investments and off-premise optimization to win a hefty—and growing—slice of market share.”
The brand also has a social mission that sets it apart from most pizza chains. In 2021 MOD partnered with the National Restaurant Association Educational Foundation to create job opportunities and training for the formerly incarcerated. Through the MOD Opportunity Network (MOD ON), MOD creates employment opportunities for overlooked populations, including individuals with autism and intellectual and physical disabilities and others who face employment barriers. When that initiative launched in April 2023, co-founder Ally Svenson said, “We know first-hand the impact inclusive hiring can have on our Squad, our culture and the communities we serve. As MOD grew, we needed a sustainable, nationwide approach to help scale our work in this area. Surprisingly, a solution did not exist. Our entrepreneurial mindset motivated us to address this challenge.”
From the beginning, the Svensons envisioned MOD Pizza as a force for good, Scott Svenson told PMQ in its January/February 2021 cover story. “When we started MOD, we referred to it as a crazy social experiment that would combine the best of a for-profit business with the heart of a nonprofit, whereby the more successful we were, the better and bigger social impact we would make,” he said.
He added, “We think about our business as a flywheel with four elements. The first is an authentic purpose, a reason for being—why we’re trying to build this business. That leads us to inspired and engaged people. If you have an authentic purpose, which is largely about and for your employees, you will, hopefully, be able to attract, engage and inspire a group of people to show up and make it their own. That leads to delivering a great customer experience and, therefore, having loyal customers. Which leads to the fourth element, which is a successful business. If you have loyal customers, you’ll build a successful business, which allows us to invest back in that first element—our purpose and impact. Our flywheel represents this mutually reinforcing cycle, with all four dimensions working together harmoniously. But it starts with making sure your people feel loved. And I think our MOD team does feel loved.”
