The 35-year-old pizza chain filed for Chapter 11 Thursday, explaining that the process would “help reduce its long-term debt load, and emerge from bankruptcy as a very strong company.” It warned that it would close unprofitable locations, but did not say how much of its 200 global restaurants would be affected.
CEO Jim Hyatt said in a release, “The unprecedented impact of Kovid-19 on our campaigns certainly created additional challenges, but this agreement of our lenders reflects their commitment to the feasibility of CPK.”
CPK acquired approximately $ 47 million in new financing so that operations could continue as usual. It has about $ 13 million in cash and has not paid rent at most of its locations for the past several months.
Temporary closure of indoor food has also been cruel for the company, as base food makes up 80% of its sales, the company said in a filing. Revenue is currently 40% lower than a year ago.
Restaurants, especially casual chains like CPK, have struggled in recent months. The rough economics of discontinuing in-person dining in some states and using third-party apps like Uber Eats or DoorDash – which increases restaurant costs and encourages eaters to eat at home – for many There is a losing proposition.
In recent months, Chuck E. Cheese’s parent company, the Italian chain Vepiano, the American entity of Le Pain Cotidien and FoodFirst Global Restaurant, which owns Bravo and Brio, have all filed for bankruptcy. Even large franchises like NPC International, which operates thousands of Pizza Hut and Wendy locations, are currently navigating the Chapter 11 process.