The 35-year-old pizza chain introduced Chapter 11 on Thursday, explaining that the process will help it “reduce its long-term debt burden and quickly emerge from bankruptcy as a much stronger company.” He warned that it will close unprofitable locations, but did not say how many of its 200 global restaurants will be affected.
“Covid-19’s unprecedented impact on our operations certainly created additional challenges, but this agreement from our lenders demonstrates their commitment to CPK’s viability as an ongoing business,” CEO Jim Hyatt said in a statement.
CPK raised nearly $ 47 million in new financing to ensure operations continue normally. He has about $ 13 million in cash and hasn’t paid rent in the past few months at most of his locations.
The temporary closure of meals indoors has also been brutal for the company, because meals on the premises account for 80% of its sales, the company said in a document. Revenue is currently down 40% compared to the same period last year, he said.
Restaurants, particularly informal chains like CPK, have been struggling in recent months. Closing in-person food in some states and the approximate economy of using third-party apps like Uber Eats or DoorDash, which increase restaurant costs and encourage diners to eat at home, is a lost proposition for many.
In recent months, the parent company of Chuck E. Cheese, the Italian chain Vapiano, the U.S. unit of Le Pain Quotidien, and FoodFirst Global Restaurants, which owns Bravo and Brio, have filed for bankruptcy. Even large franchisees, such as NPC International that operates thousands of Pizza Hut and Wendy’s locations, are currently navigating the Chapter 11 process.
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