Another one falls. Domino’s Pizza, the largest pizza chain in the U.S., has now become part of the growing list of pizza franchises facing bankruptcy, leaving several locations in Southern California in a state of uncertainty.
North County Pizza Co. in San Diego has filed for bankruptcy with reported debts ranging from $1 million to $10 million.
The company submitted its bankruptcy filing on March 11 in the U.S. Bankruptcy Court for the Southern District of California, looking to restructure its debts while under bankruptcy protection.
The specific reasons for the financial troubles weren’t shared, and it remains unclear if this will result in job losses.
This development follows an announcement from Domino’s in September regarding the closure of 36 stores, attributed to increasing costs.
The filing comes amid a backdrop of economic pressure affecting consumer behavior. CEO Russell Weiner mentioned that more low-income customers are opting to dine at home as financial struggles become more pronounced.
Chapter 11 bankruptcy allows businesses in distress to reorganize while continuing operations. So, it’s possible that the Domino’s locations affected by North County Pizza Co. could stay open while the company works to recover from its financial issues.
“Overall, I think disposable income for consumers has declined, and their confidence is hovering around levels seen in 2022,” Weiner noted.
He added that there are significant challenges facing the industry right now.
This filing comes at a time when several American pizza and fast-food brands are experiencing similar turmoil. Earlier this year, Yum! Brands’ CEO, Chris Turner, announced a major decision to close around 250 Pizza Hut locations due to disappointing sales and efforts to streamline the brand.
These closures, planned for the first half of the year, will shrink Pizza Hut’s U.S. presence by about 3%, according to reports.
