Pieology Pizza Enters Chapter 11 Following Costly Bid To Save Struggling Stores

Pieology Pizza has filed for Chapter 11 bankruptcy protection following a failed attempt to acquire and rehab underperforming franchise locations. The California-based brand, which was once celebrated as a leader in the “build-your-own” pizza space, filed earlier this week.

The filing comes after a gamble to save its footprint, which evidently backfired. Earlier this year, the corporate group made a push to acquire nearly 30 franchised locations that were on the brink of closing, but it did not have the capital necessary to drive a full turnaround.

According to court documents, external investors who had previously committed to funding the acquisition withdrew support at the last minute, and without this liquidity, the corporate entity drained its own reserves trying to support continued operations.

While this move was a contributor to the brand’s financial struggles, it’s not the only hurdle cited in documents.

“Severe disruption due to the pandemic and subsequent economic environment, including labor shortages, inflationary cost pressure and rapidly shifting consumer behavior” also contributed to the decline, co-founder Carl Chang noted in the filing.

The bankruptcy filing lists liabilities between $1 million and $10 million, including significant debts to landlords and state tax authorities. 

Notably, the filing only impacts the company-owned entities. The remaining 29 franchisee-owned locations are not part of the Chapter 11 process.

Read more about the bankruptcy here and the role underperforming locations played in it here.