Dive Brief:
- Mod Super Fast Pizza Holdings has been acquired by Elite Restaurant Group, the pizza chain said in a Wednesday press release. Elite has acquired 100% of the equity in the company as part of the transaction. The purchase price was not disclosed.
- Mod has been working on a plan to rightsize its portfolio, refresh its brand and improve the guest experience, the company said.
- The deal will help Mod avoid bankruptcy, which reports last week stated that Mod Pizza was considering. Earlier this week, Mod said in an emailed statement that it was considering all avenues to boost its capital structure.
Dive Insight:
In addition to working on improving its business, Mod Pizza has undergone some leadership changes this year. Beth Scott became CEO in January, succeeding co-founder Scott Svenson. Her restaurant experience included working at Cooper’s Hawk and Fleming’s. The chain also hired Jennifer Anderson as its CMO after her tenure as CMO at Raising Cane’s Chicken Fingers.
“MOD has an outstanding culture and passionate, loyal guests and employees,” Michael Nakhleh, president and owner of Elite Restaurant Group, said in a statement. “We recognize the inherent value this represents and look forward to helping MOD write the next chapter in its history.”
Nakhleh and Elite Restaurant Group have a history of acquiring struggling restaurant brands. In 2018, it bought 12-unit Noon, a Mediterranean brand, and turned them into Daphne’s, another Mediterranean concept with over 20 units that it acquired earlier that year. In 2019, it bought Project Pie and 68-unit Gigi’s Cupcakes
In January, Mod said it had more than 540 locations system wide, but that number has likely declined with the closure of several stores.
During the first quarter, the chain closed underperforming locations and provided severance to employees who could not be transferred to another location. Reports indicated that the amount of store closures was over two dozen, but the chain did not confirm this with Restaurant Dive.
“We have occasionally closed units that are unprofitable, which is the normal course of business for any company our size,” the company said in a statement emailed to Restaurant Dive in April.
Before its recent struggles, Mod had been thriving. In 2019, it received a $160 million equity financing investment led by Clayton, Dubilier & Rice, at which point it decided to accelerate growth to reach 1,000 units in five years. That goal was never reached, however, as the chain has yet to push past 600 units. In 2021, it submitted a confidential draft registration to the U.S. Securities and Exchange Commission for a proposed IPO, but that never materialized.
The company posted net income of $4.2 million in 2023, a decrease of about 6% compared to nearly $4.5 million in 2022, per the company’s 2024 franchise disclosure document filed in Wisconsin. The chain is largely company-owned, with 465 outlets open and 87 franchised units open at the end of 2023. Its biggest market is Texas, where it has over 100 units.
