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UNITED STATES.- One more fast food chain (Pizza shop) has filed for bankruptcy due to the coronavirus pandemic and that means the closure of its branches.
California Pizza Kitchen has filed for bankruptcy as the pandemic and debt burden hinder its operations.
The pizza chain, with 35 years of history, presented Chapter 11 on Thursday, explaining that the process will help it “Reduce your long-term debt burden and quickly emerge from bankruptcy as a much stronger company”.
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The company 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 the viability of CPK like an ongoing business ”CEO Jim Hyatt said in a statement.
California Pizza Kitchen pizzeria secured 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 percent of its sales, the company said in a document.
Revenue is currently down 40 percent compared to the same period last year, he noted.
Restaurants, particularly informal chains like CPK, have been struggling in recent months.
The closure of restaurants to the public in some states and the approximate economy of using third-party apps such as 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, which operates thousands of Pizza Hut and Wendy’s locations, are currently navigating the Chapter 11 process.
THE PIZZA SHOP
California Pizza Kitchen is the latest fast-casual chain to file for bankruptcy as the pandemic and the company’s debt burden hamper its operations https://t.co/sqRYjTTzCU
— CNN Business (@CNNBusiness) July 30, 2020
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