Elite Restaurant Group announced on July 10th that they have acquired the popular pizza chain Mod Pizza, which owns over 500 locations. Prior to this acquisition, Mod Pizza was reportedly preparing to seek bankruptcy protection in the middle of this month.
According to KTLA, Mod Pizza currently operates 512 stores in 28 states across the United States, with a significant presence in Texas and Washington, as well as 46 stores in California. Elite Group now holds complete ownership of Mod Pizza. According to National Restaurant News, Mod Pizza founder Scott Svenson stated that the sale was a “heartbreaking conclusion, but better than other alternatives,” as the company’s restructuring will result in the closure of a significant number of stores and job layoffs.
Founded in Seattle in 2008, Mod Pizza offers customers the ability to customize their pizzas on the spot, catering especially to younger demographics. With over 40 toppings, 8 sauce options, and 8 flavor combinations, each pizza is unique, yet the prices remain consistent. In July 2023, the restaurant was ranked as the second-favorite brand in the top 10 casual dining list by USA Today for its convenience, speed, and quality.
In 2013, Mod Pizza was listed as one of the “50 breakthrough brands” by National Restaurant News. By its tenth anniversary, the chain had expanded to 300 stores nationwide. One of the factors contributing to the rapid growth was the infusion of private equity funding, with PWP Growth Equity joining in 2015 as a major investor, with Mod Pizza investing $70 million for nationwide expansion. In 2019, the restaurant raised $160 million from Clayton Dubilier Rice private equity firm with plans to open over 1,000 stores and create 14,000 jobs within five years.
However, like many in the food industry, Mod Pizza faced significant challenges due to the COVID-19 pandemic, post-pandemic inflation, and changing consumer habits. By April 2024, 27 stores had permanently closed, and by early July, the number had increased to 44 closed stores as the company faced financial difficulties. The closures were attributed to the underperforming locations selected during the rapid expansion period with unfavorable lease terms.
According to Restaurant Business website, Elite Restaurant Group’s owner Michael Nakhleh and the company keep a low profile. The company has previously acquired Slater’s 50/50 focusing on bacon burgers, family dining brand Marie Callender’s, Patxie’s Pizza from San Francisco, as well as Daphne’s Greek-style fast food. Mod Pizza represents the largest known acquisition made by Elite Group. The brands possibly acquired by Elite Group may include Gigi’s Cupcakes, Mimi’s Café, and Lemonade.